Tariff threat causes slowdown at larger end of market but smaller deals are continuing
Hopes that a new administration in the White House would spark a wave of merger and acquisition (M&A) activity in 2025 quickly evaporated after the sudden imposition of tariffs.
UK deal volumes at the start of the year had remained in line with those seen in the final months of 2024 but market uncertainty sparked by the trade disputes is expected to be reflected in lower activity in recent months, particularly at the larger end of the market.
However, advisers report deals in the smaller and mid-cap markets in Scotland are holding up well.
Things are still very busy and I think that reflects a general optimism
– Ryan Mcready
Ryan Macready, who heads Glasgow-based law firm Dallas McMillan’s recently established corporate department, said fears that fevered activity ahead of tax changes in the Budget would lead to a slowdown afterwards have proved unfounded.
“Things are still very busy and I think that reflects a general optimism in the business community,” he says.
“When people are looking to make an acquisition, they are to an extent making a bet that the target company is going to do well in the future and that depends on the economy.”
While the reduction of tax breaks on disposals has been a factor in rising numbers of business owners looking to sell in recent months, Macready argues that is only part of the story.
“In a relationship-driven market like Scotland it’s not just the tax tail that’s wagging the disposal dog, there’s lots of other considerations for business owners when they are looking to do a deal,” he points out.
One trend he has seen is sellers taking a keener interest in whether a potential buyer will be the right fit for customers and staff. “It is not just a case of who is offering the most money. These people have often spent decades building up a business and want to see it go to a good home,” he explains.
“It’s very much been a factor in transactions we’ve been involved in recently, particularly in the legal and accountancy sectors.”
Elsewhere in professional services, the independent financial advisory (IFA) sector in Scotland continues to see strong M&A activity as firms respond to demographic pressures, regulatory demands and the pressure to improve operational efficiency.
Latest deals include the acquisition of a minority stake in Glasgow-based Murphy Wealth by Sweden’s Söderberg & Partners, its first deal in Scotland.
The transaction was aimed at enabling Murphy Wealth, which manages £250m of assets for families, professionals and business owners, to tap into Söderberg’s technology expertise.
According to chief executive Adrian Murphy, the deal represented the biggest step the firm has taken since it was founded 50 years ago.
“Technology is one of the biggest challenges in wealth management today, and Söderberg have been investing in AI and machine learning for years,” he explains.
“Their expertise will free up our advisers to spend more time with clients, develop our team faster, and future-proof our business.”
Greg Easter, partner at financial services group Heligan Group, says such deals highlight how acquirers are deploying increasingly sophisticated acquisition strategies amid fierce competition for high-quality targets.
“Minority stakes, network consolidations, and regional bolt-ons are all becoming part of the consolidator’s toolkit,” he said.
Easter said that although 2025 was likely to see many more deals in the sector and multiples remain elevated, sellers needed to make sure they are as attractive as possible to buyers.
“The narrative is shifting toward long-term value creation. The focus is increasingly on fit, efficiency, and the ability to support regulatory and technological change across growing networks.
“For sellers, this means demonstrating not just profitability, but alignment with acquirer platforms’ infrastructure, culture, and long-term goals.”
Although a recent raft of trade deals have reduced the risk of a major economic crisis stemming from the US tariffs, the impact the disruption has already had on some industries is also expected to lead to deal activity across the wider economy.
Alistair McAlinden, head of corporate restructuring practice Interpath Advisory in Scotland, predicts the uncertainty and disruption will present opportunities for M&A in the months ahead.
“We’re already seeing mandates in the market locally for businesses that have suffered a quick change in fortune and could present significant opportunities to take on market share, expand into new areas, or acquire certain expertise,” he says.
“Corporate buyers with strong balance sheets can look to put capital to work and realise their growth ambitions. For private equity, we may see this pull through into portfolios as they make incisive buy and build plays to build value.”
Spring Deals in Focus
Rugby stars secure funding for expansion
Puresport, a Glasgow-based business founded by former Scotland rugby internationals Adam Ashe and Grayson Hart, raised £3.6m in funding from backers including venture capital firms Redrice Ventures and Five Seasons Ventures.
Others supporting the performance nutrition firm included British and Irish Lion Finn Russell, the Scottish back, and England rugby international Ben Earl.
US event firm snaps up Scottish agency
Dallas-based events business Freeman acquired Glasgow’s marketing agency Tag Digital for an undisclosed sum.
Tag, founded by Laura and Craig Davidson in 2011, specialises in work on global trade shows and large-scale conferences.
Wireless tech firm in £6m Series A round
CSignum, which develops technology for Internet of Things (IoT) communications, completed a £6m Series A funding round to accelerate product development.
The funding round at the Edinburgh firm was led by Archangels, Par Equity, and Scottish Enterprise with additional investment from British Business Investment (BBI), Raptor Group, Deep
Future, SeaAhead’s Blue Angel Network, and individual US investors.
MBO at IT consultancy
Glasgow-based McDonach IT Consultancy has transitioned ownership to its management
eam through a vendor-initiated buy-out.
The move to IT Resolution Group, a new company formed by the management team, has enabled founder Kenneth McDonach to exit. Harper Macleod provided legal advice and Watson & Co handled accounting and tax aspects of the transaction.
Aquaculture group in £7.5m raise
Ace Aquatec raised £7.5m in equity funding plus an additional £2.5m debt facility, in a move to support the creation of 15 jobs at the company’s offices in Dundee, Glasgow and Chile.
The oversubscribed round at the firm, which provides fish farmers with data insights, was led by Stolt Ventures and supported by Scottish Enterprise and Aqua-Spark.
Impact Capital Partners acted as lead financial adviser to Ace Aquatec.
Spirits high as 700 investors raise £2m for new distillery
For independent spirits producer the Thompson Brothers, the timing of its recent crowdfunding campaign proved challenging.
The campaign had been planned for months but the offer period for investors co-incided with a global stock market plunge and high-profile warnings from the industry over tariff impacts.
Despite the difficult environment, the business successfully raised £2.4m from more than 700 investors to help fund the construction of the Struie Distillery in Dornoch.
Although market turmoil inevitably led some investors to commit less than they had indicated months earlier, the brothers behind the business were pleased with the outcome.
“We had previously done a crowdfunding exercise where participants got rewards rather than equity and that worked well so when we were looking at raising funds for the new distillery, giving our existing customers a chance to be involved seemed a good idea,” explained Phil Thompson, who heads the business alongside brother Simon.
“Crowdfunding allows lots of people to jump on board whether it’s for £20 or £2,500, and it is relatively easy to manage compared to the process of getting bigger investors involved, although the platform does take a fee.
“It’s a good option to consider if you have a large base of supporters.”
