FTI’s Angus Wilson: M&A backlog to drive activity in 2025

Deal flow should pick up quickly in 2025, as a backlog of transactions comes to market, following a quiet period, according to Angus Wilson, Senior Managing Director – Co-Head Private Equity EMEA, FTI Consulting. 

“After a couple of flat years from an M&A perspective, people are excited about the prospect of the market improving quickly. The 2025/2026 horizon looks like a return to pre-COVID levels, even though there’s still some political uncertainty in some of the larger economies. But, with most of the electoral cycles finished, at least we know what we have going forward,” says Angus.

This excerpt from our 2025 UK&I M&A Outlook Report, which features insights from 8 top UK&I dealmakers, explores Angus Wilson's perspective on the factors shaping M&A activity in the UK&I market. Angus discusses the anticipated rise in deal activity driven by improving economic conditions and a need for companies to bolster their supply chains.

A return to pre-COVID deal activity levels

Against a sluggish backdrop, buyers’ and sellers’ price expectations have narrowed. “The multiples assets may have traded at three or four years ago are not the right yardsticks anymore. Enough time has passed for people to have adjusted to, or at least be able to justify, why multiples might be different, having had a relatively long period of high interest rates in the context of the preceding 10 years. People are optimistic around the new normal at least staying as it is, but most likely improving in terms of the cost of capital,” says Angus.

Unwinding the backlog of transactions

After a number of years of slower activity, there is a backlog of transactions that need to happen from a private equity and a corporate perspective. “While fewer businesses have required restructuring because a lot of debts have been covenant light, those under some capital strain will need to look to transact or be transacted on to relieve that strain. You can’t do that forever and there hasn’t been enough time for them to trade out or into a better position,” Angus says. 

He says market conditions aside, funds have worked hard, particularly in private equity, to raise capital. “The indigestion of deals means there has not been a capital race. There are pools of capital that have grown, but the conditions for an active deal market have to be there.”

The rise of "buy and build" strategies

In light of current market conditions, some asset owners have developed a buy and build strategy. “A number of my clients have a definite eye for those arrangements, because it gives them a line of sight on capital employment. It also gives them a line of sight on a coherent thesis and an identifiable path to go back to investors to show them they are putting their money to work the way they said they would.”

Key investment themes

From a thematic perspective, tech remains in investors’ sights. “AI assets are attractive for the right investors, although people are cognisant this is new technology. Some of the better software-as-a-service businesses are also changing hands,” he says.

Angus notes the AI opportunity extends to the underlying infrastructure, such as power sources, data warehouses and data centres. “AI in those parts of the market is generating deal flow.” Tech aside, the energy transition theme will also drive deal flow. “That’s an asset class that’s hotly contested.”

Navigating geopolitical and economic risks

Turning to risk, the potential for conflicts in Europe and the Ukraine to upset deal markets remains.

“The return of the Chinese economy, if it continues, will be a good thing for economic growth and their stimulus package is important globally. Everyone will feel the pain if that falters. If the BRIC economies don’t continue to grow, that will be a black swan event as it relates to that part of the world,” says Angus.

Improving deal processes and the rise of AI

While processes have been truncated and spasmodic, that’s changing. “Over the next two years we’ll see more efficient deal processes and more processes going to conclusion. Having a team that’s experienced at moving a bit quicker than we’ve been moving is really important. In terms of financing deals, the equity and debt markets are open. The market just needs to get used to the relative level of conservatism investors are applying to their decision making.”

AI is fast becoming a routine tool in transactions for deal and risk identification and data analysis. “If you’re not doing that, you’re already behind. We work hard to use AI in a meaningful way, which keeps giving us really great results. But we’ve seen other people get some pretty obscure outcomes with AI, which has led to deals not being conducted as quickly as you can connect them or insights not being brought to bear that could have or should have been brought to bear, if you thought more about it,” he says.

The importance of diligence

Due diligence remains an essential part of technical, financial and tax risk management, especially to secure warranty and indemnity insurance. “We take a really sharp look at where the value add in diligence is and our clients tend to work with us because that’s our point of difference,” says Angus.

Career reflections

While not wanting to pick a favourite child from the transactions he’s worked on, Angus says the real career highlight has been working with great people.

“In M&A, it’s a joy to come to work when you’re in a good team, working with good clients. An intellectual capacity, commercial nous and an ability to communicate are crucial. You have to work hard, so it’s not for the faint hearted. But if you enjoy rolling your sleeves up, it might be for you.

Looking ahead

Angus Wilson’s insights offer valuable perspectives on the M&A landscape in the UK&I. To gain a deeper understanding of the key trends and predictions shaping the market, we encourage you to download the full M&A Outlook report. This comprehensive report features in-depth analysis to equip you with the knowledge you need of the current deal environment in the United Kingdom and Ireland to be able to capitalise on emerging opportunities.