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Q2 2026 Quarterly Round-Up
Blog
July 31, 2026
5 mins
Welcome to the Q2 2026 edition of M&A Insights, covering UK and global dealmaking through April, May and June. The data tells one consistent story this quarter: resilience under real pressure. I've set that out in full below, then turned to what it means sector by sector, in the UK, and globally.
• MarktoMarket UK M&A Valuation Barometer (April, May, June & July 2026 editions)
• MarktoMarket UK M&A Valuation Indices, Q1 2026
• PitchBook Q2 2026 UK Market Snapshot
• PitchBook Q2 2026 Global M&A Report
• SRS Acquiom 2026 M&A Deal Terms Study
• Akin Gump, Q2 2026 UK Merger Control and National Security/Investment Screening Update
One story runs through every dataset this quarter. Deals are getting done, but they look different to two years ago: financing is tighter, diligence takes longer, yet volumes, confidence and pricing are all improving. Resilience, not a rebound, is the theme, and it changes how you should think about timing an exit.
UK dealmaker confidence has risen for four straight months, from a low of 37 in March to 56 in June. UK deal value climbed every month of the quarter, from £9.7bn to £32.0bn, and Q2 volumes are running around 10% ahead of Q1. The pace has continued since: UK M&A value is on track for a record year, annualising to around £347bn (Bloomberg).
Private equity pulled back hard: global buyout value fell 35.7% quarter on quarter, and UK PE fundraising is on pace for a 30% year-on-year decline. BDO puts a number on why: PE now needs roughly 12% annual EBITDA growth to hit historical return targets, nearly double the old benchmark, so financial engineering is giving way to real operational improvement.
Advisers tell me hold periods have stretched to around 6.2 years, with lower return targets baked in from the outset, well before a deal is even signed.
PwC data shows the top 10 UK deals made up around 52% of H1 2026 M&A value. It's a K-shaped market: mega-deals are propping up the average while activity below £50m stays comparatively constrained. If that's your bracket, the message is preparation over timing.
Bottom line for business owners: the window for a good exit is open, and arguably widening, but it takes more patience, preparation and flexibility on structure than it did a year ago.
UK deal volumes were choppy through the quarter: 502 in April, down to 357 in May (the quietest month in a year), before recovering to 434 in June. Taken together, Q2's estimated 1,532 deals mark growth of roughly 10% on Q1's 1,386, a sign the pipeline is rebuilding even where the month-to-month numbers wobble.
Deal value rose every month, from £9.7bn in April to £32.0bn in June. Confidence tells the same story: the CF Confidence Index fell to a 12-month low of 37 in March, then climbed for four straight months to 56 in June, even as UK and European rates moved the wrong way.
Buyer mix held steady: trade buyers took 60 to 66% of deals, private equity 23 to 28%.
Adviser feedback backs this up. Broad auctions are increasingly rejected in favour of tighter, relationship-led processes, with shortlists of around 20 buyers now recommended over 50.
It's showing up in real transactions too: LDC backed a growth investment in Bespoke Kitchen Foods this quarter, proof PE is still writing cheques at the lower end of the mid-market, not just chasing headline megadeals.
The most recent Valuation Indices, covering Q1 2026 (the latest available at the time of writing), show multiples softening slightly from a strong Q4 2025 peak but still ahead of where they stood a year earlier. The All-Cap median EV/EBITDA multiple eased from 6.7x in Q4 2025 to 6.3x in Q1 2026, but that's still 12% higher than the 5.6x recorded in Q1 2025, and deal sizes in the sample were notably larger (median £9.7 million, against £3.8 million a year earlier). Buyers aren't chasing valuations downward opportunistically. If anything, pricing on completed transactions looks more supportive than it did twelve months ago. Capstone Partners' 2026 mid-market projections tell a similar story: typical and premium EBITDA multiples are put at 6.8x and 9.8x respectively for the year, with most advisers expecting little change and only around 27% anticipating a further rise.
PitchBook's independent UK data corroborates the same picture from a private-capital-markets lens. UK private equity deal value reached £38.4 billion in Q2, a significant step-up on Q1, though still below the strong second half of 2025, led by EQT's £10.9 billion buyout of quality-assurance group Intertek. Strategic (corporate) acquisitions were similarly active, at £29.3 billion across 675 deals.
The macro backdrop remains mixed but improving on the metric that matters most to the Bank of England: UK inflation eased to 2.8% in May, moving closer to target, even though the Bank held rates at 3.75% in June and the labour market continued to cool.
