The first half of 2026 was an unusually busy period for education policy. The CMA opened a market study into childcare and the SEND white paper set out a substantial reform of specialist provision. The change of administration in July has since added a commitment to technical and vocational pathways from age fourteen and a clear tilt towards regional devolution. Policy of this breadth takes time to work through into provision and funding, but it has given buyers a clearer view of where government strategy, and therefore funding, is headed.
Against that backdrop, 75 education and training transactions completed in the first half. That is below the ninety-one recorded in a record first half of 2025, though it compares with a wider UK market where volumes fell by around a third year on year in the first quarter. Education has fared well in a subdued M&A market, as it tends to, with demand underpinned by demography, statutory entitlement and public funding rather than the economic cycle.
Early years: consolidation with a sharper filter
Nurseries and childcare remained the busiest part of the market at 33 deals, a little under half of all volume, as regional platforms continue to consolidate a fragmented, owner-managed estate supported by the funded-hours expansion. With the CMA examining fees, top-up charges, provider sustainability and the influence of corporate ownership, acquirers are already modelling possible remedies into deal structures rather than waiting for conclusions. Occupancy quality, staffing ratios, freehold exposure and the balance between funded and private fee income are receiving closer attention as a result.
Independent schools: consolidation into groups
Eighteen transactions in schools and higher education reflect a structural change. VAT on fees has compressed margins as enrolments are softening, and pre-VAT cash reserves are beginning to dry up, with an unprecedented number of closures in 2026 so far. The schools most exposed are those least able to spread central costs. Groups able to carry compliance, admissions, marketing and estate management centrally are acquiring capacity, and private equity investment into online and flexible provision this half shows buyers are willing to back delivery models beyond the traditional campus where demand from SEND, home-educating and international families is demonstrable.
Skills and vocational: alignment with industrial strategy
Thirteen transactions were completed in vocational and technical training, with buyers concentrating on provision aligned to priority sectors within the industrial strategy: construction, engineering, digital, health and early years to name a few. Employer demand in these areas is persistent, provision is hard to replicate quickly, and the policy focus on reducing the number of young people not in education, employment or training gives publicly funded routes into work a level of protection.
July’s commitment to technical and vocational pathways from age fourteen, to be designed and delivered locally from 2028, extends that logic. Detail remains limited, but the direction is towards mayors and combined authorities holding greater influence over skills funding and curriculum design. If that materialises, providers with regional strength, and with the close employer and local authority relationships to match, could become more valuable than their scale alone would suggest. We examine the implications in more detail in our spotlight later in this report.
Private equity: committed across platforms and bolt-ons
Private equity was involved in 61% of transactions in the first half. New platforms were backed across early years, online schooling and EdTech, while established groups continued to add bolt-ons. Despite policy reform and wider economic uncertainty, investors continue to support education platforms. Overseas buyers remain active at the larger end of the market, providing an attractive exit route for scaled businesses with strong management teams.
Looking ahead
The CMA study runs into 2027 and its findings are some way off; the shape of technical education at fourteen will emerge gradually; and the impact of potential devolution strategies on areas such as funding security will continue to be examined closely in diligence, particularly for platform investments. None of this points to a change in appetite. Sponsors are well capitalised and actively deploying, various sub-sectors remain fragmented, and the fundamentals that make education attractive to investors are unchanged, albeit the mechanics of funding could be shaken up.
Next steps
Set up an initial meeting and discuss the right option for you and your business. Before the meeting it is helpful to consider the following topics:
- What are your objectives? Are you looking to exit or grow your business to the next level?
- Would you like to remain involved going forward? What is your desired timeline for exit/growth?
- What legacy do you want to create for the business and its employees?
- How has your business performed historically, and how robust are your financial systems and revenue contracts?
- What are the skill sets and ambitions of your current management team/family members working within the business?
- What are your plans for growth, and what does your business need to deliver this?
