Despite business uncertainty, severe political instability and a number of sectors such as retail and energy facing continuing tough challenges, the deals market across Scotland does not appear to be taking much notice. As the UK started 2019 with nervous anticipation, the corporate deals market in Scotland shows little sign of slowing down.

In the last 12 months, our Corporate Finance team has been involved in over 123 corporate deals and, so far, the first quarter is looking strong. In 2018, the deals spanned a large number of sectors and a wide range of deal values, involving both ends of the spectrum, from large PLCs to some of Scotland’s most ambitious start-ups.

Despite what is going on around us politically, around 15% of these deals had an international element (typically involving international headquartered companies looking to invest in Scotland or increasing their investment in Scottish businesses). This included New Zealand based Xero (a global leader in accounting software) acquiring the Scottish based Instafile business as part of its growth plans.

This activity seems reflective of the wider market in Scotland where an appetite for Scottish firms remains strong. Large multinationals who had their sights set firmly on global expansion in 2018 did not appear to consider Brexit a deal breaker. Indeed, Ernst and Young’s Scottish Attractiveness Survey in 2018 highlighted an unprecedented run of success for Scotland with a 7% increase in foreign direct investment projects, reinforcing the country’s reputation as the most attractive foreign investment destination in the UK after London. Latest figures also indicate that Scotland’s economy and international exports both continued to grow last year with unemployment figures being the lowest on record.

Domestically, Scottish businesses are used to a steely “business as usual” stoical approach to political uncertainty – perhaps because they have experience of living through years of limbo leading up to the Scottish referendum in 2014. This resilience has no doubt been a factor in the increase in investment and deal activity in 2018.

What can we learn then from the 123 deals we have advised on over the last 12 months?

  • Over 35% of the transactions involved our clients disposing of their business
  • Just under 30% involved clients acquiring businesses
  • 17% involved restructuring (many in preparation for a future planned sale)
  • 10% involved equity investment
  • 8% involved a range of other corporate activity

Is there anything we can take from these statistics? At one level, it appears that many business owners are taking advantage of the availability of entrepreneur’s relief to realise the value in their business. Others are one stage behind and looking to re-structure to facilitate a tax efficient transaction in due course. Of the disposals/acquisitions in which we were involved, over 15% involved passing the business to existing management.

A healthy mix of activity. What about sectors?

Deals we have completed over the last year have taken place within a wide range of sectors right across the Scottish economy:

Food & Drink

Last year saw food and drink exports top £6 billion, undoubtedly helped by a scorching summer that boosted sales to their highest level in five years in July.

Of the transactions in which we were involved in this sector, the main theme seemed to be whisky or fish related – perhaps not a surprising situation. This sector, however, is one where Brexit could have a significant impact. In 2017, for example, exports to EU countries increased by over 13% while exports to non-EU countries increased by less than 1%. Interestingly however, we have found that many of our clients have been laying the groundwork for some time for market diversification to ensure that any export issues with Europe can be offset by growth of non-European exports.


The UK video games development and digital publishing sector looks set for another year of expansion. In a recent survey of UK businesses in this sector, over 77% of respondents indicated they were planning on increasing employment in 2019. With Scotland representing the largest games cluster in the UK outside London and the south east, our rich heritage looks set to grow.

One company pursuing a growth strategy in 2018 was Edinburgh based Speech Graphics. The company provides pioneering facial animation technology to the gaming industry and last year secured investment from Archangels, Par Equity and Scottish Investment Bank to expand its offering further. Speech Graphics’ animations currently feature in a range of productions from AAA video games to music videos. They are a great example of a Scottish based technology business with a real presence (and opportunity) on the global stage.

Health & Life Sciences

The life sciences industry in Scotland has huge aspirations, including delivering a combined turnover target of £8 billion for life sciences by 2025. Dundee’s life sciences sector also recently received praise from the Scottish Parliament, particularly for its efforts to strengthen partnerships between industry, academia and the NHS in Dundee.

In 2018, we continued our work within the wider healthcare sector, advising many in the pharmacy sector (including the multi-million-pound finance deal from HSBC to Scottish Pharmacy Group), the care home sector and the animal health sector (including the vet sector, which continues to undergo significant consolidation throughout Scotland and the rest of the UK).

Business Services

The insurance and IFA industry has seen a string of acquisitions this year. We advised Boyd & Company in making its first acquisition since becoming part of the UK-wide Broker Network in 2017 with the purchase of Musselburgh-based insurance broker Insureness Limited. It is likely that further consolidation will continue in 2019.

Employee Ownership

The employee ownership sector also saw a boom in 2018, primarily driven by economic development agency Co-operative Development Scotland. This year, for example, we advised 20/20 Business Group – a provider of market-leading project management training courses – on its transition to employee ownership, with 20 of its employees becoming owners. The variety of options and structures available to allow ownership passing to employees is likely to mean more and more business owners consider this option in 2019 as its profile, as an alternative to other forms of exit increases.

As we look to the year ahead, Scotland’s deals community appears to be thriving as businesses continue to prioritise growth and development over concerns of what may or may not happen. It will remain to be seen how the political uncertainty manifests itself but, certainly, it appears that corporate Scotland is not sitting back and waiting.

Click here to see a selection of our latest corporate deals


Operating across a wide range of sectors, we advise clients on a broad range of issues, including start-up and venture capital deals, joint ventures and helping traditional family businesses. To find out how we can help you, please contact our Corporate Finance team.