As we approach the end of our first month back following our festive break, we wanted to take this opportunity to summarise our thoughts on an eventful 2021, in what is safe to say was a stellar year for deal-making in Scotland.
Whilst the latter part of 2020 was a period of stabilisation, change as we know can bring opportunity, and in 2021, corporates, investors and dealmakers alike have embraced that positive mantra to deliver a host of market leading deals, across a wide variety of sectors.
From a buyer’s perspective, M&A has gained heightened prominence as a means of accelerating growth, and on the sell side, high valuations have brought vendors to the table in significantly greater numbers. Whilst we have benefitted from a number of transactions being brought back to the market which went on hold in early 2020, new deals have been initiated in high volumes, and with a deep pool of private equity capital seeking to be put to work after a quieter 2020, in addition to strong overseas trade interest in Scottish businesses, this has made for a fertile market.
Notably, last year also saw several successful Scottish IPOs delivered, yet another strong bellwether for Scottish business confidence.
In terms of sectoral themes, digital, financial services, cleantech, renewables, medtech and pharmaceuticals have received particularly strong interest, but similarly segments of the traditional economy have also fared well, as a result of the heightened appetite in the market. The funding landscape too continues to flourish, with what can only be termed a prolific angel and early stage investor network delivering growth capital deals which themselves will drive more transactions in the future. The availability of liquidity has been further enhanced by the creation of new private and family offices, together with fresh impetus from government-backed funds, principally through the recently-created Scottish National Investment Bank.
We’re now naturally casting an eye on what 2022 holds in store, and with – even by pre-pandemic standards – an unprecedented number of transactions either in process or in preparation for being brought to market, we look forward with confidence to what should be a buoyant start to the year.
While there is certainly grounds for real optimism following the recent developments with Covid-19, sections of the economy yet again find themselves wrestling with challenges brought on by pandemic-related restrictions and hence, much as 2021 continued to present obstacles to contend with, 2022 too will no doubt similarly require tenacity from dealmakers to contend with any covid-inspired headwinds. However, Scottish businesses should be applauded for their resilience and adaptability to dealing with the new set of circumstances, and these traits will be invaluable to maintain the momentum created last year.
As a new name in the advisory market, but one with a long heritage led by many familiar faces, we at N4 have been warmly received, and this has been borne out by the fantastic progress we have made in terms of deals completed and those under current management, working with exceptional entrepreneurial, high growth clients. We anticipate 2022 being yet another pivotal year for the Scottish deals market, and we look forward to playing our role in driving the market forward.
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