Dealmakers

As we welcome in 2023,  do we dare draw a line under 2022, which was another challenging year, not just for business, but for society as a whole?

This time last year it seemed as if we all wanted to see the end of 2021, and welcome 2022 afresh. If ever there was a time when a crystal ball could have come in handy, January 2022 would have been it.

No industry, sector or indeed portion of our everyday lives has been immune from the challenges brought on by the impact of Brexit, global conflict and rising inflation. Those three factors individually would make businesses stand up and take action. Combined, they are a different challenge very few will have experienced before.

We are in the relatively fortunate position to work with Scottish business owners day in, day out. Their resilience has certainly been tested, and will continue to be. However, I have no doubt they will stand up to the challenge.

On the home front, after a busy start to 2022 most likely fuelled by the pent up demand from business owners and investors, we headed into the summer with the independent recognition of being named second in Scottish Business Insider’s Scottish 2021 deals table, having completed 155 transactions with a combined value of £240.7m.

That healthy level of activity continued throughout the year with investment coming from a wide range of areas including venture capital, private equity, traditional debt, and large corporates.

Despite the political uncertainty, M&A activity continued to be busy in 2022. Domestic and international consolidators across sectors such as healthcare, technology, and professional and financial services, continued their investment in Scotland.

As 2022 drew to a close, business owners could thankfully look ahead to 2023 knowing their contribution to the economy was recognised by those who control the public purse. Despite fears in some quarters, the new chancellor did not bring capital gains tax into line with income tax. They won’t necessarily have breathed a sigh of relief, but business owners know they can keep one eye on succession plans or selling their business with renewed confidence.

With a continued rise in inflation, one thing to monitor will be the appetite from banks to provide debt funding. If the uncertainty continues, coupled with the projected rise in interest rates, this does not paint a positive picture.

In the event of a prolonged economic downturn, we would expect to see consolidation in those sectors which are somewhat insulated, such as healthcare, dentistry and care homes. We would also anticipate activity in financial services, particularly insurance brokers, with insurance being the last cost to be cut.

The volume of corporate transactions taking place is not the only barometer of economic activity, but it’s a pretty good yardstick. If anything, over the last few years at least, the only certainty has been continued uncertainty. We can take confidence that, despite this uncertainty, activity levels have remained high.

Over the next few pages we’ve shone a light on some of our work in 2022. Thank you to all our partners who we’ve worked with in the past year, and to those we’ll work with in the future.

Read our January 2023 here

Dealmakers