Deal Advisory Insights

Preparing for a Successful Transaction

Whether buying of selling, early preparation remains critical for successful transactions. Businesses should ideally start planning at least three years in advance, focusing on management team capability and capacity, evidencing the growth strategy, working capital management, and diligence readiness.

Key steps in preparing for a successful transaction include:

Management team capability and capacity: Ensuring that the management team is complete and aligned with the company's strategic goals is crucial. This includes succession planning and leadership development.
Evidencing the growth strategy: Showing a track record of growth and the delivery of strategic priorities helps investors to feel comfortable that strategy can be delivered.
Working capital management: Optimising working capital is essential for improving cash flow and enhancing the company's financial position. This includes managing inventory levels, receivables, and payables.
Diligence readiness: Having comprehensive data (a “datacube”) and a thorough understanding of risks and opportunities is critical. Sellers should consider vendor packs that demonstrate that the analysis and prep has been done.

Data and AI considerations

The deployment of advanced data analytics and artificial intelligence (AI) in due diligence has increasingly become standard practice, particularly in larger transactions. This has led to more sophisticated analysis of target companies and deeper understanding of value drivers. Diligence providers can access more data and process / analyse it quicker. This results in higher expectations from investors, who want to see targets operating with a high-quality data environment and expect to see detailed underpinning to historical and future trading trends. Businesses need to leverage technology to gain deeper insights and improve transaction outcomes.

Revised accounting standards will start to impact deals

Companies and investors need to consider the impact of new UK accounting standards (including revised revenue recognition and lease accounting) that will impact deal structures (for example completion accounts, earn outs) and valuations (as EBITDA, working capital and net debt will change); businesses need to stay abreast of these changes and ensure the impact is understood to avoid potential deal disruptions.

ESG considerations

ESG is starting to move beyond the box-ticking to become integral to transactions. Impact investors are particularly interested in businesses with strong social and environmental credentials. Companies need to ensure they develop robust ESG strategies to attract investment and improve valuations.

In summary

As we move into 2025, the deals market presents both opportunities and challenges. Success will likely favour well-prepared businesses that can demonstrate strong fundamentals, clear growth potential, and robust operational capabilities. While uncertainty persists in the broader economic environment, the market has demonstrated resilience and adaptation, suggesting continued activity for high-quality assets and well-executed transactions.

The emphasis on thorough preparation, technological capability and strong management teams will remain paramount. Businesses that can effectively address these elements while navigating the evolving regulatory landscape will be best positioned to achieve successful outcomes in the year ahead.

Deal Matrix and Sector Snapshots

Discover our comprehensive guide to the latest trends and shifts in M&A activity in the key economic sectors. You can find out more about emerging market opportunities, analysis of performance and trends, and predictions which include our PE trends for 2025.

59 deals

The TMT sector once again proved its resilience and dynamism in the face of economic and geopolitical uncertainty and volatility through 2024. Many areas of TMT benefit from providing mission critical products and services, which insulates them from broader market challenges. However, some of our clients have reported that their growth ambitions have been affected by customer budget pressure, delayed decisions and extended sales cycles. This will have affected valuations and may explain the increase in earnouts we witnessed during 2024.

The whole sector, from generative AI to clean tech, has continued to attract both strategic and financial investors but subject to greater scrutiny (data, data and more data!) and a sharper focus on value creation.

Access to capital drives deal flow and there remains pent up demand from investors to deploy into the TMT ecosystem. To find success in 2025, companies must remain agile and focus on innovation, sustainability and value creation.

For businesses and investors alike, the key to success will lie in a forward-looking approach—identifying not just where the sector is today, but where it’s headed tomorrow. For a more in-depth analysis of the TMT market, trends and outlook into 2025, read the full article here.

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19 deals

The Life Sciences sector is set for growth in 2025, underpinned by increased global R&D investment, the demands of an ageing population and the emergence of novel therapies such as cell and gene treatments. Combined with a more stable economic environment, the sector is primed for new opportunities.
In the United States, stringent new regulatory measures targeting drug pricing, following recent political shifts, are set to have a significant impact on global market strategies. Additionally, the funding landscape for biotech and biopharma is witnessing a resurgence with venture capital, M&A, and IPO activities heating up as market confidence rebounds.

