M&A activity in the UK’s recruitment sector increased by nearly a third in the first three quarters of 2025, as strategic and private equity-backed trade buyers drove strong dealmaking in the face of ongoing economic challenges.
According to a new report from RSM, there were 58 UK recruitment-related transactions during the first three quarters of 2025, up by 32 per cent compared to the same period of 2024 (44 deals), and putting the year well on course to beat 2024’s full-year total of 63 completed deals.
Deal activity did dip slightly during Q3, dropping to 17 deals compared to the H1 average of 20, but this still remained ahead of figures seen in 2024 (15 deals in Q3), demonstrating the resilience of M&A despite continuing macroeconomic pressures.
Private equity-related activity accounted for slightly over a third of Q3’s dealmaking, primarily in the form of bolt-on deals for existing portfolio businesses. While private equity firms have been highly selective in making new platform deals, PE-backed companies have continued to target add-on deals in an effort to boost scale and capability, with RSM linking these efforts to a challenging backdrop for organic growth.
During Q3 and in the year-to-date, trade activity has continued to outstrip private equity dealmaking. According to RSM, trade buyers have been motivated by the need to broaden their sector coverage and access new markets as they seek to overcome challenging conditions.
Trade deals accounted for 41 per cent of Q3 deals, compared to 35 per cent for private equity (12 per cent primary deals, 23 per cent bolt-ons). In the year-to-date, trade deals made up 47 per cent of the total, compared to 40 per cent for private equity (12 per cent primary, 28 per cent bolt-ons).
RSM report that, while new platform activity from private equity firms has remained selective throughout the year, such deals have largely focused on businesses with global reach, firms with a deep niche and businesses with either a tech platform or tech-enabled business model.
Reflecting this, the report found that tech-led recruitment platforms remained the leading segment overall during the first three quarters of the year (22 per cent of deals). Other prominent verticals during the year-to-date included engineering, construction and industrial (12 per cent), technology (12 per cent), multi-sector (10 per cent), healthcare and life sciences (9 per cent), education (9 per cent) and professional services (9 per cent).
Other RSM findings from Q3 included a softening of interest in UK recruitment companies from overseas buyers, with just two inbound transactions during Q3, down from seven in Q2. UK activity overseas also dropped, with only one transaction during the quarter, compared to seven in Q2.
Meanwhile, interest in management buyouts (MBOs) as an exit route remained noticeable, with three MBOs during Q3, reflecting a continuation of a steady trend seen during the first half of the year.
Summing up the state of recruitment M&A during the first three quarters of 2025, RSM state that the sector remains resilient despite persistent trading challenges, with strategic and PE-backed buyers the key drivers.
According to the firm, valuation expectation gaps between buyers and sellers appear to have narrowed since the post-pandemic dealmaking boom, with buyers “increasingly preparing for future exits” and revenues and EBITDA forecast to improve.
Find out more about private equity M&A trends in 2025
Technology, media and telecommunications has been one of 2025's most active sectors for dealmaking
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