As I write this, Netflix have just announced their $72bn acquisition of Warner Bros, demonstrating that even in the maelstrom of Trump’s US, the inherent optimism that underpins any deal prevails.
In the UK it is lucky that the entrepreneurial spark is strong, for the lack of clarity and confidence surrounding the last two budgets and the sense that there are more brickbats to come for business and businesspeople, has undoubtedly created a backdrop of uncertainty. The budgets of 2024 and 2025 have both been characterised for HMT by a wave of deals in the preceding weeks as vendors sought to close out the risk of future tax hits.
Despite the fiscal backdrop to the UK deals environment however, the fundamental drivers for mid-market transactions remain consistent and strong.
In a very low growth economy, intelligent acquisitions remain a route for corporate buyers in the UK and overseas to deliver (or at least to promise) growth in revenues and margins. Private Equity and Private Credit funds remain buoyant and are actively seeking new investment opportunities. A trend for buy and build platforms has also created exit opportunities for smaller business vendors in such diverse and consolidating sectors as auto repair centres, accountancy firms, Managed Service Providers and building services.
At the same time, many business founders, having survived Brexit, Covid, Truss, War in Europe, Tariff uncertainty and now a business unfriendly Labour Government; have frankly had enough and with increases in the Business Asset Disposal Relief rate and the threat of aligning capital and income tax rates, are looking to the near term for their exit before anything else changes for the worse.
This creates a reasonable environment for mid-market deals in 2026 despite the gloom of economic commentators. On the ground there are good businesses whose shareholders want to sell and plenty of motivated buyers, corporate and institutional, who are looking to buy.
Overseas buyers have become more active in the UK Mid-market over the last couple of years with even US PE Funds actively targeting (and paying good prices for) strategic assets. Historically the mid-market would not have attracted these players. We have also seen the rise of the Search Fund, which is creating deal opportunities at the lower end of the market as privately backed individuals search for businesses where they can individually add value.
The reduction in Capital Gains Tax relief on the sale of a private business to an Employee-Owned Trust (EOT) is also likely to result in more businesses coming to the deals market. While tax relief on such a sale remains attractive at 50% (meaning at current CGT rates an effective tax rate of 12%), there are downsides to the resulting structure, particularly if there is any prospect of a subsequent sale of the trust shares. The reduction in the tax benefit and the increased regulation around how Trusts are administered might make the choice between EOT and commercial sale more marginal, particularly if exiting shareholders are entitled to BADR.
In terms of the sectors that will be the most active in 2026, it is difficult to see the wave of professional services deals subsiding. With more than 20 Private Equity backed accountancy and/or legal consolidation platforms in play in the UK, the competition for professional services assets is likely to drive significant activity into next year and as those platforms look for efficiencies and growth, it is likely to impact demand for relevant software solutions, digital capabilities and data analysis. Furthermore, the appetite and competition for human capital businesses is likely to spill over into other areas of the market such as recruitment, marketing services and specialist consultancies.
Business to Business software platforms, data science businesses and IT managed services are perennially attractive to private equity and consolidators alike with their recurring revenue profiles and scalability. As increasing numbers of investors specialise in these sectors, we can expect to see appetite and competition for businesses that define themselves under these headings. This will be particularly true in the Fintech and Insurance markets where significant scope remains for efficiency gains, and genuine use cases for Artificial Intelligence can expect to generate exciting multiples. This is not unrelated to the focus of PE on professional services where demonstrably there must be a revolution in the use of technology to deliver target returns.
Other sectors which are likely to see significant deal activity will, as ever, be influenced by the Government pound and where it is to be invested. We have seen an increased but very selective appetite for defence focussed businesses and continued interest in healthcare services and green energy, albeit that the ESG sector demands more investment cash than is available for it so there is a definite flight to quality and to proven, cash generating technology/services. It is also a detractor that the Government has shown itself willing to disrupt entire supply chains with a single change in policy such as the ECO4 grant regime.
Debt multiples have not changed much, and investors and corporates (as well as lenders) remain circumspect about leverage. We have seen the rise of the debt fund in recent years with highly priced debt instruments taking the place of equity in a range of transactions and these funds are now an established part of the mid-market, often willing to look at stable but lower growth businesses who are willing and able to service their interest rates but not able to deliver equity returns. Private Equity funds rarely look for more than 3-4x earnings as a debt strip and will always ensure that there can be no circumstances were control is ceded to a debt provider.
