The UK mid-market is experiencing a positive shift in 2025, with improved deal performance and greater professional support available to business owners navigating the M&A sector.

The M&A sector is now in a stronger position than in previous years, following economic decline caused by Brexit and the global pandemic - bringing significant knock-on effects and challenges for UK businesses.

Fast forward to current times, the sector has adapted and learned from the past, resulting in stronger support for business owners navigating M&A deal execution. UK business owners are now seeing the benefits of a stronger M&A sector shaped by opportunity, effective alignment and evolving valuation benchmarks.

Dealmaking in the M&A sector is proving to be more promising and disciplined compared to 2024, with 2025 demonstrating a time where UK sellers have greater clarity on their business’s value and worth. Along with this, business owners have more exposure to various advantageous opportunities to increase their business value and enhance their future success.

In this article, we explore key M&A UK valuation mid-market trends, based on research conducted by DealSuite, and why valuation size matters for your business's growth. We will also explore what pitfalls to avoid when preparing for a sale and the strategic moves you can make to maximise business valuation, along with how GS Verde Group supports businesses with clarity and confidence when navigating the M&A valuation process.

UK M&A 2025 Valuation Trends and What the Data Reveals

According to an M&A Monitor report, published by Dealsuite in February 2025, the average enterprise value/EBITDA multiple across the M&A mid-market in the UK and Ireland increased from 5.2x in H1 2024 to 5.35x in H2 2024. This data shows clear momentum for M&A businesses in 2025 - especially for businesses that are well-prepared and high-performing in the sector.

The report highlights the highest average multiples are seen in sectors such as:

• IT Services: 7.9x
• Software Development: 8.2x
• Healthcare & Pharmaceuticals: 7.9x

Other sectors such as retail, construction and wholesale are still seeing lower multiples in comparison, typically ranging from 3.5x to 3.8x according to the Dealsuite report.

This research demonstrates key trends including:

• High profitability
• The importance of a thorough business model
• Scalability opportunities for UK businesses operating in competitive, lower-margin sectors

As a result, we are seeing more UK business owners approaching deals with thorough preparation, careful caution and a willingness to invest in future-proofed businesses with scalability opportunities.

Why the Size of Multiples Matters to Buyers

One of the current themes in the M&A environment is the view that the size of a company and its value matter when it comes to long-term success.

Based on Dealsuite’s findings, it’s clear there’s a continued perception of “size premium” - where larger companies are viewed to command higher valuation multiples and are less risky compared to smaller companies.

Valuation multiples increase significantly with EBITDA sizes when it comes to small and large businesses:

• EBITDA £200k = Multiple of 3.3x
• EBITDA £1m = Multiple of 5.1x
• EBITDA £5m = Multiple of 7.0x
• EBITDA £10m = Multiple of 8.4x

There are many reasons for this, including:

• Resilience and diversification: Where larger businesses have stronger infrastructures, customer bases and supplier connections.
• Scalability: Having a larger EBITDA will showcase a business as being a valuable platform for growth and expansion.
• Professional governance: Larger businesses often have stronger management teams and due diligence preparation.
• Buyer accessibility: Having higher EBITDA multiples compared to smaller businesses provides larger businesses with more investment opportunities.

The higher the size of a business’s valuation, the more growth opportunities become available for business owners. Access to a wider pool of potential buyers and investors boosts confidence, especially when supported by predictable, high returns.

Achieving high valuation figures as a larger company stems from early preparation and conducting thorough due diligence ahead of a sale. This helps:

• Reduce risk
• Become more appealing in the eyes of investors
• Strengthen a business’s position in a competitive market

How to Boost Valuation While Avoiding Common Pitfalls

From the research conducted by Dealsuite in its M&A Monitor report, 54% of advisors put sellers having an unrealistic expectation of valuations as a main reason for business deal failure.

It is crucial for sellers to go into a sale without overestimating their business’s value but instead conduct thorough due diligence to get an accurate reading for serious buyers looking to invest.

As a business owner, there are various factors you need to avoid producing an inaccurate valuation figure ahead of a sale. This includes:

• Guessing your business’s valuation
• Producing unclear and inconsistent financials
• Relying heavily on key individuals for essential financial and business knowledge
• Having a weak cash flow or large amounts of pre-existing debts
• Entering the valuation stage of a deal with unidentified risks

Presenting clear and accurate financials and a strategy for future growth is key when selling your business, and there are various ways to boost your value figures with clarity and confidence for a successful exit:

Key ways to enhance your valuation in 2025 include:

• Building predictable revenues: This can range from subscription models and contracted services to long-term customer agreements to boost investor confidence
• Enhancing margin profile: By focusing on higher-margin services within your business, buyers will see potential for greater profitability
• Strengthening business management: Having a strong management team within your business reduces the risk of dependency
• A clean finance record: A well-structured business with minimal debt is key to attracting investors and streamlining the valuation process
• Having a scalable growth strategy: Preparing and carving out a route for business growth is essential when preparing for a sale, especially when attracting investors

How GS Verde Group Supports M&A Valuation

At GS Verde Group, we understand the importance of having an accurate valuation figure when preparing for a sale. We know that valuations are not just a number, but a clear representation of how a strong business pre-sale strategy can lead to a successful future for your business.

That’s why we help business owners enter M&A deals with confidence and at their best level. With a strong ‘One Team’ approach, our integrated and multi-discipline team of legal, finance, tax and accountancy experts working seamlessly together to support clients with:

• Accurate business valuation through real-time data and market benchmarking
• Enhancing investor appeal through preparation and accurate storytelling
• Creating structure and efficiency regarding tax, finance, legal and operations
• Maximising valuation and mitigating risk through an effective deal strategy

Expert Advice from GS Verde Group

At GS Verde Group, we understand that accurate and early preparation ahead of a business sale is the key to success. We know that the earlier you start preparing for your sale, the more opportunities there are for you to optimise your business’s valuation – and we are here to help.

With 2025 demonstrating a time of strong appetite for buyers across all sectors, now is the time to consider valuable opportunities for your business.

Whether you’re planning on selling this year, or exploring options for the future, we are here to help navigate you through the valuation process and make sure you exit on your terms - at the right value.