Deals across the industry

The professional and business services industry is diverse, comprising various subsectors. Throughout 2024, M&A activity within the industry was generally strong, with the industry’s appeal stemming from the broader economic trend towards outsourcing specialist functions. Technology-enabled businesses that provide service efficiencies to enable customers to focus on core activities have been, and continue to be, particularly attractive to buyers. We have seen activity from both corporate and private equity buyers throughout the year, with the latter focused on both platforms and buy-and-build strategies.

Professional and business services outlook for 2025

Overall, the UK M&A landscape in the industry for 2025 is set to be robust, with opportunities for growth and innovation. Companies that can effectively navigate the challenges and leverage the trends will be well-positioned for success. We expect that:

Rising employment taxes and high employee costs will challenge the industry. Niche market businesses may choose to pass costs to customers, while others will review operational strategies, resulting in businesses embarking on transformation programs to enhance efficiencies and reduce staff costs.
Enhancing digital capabilities will be crucial to stay competitive. Companies will seek acquisitions in accounting, lawtech, AI, cyber security, and data analytics to stay ahead of the competition and meet client demands. Recruitment businesses are likely to diversify and evolve their service portfolios through acquisitions to meet changing customer needs.
Private equity will continue to target growth-oriented, resilient companies like legal and accountancy firms. With the industry, highlighted in the government’s “Invest 2035” strategy, we may see consolidation to promote regional strengths or enable expansion into global markets to enhance international reach.