26 November 2025
By Hamish Morrison, Partner at Translink Corporate Finance UK
2026 is shaping up to be a big year for business services; if you’re positioned to scale, this may be the moment to get on the front foot. With over *$2 trillion in “dry powder” (cash to invest), plus prospective rate cuts, private equity (PE) investment activity is likely to accelerate.
This builds off years of momentum. Private equity investment in business services has shown serious staying power. Over the past decade, the sector has consistently accounted for about *12% of global PE deal value and nearly one-quarter of all the world’s deal volume. Even in a tougher macroeconomic environment, this year saw deal activity rebound as investors doubled down on platform-building plays and operational upliftment strategies.
Factors driving the deals include outsourcing demand, which keeps rising; along with tech reshaping operating models, and fragmentation, which creates a clear runway for consolidation, scale and gains in efficiency.
Why PE keeps coming back to Business services
This is a sector built for investors who think in systems, scale and repeatability:
- Asset-light models mean lower capital intensity and provide potential for strong equity returns.
- Recurring revenue streams create predictable cash flows, backed by long-term customer relationships and contract-based income sources.
- Scalability is built in as technology, automation and process optimisation allow businesses to grow without costs rising at a similar pace.
- Fragmentation across multiple subsectors is still significant, presenting robust opportunities for consolidation and professionalisation.
- Business services are generally less cyclical than many other industries and tend to have relatively low customer concentration.
- There is a strong track record of synergies being unlocked through centralised costs and shared resources.
- Outsourcing trends have supported strong organic growth across several segments, while upsell and cross-sell opportunities allow companies to expand their service offerings and build more resilient revenue bases.
The playbook: Integrate, standardise, scale
Platform-building remains the core approach. Investors are prioritising platforms that can be scaled through shared systems, operational uplift and disciplined bolt-ons, particularly in fragmented service-led markets such as professional services, insurance services, TICC (testing, inspection, certification and compliance), and facilities management.
At the same time, tech-enabled services are attracting premium valuations, especially where businesses are making effective use of AI, cloud solutions or automation to improve delivery, quality and cost efficiency.
Valuations for high-quality companies, including platform investments, have held up. The emphasis has shifted more sharply toward profitability and operational value creation, and there continues to be significant multiple arbitrages between the upper and lower ends of the market.
Additionally, exit strategies in the sector are evolving. Hold periods have lengthened and are now averaging more than five years. Secondary buyouts are increasing as investors seek liquidity. IPO windows are starting to reopen for companies that are tech-enabled and ESG-aligned.
The outlook for 2026
With capital available, market conditions evolving and proven strategies in place, those who act now may gain the advantage.
With clear fundamentals – resilience, scalability, and multiple paths to value creation – business services remain a core focus for private equity investment. For companies in the sector, the next 12 to 18 months present an ideal time to explore your options and potentially secure investment and accelerate your growth plans.
We would welcome the opportunity to have a no obligation exploratory conversation with ambitious owners. If you are keen to gain a better understanding of your options and what a deal might look like financially for you then please do get in touch: hmorrison@translinkcf.com
*Sources:
– S&P Global Market Intelligence, July 2025
– Bain & Company Global Private Equity Report 2025
