Every year, the LAVA team gives us a sneak preview of what they think the year ahead holds for the M&A industry, and every year, we hold them to it!
So read on to find out how their 2025 predictions played out…
Hamish thought greater political and tax clarity would give the M&A market some much-needed stability, helping deals get done and potentially easing borrowing costs.In reality, while UK dealmaking showed resilience and some late-year strength in valuations and activity, the late budget meant volumes were flatter and selective rather than booming, and economic headwinds meant growthwasn't as smooth as hoped. Overall, the environment was steadier than 2024 butnot quite the strong, broad uplift we might have hoped for.
Simon predicted a cautious year, with good deals for nimble companies and due diligence becoming the norm. That very much rang true: deal timelines stayed long and corporates and private equity were selective, with reduced volumes in many sectors in H1 2025 and a focus on quality transactions rather than quantity. His call on opportunities for agile players was spot-on.
Tom expected a continued cautious rebound, with strategic acquisitionsplaying outinprofessional servicesand aerospace/defence. The broader picture of 2025 shows mixed performance with some pockets of strength,especially in tech and strategic sectors globally,butoverall UK M&A volumes lagged compared with 2024. Strategic deals did persevere, though perhaps not at the scale many hoped.
Loïc was upbeat on mid-market momentum, improved borrowing conditions, and tech/AI deals driving activity. Mid-market and tech deals did see interest, and private equity activity surged in parts of the year, but borrowing conditions and volumes remained mixed and uneven, with overall UK market numbers softish. Loïc's themes showed real movement, even if the pace was more measured than predicted.
Felixanticipated political spillover effects on markets, renewed private equity pressure for exits, and a buyer-friendly tilt in valuations. The political backdrop certainly influenced confidence and deal timing, and private equity was active with exits and strategic plays; valuations did fluctuate and buyers had leverage in many negotiations. His macro picturelargely held up even if the scalewasn't dramatic.
Joe forecast increased public-sector and ESG-linked deals. Those themes were present, ESG considerations and public infrastructure interest stayed important, but broader market caution meant such deals were part of a mixed overall picture rather than a runaway trend.So his focus areas were valid, just not dominant across the whole market.
Millie called a shift towards private equity portfolio reviews,divestments and carve-outs. That turned out well for parts of the market: PE houses did take stock and count deals where they could, particularly in Q3 with strong private equity values and exits, aligning with her sense of a more strategic and selective PE playbook in 2025.
Ivo expected a continued uptick in activity and more PE exits later in the year. Indeed, while early 2025 was subdued, deal values and activity picked up in parts of the year and private equity played its part, so his sense of momentum building was reflected in the data, even if the overall picturewasn't a simple up-trend.
Ary predicted stabilisation in rates and capital cost, leading to better quality opportunities and interest in niche services. The Bank of England did cut rates late in the year, and appetite for specialised, people-led sectors did surface, which matches his view of a more discerning, quality-focused market rather than a broad boom.
Cannelle expected resilient growth, with tech/AI, healthcare and renewables drawing attention. Tech and AI deals were indeed prominent themes globally, and those sub-sectors remained active points of interest in 2025, even as the wider macro environment kept activity uneven, so her sector focus was nicely aligned with real trends.
Stay tuned for the team's 2026 predictions coming soon!
And in the mean time,