A pivotal trend in 2025 will be the potentially revolutionary use of Generative Artificial Intelligence (GenAI) in drug discovery, regulatory compliance and supply chain managment. Patent expirations are also driving companies toward aggressive M&A and innovation to secure their revenue streams.

The year will also highlight the contrast between personalised medicine and mass-market treatments, with both sectors expected to expand significantly. As Life Sciences companies navigate these trends, agility and strategic foresight will be crucial for capitalizing on the dynamic market landscape.

Read our in-depth analysis of the healthcare, life sciences, pharma and biotech market, trends and outlook into 2025.

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30 deals

In 2024, the financial services sector demonstrated resilience, achieving approximately £30bn in deal value, an increase of 15%-20% over 2023. Despite market uncertainty and regulatory challenges, mid-market activities remained vibrant, fuelled by sustained access to debt financing, particularly in wealth management and insurance intermediaries.

Significant transactions in speciality finance and notable mid-sized bank mergers further underscored the sector's resilience and dynamism.

There was continued momentum in wealth and IFA buy-and-build strategies, complemented by some noteworthy deals in the insurance intermediary market. The Pockit/Monese merger was typical of ongoing efforts to integrate fintech innovations.

The sector is grappling with an inquiry into discretionary commissions which is impacting key players and potentially reshaping future regulatory frameworks.

As we look towards 2025, optimism prevails. We expect a robust deal-making environment driven by private equity and strategic consolidations. The anticipated shakeout in fintech, alongside a focus on non-core disposals and professional services mergers, suggests a year of strategic realignments and potential growth opportunities.

Read our in-depth analysis of the financial services market, trends and outlook into 2025.

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19 deals

Despite a sluggish first half to 2024, the Leisure, Retail & Consumer sector saw a noticeable uptick in M&A activity driven by strategic corporate acquisitions and a resurgence in the travel industry. The sector, which had been grappling with persistent market challenges and political uncertainty, is showing signs of optimism heading into 2025.

Private equity interest, cautious throughout 2024, is expected to increase with the travel sector already experiencing significant investments from firms like Risk Capital Partners, Piper Private Equity and Soho Square. This resurgence is driven by sustained growth in passenger numbers, overtaking pre-Covid levels. Passenger numbers are also a strong indication of consumer preference for experiential spending over material goods.

The outlook for 2025 is promising. Increased debt lending and a revitalised IPO market, witness Applied Nutrition's recent success, will create dynamic growth and a conducive environment for deals due.

Read our in-depth analysis of the 2024 trends and 2025 predictions for the Leisure, Retail & Consumer sector.

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30 deals

Despite facing the most challenging market conditions in over a decade, with low transaction volumes and high deal abort rates, the UK real estate sector showed signs of resilience and recovery through 2024. High inflation and interest rates initially stifled liquidity, impacting most investors except the largest institutional ones. The last quarter, however, saw a surge in deal activity, particularly driven by operational real estate assets with higher return opportunities such as retail, residential and hotels.

Investment trends shifted with a renewed interest in logistics, spurred by e-commerce growth. Meanwhile, investments in core assets such as prime commercial properties remained cautious. The landscape was further shaped by significant mergers and consolidations, notably in the REIT sector, a result of a strategic push towards scale and efficiency.

Our Deals Advisory team experienced a record year, leading major transactions and mergers and setting a strong foundation for continued growth into 2025. With a stabilizing economic outlook and strategic capital market reforms on the horizon, the sector is poised for a dynamic transformation.

For a more in-depth analysis of the real estate market, trends and outlook into 2025, read our full analysis of M&A in real estate.

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28 deals

The Professional Services (PS) sector demonstrated resilience and dynamic growth in 2024, driven by strategic mergers, acquisitions, and private equity (PE) investments, despite facing global economic challenges such as inflation and geopolitical instability. The year saw a surge in consolidations and cross-border deals, particularly in high-demand areas like data analytics, tax advisory, and compliance, underscoring the sector's ability to adapt to an increasingly complex global market.

Key trends included the rise in bolt-on acquisitions, allowing firms to seamlessly enhance specific capabilities and enter new markets. Strategic acquisitions, especially in digital transformation, cybersecurity, and sustainability, were also significant, as firms sought to align with evolving client needs and regulatory standards.

