The latest Office for National Statistics (ONS) figures analysing UK M&A activity for Q2 (April-June) of this year show a meaningful pick up with 501 domestic and cross border deals, up from a (revised) 412 in Q1 (+21%). Activity was front loaded in April (216 deals) before easing in May (138) and June (147).

The Headline That Matters For SMEs

• Domestic UK to UK deals - the heartbeat of the SME market - rose to 228 transactions in Q2 (from 147 in Q1) while deal value edged up to £3.4bn (from £2.8bn). That combination (more deals, modest value increase) is consistent with more sub £100m ‘owner managed’ transactions getting over the line, which is good news for the SME.

• Inbound buyers (overseas acquirers of UK companies) completed 186 deals in Q2 (88 in April, 39 in May, 59 in June), but aggregate value fell to £9.3bn from £21.1bn in Q1. This is a clear sign that the big ticket end of the market cooled even though the number of deals was broadly the same as the 191 registered in Q1. Think more bolt ons, fewer blockbusters.

• Outbound UK buyers did 87 deals in Q2, with value down to £4bn versus £8bn in Q1 over 74 deals. This again points to good levels of activity, but with fewer very large cheques. One ONS caveat worth noting is that figures are provisional and typically revised (often upwards). So treat Q1/Q2 comparisons as directional rather than absolute.

Splitting the Signal: SME-Scale v Large-Cap Noise

The ONS doesn’t publish a strict SME cut by company size or deal value - their series captures transactions greater than £1m - but the pattern is telling: the sharp rise in the number of domestic deals alongside only a modest rise in total domestic value suggests a fatter middle of the market rather than a handful of outsized transactions. For owner managed businesses, that’s the environment you want, with more active buyers, pragmatic pricing, and processes being completed.

If You’re Thinking About Selling in the Next 6–18 Months…

1) The buyer universe is there, especially UK trade and PE backed platforms. With 228 domestic deals closing in Q2, it also suggests local acquirers are active. That’s supportive for SMEs that offer defensible niches, recurring revenue and strong cash conversion.

2) Expect sharper scrutiny rather than frothy pricing. The Bank of England’s Q2 business conditions point to tighter budget management and slower decision making among corporates. That translates into more questions in diligence, more focus on working capital and capex, and slightly longer timetables (but not a closed window).

3) Inbound interest hasn’t vanished; it’s just less ‘mega’. With 186 inbound deals but a lower overall inbound value, we’re seeing more bolt ons / add ons than transformational take privates. For SMEs with clear adjacency value (technology, capability, customer access), international buyers remain a real option.

4) Preparation will do more for price than waiting for the perfect quarter. In a market where counts are climbing but values aren’t running away, you win on readiness: clean financials, cohesive growth story, visibility on forward demand, and a credible plan for succession/hand over. This is how you capture competitive tension when buyers are choosier.

If you’re an SME owner considering a sale within the next 6–18 months, this is a constructive window to prepare and test buyer appetite rather than wait for precise cycle timing. A light, well structured market exploration now can validate valuation, surface the right buyers (UK and overseas), and set you up to execute swiftly when you decide to go.

If you’d like a confidential, no obligation view on buyer mapping, valuation drivers and timeline, drop me a message as I’m happy to help you make it happen with the facts (not the headlines).

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Jim Shaw is Founder & CEO of Shaw & Co.

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