Despite continuing global geopolitical instability – and particularly the US-Iran war and its impact on global oil prices – Scotland’s dealmakers enjoyed a busier-than-expected summer as investors and businesses alike begin to eye the upcoming Budget.
John Healey will deliver his debut statement at the end of October, with questions raised by Scottish advisers over new Labour Prime Minister Andy Burnham’s attitude towards wealth and its impact on dealmaking.
“Q3 has been a notably busy summer period, with strong levels of deal activity despite ongoing economic and political uncertainty,” explains Callum Gray, a corporate finance partner at accountancy firm AAB, which advised on recent deals including the management buy-out at Westerton Access Management and Kirktonholme Childcare’s acquisition of Little Stars Nursery.
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Autumn Budget uncertainty accelerates Scottish dealmaking
“Undoubtedly, there are sellers seeking to complete prior to the Autumn Budget to ensure they deal falls within the current tax rules.
“At the moment, the overall sentiment remains positive, supported by strong levels of transaction activity and healthy demand from strategic and private equity buyers.
“Assuming no significant changes following the Autumn Budget, we expect deal activity to continue broadly in line with the strong momentum seen throughout 2026 so far.”
The overall sentiment remains positive, supported by strong levels of transaction activity and healthy demand from private equity buyers
— Callum Gray
Gray’s comments ring true for start-up companies too, with David Ovens, joint managing director of Archangel Investors, noting: “From a UK perspective, the new Labour leadership brings uncertainty around fiscal policy and support for enterprise, so all eyes will be on the Autumn Budget.”
A record 76 funders backed Scottish companies with risk capital for the first time last year, up from 73 in 2024, according to the recently launched Young Company Finance’s (YCF’s) Annual Newcomers Report.
More than 31 per cent of Scotland’s growth capital rounds attracted at least one newcomer, the highest proportion since YCF began tracking the trend.
Artificial intelligence and Scottish fintech attracts fresh investment
“We are seeing a slight uptick in activity compared with earlier in the year, with continued focus on artificial intelligence across all sectors – either companies with specific commercial use cases, such as legal and professional services, or those using AI to strengthen or augment their core activities, for example medical imaging,” notes Ovens.
AI continues to attract investment, with Edinburgh-based Aveni – which specialises in AI for regulated financial services – securing £12m from Puma Growth Partners, PXN Group, Nationwide, Lloyds, and other investors.
“This latest investment was a follow-on round with existing investors and was considerably less complex than the earlier rounds, with investors now having greater confidence in Aveni’s growth and track record,” says Max Scharbert, a director at law firm Anderson Strathern, which advised Aveni.
“There is clearly more interest in Scottish fintech than there was a few years ago. Investors are becoming more familiar with the quality of businesses entering the sector, while the development of AI is opening up further opportunities.”
Overseas capital targets Scottish battery storage and public markets
Brian Moore, corporate partner at Dentons, also reports that Scotland’s burgeoning battery storage sector is currently attracting significant attention from overseas backers.
“We are seeing strong interest from Middle East-based investors in quality grid-connected BESS (battery storage) assets in Scotland,” he says.
“We recently advised on one of these transactions and are working on a number of others.
“This is part of a larger picture of continued appetite among Middle East based investors for quality assets in the renewables and adjacent infrastructure space globally, including in Scotland, that Dentons has seen and supported.”
Other major deals over the summer included shareholders at Edinburgh-based Capricorn Energy backing the proposed takeover by Genel Energy.
The deal values London-listed Capricorn at around $360m (£271m) and will remove another one of Scotland’s dwindling number of quoted companies from the public markets.
Summer deals in focus
1. Castings firm secures £3.5m to meet growing demand
Dundee-based Rautomead, [pictured below] which manufactures specialist casting equipment, has secured a £3.5m funding package.
The deal will support the delivery of new international contracts and help manage the family-owned business’s supply chain requirements through a strategic global growth plan set to expand its reach to India, South America and Turkey.
2. Accountancy firm expands to mainland
Orkney-based accountancy and advisory firm CRC acquired Aberdeenshire’s BBKS & Co in the latest consolidation move in the sector.
