Why private equity interest in UK mid-cap takeovers is fading after GlobalData and Craneware

GlobalData Plc’s failed acquisition talks with Kohlberg Kravis Roberts & Co. L.P. and ICG Europe Fund IX GP S.a.r.l., followed by a 10% stock drop, have reignited questions about whether global private equity interest in UK mid-cap takeovers is beginning to lose momentum. This marks the third high-profile UK-listed target in recent quarters—after Craneware and Darktrace—to terminate discussions following valuation disagreements or strategic misalignment with founders or boards.

Once seen as fertile ground for cross-border takeovers, London-listed data and software businesses are now proving more resistant to exits. Founders are prioritising long-term control over cash deals, even when global private equity firms are offering premiums. With structural valuation discounts and elevated financing costs, many fund managers are being forced to recalibrate their mid-cap strategy in the UK.

Why did the GlobalData Plc takeover talks collapse?

GlobalData Plc, listed on the AIM exchange, confirmed between April and June 2025 that it had received preliminary cash-and-equity proposals from ICG and KKR valuing the company at roughly £1.4 billion. Both offers included an optional unlisted equity component for shareholders seeking continued exposure post-takeover. However, as of 11 June 2025, both private equity bidders had formally withdrawn, each citing an inability to agree on final terms.

ICG and KKR issued Rule 2.8 statements under the UK Takeover Code, which legally restricts them from re-engaging unless specific circumstances are met. These exits followed six weeks of engagement with GlobalData’s board, during which CEO Mike Danson—who holds a controlling 59% stake—was reportedly central to decision-making.

Danson did not publicly oppose the offers but was widely seen as disinclined to accept a proposal that would dilute his operational control or strategic flexibility. The collapse of both bids sent GlobalData shares from a high of 188.00 GBX in May to 155.00 GBX by 12 June 2025, marking a 17.5% drop in less than three weeks.

How do the Craneware and Darktrace cases compare?

The breakdown of GlobalData’s buyout echoes recent moves at Craneware Plc and Darktrace Plc—two other founder-led, data-centric UK mid-caps that rejected private equity offers in 2024 and early 2025. Craneware, a healthcare software vendor serving U.S. hospitals, declined a £26.50-per-share proposal from Bain Capital, arguing the offer “fundamentally undervalued” its business. Its founder and CEO Keith Neilson remains in control and reiterated commitment to long-term public market growth.

In Darktrace’s case, the cybersecurity firm ended talks with Thoma Bravo in 2023. While an official bid was never tabled, market speculation pushed shares up nearly 40% before falling 35% once talks ended. The board cited valuation uncertainties and shareholder composition as key concerns.

All three firms share a similar profile: high-margin subscription models, IP-heavy operations, and founder governance. More importantly, each commands strategic value in their niche, meaning management believes upside potential outweighs the short-term certainty of a private equity sale.

What is the historical context for UK mid-cap private equity deals?

Between 2021 and 2023, UK-listed companies were prime targets for global private equity. Currency weakness, low valuations relative to U.S. and European peers, and investor fatigue created a rush of M&A activity. Notable deals included Aveva Group, Blue Prism, and Dechra Pharmaceuticals, many of which went private through buyout mechanisms funded by North American or Gulf-based capital.

But in 2024, the pace of completed takeovers began to slow. According to Dealogic, private equity-led UK transactions fell 19% year-on-year in volume and 27% in value. The average premium offered declined as well—from 39% in 2022 to 22% by late 2024. In parallel, founder-led governance and dual-class protections became increasingly common, reducing the likelihood of fast-closing all-share or leveraged buyouts.

What are institutional investors saying about recent UK M&A dynamics?

Market sentiment among institutional investors has shifted to caution. Analysts note that founder-led companies are now more selective about exit terms, and that private equity firms are underestimating governance friction in the UK.

Traders at several London-based event-driven funds reported significant outflows from GlobalData on 12 June following ICG’s withdrawal. One buy-side desk noted that “the market clearly priced in a deal, and the absence of a premium has now reset expectations across the sector.”

