UK private equity buyout activity slowed noticeably in the first quarter of 2026. Deal volumes fell from 461 in Q4 2025 to 352 in Q1 — a 24% quarterly drop — according to RSM UK's analysis of PitchBook data. The Middle East conflict appears to be the main factor, with investment committees applying more scrutiny to new commitments, particularly in sectors exposed to inflation and energy price volatility.
That said, the year-on-year picture is steadier. Q1 2026 was down just 3.8% compared to Q1 2025, which suggests the pullback is cautious rather than structural. And bolt-on deals — the kind that support buy-and-build strategies — still made up 75% of all PE buyouts during the quarter. If you're running a business that fits a platform's rollup model, buyer interest hasn't disappeared.
What's more interesting is the divergence between deal flow and exits. While new buyouts slowed, exit values hit their highest point in two and a half years. PE funds are under pressure to return capital to limited partners after extended hold periods, and the dry powder sitting on the sidelines means there's plenty of capital available when sponsors do decide to sell. Exits are expected to stay active through 2026 and into 2027.
For owner-managed businesses in electrical wholesale, lighting, or trade distribution, this creates an uneven but navigable environment. Platforms with capital already deployed are still looking for bolt-ons to strengthen their portfolios. Those deals tend to move faster and with less fuss than standalone platform acquisitions, because the buyer already understands the sector and has infrastructure in place.
If you're considering a sale in the next 12 to 18 months, it's worth understanding where your business fits. Bolt-on buyers will move when the strategic fit is clear, even in a cautious market. Standalone platform sales — where a PE firm is backing a new platform or making a first entry into the sector — may take longer to gain momentum, but exit conditions for those buyers are improving.
The macro uncertainty isn't going away quickly, but the fundamentals for well-run, profitable businesses in resilient sectors remain solid. Buyers are still active. They're just being more selective.