Louise Birse, founder of the Banchory practice, retired after four decades with the firm but the rest of the BBKS team has remained in place. CRC was founded eight years ago by Calvin Cooper.
3. Regenerus Laboratories sells stake
Foresight Group has bought a £5m stake in Regenerus Laboratories [pictured above] to help the diagnostic health testing firm to expand and commercialise its digital platform.
Regenerus also received a £3m research and development grant from Scottish Enterprise, which will be used to boost the UK-wide company’s research centre in Edinburgh.
4. Property firm cements Scottish presence
Glasgow’s Newton Property Management has bought Aberdeenshire-based peer PMC Property Management & Lettings, which manages more
than 10,000 properties and generates revenues of around £1.5m a year.
The deal cements Newton’s position as one of Scotland’s largest property managers, taking the size of its portfolio to around 50,000 homes, and its annual revenues to around £9.5m.
5. Scottish surveyors strike deal
Hardies Chartered Surveyors has acquired the Glasgow-based Storrier & Donaldson Quantity Surveying practice. Hardies Chartered Surveyors are the construction surveying arm within the Shepherd group.
Storrier & Donaldson, founded 50 years ago, works on projects including hospital ward refurbishments, public libraries, golf courses and major capital framework projects. The team has relocated to the Glasgow city centre offices of Hardies.
Iran war stokes defence spending
A slew of deals over the summer has continued to demonstrate investors’ appetite for investing in defence companies, especially as wars continue to rage in Ukraine and the Middle East.
Deals completed over the summer included New York-listed Karman Space & Defense buying Glasgow-based Walker Precision Engineering for $90m (£70m).
Karman highlighted the attractiveness of Walker’s “advanced products”, which support missile seekers, guidance systems, and control systems on more than 25 European Union tactical missile, air and defence programmes.
Stirling-based Quickblock secured a £940,000 investment by selling shares to Equity Gap, the University of Strathclyde and Scottish Enterprise. Scottish Enterprise and Innovate UK also provided research and development (R&D) grants.
Quickblock – which already lists the Ministry of Defence, the Indian Army, and Germany’s Bundeswehr among its clients – will use the cash to expand its modular buildings further into the European market.
News of the investments follows on from the launch of the UK Government’s £50m Scotland Defence Growth Deal.
The funding includes £5m to support Arrol Gibb’s innovation campus at Rosyth, which will bring together academics with industrialists, and another £5m to support the Clyde Engineering & Innovation Centre near the Clyde naval base to develop new technology.
“Defence has remained an attractive sector for investors due to its specialist capabilities, strong margins and high barriers to entry,” notes Callum Gray, a corporate finance partner at accountancy firm AAB. [View AAB’s recent deals in the DealMakers’ Directory].
This article is featured in the Autumn 2026 edition of The Business magazine.
Distributed with The Sunday Times Scotland.
FAQs
Why has Scottish deals activity increased ahead of the Autumn Budget?
Some business owners are seeking to complete transactions before the Budget in case changes are made to the tax rules. Advisers also report continuing demand from strategic investors and private equity buyers.
Which Scottish sectors are attracting investment?
Artificial intelligence, fintech, battery energy storage, renewable infrastructure, defence, healthcare, manufacturing and professional services are among the sectors attracting investor interest.
Which Scottish AI company secured major funding?
Edinburgh-based Aveni secured £12 million from Puma Growth Partners, PXN Group, Nationwide, Lloyds and other investors. The company develops artificial intelligence technology for regulated financial services.
Why are overseas investors interested in Scottish battery storage?
Scotland has a growing pipeline of grid-connected battery energy storage system assets. Dentons reports strong interest from Middle East-based investors seeking opportunities in renewables and related infrastructure.
Which defence businesses secured investment?
Karman Space & Defense acquired Glasgow-based Walker Precision Engineering for $90 million, while Stirling-based Quickblock secured £940,000 from Equity Gap, the University of Strathclyde and Scottish Enterprise.
