Add-on deals in the technology and media sector helped to drive a recovery in private equity M&A activity during the second quarter of the year, although dealmaking remained down compared to the same period last year.
According to an analysis of Pitchbook data by audit, tax and consulting firm RSM UK, UK private equity buyouts increased by 3 per cent from 317 in Q1 2025 to 327 in Q2 2025. While the recovery may appear slight, it comes after activity fell 32 per cent in Q1 2025.
While all industries saw a drop in PE dealmaking during Q1, figures from Q2 show that the technology and media sector has been among the first to rebound, with PE deals up by 34 per cent, from 56 in Q1 to 75 in Q2. There was also growth in the consumer industry, where deal activity rose 12 per cent from 47 to 51.
Much of this recovery was generated by a rise in add-on activity. Add-on deals in the technology and media sector rose 54 per cent from 41 transactions in the first quarter to 63 in the second. In the consumer sector, meanwhile, add-ons were up 40 per cent from 25 to 35.
The two sectors also played a leading role in growing UK corporate deals, which rose from 601 in Q1 to 620 in Q2. Corporate tech and media industry deals increased 10 per cent from 96 in the first quarter to 114 in the second, while corporate deals in the consumer industry were up 17 per cent from 154 to 180.
RSM UK Private Equity Analyst and Financial Modelling Lead for PE Salik Chaturbhai said that it was “positive” to see rising PE deal activity following “a slower than expected start to the year.”
He continued: “PE is feeling the strain across several fronts, with pressure points not only in deal activity but also fundraising and portfolio performance. That said, there remains plenty of opportunity for firms that are proactive with strategic add-ons and value creation strategies.”
Chaturbhai described the technology and media sector as being “ahead of the game” in its recovery from Q1’s dip, adding that solid dealmaking in the consumer industry was “encouraging to see”.
However, there were still indications of the challenging environment that UK dealmakers continue to face. Despite rising from Q1, private equity deals remained down 16 per cent compared to the 391 transactions completed in Q2 2024. Venture capital deals also fell 27 per cent in the second quarter, dropping from 461 in Q1 2025 to 337.
RSM’s Head of Private Equity Stuart Clowser said that the UK’s challenging M&A market appears to be “here to stay”, but added that “this creates space for well-prepared firms to step in and add value.”
Clowser said that RSM expects much of 2025’s M&A volume growth to occur during the second half of the year, but that this would require private equity firms to “adapt, focusing on industry experience and embracing technology to deal with risks appropriately.”
He continued: “It’s imperative that investment teams possess deeper industry knowledge, including having a strong understanding of sector-specific risks and the most appropriate strategies, so they are best placed to support growth.”
Find out more about why add-on and mid-market acquisitions will be crucial to a recovery in private equity dealmaking
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