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M&A activity shows encouraging signs amid geopolitical uncertainty, with renewed interest in executive search

M&A activity in the sector got off to a solid start as Q1 2026 recorded a further 19 UK recruitment (and broader workforce solutions) deals consistent with the overall quarterly average for 2025. Encouragingly, there were some notable transactions and renewed activity in executive search firms, sparked by AdventÓ×Å®ÊÓƵ™s $1.3bn take-private acquisition of Heidrick & Struggles that completed in December 2025.

There was a reasonably even mix of trade and private equity (PE) M&A activity, with PE transactions again heavily weighted towards add-on acquisitions for existing portfolio companies.

Key themes shaping UK recruitment M&A in Q1 2026

• Strong activity in executive search firms, with three significant deals: two advised by Ó×Å®ÊÓƵ - the $100m acquisition of Metric Search by US PE firm Southfield Capital and Groupe AdequatÓ×Å®ÊÓƵ™s acquisition of Solutions Driven (see Ó×Å®ÊÓƵ˜Notable recruitment M&A transactionsÓ×Å®ÊÓƵ™ below for further details) - and leading UK independent search firm Sheffield HaworthÓ×Å®ÊÓƵ™s Australian acquisition of OÓ×Å®ÊÓƵ™Leary & Partners.
• New platform PE activity remains highly selective, with the two completed Q1 deals. The Southfield Capital deal highlights the greater appetite of US PE for businesses with sufficient US-market penetration and potential. The other PE deal was in HR Consulting, with Stephenson Capital investing in Realise HR (see Ó×Å®ÊÓƵ˜Trade v PE activity in the recruitment sectorÓ×Å®ÊÓƵ™ below).
• Add-on acquisitions by PE continued to be strong (six in Q1 2026 versus four in the previous quarter), primarily driven by serial sector-focused acquirer Meraki Capital (see Ó×Å®ÊÓƵ˜Notable recruitment M&A transactionsÓ×Å®ÊÓƵ™ below for further details). Value creation over a longer cycle to supplement organic growth continues to be a key theme.
• STEM / construction was the dominant vertical in Q1 2026 with 10 deals in this space.
• Growth in both overseas interest in UK firms and overseas expansion by UK firms, following muted activity in the second half of 2025.

Notable recruitment M&A transactions

• In March 2026, US PE firm, Southfield Capital, acquired UK-headquartered Metric Search in a deal worth $100m, in order to support international expansion and increased specialisation in its core US markets. Founded in Nottingham in 2019, Metric Search is a fast-growing provider of specialist senior and executive-level search specialising in the life sciences, engineering, infrastructure and data centre verticals. It was recognised in the Financial Times list of EuropeÓ×Å®ÊÓƵ™s fastest growing companies in both 2025 and 2026, having scaled to over 130 consultants across seven global offices. Ó×Å®ÊÓƵ was delighted to have provided sell-side due diligence services on the deal, drawing on our expertise from across the US and UK.
• Following the opening of its London office, we were thrilled to advise French-headquartered global staffing platform, Groupe Adequat, on its first UK acquisition, acquiring Solutions Driven. This acquisition expanded Groupe AdequatÓ×Å®ÊÓƵ™s executive search capability in the engineering and STEM space as well as enhancing its international capability.
• Meraki Capital, an investment firm specialising in the recruitment industry, completed five bolt-on acquisitions in Q1 2026 through its Magnus Search platform. These deals form part of Magnus SearchÓ×Å®ÊÓƵ™s long-term plan to scale its business by using established blue-collar focused staffing specialists in need of operational (or financial) support to boost their growth.

Trade vs PE activity in the recruitment sector

Trade buyers narrowly surpassed PE as the dominant exit route in Q1, responsible for nine transactions (47%) versus eight by PE investors (42%). Three-quarters of PE deals in Q1 were add-ons, continuing a wider theme across the PE industry and compared to 70% in 2025. As noted above, in addition to the Southfield Capital/ Metric Search deal, the other PE platform deal was Stephenson Capital investing in Cumbrian training and recruitment consultancy services firm Realise HR.

The split by deal type for Q1 2026 is similar to that in 2025, with reduced management buyout (MBO) and debt-funded deals in favour of a slightly higher proportion of PE activity.

