| SARRATT GLOBAL ADVISORS | SIGNAL NOTE |
If your UK acquisition models price switching costs as a durable moat — or assume that completing acquisitions sequentially protects against portfolio-level merger review — how exposed are your current UK positions to the CMA repricing both assumptions simultaneously?
Count your completed UK acquisitions from the past 24 months. If you own a healthcare or enterprise software platform that has done three or more, the CMA may already be evaluating them as a single merger. You would not necessarily know.
That is what happened to Welltower — a $145bn S&P 500 REIT with institutional governance, public- company accountability, and a direct line to the UK Government's Office for Investment. It completed four separate UK care home acquisitions between October and December 2025. In February 2026 the CMA served enforcement orders on all four simultaneously, treating the £6.4bn portfolio as one merger. Phase 1 decision deadline: May 8.
In the same quarter, the CMA confirmed it will launch a formal investigation into Microsoft's business software ecosystem in May — explicitly targeting the switching costs and egress fees that justify SaaS acquisition premiums. These are not unrelated events. They are the same regulatory doctrine applied to two of the largest PE deployment categories at once: the structural features you paid to acquire are now the features the CMA is targeting.
The standard PE playbook for UK M&A: complete acquisitions sequentially, keep each deal below formal notification thresholds, rely on the CMA's case-by-case review to evaluate each transaction on its individual competitive footprint. Welltower ran that playbook — and the CMA rewrote it.
Barchester (284 homes, £5.2bn), HC-One, Aria Care, and Danforth Care: four deals, four separate counterparties, completed over eight weeks. Combined: more than 600 operational UK care homes. The CMA treated them as one. Initial enforcement orders on all four — simultaneously — arrived in February. The Phase 1 investigation commenced March 9. The CMA is also investigating secondary transactions involving Care UK and Apex Healthcare within the same bundle, expanding scope beyond Welltower's direct acquisitions.
Welltower's size provided no protection. Its governance quality provided no protection. Its prior engagement with the Office for Investment — the UK Government body that had publicly welcomed its care sector commitment — provided no protection. The CMA issued four enforcement orders in three weeks.
The 'sophisticated strategic operator' defense is gone. If institutional governance and public-company accountability can't shield four
completed deals from concurrent enforcement orders, no PE-backed roll-up in the UK can assume it will.
The CMA has been working its SMS designation pipeline methodically. April 2025: DMCC direct enforcement powers live. October 2025: Apple and Google designated in mobile platforms. April 1, 2026: first voluntary commitments from both on app store fairness — now enforceable. April 2026: Google conduct requirements in search finalised. May 2026: Microsoft business software ecosystem SMS investigation launches.
The investigation explicitly targets cloud licensing terms, switching costs, and egress fees. Those three items are not incidental features of enterprise software businesses. They are the structural properties that produce durable NRR, reduce churn, and justify premium acquisition multiples in a roll-up model.
The SMS threshold — £1bn in UK revenue or £25bn globally — is not a Big Tech filter. It captures every enterprise software platform at the core of a European SaaS roll-up strategy. Once designated, conduct requirements carry fines of up to 10% of global annual turnover. The UK's app economy alone is valued at £28bn — the CMA's own figure. The enterprise software market the investigation now enters is larger.
The CMA has categorised the switching costs you modelled as a moat as a competition problem. NRR assumptions baked into acquisition models are not durable competitive advantages. They are the next target on the SMS roadmap.
UK healthcare roll-up platforms. The Welltower doctrine does not require a single dominant deal. It requires a pattern. Any PE-backed operator that has completed three or more UK healthcare acquisitions in the past 24 months — care homes, dental, veterinary, primary care, behavioural health — is now operating under a CMA framework that can treat that portfolio as a single merger. The Welltower Phase 1 decision on May 8 will establish whether behavioral remedies are available or whether Phase 2 referral — a 24-week investigation — becomes the template.
SaaS roll-up funds with UK-exposed enterprise portfolios. The Microsoft SMS investigation will produce conduct requirements that structurally erode the switching costs your acquisition model priced as moat. That is a present impairment to terminal value assumptions — not a future risk. It cascades to NRR compression, churn rate deterioration, and exit multiple reduction on every UK-facing enterprise SaaS asset in your portfolio. Software comprises roughly 17–22% of European PE deployment by deal count. The firms most exposed are those where switching costs are contractual rather than operationally embedded — the exact category the CMA investigation is targeting.