Start-ups and early-stage funding rounds remain challenging and the ecosystem for funding at this end of the market is woefully inefficient. Investors are seeking potential unicorns, knowing that the chances of finding one are slim. The costs of bringing a start-up product or service to market and scaling it are vast and for early-stage investors the risk of dilution, even in a successful investment, means that without the capacity to follow on, the rewards are capped.
For investors across the market the risk of losing a successful investment “too early” due to the constraints of their fund or the timing of a likely exit has led to a plethora of Continuation Funds, allowing investment managers to “recycle” their most exciting investments without losing control of them. This trend is likely to grow. It will be interesting to see if venture funds are able to build their own continuation capacity, which might increase the appetite for earlier stage investing.
Despite the increase in CGT rates for entrepreneurs, tax does not seem to be the focus for most would-be transactors. It is rare now to see the “Tax tail wag the commercial dog” other than (perhaps) in the popularity of EOTs. The tax code offers relatively little opportunity for meaningful tax planning, and most vendors are prepared to pay up. It is to be hoped that the Chancellor doesn’t mess around with Capital Gains Tax rates any further. Any threat of this is likely to drive another pre budget wave of deal closings.
All in all, the UK Mid-Market deal environment is one that has become used to black swan events and to dealing with them. These days, deals need to be well prepared for and will rarely be rushed. Due diligence is thorough and protracted, and risks are fully debated and allocated between buyer and seller. Multiples have declined from the heights of 2021 but remain buoyant where there is strategic value and/or competition for an asset. Despite inherent cautiousness, the market is packed with willing buyers and sellers and we expect another active year in 2026.
As I write this, Netflix have just announced their $72bn acquisition of Warner Bros, demonstrating that even in the maelstrom of Trump’s US, the inherent optimism that underpins any deal prevails.
In the UK it is lucky that the entrepreneurial spark is strong, for the lack of clarity and confidence surrounding the last two budgets and the sense that there are more brickbats to come for business and businesspeople, has undoubtedly created a backdrop of uncertainty. The budgets of 2024 and 2025 have both been characterised for HMT by a wave of deals in the preceding weeks as vendors sought to close out the risk of future tax hits.
Despite the fiscal backdrop to the UK deals environment however, the fundamental drivers for mid-market transactions remain consistent and strong.
In a very low growth economy, intelligent acquisitions remain a route for corporate buyers in the UK and overseas to deliver (or at least to promise) growth in revenues and margins. Private Equity and Private Credit funds remain buoyant and are actively seeking new investment opportunities. A trend for buy and build platforms has also created exit opportunities for smaller business vendors in such diverse and consolidating sectors as auto repair centres, accountancy firms, Managed Service Providers and building services.
At the same time, many business founders, having survived Brexit, Covid, Truss, War in Europe, Tariff uncertainty and now a business unfriendly Labour Government; have frankly had enough and with increases in the Business Asset Disposal Relief rate and the threat of aligning capital and income tax rates, are looking to the near term for their exit before anything else changes for the worse.
This creates a reasonable environment for mid-market deals in 2026 despite the gloom of economic commentators. On the ground there are good businesses whose shareholders want to sell and plenty of motivated buyers, corporate and institutional, who are looking to buy.
Overseas buyers have become more active in the UK Mid-market over the last couple of years with even US PE Funds actively targeting (and paying good prices for) strategic assets. Historically the mid-market would not have attracted these players. We have also seen the rise of the Search Fund, which is creating deal opportunities at the lower end of the market as privately backed individuals search for businesses where they can individually add value.
The reduction in Capital Gains Tax relief on the sale of a private business to an Employee-Owned Trust (EOT) is also likely to result in more businesses coming to the deals market. While tax relief on such a sale remains attractive at 50% (meaning at current CGT rates an effective tax rate of 12%), there are downsides to the resulting structure, particularly if there is any prospect of a subsequent sale of the trust shares. The reduction in the tax benefit and the increased regulation around how Trusts are administered might make the choice between EOT and commercial sale more marginal, particularly if exiting shareholders are entitled to BADR.
In terms of the sectors that will be the most active in 2026, it is difficult to see the wave of professional services deals subsiding. With more than 20 Private Equity backed accountancy and/or legal consolidation platforms in play in the UK, the competition for professional services assets is likely to drive significant activity into next year and as those platforms look for efficiencies and growth, it is likely to impact demand for relevant software solutions, digital capabilities and data analysis. Furthermore, the appetite and competition for human capital businesses is likely to spill over into other areas of the market such as recruitment, marketing services and specialist consultancies.
