Anderson Anderson & Brown Corporate Finance (“AABcf”) is delighted to share with you our quarterly Deals+ update for Q1 2020, highlighting selected M&A and fundraising transactions across Scotland.
With the COVID-19 pandemic wrecking havoc globally, financial markets faltering and a geo-political oil price war unfolding it is clear that we are in unprecedented times that are proving far more sinister than could ever have been imagined at the beginning of the quarter. Despite some positive relief in the equity markets with the recent announcements from the UK Chancellor of the Exchequer coupled with banking stimulus packages, the outlook for the global economy still paints a bleak picture at present. As it becomes increasingly apparent
that the effects of the outbreak may be lasting, it is essential that businesses are aware of the support packages made available by Government and lenders and that they obtain support and guidance to steer them through the current crisis (available here).
Despite the events of the last few weeks M&A activity across Q1 2020 remained relatively strong with a number of stand-out transactions including the acquisition of Rowan Manufacturing and Smith & Frater from Rowan Group by leading timber specialist James Donaldson Group and Hunting Plc’s acquisition of subsea production enhancing specialist Enpro Subsea for £28m. Elsewhere, private equity houses continued to deploy capital with consumer focused investor Inverleith acquiring Montane, a leading sportswear and mountaineering provider, and Leeds-based Endless acquiring leading Scottish timber merchant BSW Timber. This was followed up by Envoy & Partners backed Ross-shire Engineering acquiring utilities focused ACIEM. However, M&A activity has faltered in the last few weeks of the quarter, prompted largely by caution and market sentiment, and we expect deal making to be challenging in the months ahead albeit we are likely to see far more distressed M&A activity.
Fund-raising activity in Q1 2020 was led by a number of emerging technology companies, including health and safety software provider SHE Software’s £7m Series B round led by Frog Capital and Mercia. A stellar deal during the quarter was leading digital oil & gas platform Xergy’s successful £1.8m raise form private individuals.