We also note that the majority of sellers continue to be privately owned businesses, with the notable exception being Metric Search which had been backed by a minority investment by BGF.

PE has been more focused on value creation in portfolio companies than exits in the sector, although we are expecting this to evolve over the coming year and especially into 2027 as EBITDA strengthens and market sentiment improves. The successful returns by BGF on their exit of Metric Search is a positive step in this direction.

Overseas buyers return to UK market

Q1 2026 saw acquisitions by three overseas investors: two by US buyers and one by a French buyer, compared to just one such deal by a US buyer in Q4 2025. Overseas acquirer interest typically varies by quarter, with recent quarterly activity much lower than the high of seven deals recorded in Q2 2025.

In addition to the Metric Search and Groupe Adequat deals referenced above, deals also included the acquisition of JMC Aviation by US PE-backed Launch Technical Workforce Solutions.

Reduced MBO activity

One MBO was completed in Q1 2026 Ó×Å®ÊÓƵ“ the acquisition of shares by the existing senior leadership team of Cast UK, a Manchester-based specialist recruitment partner operating across the UK and internationally.

Increase in overseas assets acquired by UK buyers

There were three transactions involving UK investment in overseas workforce solutions businesses in Q1 2026, compared to just one in each of the previous two quarters. These included:

• Sheffield HaworthÓ×Å®ÊÓƵ™s acquisition of Australian executive search business OÓ×Å®ÊÓƵ™Leary and Partners (the founder being ex-Heidricks).
• AdzunaÓ×Å®ÊÓƵ™s acquisition of Spanish job search engine Trovit and Mitula.
• Red GlobalÓ×Å®ÊÓƵ™s investment in American LRB Group, a deal used to strengthen both its Workday delivery capabilities and its presence in the US. Red Global is backed by US PE firm AEA Investors.

Key verticals Ó×Å®ÊÓƵ“ high demand in the engineering / construction sector

Transactions in the engineering and construction sector account for over half of the deals in Q1 2026, compared to just 19% of 2025 activity, with Meraki CapitalÓ×Å®ÊÓƵ™s acquisition spree boosting the growth in this vertical.

In addition to the five Meraki Capital deals, there was one further PE add-on (Capitol Meridian PartnersÓ×Å®ÊÓƵ™ investment in JMC Aviation via Launch Technical Workforce Solutions), the Cast UK MBO noted above and three trade acquisitions.

Overall, deals were spread across a narrower range of sectors in Q1 2026 compared to previous periods. Other key segments in Q1 2026 were professional services, tech-led recruitment platforms and education, with deal volumes in these areas proportionally comparable to 2025. Education staffing is a fragmented market giving rise to bolt on opportunities. Q1 deals included Anzuk EducationÓ×Å®ÊÓƵ™s acquisition of teaching recruiter, Apple A Day Supply, and Zen EducateÓ×Å®ÊÓƵ™s acquisition of education recruitment agency AK Teaching.

UK recruitment M&A outlook: what to expect in 2026 and beyond

Overall, we are starting to see more positive signs in the market. A number of firms now enjoying growth on leaner cost bases Ó×Å®ÊÓƵ“ in particular specialist firms in strong verticals focused on more senior hires with access to overseas markets. There is cautious optimism that this will be sustained over the coming months, notwithstanding global and geopolitical uncertainties which now seem a given in todayÓ×Å®ÊÓƵ™s world.

ThatÓ×Å®ÊÓƵ™s not to say everything is rosy. The economic environment still has its challenges and UK PE is still cautious and selective. In turn, this may mean a flight towards quality assets, particularly those with market profiles attractive to US PE, and business models which better align to premium hires, specialist niches and consulting, rather than pure staffing models.

Our deal services team is seeing a stronger pipeline of sector opportunities, which is an indicator of quality and not just quantity. This is in addition to supporting businesses at the earlier stages of deal and data readiness. Given buyer caution and the rigour of diligence that follows, strong preparation for exit is more important than ever.

We are delighted to have advised on both the Metric Search (sell-side diligence) and Groupe Adequat (buy-side diligence) deals. After a prolonged period of challenging conditions, we look forward with real interest to see how the coming months shape up for the sector.

For more information or to discuss how our deal services team could help realise your business growth ambitions, please contact Jonathan Wade.

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