Buyers currently in diligence on UK software or care assets. Any acquisition model that does not include a CMA portfolio-doctrine scenario or SMS designation risk is incomplete. The question for your IC is not whether the CMA will scrutinise your sector. It is which deal in your existing portfolio triggers the clock — and whether you modelled that before you closed.
Buyers who reprice into the new environment. Sponsors who adjust UK roll-up models now — accounting for switching-cost erosion under SMS and portfolio-doctrine exposure in care — will acquire assets at multiples that reflect the actual regulatory environment. In competitive processes, that is a structural advantage over bidders still pricing the pre-CMA assumption.
Niche vertical SaaS below the SMS threshold. Platforms below £1bn in UK revenue are structurally insulated from SMS designation. Businesses where switching costs are operationally embedded — field service management, clinical workflow, regulatory compliance tooling — remain defensible. The CMA's doctrine creates a flight-to-quality dynamic toward genuinely sticky platforms that don't depend on contractual lock-in.
The sleeper: acquirers of distressed roll-up assets. If Microsoft SMS compresses multiples on UK SaaS platforms and Welltower-precedent increases friction costs for healthcare roll-ups, sponsors who cannot survive the repricing will need to exit. The secondary market for those assets — at adjusted entry — is the opportunity that the enforcement cycle creates.
The prevailing view in European PE is that the CMA under Doug Gurr is pivoting to a pro-growth posture. The UK Government's Strategic Steer explicitly told the CMA to prioritise economic growth. Enforcement, the argument runs, will soften.
Three things the pro-growth narrative gets wrong:
businesses — switching costs that block SaaS competitors, healthcare consolidation that reduces choices for local authorities — while reducing friction for inbound investment. The pro-growth mandate does not protect incumbent market structures. It targets them.
Trade Committee expressed explicit reservations about his approach to enforcement. The CMA's first acts after his confirmation: accelerate Apple/Google commitments, confirm the Microsoft SMS investigation. That is not a softening signal.
CMA has already issued its first procedural fine (February 2026), launched five new consumer law investigations (March 27), served four simultaneous enforcement orders on Welltower, and confirmed the Microsoft SMS investigation. Eight significant enforcement actions in twelve months is not a regulator pulling back.
The CMA is not going after bad actors. It is going after the structural features that make businesses worth acquiring. That is a different problem — and a more durable one.
DATE
April 22, 2026
CMA Apple/Google steering consultation closes
May 8, 2026
CMA Welltower Phase 1 decision deadline
May 2026
CMA Microsoft SMS investigation launch
2026–27
Welltower Phase 2 (if referred)
Microsoft conduct requirements issued
THIS WEEK — sets next SMS intervention scope
HARD DATE — Phase 2 referral = 24-week investigation
CONFIRMED — cloud licensing and egress fees in scope
Precedent-setting for all UK healthcare roll-ups
Fines up to 10% global turnover for non- compliance
This note covers the public signal. Our monitoring practice tracks:
Welltower Phase 1 remedy negotiations and CMA case team communications • Microsoft SMS investigation scope filings
within the Welltower bundle
May 8. If the CMA refers Welltower to Phase 2, the investigation runs another 24 weeks — and every UK healthcare roll-up in your portfolio will be reviewed by LPs against that precedent. If you are evaluating a UK care, dental, or primary care acquisition, that conversation should happen before the Phase 1 decision.
SGA tracks where government actions collide with portfolio dynamics — and what it means for your assets before the market prices it.
Pre-Investment Diligence: CMA exposure mapping for UK-facing healthcare and SaaS targets, including portfolio-doctrine risk assessment and SMS designation probability analysis for enterprise software acquisitions.
Portfolio Company Support: Enforcement monitoring for existing UK roll-up platforms, including CMA case timeline tracking, remedy scenario analysis, and switching-cost erosion modelling for SaaS assets under SMS investigation.
Scenario Playbooks: Probabilistic acquisition premium analysis under Phase 1 behavioral remedy, Phase 2 referral, and divestiture scenarios — with LP-presentable framing for affected portfolio positions.
For further discussion: satish.narayanan@sarrattglobal.com
Connected signals: The Roll-Up Reckoning • The Six-Front Healthcare Squeeze • The FTC Franchise Bomb
Sarratt Global Advisors tracks where government actions collide with portfolio dynamics — and what it means for your portfolio before the market prices it. This note is for informational purposes only and does not constitute investment or legal advice. © 2026 Sarratt Global Advisors.