Scotland business deals to be had in spite of political and economic uncertainty, say experts

Despite political uncertainty and economic headwinds, Scottish companies are continuing to attract domestic and global investment with some sectors proving particularly resilient, according to business commentators.

The latest quarterly Deals special report published in today’s Scotsman, in association with business services group AAB and law firm Brodies, points to cautious optimism among investors and advisers. Sectors such as technology and life sciences remain particularly active when it comes to deal making.

Analysis by Experian MarketIQ found in the first half of the year in Scotland, 183 deals were recorded – 16 per cent fewer than during the first six months of 2021. However, valuations were up 19 per cent to just under £14 billion.

Neil Burgess, partner who leads the corporate and commercial practice at Brodies, said: “We've seen robust levels of activity across the board for Scottish dealmakers in the first half of this year. Our experience mirrors the Experian report, with deal volumes being slightly down in the first half of this year, but that’s against a bumper time for mergers and acquisitions (M&As) in 2021. So despite volumes being down, it was nevertheless a positive start to 2022.”

Scottish companies are continuing to attract domestic and global investment despite economic uncertainty, experts have said. Picture: Jane Barlow/PA Wire

Mr Burgess said there had been a slight softening in the deals market at the start of the Ukraine conflict in February, followed by a steady improvement since then.

Chris Thompson, director of the corporate finance team at AAB, pointed to strong deal flow and plenty of capital in the market, particularly in more resilient sectors.

He said: “The tech sector in Scotland is still performing strongly, with a lot of investment from the likes of angel syndicates and venture capital funds.”

According to the Deals special report, interest in Scottish business remains strong from such markets as the US and Canada.

Looking ahead, Gordon Steele, partner and head of deals in AAB’s corporate finance team, said: “I expect there to be a cautious approach to pricing deals, especially for businesses that are capital intensive.

Mr Burgess added: “In the next six to 12 months, we’ll see some adjustment in certain sectors. But there are opportunities out there.”