Deal making in rude health despite fears over economy

Corporate deal activity in Scotland remains buoyant but the setting of a date for a second independence referendum is likely to lead to a lull, according to a new report published today.

But business leaders said setting a date for indyref2 could lead to a pause in investment activity. Picture: Andrew O'Brien

The survey of 50 leading figures from across corporate Scotland, conducted by law firm Burness Paull, provides some insight into what can be expected in terms of deals and investment in the next 12 to 24 months.

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Among the key findings was a clear message from Scottish businesses that they would not let political or economic uncertainty define them or their activities. Instead, there is likely to be “more diversity” in deal making and funding.

Where the major banks once dominated, growth and acquisition finance is set to come from private equity, venture capital, business angels or growth capital providers, according to the study, entitled “Corporate Scotland: Deal-making trends”.

Survey respondents cited that setting a date for indyref2 will likely lead to a pause in investment activity across some sectors, until the outcome of the vote is known. However, business leaders were less concerned about Brexit as many Scottish companies are already “actively engaging” with clients out with the European Union.

Despite the uncertain backdrop, investment in technology is forecast to increase for most if not all businesses over the next two years, with cloud, big data and digital payments the main areas of interest.

Peter Lawson, head of corporate at Burness Paull, said: “The resilience and positive attitude of Scotland’s business leaders, matched with robust and well designed strategies, will continue to drive deal-making in the next 12 to 24 months.

“Our survey’s results indicate that exit activity will continue to rise – with buyer interest expected to come from overseas, trade or private equity.

“Overseas investment into Scotland in particular, will almost certainly increase with Scottish trophy assets inviting interest from international businesses.”

He added: “Leaving to one side uncontrollable political factors, ‘Corporate Scotland’ will not rest on its laurels and wait for opportunities to come along.

“We believe it will take its well-earned confidence and, with its vision, dynamism and dogged determination, create the opportunities that will continue to generate healthy levels of deal activity.”