Business to Business software platforms, data science businesses and IT managed services are perennially attractive to private equity and consolidators alike with their recurring revenue profiles and scalability. As increasing numbers of investors specialise in these sectors, we can expect to see appetite and competition for businesses that define themselves under these headings. This will be particularly true in the Fintech and Insurance markets where significant scope remains for efficiency gains, and genuine use cases for Artificial Intelligence can expect to generate exciting multiples. This is not unrelated to the focus of PE on professional services where demonstrably there must be a revolution in the use of technology to deliver target returns.
Other sectors which are likely to see significant deal activity will, as ever, be influenced by the Government pound and where it is to be invested. We have seen an increased but very selective appetite for defence focussed businesses and continued interest in healthcare services and green energy, albeit that the ESG sector demands more investment cash than is available for it so there is a definite flight to quality and to proven, cash generating technology/services. It is also a detractor that the Government has shown itself willing to disrupt entire supply chains with a single change in policy such as the ECO4 grant regime.
Debt multiples have not changed much, and investors and corporates (as well as lenders) remain circumspect about leverage. We have seen the rise of the debt fund in recent years with highly priced debt instruments taking the place of equity in a range of transactions and these funds are now an established part of the mid-market, often willing to look at stable but lower growth businesses who are willing and able to service their interest rates but not able to deliver equity returns. Private Equity funds rarely look for more than 3-4x earnings as a debt strip and will always ensure that there can be no circumstances were control is ceded to a debt provider.
Start-ups and early-stage funding rounds remain challenging and the ecosystem for funding at this end of the market is woefully inefficient. Investors are seeking potential unicorns, knowing that the chances of finding one are slim. The costs of bringing a start-up product or service to market and scaling it are vast and for early-stage investors the risk of dilution, even in a successful investment, means that without the capacity to follow on, the rewards are capped.
For investors across the market the risk of losing a successful investment “too early” due to the constraints of their fund or the timing of a likely exit has led to a plethora of Continuation Funds, allowing investment managers to “recycle” their most exciting investments without losing control of them. This trend is likely to grow. It will be interesting to see if venture funds are able to build their own continuation capacity, which might increase the appetite for earlier stage investing.
Despite the increase in CGT rates for entrepreneurs, tax does not seem to be the focus for most would-be transactors. It is rare now to see the “Tax tail wag the commercial dog” other than (perhaps) in the popularity of EOTs. The tax code offers relatively little opportunity for meaningful tax planning, and most vendors are prepared to pay up. It is to be hoped that the Chancellor doesn’t mess around with Capital Gains Tax rates any further. Any threat of this is likely to drive another pre budget wave of deal closings.
All in all, the UK Mid-Market deal environment is one that has become used to black swan events and to dealing with them. These days, deals need to be well prepared for and will rarely be rushed. Due diligence is thorough and protracted, and risks are fully debated and allocated between buyer and seller. Multiples have declined from the heights of 2021 but remain buoyant where there is strategic value and/or competition for an asset. Despite inherent cautiousness, the market is packed with willing buyers and sellers and we expect another active year in 2026.
The UK’s Corporate Hospitality Market : A Brief Overview
The term “corporate hospitality” refers to the practice of a business entertaining clients, potential leads, employees or other stakeholders in order to strengthen relationships, reward employees and create commercial opportunities. In the UK, corporate hospitality represents a significant and distinctive segment of the wider hospitality and events market, blending experiences with client relationship management and brand positioning. However, underlying the simplicity of the definition is a complex, multi-tiered ecosystem that connects leisure, culture and luxury with business services.
In the UK, corporate hospitality has long been associated with the sporting and cultural calendar. Events such as Wimbledon, Royal Ascot, the British Grand Prix, Rugby and Premier League football fixtures have historically defined the space. Traditionally, businesses would purchase private boxes or bespoke ticket packages to entertain key clients, combining exclusive access with high-quality services. Over time, corporate hospitality has evolved beyond singular events. Today, it encompasses a range of activities including:
Live Sports & Entertainment: Stadium boxes, VIP suites & corporate lounges at major events.
Business Events & Conferences: Managed and brand-aligned corporate events.
