Frank O’Donnell: Scotland’s deal market is flying in the face of adversity

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Deals and investments are the sparks of our economy and their frequency is an indicator of Scotland’s economic vitality.

The looming shadow of Brexit – which is set to happen less than 200 days from now – and a slow rate of growth has failed to put a dampener on the number of takeovers and the volume of money flowing into the country.

The purchase of Barrhead Travel by US-based Travel Leaders Group, which will leave the current management team in place, is an 
exciting development in the Scottish economy that will allow the Glasgow-based firm to expand into new markets.

This article appeared in Deals 2018. A digital version can be found here.

This year has been a significant one for our financial services industry with Standard Life merging with Aberdeen Asset Management to create Standard Life Aberdeen, which will manage £610 billion of assets around the globe.

The last quarter of 2017 also saw the acquisition of GlenAlchallie distillery from Pernod Ricard by an independent group made up of industry veterans, including former Benriach distillery owner Billy Walker.

This move typifies a vibrant Scottish food and drink sector which continues to innovate and attract inward investment.

As Ivan McKee, minister for trade, investment and innovation, points out in his first-person article on Page 9, building innovative businesses is the key to our future economic prosperity.

When it comes to attracting inward investment, Scotland is in an enviable position.

The country is the most popular destination for foreign direct investment in the UK outside London, according to a EY Investment Attractiveness Survey published this year.

It is encouraging, therefore, to see the Scottish Government continuing to push our high quality of living and easy access to stunning scenery to investors and visitors alike around the globe in their Scotland is Now campaign.

Deal activity is also increasing in the North Sea as the industry emerges from the downturn.

Key to this turnaround has been a focus on innovation to ensure further exploration demonstrated by the Oil and Gas Technology Centre in Aberdeen, which specialises in exploring how to exploit reserves in smaller pools.

Our economy continues to evolve at a fast rate as disruption challenges the old norms of doing business.

Small-scale enterprises in Scotland now employ more than 1.2 million people in fields ranging from micro-brewing to web design.

The country’s business base is at its highest since early 2000s with more than 365,000 private enterprises in operation.

Funding, too, is not standing still.

While traditional lenders still bankroll much deal activity in Scotland, the networks of angel investors and new funding models such as peer-to-peer lending, that emerged from the crash, continue to go from strength-to-strength.

Retail will be the space to watch in 2018 for deal activity as the sector undergoes fierce transformation in response to changing consumer behaviour.

Could some of our well-known shopping centres change into online distribution hubs in years to come? Time will tell.

Frank O’Donnell is editorial director of The Scotsman.