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Is M&A activity really picking up this year?

The short answer: yes, and we’re seeing it first-hand.

At SI, we’ve closed 14 deals already in 2025. That’s ahead of pace compared to recent years And with more signed heads and completions expected before the end of the year, the trendline is clear: M&A activity is building.

It’s not a feeding frenzy - but it’s definitely busy. Deals are taking time, diligence is still deep, and financing can be fussy. But there’s real intent from both sides. Buyers want in, and sellers are ready - often after a long pause in their exit plans.

So what’s changed? Well Liberation Day didn’t bring the level of economic disruption that many had forecast, partly due to significant dilution of Trump’s original proposals. And the accelerating disruption caused by new technologies and AI means that for most, M&A is not an option, it’s a necessity if they hope to remain competitive.

Small cap PE platform deals are competing with existing PE-backed groups

There’s growing heat at the smaller end of the private equity spectrum—and it’s coming from two directions at once.

On one side, PE funds are racing to establish new platforms in high-demand segments – usually sector or capability specialists. These aren’t mega-deals, they’re sub-£10m, founder-led businesses with clear growth stories. But the strategic intent is big: to build vertically focused groups that can scale quickly and credibly.

But on the other side, those same targets are also being chased by existing PE-backed groups that need to deliver on their own buy & build plans. They’re used to having rich pickings among these smaller assets, but are now having to compete with direct PE propositions that offer founders the opportunity de-risk and pursue their own growth strategies.

The result is that it’s a seller’s market at this level. Differentiated agencies with a clear proposition and clean numbers are seeing multiple bidders. And the competition is driving up prices, often to surprising levels.

Buyers want human + AI, not AI alone

The AI gold rush is real, but buyers are increasingly clear on what is and isn’t worth buying at its current stage of development.

What’s attracting premium interest at the moment isn’t the pure-AI business model, but agencies and consultancies that combine deep human expertise with intelligent AI use. Think AI-augmented creative teams, strategy that’s grounded in real-world brand nuance, and analytics functions that blend automation with human interpretation.

Buyers and investors are wary of propositions that lean too heavily on off-the-shelf AI with a thin layer of IP and little in the way of client stickiness. The question they’re asking is: can this model survive the next wave of change? And how easily can it be replicated by others?

The sweet spot is where AI enhances delivery, but the core value still rests on talent, insight, and trusted relationships. That’s where we’re seeing the sharpest M&A appetite right now.

For further market insights, get in touch with the SI Global team.