Meanwhile, foreign institutional investors trimmed their exposure in both GlobalData and Craneware, citing reduced likelihood of take-private arbitrage. Domestic institutional investors, on the other hand, appear more neutral—holding on in anticipation of main-market uplisting or long-term compounder narratives.

Are founder-controlled structures deterring private equity deals?

One consistent theme across failed transactions is founder ownership. In the case of GlobalData, Mike Danson’s 59% stake gave him veto power. At Craneware, founder-executive alignment also proved critical. These dynamics are not uncommon in the UK AIM and FTSE 250 spaces, where many technology companies emerged from founder-driven growth stories post-2008.

Private equity firms accustomed to U.S.-style governance are often unprepared for this level of centralised shareholder control. Bids that don’t account for long-term strategic alignment—or offer insufficient roles to incumbent leadership—are increasingly being rejected or ignored.

What happens next for GlobalData Plc and other potential targets?

With its M&A window closed, GlobalData Plc is turning back toward organic growth. The company has reaffirmed its three-year strategic plan to grow annualised revenue to £500 million by the end of 2026. In 2024, it reported £286 million in revenue and £54.9 million in pre-tax profit, reflecting strong double-digit margins and expanding operating leverage.

GlobalData also continues to evaluate a main-market listing on the London Stock Exchange, with the aim of joining the FTSE 250. Analysts expect that a successful uplisting could re-anchor valuation multiples closer to global data analytics peers such as RELX and S&P Global.

In the absence of buyout premium narratives, valuation will now depend on execution. Any shortfall in earnings growth, margin performance, or product expansion may further pressure shares, especially given the sharp pullback after ICG’s exit.

What is the future outlook for private equity interest in UK mid-cap companies?

Despite the high-profile collapse of takeover talks involving GlobalData Plc, Craneware Plc, and Darktrace Plc, analysts continue to express cautious optimism about the long-term outlook for private equity investment in the UK’s mid-cap segment. The withdrawal of major players like Kohlberg Kravis Roberts & Co. L.P. and ICG Europe Fund IX GP S.a.r.l. may have tempered expectations for rapid-fire take-private deals, but dealmaking activity is not expected to vanish altogether. Instead, the nature and structure of such transactions are undergoing a strategic recalibration.

Industry experts note that deal teams are becoming increasingly methodical in their approach to UK mid-cap targets. Whereas previous buyouts were often driven by valuation arbitrage or balance sheet efficiency, the current focus has shifted toward governance compatibility, founder alignment, and long-term integration viability. This shift reflects lessons learned from failed bids in 2023 and 2024, where concentrated ownership and board resistance upended initial optimism.

Rather than pursuing full takeovers, many private equity firms are now exploring more flexible investment structures, including bolt-on acquisitions, strategic joint ventures, and minority equity stakes. These approaches allow PE sponsors to gain exposure to high-growth sectors—such as enterprise data analytics, cybersecurity, and healthcare software—without the friction of control negotiations or regulatory delays. In some cases, structured earn-outs or dual-track exit pathways are also being considered to balance investor expectations with founder-driven roadmaps.

According to a recent sector-wide forecast by Canaccord Genuity, as many as one-third of AIM-listed companies may receive strategic interest or acquisition approaches between 2025 and 2026, though these will likely take on a very different profile than previous years. Future bids are expected to be more patient, sector-specific, and aligned with long-term operator vision. For instance, interest is expected to remain strong in verticals such as climate intelligence platforms, regulatory risk analytics, fintech automation, and specialised B2B SaaS.

Furthermore, analysts note that sovereign wealth funds and pension-backed growth capital are increasingly participating in the mid-cap space, particularly for targets that have scale but remain undervalued in the public market due to liquidity constraints or AIM-specific discounting. This could open new channels of capital for founder-led firms hesitant to engage with leveraged buyout structures.

In summary, while traditional take-private strategies may face headwinds in the current environment, private equity capital is unlikely to exit the UK mid-cap stage entirely. Instead, a more nuanced and founder-aligned approach appears to be emerging—one that recognises not just valuation, but also leadership continuity, capital market optionality, and strategic sector positioning. As analysts frequently reiterate, the UK remains rich with intellectual property and recurring revenue businesses—ideal targets for any PE firm willing to align with the realities of founder governance and long-term value creation.