Mid-market bolt-on acquisition activity across UK private equity and venture capital-backed platforms fell sharply in 2025 following a record year in 2024, according to new research from UK law firm Stevens & Bolton.
The analysis shows that the number of add-on acquisitions completed by the 45 most active serial acquirers in the UK declined by 61% year-on-year, dropping from a peak of 114 deals in 2024 to significantly lower volumes in 2025.
Despite the overall downturn, buy-and-build deal activity remained concentrated in a small number of resilient sectors. Business services accounted for 36% of transactions in 2025, followed by financial services and consulting, each representing 16% of total deals. Insurance and education, which had been strong contributors in prior years, saw pronounced declines of 85% and 71% respectively, while technology bolt-ons fell by 80%.
Researchers noted that the slowdown followed a period of heightened activity in 2024, when deal volumes reached their highest level over the five-year review period. That surge was driven by sustained appetite for consolidation in fragmented sectors such as business services and insurance, which continue to attract private equity interest due to recurring revenues and defensive market characteristics.
Stevens & Bolton believes that the 2025 decline was influenced by a combination of macroeconomic and political uncertainty, alongside a natural pause in transaction activity following an unusually active prior year. The firm also pointed to a shift in focus among portfolio companies towards integrating earlier acquisitions rather than pursuing further expansion.
Joe Bedford, head of corporate at Stevens & Bolton, said the reduction in activity should not be interpreted as a structural shift away from buy-and-build strategies.
“The fall in bolt-on activity last year was sharp but doesn’t suggest that private equity or venture capital has fallen out of love with buy and build, which will still remain a naturally favoured strategy and significant driver of UK M&A activity,” he said.
He added that dealmaking typically reflects broader economic sentiment and that periods of uncertainty often delay transactions rather than eliminate them. Bedford pointed to geopolitical developments and domestic policy changes as key contributors to the slowdown, while noting that elevated activity in 2024 may also have drawn forward deal flow.
Jonathan Steele, corporate partner at the firm, said sector-specific trends were also shaping activity levels, particularly in technology, where investor attention has increasingly shifted towards artificial intelligence rather than traditional platform expansion.
“The AI bubble is dominating the market and, inevitably, PE is focused on tactical and strategic long-term investment in future technologies,” he said.
Steele added that the pause in acquisition activity may reflect a broader consolidation phase, as private equity firms focus on integrating assets acquired during the previous cycle before potentially returning to more aggressive expansion strategies.
Despite the 2025 slowdown, the report suggests underlying conditions for buy-and-build remain intact, with firms continuing to deploy capital selectively across established sectors and maintaining significant dry powder for future deployment.
Looking ahead, Stevens & Bolton believes that improved confidence or a more stable macroeconomic backdrop could support a rebound in activity during 2026, potentially restoring deal volumes to pre-2024 levels or higher following the temporary contraction.
