UK M&A Activity Q3 Report (2024)

UK deal activity in Q3 2024 has shown signs of recovery, with quarterly deal volumes and values trending upwards after 3 consecutive quarters of decline.

Rickitt Mitchell’s market analysis (powered by Pitchbook) shows deal value* increased to £72.4bn in Q3 24 from £59.1bn in Q3 23, an increase of 22%. Q3 24 deal count also increased 13% year over year.

Private Equity activity registered a 35% increase in deal count compared to Q3 23 – continuing the strong positive trend. Deal count for the first three quarters of 2024 is up 13% compared to the same period last year.

*Based on disclosed deal values only

Corporate M&A activity has slowed slightly from Q2, decreasing 10% in deal value and 11% in deal count. However, corporate M&A deal value in Q3 has increased 53% compared to Q3 23, and deal count has increased 15% year over year.

Despite a strong Q2, VC deals continued their steep downward trend in 2024, registering a 49% drop in overall deal value Q3 compared to Q3 2023. Q3 24 VC deal count is also down 35% compared to Q3 23.

Overall year to date deal volume for 2024 as whole has increased 4.5% from 2023 levels, and deal value has increased significantly 46.4% to £231.3bn from £158.0bn.

Sector Trends

Q3 deal volume was down across all sectors compared to Q2, however the healthcare sector registered a increase of 350% in deal value in Q3 compared to Q2. This significant increase is partly driven by Merck & Co.’s £3bn acquisition of EyeBio.

Over the last year Healthcare deal activity has proved resilient, with deal values increasing by 14% (£8.2bn Q3 24) whilst volume dropped by 14%.

TMT deal activity has slowed following a strong 2023, with deal value in Q3 decreasing by 53% on a yearly basis. TMT deal volume decreased by a more modest 17% compared to Q3 23.

Kaine Smith, Partner

‘The modest growth in deal volumes and values in Q3 predominantly reflects a slow but steady return to form for Private Equity, with ever growing pressure to deploy record levels of ‘dry powder’ a consistent backdrop.

PE’s desire to invest, however, is still being stifled by a mismatch between the number of prospective investors vs the number of investable businesses available, nervousness over the macro backdrop and a clear trend to much deeper, more measured and wide-ranging diligence processes.

Deals are happening but continue to take longer to deliver. Thorough seller preparation has been more important than ever to ensure deals can be driven over the line.

Predictions for Q4? A busy October! The scramble to complete transactions pre the 30th October budget in anticipation of a rise in capital gains tax will lead to a huge spike in activity. We expect activity levels close to the record levels last seen in 2021 – watch this space.’

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