M&A in the UK recruitment sector: H1 2026
Deal activity stabilises as buyers prioritise acquiring specialist capability
27
deals completed
in H1 2026
70%
of transactions were trade deals
25%
of deals were in the construction, energy and engineering sector
Our view of the market
UK recruitment M&A activity remained stable during H1 2026, with 27 transactions completed, compared with 26 in H2 2025. Although volumes remained below the 37 deals recorded in H1 2025, the decline seen through last year did not continue, suggesting that activity may have found a floor.
This relative stability is notable against a subdued hiring backdrop. UK vacancies fell to 712,000 in the three months to June 2026, down 2.5% year-on-year and almost 10% below pre-pandemic levels, while payrolled employment remained below the prior year. Weak growth, elevated employment costs and geopolitical uncertainty continued to weigh on hiring, encouraging employers to retain flexibility through temporary and contract labour.
We expect activity to remain broadly stable during H2 2026. Buyers are likely to remain selective, but we expect demand to remain strong for high quality assets with specialist exposure, recurring or contract-led revenues, resilient earnings and strong management teams.
Number of deals
Buyer landscape
Trade vs PE
Trade buyers continued to drive recruitment M&A, accounting for 70.4% of H1 2026 transactions. PE and PE-backed buyers represented the remaining 29.6%, up from 23.1% in H2 2025 but broadly consistent with the longer-term buyer mix.
Trade buyers remain active in the market, with a clear focus on specialist capabilities and services that can deliver margin expansion and synergies. PE activity is increasingly focused on bolt-ons that add scale or access to attractive niches. Across both groups, appetite remains strong for specialist businesses with recurring or contract-led revenues, scalable operating models and strong management teams. These characteristics provide greater earnings visibility and help distinguish businesses from more cyclical, generalist recruitment models.
Domestic vs cross-border
Overseas buyers completed eight UK recruitment acquisitions during H1 2026, up from six in H2 2025, and broadly in line with the biannual average since H1 2024. Domestic activity remained comparatively subdued at 19 transactions, compared with 20 in H2 2025 and a biannual average of 25.8 since 2024.
International interest has therefore remained resilient despite lower overall deal volumes, with buyers continuing to value the UK’s specialist recruitment expertise and exposure to attractive end-sectors, as demonstrated by the sale of Mactech to France-headquartered Assystem. For UK business owners, this reinforces the importance of considering an international buyer universe.
UK acquisitions by buyer geography
Listed company valuation multiples
Recruitment deals by sector
Spotlight on construction, energy and engineering
Construction, energy and engineering remained one of the most active sectors during H1 2026, with five transactions completed during the period. The sector has consistently represented one of the most active areas of recruitment M&A since the start of 2025, having accounted for a considerably smaller share during 2024.
- Long-term investment across infrastructure, renewable energy and nuclear continues to support demand for technical and project-based talent, despite softer conditions elsewhere in the construction market.
- Persistent shortages of specialist skills reinforce the value of recruitment firms with established candidate networks, sector expertise and the ability to mobilise qualified contractors.
- These capabilities can be difficult to build organically, supporting acquisition interest from trade buyers and PE-backed platforms seeking exposure to structurally attractive end-markets.
The sale of Mactech Energy Group to French engineering consultancy Assystem, on which Moore Kingston Smith advised in 2025, demonstrates this strategic appeal. Mactech’s established nuclear workforce and involvement in major UK infrastructure projects provided Assystem with complementary specialist capability in the strategically important nuclear new-build construction market.
Deals by sector
Deal highlight
Meraki Capital-backed Magnus Search acquired Wise Employment, CSP Recruitment and Rite People during H1 2026, together representing three of the six generalist recruitment transactions recorded. The acquisitions expanded the group’s presence across temporary and blue-collar recruitment markets, including logistics, manufacturing, construction, healthcare and education.
Meraki is using Magnus as a technology-enabled consolidation platform, targeting established recruiters with strong local relationships which can benefit from greater scale and investment. By providing shared technology, operational infrastructure and funding, the strategy aims to improve efficiency and support growth amid rising employment costs, regulatory complexity and pressure on sector margins.
Outlook
As the broader M&A market shows signs of greater stability, recruitment firms continue to attract investment from both strategic and private equity buyers. Specialist businesses with strong market positioning, resilient earnings and clear strategic value continue to attract buyer interest and stronger valuations.
“The recruitment M&A market has found a degree of stability despite a challenging hiring environment. Overseas buyers are increasingly active in the sector and indicators are that this will continue into the second half of the year. More widely, demand for high-quality assets remains robust, particularly in sectors where talent shortages and long-term investment trends create attractive growth opportunities.”
Matt McRae, Corporate Finance Director
How can Moore Kingston Smith help you?
If you are considering your strategic options, Moore Kingston Smith’s specialist recruitment corporate finance advisors can provide a no-obligation valuation assessment and an initial discussion about buyer appetite and what your business could be worth in the current market.
Methodology
The data of this report has been sourced from Pitchbook and only includes deals where the acquisition target is UK based.
Please reach out directly for further information about the findings of this report or its methodology.
