How We Detect Off-Market Deals:
24 Signals That Predict Transaction Readiness

Most deal origination in the UK lower mid-market relies on relationships. You know someone, they know someone, a conversation happens. It works, but it does not scale, and it only covers a fraction of the market.

We built a different approach. Velinor tracks 5.6 million UK companies and scores each one across 24 proprietary signals that predict whether a business is likely to engage in a transaction conversation. Not just whether it fits your investment thesis, but whether the timing is right.

Here is how it works.

The four dimensions

Every company receives a score from 0 to 100, calculated across four weighted dimensions:

Exit Readiness (8 signals)

This is the most powerful dimension. It answers the question: is this business approaching a point where the owner is likely to consider a transaction?

The signals include:

• Director age and tenure: A founder over 55 who has been running the company for 20+ years is statistically more likely to engage in exit conversations than one who is 40 and growing fast
• Succession indicators: Has a new director been appointed recently? Has the founder stepped back from day-to-day? Is there a gap in the management team that suggests succession planning?
• Ownership structure changes: Recent PSC (Persons with Significant Control) changes, new shareholders, or changes to share classes can all signal preparation for a transaction
• Advisor appointments: The addition of non-executive directors, advisory board members, or corporate finance professionals to the board often precedes a sale process by 12-18 months
• Business simplification: Dormant subsidiaries being wound down, group restructuring, or the sale of non-core assets are signals of a business being "tidied up" for exit

Financial Health (6 signals)

Financial signals tell us about the quality of the business as an acquisition target. Strong financials do not just mean "good investment," they mean the company is more likely to attract competitive interest and therefore needs to be reached early.

• Revenue trajectory: Consistent growth over 3+ years, particularly in the 5-15% range, signals a healthy business without the volatility risk of hypergrowth
• Recurring revenue percentage: Businesses with 70%+ contracted or recurring revenue attract 2-3x higher multiples and more buyer interest
• Profitability indicators: We analyse filed accounts for margin trends, working capital health, and cash generation patterns
• Filing patterns: Companies that file full (rather than abbreviated) accounts, file on time, and maintain clean records are typically better managed and more transaction-ready

Market Position (6 signals)

Market position signals help us understand the competitive dynamics around a target. A company in a fragmented market with strong local positioning is fundamentally different from one competing against dominant national players.

• Sector fragmentation: Highly fragmented markets with many small operators are ideal for buy-and-build strategies. We track the number of competitors and their relative size
• Geographic concentration: Regional champions in underserved markets are often the most attractive targets for platforms looking to expand
• Sector growth dynamics: New incorporations vs dissolutions in the sector tell us whether the market is expanding or consolidating
• Cross-sector adjacencies: Companies operating at the intersection of two growing sectors (e.g., healthcare IT, industrial IoT) often attract premium valuations

Execution Capability (4 signals)

These signals assess how well a business can sustain performance through an ownership transition. High key-person dependency, for instance, creates risk but also creates urgency.

• Key person dependency: How reliant is the business on the founder? Companies with strong management teams below the founder are both more valuable and more likely to succeed post-acquisition
• Team depth: We track officer changes, new appointments, and team stability as indicators of organisational resilience
• Operational independence: Can the business run without the current owner? This is the single most important factor for search fund acquirers

How we weight the dimensions

Not all dimensions matter equally. Our weighting reflects what actually drives transaction likelihood in the UK lower mid-market:

• Thesis Fit: 40% - Does the company match what the buyer is looking for? Sector, size, geography, deal type
• Transaction Readiness: 35% - Is the timing right? Succession signals, ownership changes, advisor appointments
• Accessibility: 25% - Can we actually reach the decision-maker? Off-market companies with identifiable owners score higher than corporate subsidiaries with opaque structures

A company scoring 70+ is what we consider "qualified," the signal strength is high enough to warrant proactive outreach. Our clients only see companies above this threshold.

The data sources

Every signal is derived from public data. We do not scrape, we do not hack, and we do not use any data that is not freely available. The intelligence comes from connecting data points that nobody else is connecting at this scale:

• Companies House: Daily bulk data sync of company filings, officer records, PSC registers, confirmation statements, and annual accounts
• Public web data: Website content, job postings, news mentions, and industry directory listings
• Sector intelligence: Industry-specific databases, trade body membership lists, and regulatory registers

The system processes this data continuously. When a signal fires (a new director appointment, a PSC change, a filing pattern shift), the company's score updates automatically. Our clients see a continuously refreshed pipeline, not a static spreadsheet.

Why this matters

Traditional deal origination is binary: either you know about a company, or you do not. Our scoring system turns this into a spectrum. We can tell you not just which companies fit your thesis, but which ones are most likely to engage in a conversation right now.

That distinction, between a company that fits your criteria and a company that is ready to transact, is the difference between cold outreach and a warm conversation. It is why our clients consistently connect with owners who are genuinely ready for a conversation.