More measured pace despite cautious optimism

The M&A market in Wales has seen a slowdown in pace in 2025, reflective of wider trends across the rest of the UK. However, there is now a sense of cautious optimism as we move through the second half of 2025 and Wales continues to punch above its weight with a number of high-quality businesses here across a diverse range of sectors.

The volume of transactions is down when compared with H1 2024, again reflecting a wider UK trend. 116 transactions were completed at a disclosed value of £506 million compared with 142 at a value of £2.7 billion in 2024. We did see an increase in Q2 and we would expect that trend to increase throughout the remainder of the year.

Wales has seen some notable transactions in recent times, such as the acquisition of Zip World by Dolphin Capital, valuing the company at £100 million. This provided an exit for LDC, having first invested in the business in 2018. Zip World has now grown to 4 sites in Wales (with 2 in England) and is helping drive tourism to the area and now employing over 200 people.

Sports, tourism and leisure is a major player in the Welsh economy, and another landmark deal saw Welsh Fire, the Welsh-based cricket franchise, attract investment from Sanjay Govil, a US tech entrepreneur. This will support the Welsh Fire team as it looks to become a key player in the Hundred competition but will also allow Glamorgan County Cricket Club to invest in the foundations of the County and elevate them to the forefront of cricket in the UK.

Wales is a diverse region but has always had a significant manufacturing presence. It tends to lead in deal volume compared to other sectors, while healthcare and IT services, particularly digital transformation have also been popular.

We expect to see those sectors continue to be attractive, while TIC (testing, inspection and control) has also seen robust growth in the last 5 years alongside professional services. Given the amount of private equity entering both the accounting and legal professions, we expect to see further consolidation in the region as founders and partners plan for succession, and Wales will be an attractive region given the number of quality professional advisory firms.

One key theme has been the ‘softening’ of valuations in 2025. Market leading assets will still command high valuations, but we have seen the market multiples dip, and there is a need for sellers to realign their expectations in order to make a deal happen.  

While global uncertainty continues to have an impact, Wales remains an attractive destination for strategic investment. Private equity firms are grappling with excess liquidity and are actively seeking quality assets to deploy capital. This bodes well for Welsh businesses with strong fundamentals and growth potential.

Inward investment across the UK rose by 11% in Q1 2025, led by global bidders targeting sectors such as real estate, healthcare and energy. Wales, with its growing innovation hubs and strategic location, is well-positioned to benefit from this trend.

Looking ahead, the Welsh M&A market is expected to maintain a steady, if more measured, pace. The recalibration seen so far in 2025 may pave the way for more sustainable and strategically aligned transactions. As valuation gaps narrow and financing conditions stabilize, there is likely to be a renewed confidence in the market.

The emphasis will be on quality over quantity, with a focus on strategic fit, operational synergies, and long-term value creation.

Wales’ M&A market in 2025 is not defined by volume but by its adaptability, strategic focus and resilience. As businesses and investors reassess priorities, Wales will look to seize opportunities in a changing economic landscape. For sellers, the focus should be on preparation for sale to ensure they can maximise proceeds and achieve the best deal.

*Source: Mergers and Acquisitions Review: H1 2025 – Experian UK