Private Dining & Members Clubs: Exclusive dining & other experiences in luxury venues.
Luxury & Incentive Travel: Corporate trips, retreats and incentive travel.
Experience-Led Activities: Immersive events, team -building activities and leisure experiences.
The breadth of the corporate hospitality sector means it is not just a service industry, but a strategic extension of marketing and business development.
In the professional service sector, covering such activities as finance, accountancy, law and technology consultancy; hospitality is a vital opportunity for client engagement and brand differentiation. Segments of the corporate hospitality sector include:
Event Management Companies: Deliver bespoke brand events and incentive events.
Tech-Driven Platforms: Enable online booking, ticketing and analytics that bring transparency & scalability to corporate spend.
[…]
Trends and Shifts in the UK’s Corporate Hospitality Market
In 2025, there are several trends that are re-shaping the UK’s corporate hospitality sector, redefining how businesses buy, deliver and value experiences, providing the perfect environment for deal activity. Historically, corporate hospitality has been driven by one-off events and impromptu entertaining, however today’s market is moving towards structured, programme-orientated purchasing. Corporates increasingly opt for repeatable packages and membership models to ensure predictable spending patterns, measurable returns and consistent client engagement. Prior to the pandemic, corporate hospitality was often a discretionary part of how businesses budgeted. In 2025, corporate buyers increasingly view hospitality as a strategic and budgeted extension of their marketing strategy.
Since 2020, the corporate hospitality market in the UK has undergone a significant transformation that has been shaped by the pandemic, accelerated by technology and redefined by a shift in client expectations including the impact of anti-bribery legislation. During the pandemic, the experience of disruption made clients more selective, data-conscious and value-driven, reflected in the movement away from ad-hoc entertainment and towards programme-based investment. By 2023, corporate travel and event activity had recovered significantly and in many sectors, had returned to pre-pandemic levels. This recovery has seen M&A activity across all hospitality sectors including; food and beverage, accommodation, entertainment and travel and tourism. Encouraged by stabilised occupancy and renewed demand, institutional investors and PE firms have returned to hospitality assets, with a focus on scalable and experience-led models.
One of the major shifts in spending is taking place alongside the consumerisation of experience. Immersive venues, such as The Steel Yard in London, are becoming an increasingly popular option for corporate events due to their ability to provide memorable experiences, enhanced engagement and to be customised using tailored and bespoke virtual environments.
Consequently, the traditional model of passive hospitality is being replaced by immersive, story-driven and thematic experiences designed to differentiate. Immersive doesn’t just refer to tech-based events, it could include a curated private dining event, exclusive cultural experience or a themed-activity that aligns with a business’s vision, mission and values, whilst resonating with their audiences. This has led to a surge in demand for hospitality offerings that can successfully blend entertainment, creativity and brand storytelling. Experiential operators, such as boutique events and themed venues, have capitalised on this shift, both expanding their corporate portfolios and attracting investment interest.
The most significant shift in the corporate hospitality sector has been a result of advancements in technology and data intelligence. The rise of MarTech and event-tech platforms has enabled businesses to plan, deliver and measure hospitality in ways that were previously impossible. Online booking systems, such as CRM integrations and analytics dashboards have enabled corporates to track spend, engagement and ROI in real time. For the businesses that supply the sector, this has redefined competitive advantage. Similarly, the rise of environmental, social and governance (ESG) considerations has resulted in a significant shift in the corporate hospitality sector. Since 2020 businesses have become more conscious of how their hospitality choices reflect their values. In 2025, hospitality venues and packages that prioritise green energy, ethics and local suppliers are more likely to be chosen by companies seeking to align hospitality with their broader ESG commitments.
If you want to read the whole white paper, please email Melissa Dainelli at [email protected] for a copy.
The UK’s Corporate Hospitality Market : A Brief Overview
The term “corporate hospitality” refers to the practice of a business entertaining clients, potential leads, employees or other stakeholders in order to strengthen relationships, reward employees and create commercial opportunities. In the UK, corporate hospitality represents a significant and distinctive segment of the wider hospitality and events market, blending experiences with client relationship management and brand positioning. However, underlying the simplicity of the definition is a complex, multi-tiered ecosystem that connects leisure, culture and luxury with business services.
