Is the UK mid-market a target for cross-border acquisitions?

The UK large-cap M&A market is very hot! Non-UK corporations and financial sponsors, increasingly alongside domestic private equity, are targeting UK businesses, driven by a persistent valuation gap, predictable regulation and improving financing conditions. This is most advanced at the top of the market, where large and upper-mid-cap take-privates dominate deal value. Sponsor-to-sponsor exits have become the default liquidity route. But a quieter, more gradual trend has been building beneath the surface.  Overseas corporations and private equity houses are also increasingly turning to Britain’s mid-market.

The clearest signal comes from the top of the market. LSEG data put UK-targeted M&A at $192 billion by mid-May 2026, more than triple the equivalent point in 2025, with foreign acquirers accounting for 86% of deal value, up from around 74-75% a year earlier. By early July, total offer value had climbed past $231 billion, up roughly 210% year-on-year. 2026 is shaping up as one of the heaviest years on record for takeovers of UK-listed companies.

Clearly, these figures are dominated by large-cap and listed mid-cap deals, and the pipeline has kept growing through the summer. Notably EQT’s £9.5 billion take-private of Intertek, Nuveen’s £9.9 billion offer for Schroders, Zurich’s £8.1 billion acquisition of Beazley, KKR/Energy Capital Partners’ £5.75 billion take-private of DCC, Ingredion’s offer for Tate & Lyle, ABB’s £4.1 billion offer for Rotork and OCS Group’s £3.1 billion take-private of Mitie.

However, a cluster of deals now sit squarely in the FTSE 250, mid-cap segment. US buyout group Veritas has agreed a £1.8 billion takeover of industrials group Bodycote, seeing off a rival bid from CVC (albeit, CVC has not formally walked away). UK private equity firm Epiris has agreed a £1.1 billion offer for telecoms group Gamma Communications, at a 53% premium to Gamma’s undisturbed share price. And Norwegian oil and gas company DNO has agreed to buy Scotland’s Capricorn Energy in a deal valuing it at roughly £292 million.

Large-cap take-privates vs the mid-market

UK public-to-private activity has stayed elevated through 2024-2026, led overwhelmingly by US sponsors and strategics exploiting the valuation gap between UK-listed and US/European peers, though as Bodycote and Gamma show, UK and European sponsors are competing hard for the same assets. Roughly two-thirds of public M&A offers in Q1 2026 came from private equity. PitchBook data shows UK PE exit value on pace for a record year, around £20.9 billion across 131 deals in the first four months of 2026 alone.  62% of those exits were sponsor-to-sponsor sales, up sharply from under 40% in 2023, rather than trade sales or IPOs.

With the UK IPO window largely closed take-privates and secondary buyouts have become the primary route for both entry and exit at the large-cap end.

A sector pattern is also becoming clearer. Buyout firms are showing particular appetite for London-listed businesses in sectors viewed as more resistant to AI-driven disruption, such as industrials and engineering. ONS completion data for Q1 2026 recorded 352 total acquisitions, down from 495 in Q4 2025. A Dealsuite survey of over 400 UK and Irish advisory firms found a more encouraging but uneven picture, 38% reported an increase in completed transactions in H1 2026 against 17% reporting a fall.  Deals above £10 million rose from 15% to 19% of completions, while those below £2.5 million fell from 42% to 32%. Indicating demand is concentrating on larger, better-prepared businesses.

Cross-border penetration looks different once you leave the FTSE. Mid-market tracking puts cross-border deals at roughly 38–39% of activity, rising steadily from about 33%, but nowhere near the 86% foreign-value share at the top of the market.

Foreign and increasingly domestic private equity alike is reshaping the top of the UK market, where a growing cluster of large and upper-mid-cap take-privates account for an outsized and rapidly growing share of value. The privately-held mid-market is moving in the same broad direction, more cross-border interest and more competitive processes. Albeit, from a lower base with domestic buyers still doing much of the volume.

Why the UK specifically?

Market commentary cites a persistent valuation discount for UK-listed and private businesses versus US and European peers, amplified for overseas buyers converting from stronger currencies, regulatory predictability. Also improving financing conditions alongside aggressive private-credit expansion particularly relevant to mid-market buyouts and sector concentration, with technology, healthcare, financial services, industrials, engineering and business services drawing the heaviest interest.

What it means for UK mid-market businesses

Finally, it’s worth distinguishing between the public and private markets, as the two are moving for related but distinct reasons. The take-private wave sweeping the FTSE reflects a valuation gap specific to public markets, where UK-listed shares have traded at a persistent discount to US and European peers. Private mid-market businesses were never subject to that public-market discount in the same way, but they stand to benefit from the same underlying forces now driving buyers toward the UK, particularly the aggressive expansion of private credit.

Just as importantly, the wave of take-privates is itself a private-ownership story. Every business EQT, KKR, Veritas, or Epiris and others take off the London Stock Exchange becomes a privately-held asset that will, in time, need to be grown, bolted onto, or exited; typically through further acquisitions of smaller private targets. As sponsors deploy record levels of dry powder into UK platforms, and as sponsor-to-sponsor exits continue to dominate liquidity routes, that capital increasingly flows downward into bolt-on acquisitions of private mid-market businesses. According to Bain & Company and Preqin, global private equity dry powder stands at approximately $3.7 – 3.9 trillion, providing sponsors with substantial capital to deploy into new acquisitions.

Businesses large or public enough to be realistic take-private candidates are in a genuinely hot market with deep competitive tension among both foreign and domestic bidders. But this is increasingly a market where a “sale” comes with earnouts and rollover equity rather than a clean exit, and smaller, privately-held businesses face a more selective buyer group. Valuation conversations increasingly reference a global opportunity set, but the clearest gains go to larger, well-differentiated businesses in in-demand sectors. Owners of smaller or less differentiated businesses should expect the recovery to arrive later and more unevenly than headline UK M&A figures suggest.

Private owners should therefore expect the current wave of public takeovers to be a leading indicator rather than a separate phenomenon. The same capital, buyer appetite, and valuation logic reshaping the FTSE will gradually work its way into the private mid-market, supporting increased buyer activity, competitive tension, and pricing over the coming years, even if that recovery arrives later and less dramatically than the headline take-private figures suggest.

How we can help

Thomson Snell & Passmore’s Banking & Finance team has the expertise to advise businesses and lenders on the financing arrangements supporting acquisitions and growth. With experience across acquisition finance, secured lending and private equity transactions, we help clients navigate complex funding structures and achieve their commercial objectives.