Activity slow in logistics sector, but M&A appetite remains high

The UK’s logistics industry has continued to see stable levels of dealmaking activity so far in 2025, despite significant economic headwinds.

While dealmaking has been challenging, M&A appetite remains strong, driven by overseas interest, private investment and an ongoing need for trade buyers to increase efficiencies and expand their operations and service offerings.

According to recent figures from BDO’s UK M&A update, there were 18 deals in the UK logistics sector between January and March 2025, a marginal fall compared to the deal volume seen during Q4 2024 (19 deals).

A large majority of these transactions (94 per cent) were trade acquisitions carried out either by independent logistics businesses or firms backed by private equity investment, with buyers focusing on strategic consolidation.

Notable transactions during the first quarter of the year included FreightForce Distribution's acquisition of MA & HV Medler, Gregory Distribution’s takeover of John Mitchell Haulage and OnPoint Group’s acquisition of Eric Elliot Transport.

Other trends highlighted in the report include strong cross-border activity, with deals involving overseas buyers accounting for more than a quarter (28 per cent) of the total, and tech-related deals, which made up 17 per cent of the total. There was particularly strong interest in tech-related deals among venture capital investors and PE-backed trade buyers.

Significant tech-focused deals included the acquisition of customs declaration automation platform Flytta by Insight Partners portfolio company Sedna Communications and the takeover of fleet monitoring tech firm RAM Tracking by Capvest-backed Kerridge Commercial Systems.

Discussing the difficulties facing dealmakers in the UK logistics sector, BDO Deal Advisory Partner, M&A, Jason Whitworth said:

"Continued economic uncertainty means businesses are navigating a complex landscape marked by many challenges.”

"Today, the sector faces significant hurdles, grappling with increased costs, regulatory changes, and disrupted supply chains. All of this is further heightened by the unpredictability around the implementation of the US Administration's tariff policy and the potential impact of retaliatory tariffs. This is creating instability in global trade and the international supply chains serviced by UK logistics.”

Whitworth added that the “uncertainty and volatility” facing the sector was making it difficult for prospective buyers to “forecast and value opportunities”. As a result, many will find it challenging to do deal “at an acceptable valuation” until there is greater economic clarity.

"However,” Whitworth continued, “despite all the challenges, deals are happening with the focus on strategic consolidation to drive growth and efficiencies in expansion of operations and service offerings. This is evident in continued interest from international investors and investment in tech-enablement."

Members can read this exclusive insight: From logistics to manufacturing and warehousing to packaging, tech and automation are transforming both work and M&A strategies.

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