In the UK, corporate hospitality has long been associated with the sporting and cultural calendar. Events such as Wimbledon, Royal Ascot, the British Grand Prix, Rugby and Premier League football fixtures have historically defined the space. Traditionally, businesses would purchase private boxes or bespoke ticket packages to entertain key clients, combining exclusive access with high-quality services. Over time, corporate hospitality has evolved beyond singular events. Today, it encompasses a range of activities including:
Live Sports & Entertainment: Stadium boxes, VIP suites & corporate lounges at major events.
Business Events & Conferences: Managed and brand-aligned corporate events.
Private Dining & Members Clubs: Exclusive dining & other experiences in luxury venues.
Luxury & Incentive Travel: Corporate trips, retreats and incentive travel.
Experience-Led Activities: Immersive events, team -building activities and leisure experiences.
The breadth of the corporate hospitality sector means it is not just a service industry, but a strategic extension of marketing and business development.
In the professional service sector, covering such activities as finance, accountancy, law and technology consultancy; hospitality is a vital opportunity for client engagement and brand differentiation. Segments of the corporate hospitality sector include:
Event Management Companies: Deliver bespoke brand events and incentive events.
Tech-Driven Platforms: Enable online booking, ticketing and analytics that bring transparency & scalability to corporate spend.
[…]
Trends and Shifts in the UK’s Corporate Hospitality Market
In 2025, there are several trends that are re-shaping the UK’s corporate hospitality sector, redefining how businesses buy, deliver and value experiences, providing the perfect environment for deal activity. Historically, corporate hospitality has been driven by one-off events and impromptu entertaining, however today’s market is moving towards structured, programme-orientated purchasing. Corporates increasingly opt for repeatable packages and membership models to ensure predictable spending patterns, measurable returns and consistent client engagement. Prior to the pandemic, corporate hospitality was often a discretionary part of how businesses budgeted. In 2025, corporate buyers increasingly view hospitality as a strategic and budgeted extension of their marketing strategy.
Since 2020, the corporate hospitality market in the UK has undergone a significant transformation that has been shaped by the pandemic, accelerated by technology and redefined by a shift in client expectations including the impact of anti-bribery legislation. During the pandemic, the experience of disruption made clients more selective, data-conscious and value-driven, reflected in the movement away from ad-hoc entertainment and towards programme-based investment. By 2023, corporate travel and event activity had recovered significantly and in many sectors, had returned to pre-pandemic levels. This recovery has seen M&A activity across all hospitality sectors including; food and beverage, accommodation, entertainment and travel and tourism. Encouraged by stabilised occupancy and renewed demand, institutional investors and PE firms have returned to hospitality assets, with a focus on scalable and experience-led models.
One of the major shifts in spending is taking place alongside the consumerisation of experience. Immersive venues, such as The Steel Yard in London, are becoming an increasingly popular option for corporate events due to their ability to provide memorable experiences, enhanced engagement and to be customised using tailored and bespoke virtual environments.
Consequently, the traditional model of passive hospitality is being replaced by immersive, story-driven and thematic experiences designed to differentiate. Immersive doesn’t just refer to tech-based events, it could include a curated private dining event, exclusive cultural experience or a themed-activity that aligns with a business’s vision, mission and values, whilst resonating with their audiences. This has led to a surge in demand for hospitality offerings that can successfully blend entertainment, creativity and brand storytelling. Experiential operators, such as boutique events and themed venues, have capitalised on this shift, both expanding their corporate portfolios and attracting investment interest.
The most significant shift in the corporate hospitality sector has been a result of advancements in technology and data intelligence. The rise of MarTech and event-tech platforms has enabled businesses to plan, deliver and measure hospitality in ways that were previously impossible. Online booking systems, such as CRM integrations and analytics dashboards have enabled corporates to track spend, engagement and ROI in real time. For the businesses that supply the sector, this has redefined competitive advantage. Similarly, the rise of environmental, social and governance (ESG) considerations has resulted in a significant shift in the corporate hospitality sector. Since 2020 businesses have become more conscious of how their hospitality choices reflect their values. In 2025, hospitality venues and packages that prioritise green energy, ethics and local suppliers are more likely to be chosen by companies seeking to align hospitality with their broader ESG commitments.
If you want to read the whole white paper, please email Melissa Dainelli at [email protected] for a copy.
![[White Paper] M&A and Value Drivers in the Corporate Hospitality sector in the UK](https://www.hmtllp.com/wp-content/uploads/2026/06/corporate-hospitality-scaled.jpeg)
