AAB top of Scottish M&A league for 2020

Anderson Anderson & Brown (AAB) has ranked top in the Scottish listing of Experian’s United Kingdom and Republic of Ireland M&A Review.

AAB held its previous rank of 1st place having advised on 13 deals, making it the most active financial adviser in the year to date.

BDO came in second place having advised on nine, and RSM taking third position with six deals.

In terms of value, Evercore topped the table on £472m worth of deals, followed by Cenkos Securities in second position on £321m.

DC Advisory and Instinctif Partners jointly took third position, having advised on the SMS disposal of its metering assets to Equitix.

On the Scottish M&A market in general, the report noted that as the country passes the six-month mark since the Prime Minister announced a UK-wide lockdown, latest figures show no imminent signs of recovery of M&A activity.

The start of Q2 saw a sudden drop-off in activity as the pandemic worsened and while Q3 saw no further deterioration in deal volumes, there has been no sign yet of a return to normality for deal making in Scotland.

Overall figures show the total number of deals announced in the year to date has fallen by 65%, with deal values falling more sharply at 70%. Scotland recorded just 165 deals worth £2.3bn in this reporting period, in comparison to 465 deals worth £7.6bn in the same period last year.

The impact of COVID-19 was most apparent in the small cap segment, where volumes fell by 83% from 248 deals in 2019 to just 42 in 2020. Mid-market deals fell 41% in volume, but fared slightly better on the value front, recording a decline of 33%.

As a second wave of the virus sweeps across the country, and deals take longer to complete as lockdown restrictions make conversations between the dealmakers and business owners more difficult, it’s likely that businesses will remain cautious in making big decisions, and may be more likely to defer any M&A activity into 2021. Scotland accounted for 1.2% of all UK deal value and just over 4% of deal volume.

M&A activity across all sectors remains subdued, with financial services, usually the most active sector, bearing the brunt of the economic downturn with a 92% fall in deal volume. The number of deals fell to just 21, worth £916m, whilst the same period in 2019 recorded 257 deals worth £2.95bn.

The bulk of activity occurred across the professional services, manufacturing and infocomms sectors, with infocomms recording a small upturn in volume of just over 2%. Support services delivered the highest values, with £1.2bn worth of deals recorded, up 86% from the same period in 2019.

As more people continue to work from home, demand for high quality businesses in the digital services and technology sectors is expected to increase, as businesses in all sectors face challenges to survive and look to alternative business models as they navigate through the winter months.

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