An overview of the UK M&A Technology market in 2022

The UK tech industry achieved an impressive milestone in 2022, reaching a landmark $1tn (£764bn) valuation, previously only surpassed by the US and China. The figures, which combine the valuations of the UK’s public and private technology companies, puts the value of the UK tech industry at more than double that of Germany and almost five times larger than France and Sweden.

Despite stronger headwinds, with challenges from inflation and rising interest rates, the impact on deals in the technology sector was modest throughout 2022, with the number of deals decreasing by 16% from 5,033 to 4,232 comparatively with 2021.

Private equity (PE) continued to drive activity through a heavy focus on buy-and-build platforms across the sector, accounting for 50% of all deals in 2022. Notably, deals made in the technology sector made up 30% of all deals, followed by real estate at 13% and industrials at 11%.  

Strategic trade buyers continued to pursue tuck-in deals that can accelerate penetration of new markets. Appetite for businesses across the sector with robust revenue models and strong growth prospects remained strong. Deals in the sub-£50m space are expected to remain strong, although valuations may reduce in line with economic uncertainty.

Tech stocks have suffered as stock markets have fallen globally, caused by macroeconomic pressures including geopolitics, slow post covid GDP growth, and the increasingly real threat of higher interest rates to combat accelerating inflation. There has been a recalibration of public market appetite for growth stocks more broadly.

Cross border deals continued to drive the sector, influenced by the weakness of sterling with UK-Tech companies representing good value.

Future Trends

Digital transformation will continue to drive M&A as companies look towards acquisitions and investments in tech-enabled assets to pursue their digital transformation strategies. Despite lofty valuations, buying the necessary talent or technology to enable digital transformation shows no signs of slowing down, as business leaders continue to search for deals that position them to scale their existing offerings and drive innovation. Digitisation continues to drive revenue growth in sectors like cyber, compliance, HR, health, education, and comms. We also see ongoing activity in cloud services and MSPs as businesses continue to migrate to the Cloud.

Financial Services

Disruption from platforms and FinTech is driving rapid technological changes across Financial Services and will boost M&A as players seek to acquire digital capabilities.

Energy, Utilities and Resources

Energy transition, most notably towards more sustainable forms of ‘green’ energy, will remain a priority for investors and management teams, directing large volumes of capital to M&A and other capital project development.

Health Industries

The need to innovate and transform businesses to achieve growth goals will drive M&A activity in 2023. Biotech, consumer-facing healthcare and digital health solutions are expected to attract strong investor interest.


As environment, social and governance (ESG) rises to the top of board and investors’ agendas, there will be an increase in activity for companies in this arena.

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