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The market at a glance
A positive M&A environment continued to support equity investment, eased debt raising, and enabled founder succession and sales. However, investors and buyers remain cautious, with a real focus on detailed diligence.
At DMH Stallard, M&A revenues increased by 20% in 2025. Trade sales were in the £5 million to £20 million range, while management buy-outs (MBOs) and employee ownership trust (EOT) transactions ranged from around £3 million upwards. Trade buyers and financial sponsors remained active, with several private equity backed buy-and-build platforms accelerating their consolidation strategies. Inbound Scandinavian interest increased, with cultural alignment enhancing execution certainty and post-deal integration.
2026 considerations: Organised owners will find good deals, but planning is essential – we are not yet in a “bull market”. Buyers remain cautious so sellers must deal with any potential concerns in advance because delay increases costs and reduces buyer confidence.
Industry highlights: Construction, building, and property
Construction-adjacent services continued to attract domestic and international consolidators. Transactions ranged from environmental consultancy and building control, through to specialist HVAC and drainage services. Founders successfully exited to private equity backed platforms, as well as to strategic consolidators seeking scale and capability.
2026 considerations: If operating in built environment services, articulate a clear maintenance and compliance revenue mix, evidence consistent gross margin control, and demonstrate cross-selling potential. For sellers, invest in pipeline visibility and framework agreements to command higher multiples.
The food, beverage, and leisure landscape
Leisure and travel businesses continued their recovery from pandemic lows, with divestments of non-core assets and selective growth capital raises. We saw high-value drinks brands and specialty ingredients distributors attracting interest with brand equity, margin profile, and route-to-market key.
2026 considerations: Where demand normalisation has occurred, prioritise data-rich KPIs (cohort behaviour, repeat rates, channel mix) to substantiate resilience. For brand-led assets, invest in category leadership and distribution partnerships. For buyers, focus on assets with pricing power, diversified channels, and supply chain robustness; for sellers, address working capital discipline and margin stability to strengthen deal certainty and valuation.
Pet products: sustained post-pandemic growth
Following an exceptional pandemic-era expansion, pet products sustained healthy demand, with strategic portfolio reshaping by international owners. Transactions reflected a continued appetite for premium and functional nutrition, specialty accessories, and trusted heritage brands. Cross-border activity remained a theme, with buyers aligning category expertise and market access.
2026 considerations: Emphasise defensible brand positioning, product quality assurances, and retailer relationships. Highlight predictable reorder patterns and subscription models where relevant.
Looking forward: technical manufacturing, defence, and pharma
Specialist manufacturing, defence supply chains and pharma-adjacent services accelerated late in 2025 and are poised for further activity in 2026. We saw deals for protective case manufacturing for sensitive equipment, aerospace and defence components, and medical supplies distribution.
Themes include export markets, US operations, strength of customer relationships.
2026 considerations: Thorough diligence and documented evidence is critical, plus ensuring historic records are all in place. While some founders continue to help transition businesses, a credible management team remains important; sometimes this requires some planning.
Sectors to watch in 2026: AI and SaaS
AI start-ups and vertical SaaS providers are expected to remain active in equity raises and selective M&A. Brighton has a maturing tech ecosystem and will continue to benefit from deep talent pools and B2B/professional services demand.
SaaS remains attractive due to recurring revenue, low churn, and expansion potential, but buyers are more discerning, needing a clear plan for future growth.
2026 considerations: Founders should focus on provable sales models and capital-efficient growth, together with clean data/security posture. A clear approach to open source and protected intellectual property is critical.
Professional services: an accelerating consolidation
Professional services continued its consolidation wave with wealth management deals leading into accountancy and, more recently, legal services. Private equity ownership increased in all these sectors with some trade consolidators. Structures ranged from trade sales to EOTs, reflecting differing cultural and strategic objectives.
2026 considerations: Firms considering sale should align partner incentives early, modernise practice management systems, and evidence cross-referral efficacy.
If you are interested in more detail on any of the sectors we have been involved in through 2025, or how best to prepare for success in 2026, speak to the DMH Stallard Corporate team to stress-test your options and shape a strategy that delivers on your objectives with confidence. Contact us by email or call +44(0)3333 231580.
DMH Stallard provided excellent personal service and legal advice. They are able to handle complex matters, offer an excellent personal service and are highly responsive. – Chambers and Partners UK 2026