One further headwind worth flagging for anyone weighing PE as a buyer: UK PE fundraising slowed sharply, with only £11.9 billion raised through H1 2026, a pace that implies roughly a 30% year-on-year decline for the full year, even as regional dry powder stood at £121.4 billion at the end of 2025. Less fresh capital being raised is a genuine constraint to watch, even if existing dry powder continues to support deployment for now.
The detail that actually matters for owner-managed businesses is the National Security and Investment Act. Changes taking effect in March extend mandatory notification to the water sector, split Critical Minerals and Semiconductors into their own schedules, and narrow the AI schedule to exclude off-the-shelf tools. No NSIA Final Orders were issued in 2026 as at the Q2 update, though that's not a reason to assume reduced scrutiny given ongoing geopolitical tension. The CMA's parallel reform programme is largely a large-cap story, worth knowing about but rarely the thing that shapes a sub-£50m deal.
Sector performance diverged sharply this quarter, and we'll cover it properly in a follow-up Sectors in Focus post. In brief: wealth management kept up its UK consolidation wave, with Perspective Financial and MKC Wealth both among the quarter's most acquisitive buyers, and EY data showing UK financial services M&A value up eightfold year on year to £33.7bn in H1, driven overwhelmingly by wealth and asset management. Energy (+385.5% YoY globally) and healthcare (+71.6% YoY) posted genuinely broad-based growth, technology split into AI-driven megadeals against a near-collapse in legacy software buyouts, and generalist consumer businesses stayed firmly out of favour with buyers. More on all of that shortly.
Globally, Q2 looked softer on the surface but was still building underneath. Aggregate M&A value hit an estimated $1.3 trillion, down 18.4% on an exceptionally strong Q1 but up 35.3% year on year, while deal count barely moved (up 3.4% YoY, down just 2.4% QoQ). Pricing held firm too: the median EV/EBITDA multiple across North America and Europe stayed at 10.2x, well within its long-run range, as sellers resist repricing downward and buyers stay disciplined on entry multiples. Private equity pulled back hard, with global buyout value down 35.7% quarter on quarter, but strategic acquirers filled the gap, keeping corporate M&A value close to $900 billion.
Europe held up notably better than North America this quarter, with a much smaller drop in deal value and a deal count that actually rose. Sector momentum rotated away from financial services globally, which fell to a two-year low, and toward energy, healthcare and AI-linked technology: sectors with structural rather than cyclical demand, which is exactly why they've kept growing while financing-dependent parts of the market haven't.
The SRS Acquiom 2026 M&A Deal Terms Study, which tracks negotiated terms across more than 2,300 private-target transactions closed between 2020 and 2025, reinforces the same picture from the ground up. Representations & warranties insurance (RWI) was identified on roughly 46% of 2025 deals, and where it's used, it fundamentally reshapes seller risk: the median indemnification cap falls to just 0.5% of transaction value, against 10.0% where no RWI is present.
Even so, protection is holding up better where it's retained: 88% of 2025 deals included an escrow or holdback, and escrow sizes are up across the board, a median of 10.0% of transaction value where RWI is absent, against 9.0% the year before.
Earn-out usage remained elevated too: 24% of 2025 non-life-sciences deals included an earnout, continuing a multi-year rise, with 60% of those including more than one earnout metric (most commonly revenue). The median earnout now runs 21 months, nearly two years before a seller can expect to see the final tranche of consideration. Earnouts exist precisely to bridge the gap between a seller's forecast and a buyer's trailing numbers, and increasingly they're doing so over a longer period than they used to. Deal structure, not just headline price, is what actually determines whether, and how quickly, a transaction pays out in full.
I'm seeing exactly this tension play out in live conversations at the moment: sellers pointing to a strong forward forecast, buyers anchoring firmly to trailing, proven earnings.
Q2 2026 was a quarter of contrasts: headline values dipped from an unusually strong Q1, but confidence, deal value and pricing discipline all kept improving underneath. My read: this is a market that rewards patience and preparation, not one to fear.
What I'm seeing directly backs that up. Advisers are recommending tighter buyer lists over broad auctions, PE is underwriting to longer hold periods and lower returns, and earnouts are running longer to bridge the gap between sellers' forecasts and buyers' trailing numbers. None of that says don't sell. It says get ready properly before you do.
Technology with AI genuinely embedded, healthcare, energy and recurring-revenue services are commanding premium interest. Generalist consumer and legacy software are not. Knowing which side of that line you're on, and what to do about it before you go to market, matters as much as timing right now.
As always, get in touch if you'd like to talk through what this means for your business, whether that's an exit, growth capital, or succession planning.
Charlotte
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