Most founders are hearing two messages at once:
“M&A is back.”
“Deals feel harder than ever.”
As we enter 2026, both are true.
Deals are happening. Capital is still moving. But the bar has moved with it. Buyers are underwriting risk harder, taking longer to get comfortable, and paying premiums only when the evidence is obvious.
That’s the part a lot of founders miss. They keep reading the market like it’s a demand problem. Buyers are treating it like an underwriting problem.
This post shows what the latest sector snapshot actually says, and the misreads that keep costing founders leverage in buyer rooms.
The market isn’t closed. It’s filtered. And the filter is proof.
Graphic: The market in one glance (latest published snapshot: Q1 to Q3 2025)
UK Media and Marketing Services M&A (Moore Kingston Smith)
- Q1 2025: 85 deals completed
65% PE-backed
25% technology-first marketing services deals - Q2 2025: 82 deals completed
51% PE-backed
30% technology-first marketing services deals - Q3 2025: 77 deals completed
56% PE-backed
+4% Moore Kingston Smith Marketing Services Index
If you want a single headline from that: deal volumes edged down quarter by quarter through 2025 (to Q3), PE remained a major driver, and “technology-first” capability wasn’t a niche line item.
What the market looks like from 10,000 feet
1) Deals are happening, but buyers are choosier
Moore Kingston Smith’s Q3 view was blunt: activity stayed “subdued”, and acquirers were more cautious amid uncertainty around the UK outlook and potential fiscal measures.
That matters because it explains the founder experience right now.
You can get interest.
You can even get an offer.
But keeping buyer confidence through the messy middle has become the real game.
2) PE is still a big engine, but it isn’t sentimental
PE-backed transactions remained a meaningful share of reported activity through Q1 to Q3.
Translation: capital is still flowing, but it’s flowing toward businesses that feel underwritable. If the evidence is foggy, PE doesn’t argue with the fog; it structures around it.
3) “Tech-first” is really code for scalable, repeatable, defensible
Moore Kingston Smith tracked technology-first marketing services deals at 25% in Q1 and 30% in Q2.
This doesn’t mean you need to become a software company. It means buyers are paying for capabilities that scale without heroics, defend margin, and don’t collapse when a founder steps back.
Founders think M&A is a price conversation. Buyers treat it as a risk conversation.
What’s actually shifting: five things founders need to internalise
Shift 1: Buyers are underwriting risk harder than growth
Growth still matters, but growth without clarity creates negotiation.
If a buyer can’t quickly answer, “Is this repeatable?”, then your offer becomes conditional, and price becomes structured. Timelines stretch, and you start hearing the same phrase in different outfits: “We just need a bit more comfort.”
That isn’t a request. It’s a signal.
Shift 2: This is a buyer-led market, even when deals are happening
In a filtered market, buyers have time, choice, and alternatives.
So the question is no longer “Is my agency good?”
It’s “Is my agency easy to underwrite?”
Those aren’t the same thing, and the second one is the one that decides terms.
Shift 3: Capability buys beat brand buys
A lot of agency deals aren’t “we love your brand”. They’re “you fill a gap we need”.
Usually, it’s one of five things: performance capability, data, vertical expertise, delivery leverage, or specialist depth.
If your story is “we do great work”, you get compared on taste.
If your story is “we own a capability you need”, you get compared on value.
Shift 4: Consolidation at the top resets what buyers expect
When the biggest players consolidate, they quietly move the goalposts. Scale, efficiency, systems, leverage. For context, the UK CMA cleared Omnicom’s anticipated acquisition of Interpublic in August 2025.
You don’t need a mega-deal for this to matter. It changes what buyers call “good”.
Shift 5: Valuation dispersion is widening
Two agencies can show similar revenue and end up in completely different outcomes.
One reads buyer-grade.
One reads founder-dependent.
The difference isn’t charisma. It’s evidence.
Graphic: The buyer’s mental model (Growth vs Risk)
How buyers really place agencies
High growth + lower risk: premium outcomes, cleaner structure
High growth + higher risk: great story, hard terms (earn-outs, holdbacks, discounts)
Lower growth + lower risk: still buyable if durable, fair multiple if predictable
Lower growth + higher risk: often ignored, or only bought as a cheap add-on
The story gets you the meeting. The evidence gets you the price.
What founders are missing (and why it costs leverage)
Misread 1: “We’re profitable, so we’re ready”
Profit is necessary, it’s not sufficient.
Buyers discount fragility. And fragility has a familiar shape: concentration without mitigation, founder-held relationships, margins that move without explanation, reporting that’s reactive, delivery that relies on stars rather than systems.
When a business is profitable but fragile, the deal becomes profitable but conditional.
Misread 2: “We’ll tidy things up when we decide to sell”
That’s how founders end up negotiating from weakness.
Optionality is built before you need it. The founders who win don’t “decide to exit”. They build a business that could exit at any point because it already reads as underwritable.
Misread 3: “A strong narrative will carry the deal”
Narrative gets attention. While evidence creates confidence.
And when confidence is missing, buyers solve it with structure: earn-outs, holdbacks, escrow, conditions, and time.
Misread 4: “M&A is one event”
It isn’t.
It’s positioning, proof, diligence, terms, and integration.
Most founders prepare for the start of that chain. Buyers prepare for the part where claims get stress-tested.
Most agencies don’t fail diligence because they’re bad. They fail because they’re undocumented.
The buyer-grade lens: what buyers are really scoring
Whether they say it out loud or not, most offers reduce to five categories:
Revenue quality: is it concentrated, and if it is, is there a mitigation story that’s real? Does retention show up in data, not just relationships?
Margin durability: are margins stable, or at least explainable? Is delivery leverage real, or just overtime in disguise?
Key person risk: what happens if the founder steps back for six weeks? Not hypothetically. Operationally.
Operating system: is there a cadence buyers recognise? Forecasting discipline? Documentation and controls?
Leadership depth: who runs the business on your worst week? If the answer is “the founder”, buyers will structure around it.
A simple action plan for the next 14 days
If you want to become more buyer-grade without overcomplicating it, start with five things that make your business easier to underwrite.
First, build a single “Top 10 clients” view, with revenue, gross margin, renewal likelihood, and relationship owner.
Then map founder dependence in plain English. List the things only the founder can do today. Pick two to remove first.
Next, write a buyer-grade forecast. Twelve months, assumptions stated, not vibes. Even if it’s imperfect, the discipline is the point.
After that, create a one-page delivery engine summary: how work sells, delivers, renews, and expands.
Finally, run the 15-minute diligence test. Could you produce core docs fast, cleanly, consistently, without panic?
It’s unglamorous. That’s why it works. This is where leverage is built.
Where Succeed fits
Succeed exists to help founders see their agency through a buyer’s lens early enough to build leverage.
Market conditions don’t decide your outcome. Buyer confidence does.
A Succeed valuation shows how buyers are likely to price your agency in today’s market, what they’ll discount, and what would move the number before you go to market.
Not sure what’s holding you back from being buyer-grade?
Take the Succeed Exit Readiness Assessment to see where buyers will press hardest (Truth, Transferability, Tightness) and your next best actions.
Take the Exit Readiness Assessment
Buyer-grade isn’t a vibe. It’s evidence.
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