More M&A on the way in social care in 2026

Following the recent Budget announcement, Laura Jordan, partner and head of corporate in the governance, funding, and corporate team at Anthony Collins, predicts a wave of high-quality social care businesses testing the market for potential exit options or merger opportunities in 2026

With many mergers and acquisitions already completed and investors still looking for opportunities to deploy capital, the social care sector is potentially heading for a strong year of deal activity.

Regardless of whether they are looking to buy or sell, being well prepared can improve outcomes significantly.

While many deals completed last year were driven by financial challenges, retirement planning, or a combination of both, there were also some signs of market consolidation, with some larger players and overseas investors looking to expand their portfolios.

For example, US Reit Welltower invested a total of £6.4bn in a UK senior care homes business operated by HC-One and Barchester Healthcare in October 2025.

And more of the same is expected in 2026, as more businesses in the sector explore opportunities to achieve growth through acquisition.

While many deals completed last year were driven by financial challenges, retirement planning, or a combination of both, there were also some signs of market consolidation, with some larger players and overseas investors looking to expand their portfolios

With inflation easing in 2025, and the Bank of England introducing several interest rate cuts, there has been an improvement in financial stability, and this has been driving investor interest from private equity, trade buyers, and overseas investors.

For small and medium-sized care businesses that have been struggling to secure fee uplifts from their local authority, despite facing a wall of rising costs, the idea of selling up could seem an attractive prospect.

The push to sell

The push to sell has been accentuated by the Government’s failure to address the crisis affecting social care services and at a time when tax hikes are a growing concern.

Even though many bigger players, fund managers, and other investors have investment capital at their disposal, deciding when to invest, and which businesses to acquire, remains a key challenge.

And care businesses with a good stock of well-maintained and compliant property assets are bound to stand out, as are those that have a stake in a fast-developing market, such as complex care management, dentistry, ophthalmology, diagnostics, and personal care.

For small and medium-sized care businesses that have been struggling to secure fee uplifts from their local authority, despite facing a wall of rising costs, the idea of selling up could seem an attractive prospect

For businesses operating in mainstream areas, such as residential care homes, it is important to have a strategic growth plan in place and be able to present a clear picture of what the business will look like, and who will be running it in five or 10 years time.

For care businesses considering a sale in the near future, being well prepared is essential.

Take your time

A period of about two years is normally recommended to allow sufficient time for employment or governance-related issues to be addressed fully, and to position the business for sale with a strong growth story to tell.

For example, if the exiting owner of an established care homes business hasn’t given enough thought to succession, deal negotiations could falter at an early stage, leaving price expectations unrealised.

Conversely, investing ahead of time in talent recruitment and development to bolster the management team could help the owner to achieve the desired outcome.

From an employment perspective, it is important to check the appropriate policies are in place and to ensure they are compliant with shifting legislation, particularly in light of changes being introduced under the Employment Rights Act 2025.

Care businesses with a good stock of well-maintained and compliant property assets are bound to stand out, as are those that have a stake in a fast-developing market, such as complex care management, dentistry, ophthalmology, diagnostics, and personal care

It may also be necessary to conduct a Right to Work assessment to ensure the business is compliant with the latest Home Office guidance.

Once due diligence is underway, access to such employment information is likely to be important, along with any positive HR management data that might be available, such as employee retention rates for example.

Invest in technology

Investment in AI and digital transformation, especially in back-office functions, such as HR, can also help to demonstrate the organisation’s focus on driving efficiency and effectiveness.

For investors targeting the social care sector, quality of care is an important consideration, and concerns about the backlog in Care Quality Commission assessments and reporting can undermine confidence.

To address this, care businesses should consider investing in an independent audit of its services and a number of specialist providers are available for this purpose.

For care businesses with a property portfolio, ensuring that assets are well managed and well maintained is essential, and detailed records must be kept to evidence this.

When deal negotiations are underway and due diligence is being carried out, sellers are expected to provide details of all leases and demonstrate that compliance checks have been carried out in accordance with health and safety regulations.

Working with professional advisers with an indepth knowledge of the social care sector can improve outcomes significantly.

For care businesses with a property portfolio, ensuring that assets are well managed and well maintained is essential, and detailed records must be kept to evidence this

While the right adviser can be helpful at all stages of the deal-making process, involving them at an early stage will enable an accurate and realistic valuation, and get negotiations off to a good start.

For example, mid-sized care businesses may be sitting on hidden assets that have evolved over time, which have become part of day-to-day processes.

Recognising these assets, ensuring they are attributed a value, and including them on the balance sheet before the business is marketed for sale, can smooth the way for deal negotiations.