Looking ahead to 2025, the sector is poised for further growth with a stable market outlook post the Autumn Budget and recent elections. Enhanced by technological advancements in AI and an increased focus on sustainability, the M&A landscape is expected to flourish. Additionally, with PE firms continuing to show strong interest in the sector, cross-border deals are set to increase, driven by the stabilisation of interest rates and economic conditions post-Brexit.

For a more in-depth analysis of the professional and business services market, trends and outlook into 2025, read the full article here.

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6 deals

It’s been a busy year for M&A in Building Products and Services with a good number of deals completing in the sector. This year, we’ve seen moves in the housebuilding market as the sector gears up for growth. We’ve also seen huge levels of activity in fire safety and renewables installations.

Renewables M&A is accelerating as decarbonising technologies are adopted by consumers and businesses. We advised Hometree on the acquisitions of The Little Green Energy Company and IMS Heat Pumps. With large funding facilities adding considerable firepower to the group, we expect to see ongoing consolidation of the residential renewables installation and maintenance market.

Fire came firmly into the spotlight following Grenfell, with tightening regulations sparking a buying spree. We advised on LDC’s investment in Integrated Doorset Solutions and Fire Door Inspection Solutions, with further acquisitions expected to follow.

Looking ahead we expect momentum to be maintained in these sectors as we head into 2025, with additional themes emerging, including a resurgence in the Windows & Doors and Security sectors, and a rise in Infrastructure Services opportunities. Measures in the new housing strategy to be announced in 2025 are also expected to stimulate the market, bringing growth and opportunity to the whole supply chain.

We also expect to see an increase in private equity transactions in the sector. Some will be looking to exit investments which have been held for a good number of years, while others will be pursuing acquisitions to consolidate market position for platform investments, as seen with LDC’s recent investment in Deltron Lifts and subsequent acquisitions.

For a more in-depth analysis of the construction and building products market, trends and outlook into 2025, read the full article here.

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26 deals

The Manufacturing & Engineering sector experienced robust deal activity in 2024, defying global economic uncertainties and internal industry challenges. We advised on approximately 50 deals within the UK Industrials market ranging from engineering to pet food packaging.

Despite facing obstacles like rising costs, labour shortages and geopolitical tensions, the sector maintained a strong M&A appetite, supported by substantial private equity 'dry powder' and interest from overseas corporates. Key themes prominent in many transactions were industrial automation and sustainability. Industrial automation is being used to address crucial issues like labour shortages and supply chain security, while sustainability became increasingly central, especially in the packaging sector.

Looking forward to 2025, the sector is expected to keep focusing on automation and sustainability. We believe digital transformation, AI, and augmented reality will all emerge as key trends. Despite tax changes and ongoing macroeconomic challenges, the sector's resilience is likely to foster a steady deal flow driven by strategic and private equity investments.

Read our in-depth analysis of the manufacturing and engineering market, trends and outlook into 2025.

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7 deals

Despite strong long-term growth drivers for clean and cost-effective energy solutions, the UK's energy-related M&A activity saw a decline in 2024, impacted by higher borrowing costs, grid access constraints, and political uncertainty. Conversely, service industries supporting established renewable infrastructure are attracting private equity interest, promising higher growth and returns. This trend is exemplified by Venterra's expansion in offshore wind services, highlighting a shift towards more dynamic sectors within the energy market. As 2025 approaches, key factors such as lower borrowing costs and clear government strategies could revitalize M&A activity in this sector.

For a more in-depth analysis of the new energy and environment market, trends and outlook into 2025, read the full article here.

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2 deals

During a year of changing government and fiscal strategy, and amid continued economic uncertainty, the UK logistics sector has maintained a healthy level of M&A activity in 2024 with 74 UK businesses acquired to end Q3 and on track to surpass the 100-deal mark for the year. Overseas buyers remain prominent targeting scale and geographic leadership, as do private equity investors supporting buy and build strategies. Meanwhile Tech enabled businesses continue to attract interest. All trends we expect to see continue in 2025.

The BDO Barclays 2024 Logistics Confidence Index report published in October showed a bounce back in overall sector confidence reaching a score of 57.6 up from 47.3 last year. This increase in confidence appears to be based on the expectation of a more stable and manageable trading environment plus the resilience businesses believe they have built up having navigated and operated essential supply chains every day in what continues to be demanding economic conditions.

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