Despite the economic headwinds facing UK industrials businesses, deal volumes have remained strong. There were 313 completions in Q2 2026, compared with 297 in Q2 2025. Trade buyers and investors are finding significant value in industrial businesses despite the challenges that face them. But the data alone doesn’t show what exactly is attracting buyers, nor the increased price they’re willing to pay.

This article explores how industrials businesses are typically valued. It then outlines the lesser-known factors that can help business owners boost value ahead of an exit.

How are privately owned industrials businesses valued?

The value of privately owned UK industrials businesses is usually based on applying a multiple to a business’s underlying sustainable EBITDA (earnings before interest, tax, depreciation and amortisation).

Sustainable EBITDA is the level of EBITDA a business can realistically expect to generate year after year. This part of the valuation equation is always evidenced by underlying financial data.

In contrast, the multiple being applied is much more subjective. The ‘multiple range’ is typically based on factors such as previous acquisitions of similar businesses in the industry. Where a business falls within that range depends on its unique traits. Business owners often overlook these factors, or "value drivers”.

What drives the value of an industrials business?

Value drivers vary from business to business, but there are a few general ones that apply to many businesses within the industrials industry. Here are some examples that buyers tend to pay close attention to:

End markets

Selling products or services into attractive, growing end markets is one of the most important factors in determining a valuation multiple. In 2026, the end markets that are getting a lot of attention include:

• Defence and defence-adjacent sectors
• Electricity and grid infrastructure
• Data centre and AI infrastructure supply chains
• Medical devices and life sciences
• Fire, security and the built environment.

Customer concentration

Having a diverse customer base significantly reduces risk. Businesses with diversified revenue and profit exposure are typically considered more resilient and may get a higher valuation multiple as a result.

Intellectual property (IP)

Businesses that earn profits from IP are far more defensible and valuable to buyers than businesses that simply compete on price.

Ability to pass through input cost inflation

In recent years, factors like higher energy costs industrials businesses have experienced significant increases in input costs. Those that can pass on these costs to their customers are likely to attract an enhanced valuation multiple.

Value-added services

A business that can cross-sell a service that complements its manufacturing or product capability has a more attractive revenue model. Typically, a product sale leads to service revenue, which in turn creates opportunities for further product revenue.

Management depth

Businesses with an established management team that sit below owner level and are incentivised to grow the business, are very attractive to buyers. But they are also hard to build especially for a new owner.

Exit readiness can maximise business value

Exit readiness is the process of preparing a business for its eventual sale. It can be split into two parts.

First is the process of making sure financial and legal foundations of the business are solid and ready for buyer due diligence. This is an opportunity for any issues to be identified and rectified ahead of a sale process. This is in important way of protecting value.

The second part is aligning the business as closely as possible to the right value drivers to maximise value at the point of exit. This is the part that is often overlooked. For example, if a business has a management structure heavily focused around its owner, building a capable management team below owner level could be a big step towards exit readiness.

Not all businesses will be able to align with all applicable value drivers. But understanding which ones will strengthen the business potential value for buyers can have a massive impact on a potential sale.

How we can help maximise the value of your industrials business

We have advised on around 200 transactions across the industrials industry over the last five years. That experience means we can give you tailored expert advice and guidance throughout every part of the sale process. That includes identifying key value drivers, assessing and improving exit readiness, preparing a business for market and negotiating a sale or private equity investment.

If you are considering a sale or private equity investment, contact James Atkinson to discuss the value drivers’ buyers will focus on. Along with his team, he can help you identify steps you can take now to strengthen your exit readiness and maximise value.

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