INSIGHT

Why more PE-backed international buyers are choosing UK businesses

Private equity (PE)-backed international trade buyers are becoming an increasingly influential force in UK mid-market M&A.

While cross-border M&A has long been a feature of the market, what's changing is the role these buyers are playing. They're not just participating in sales processes; they're increasingly winning them. They're willing to move quickly, compete aggressively and, in many cases, pay the highest valuations.

Three of our recent transactions highlight this trend. We advised KDM Hire on its sale to France's Kiloutou Group, ICA Group on joining Germany-based CERTANIA, and RSM Lining Supplies on its sale to US-based Azuria Water Solutions. Each transaction involved an international trade buyer backed by PE, and each demonstrated how these buyers are becoming some of the most competitive acquirers in the market.

For business owners considering a sale, it's a trend that's creating new opportunities and reinforcing the importance of reaching the widest possible pool of buyers.

PE-backed international buyers are becoming more competitive

It's not necessarily that there are significantly more PE-backed international consolidators operating in the market than there were a few years ago. Rather, they're becoming far more active participants in acquisition processes.

Increasingly, they're emerging as the preferred bidder against a broad range of competitors, including traditional trade buyers, standalone PE firms and other international acquirers. In some cases, they're even pre-empting processes before the formal process has begun.

Our recent sale of ICA Group illustrates this well. CERTANIA identified the business early and made a compelling approach before a wider sale process had been launched. The pre-emptive offer was strong enough to warrant exploring immediately, demonstrating just how proactive some of these buyers have become in pursuing attractive businesses.

This trend isn't isolated to one sector. Across our business, we've seen a growing number of PE-backed international consolidators successfully acquire businesses across industries including business services, industrials and healthcare.

Why UK businesses continue to attract international buyers

Despite ongoing economic uncertainty, the UK is still an attractive market for international investment.

For overseas buyers, favourable exchange rates, particularly for the US dollar versus the pound, can make investment feel like good value. The UK also continues to offer access to high-quality, well-managed companies with strong reputations, established customer relationships and resilient business models.

For international businesses looking to expand into Europe, acquiring an established UK company can provide an attractive platform for future growth. Rather than building operations from scratch, buyers gain experienced management teams, existing customer bases and proven operational capabilities. Perhaps most importantly, the businesses attracting the greatest attention are those that have continued to perform despite a challenging economic backdrop.

Companies that have demonstrated consistent growth and resilience in a subdued market stand out; showing they’re capable of outperforming competitors, adapting to changing conditions and continuing to execute their strategy even when the wider market is more difficult.

Management teams are equally important. Many PE-backed consolidators aren’t looking to absorb businesses into existing operations. Instead, they’re investing in management teams and providing the resources to support the next phase of growth. That makes succession planning and leadership strength increasingly important factors in attracting buyer interest.

Different businesses, one common theme

Although KDM Hire, ICA Group and RSM Lining Supplies operate in very different sectors, each transaction reflects a similar strategic approach from international buyers.

For Kiloutou, acquiring KDM Hire provided an immediate presence across the island of Ireland, supporting its wider European expansion strategy.

CERTANIA's acquisition of ICA Group was driven by the opportunity to strengthen its UK built environment platform, expanding its capabilities in building safety, compliance and regulatory assurance.

Meanwhile, Azuria Water Solutions' acquisition of RSM Lining Supplies represented its first European acquisition, providing an entry point into the UK's water infrastructure market while adding complementary technical expertise to its existing business.

The strategic rationale behind each transaction was different, but the qualities that attracted buyer interest were remarkably consistent. All three businesses operated in resilient markets, had established track records of growth and were supported by experienced management teams capable of leading the next stage of development. In each case, the buyer wasn't simply acquiring today's business. They were investing in the opportunity to create further value over the years ahead and backing existing management teams to deliver it.

Looking ahead

We expect PE-backed international consolidators to remain highly active acquirers over the coming years.

Sectors driven by regulation, compliance, as well as those exposed to ongoing infrastructure spend are likely to continue attracting strong interest, while businesses with recurring revenues, resilient markets and experienced management teams will remain particularly attractive.

For shareholders considering a future transaction, the message is clear. The strongest buyer may not always be the one closest to home.

Reaching the widest and most relevant international audience has never been more important, and in an increasingly competitive M&A landscape, access to the right buyers can make all the difference.

Why PE backing makes a difference

PE backing gives international consolidators significant advantages when pursuing acquisitions. Buy-and-build strategies have become a central part of value creation for many PE-backed businesses. Rather than relying solely on organic growth, acquisitions are often fundamental to achieving their long-term growth ambitions.

With committed investment capital behind them, these businesses are well-positioned to move quickly when attractive opportunities arise. They're also often able to justify paying stronger valuations because acquisitions contribute to the growth of a larger platform business, creating value beyond the individual transaction itself.

For sellers, this means PE-backed trade buyers increasingly sit alongside corporate acquirers and standalone PE firms as some of the strongest potential partners in the market.

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International reach matters more than ever

As buyers become more international, identifying the right acquirers becomes increasingly important. Building a comprehensive buyer universe isn't simply about compiling a long list of potential names. It's about understanding who's actively acquiring, where they're looking to invest and what strategic priorities they're pursuing.

That's where an international network can make a meaningful difference.

Across Clearwater, our sector teams work closely with colleagues throughout Europe, sharing intelligence and maintaining regular dialogue with strategic buyers and investors. Those conversations provide invaluable insight into acquisition strategies long before businesses formally enter the market.

Rather than relying solely on desktop research, that knowledge helps identify buyers with genuine strategic interest, creating stronger processes, broader competition and, ultimately, better outcomes for shareholders.

Quite simply, the more relevant strategic buyers you have engaged in a process, the greater the opportunity to create competitive tension and maximise value.

AUTHOR

James Croxen

Director

I’m an experienced M&A Director based out of the Leeds office. I joined Clearwater in 2020, as a founding member of the Leeds team and have played an important role in growing the team as well as establishing Clearwater Leeds as a leading adviser in the region. I have 19 years of M&A experience, advising clients on all types of transactions including, minority and majority PE investments and sales to strategic trade as well as working on the buy-side for both private equity and trade acquirers. I am a calm and level-headed adviser and take great pride in delivering exceptional outcomes for clients. Outside of work, I am a father to two teenage girls, a keen golfer, general sports fan, and enjoy going skiing once a year with my family.