What Are The Most Common Private Equity Deals In The UK?

Private equity (PE) activity in the UK typically involves a variety of deal structures, each with its own strategic purpose. Below are the most common types of PE transactions that investors, founders, and professionals are likely to encounter:

• Leveraged Buyouts (LBOs)
LBOs are the most common form of PE transactions in the UK. These deals usually involve the acquisition of a company via a share purchase, although asset acquisitions also occur.
A significant portion of the purchase price is typically funded through debt, which is later serviced by the acquired business’s cash flows. LBOs often aim to improve operational performance and generate returns through eventual resale or flotation.

• Take-Private Transactions
In these deals, PE firms acquire publicly listed companies and remove them from the stock exchange. This structure allows investors to implement strategic changes more freely, away from the scrutiny and reporting requirements of public markets.
Between 2020 and 2022, take-private activity surged, reflecting both the availability of dry powder in the market and the perceived undervaluation of listed companies. PE firms were also willing to pay premiums for these deals, anticipating post-acquisition value creation.

• Flotations (IPO Exits)
Although less frequent as an entry route, a flotation—or initial public offering (IPO)—is often used by PE firms as an exit strategy. It allows them to realise returns by selling shares of the portfolio company to public investors.

• Bolt-On Transactions
Bolt-ons involve acquiring smaller companies to integrate into an existing portfolio company. These add-on deals aim to expand market share, geographic reach, product lines, or operational capabilities.
They are particularly common in platform-building strategies and can provide rapid growth with relatively lower transaction risk.

• Club Deals
A notable trend during 2020–2022 was the rise in club deals—transactions where multiple PE firms join forces to acquire a larger target.
This structure allows firms to pool resources, share risk, and take on more complex or capital-intensive deals than they might alone.

Market Trends

While 2020 to 2022 saw a flurry of PE activity—including take-privates and club deals—2023 has marked a slowdown in PE-led M&A transactions.
This reflects broader macroeconomic headwinds such as high inflation, tighter debt markets, and reduced revenues across various sectors.

Despite the slowdown, the UK remains a key hub for PE investment, with strong fundamentals and a diverse range of deal structures continuing to drive long-term interest from both domestic and global investors.