Dearth of oil deals fails to prevent Q1 surge

SCOTLAND benefited from the UK-wide resurgence in deal activity during the first quarter of this year despite a marked decline in transactions within the oil and gas industry.

Oil and gas activity in Scotland has seen an increase. Picture: Hemedia

The latest PWC Deals Index, a survey of more than 100 corporate and private equity firms, recorded a 50 per cent increase in deal volumes on the same period last year. The value of these transactions was up by 96 per cent, driven by a shift of focus among private equity houses to much larger acquisitions.

David Leslie, PWC’s head of corporate finance in Scotland, said easier access to cash through capital and debt markets has allowed firms to press ahead with mergers and acquisitions. He also noted a rise in confidence with the improving economic climate,.

“Here in Scotland, we’ve seen a number of quality deals in the last 12 months reflecting a strong international appetite for M&A across a range of sectors from business services and technology to real estate and bio-pharma,” Leslie said.

“We’ve seen a slowdown, however, in the rate of transactions within the oil and gas industry, mainly due to the slump in oil price at the end of 2014. As the price continues to recover, we predict this will pick up again due to the combination of favourable market dynamics and strong international growth potential.”

Corporate activity was the main driver of growth in terms of UK deal numbers, accounting for 70 per cent of the increase during the quarter. This compared to growth of just 2 per cent in private equity deal numbers.