M&A gains momentum as businesses seek growth through strategic acquisitions
Mergers and acquisitions (M&A) remain a key priority for UK lower mid-market businesses, according to new figures.
Some 22% identifying it as one of their top three core growth strategies over the next three years, according to new research from business advisory group Dow Schofield Watts.
The UK Growth Census, which surveyed 500 businesses with annual turnover between £10m and £150m, highlights a clear appetite for dealmaking, with 19% of firms pursuing acquisitions to expand market share, 18% looking to diversify products or services and 17% aiming to acquire new talent and capabilities.
However, businesses face significant challenges in executing deals. Competition for high-quality acquisition targets is the most frequently cited barrier, with 37% of firms struggling to identify suitable opportunities – rising to 48% for larger companies with 500 or more employees.
Securing financing remains another key hurdle, particularly for businesses in the £100m-£150m turnover range, where 39% cite access to funding as a primary concern. Other critical challenges include valuation and price negotiations (32%), post-merger integration (32%), and navigating regulatory and legal hurdles (30%).
International expansion is also increasingly on the radar, with 29% of businesses prioritising cross-border growth strategies. M&A plays a pivotal role in this, as 15% of firms cite entering new geographic markets as their primary motivation for dealmaking. More broadly, 33% of businesses say international trade and collaboration – whether through exports, joint ventures, or M&A – is already a core focus, while 46% see it as a growing priority.
Harry Walker, corporate finance partner at Dow Schofield Watts, said: “The M&A landscape is evolving, and businesses are recognising that strategic acquisitions offer a powerful means of accelerating growth. With increased competition, rising valuations, and the complexities of post-merger integration, success requires a clear plan. Businesses that approach M&A with a well-defined strategy – balancing ambition with careful execution – are the ones best positioned to create long-term value.”
Beyond M&A, businesses are investing in multiple avenues to drive long-term success. Digital transformation (41%) is the most widely cited strategic priority, while improving customer experience (37%) and new product development (32%) are also high on the agenda. With businesses facing an uncertain economic landscape, many are balancing growth ambitions with strategic cost-cutting (29%) and efforts to strengthen supply chain resilience (25%).
