A report from a wealth manager (Rathbones) finds that company sales in the UK reached their highest level for eight years. There were almost 6,000 company sales in 2025: roughly 70% more than in 2018. This means the typical company/business changed hands while still being small, with a median annual turnover of about £15 million at the point of sale.
This finding comes days before the Chancellor, John Healey, presents his first Budget on 28th October. Healey has said the Budget would be aimed at supporting determined entrepreneurs, and has promised to ease the financial burden on companies after recent rises in tax and employment regulation.
Analysis
The main figures shown above points to a gap in the UK economy: plenty of people launch companies (new company formation is running at around 100,000 more each year than before), but comparatively few are carried through to the stage where they employ thousands of employees. Rathbones’ view is that many owners still remain profitable but believe the extra effort and personal strain of business expansion are no longer worth it.
What does this mean for the sector?
- Tax announcements in the Budget could change when and how owners choose to sell, as some may accelerate or delay a deal depending on what is announced
- Pressure will build on policymakers and investors to improve later-stage company funding, so that ambitious companies have a realistic alternative to selling
- A reliable flow of new companies coming to market should underpin higher transaction volumes, especially for private equity buyers
How to use this in applications
Application
Private M&A teams would act for sellers and buyers on the sale itself. They would negotiate the share purchase agreement, including the warranties and indemnities that allocate risk after completion, and any deferred or performance-linked payments to the founder. Buyers’ advisers would investigate the target’s legal and financial position, while sellers’ advisers would control what is disclosed and when.
Private equity teams would advise funds buying founder-led companies and the managers taking part in buyouts. Their work covers how the deal is structured and financed, and how a founder who remains involved is rewarded.
Tax teams would help owners decide how and when to sell, in light of the Budget and any changes to the reliefs that currently reduce tax on a business disposal. They would also advise buyers on the tax cost of the acquisition and how best to structure it.
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