The north-east dealmaking community is optimistic about continued merger and acquisition activity over the next 12 months, according to a new survey by professional services firm KPMG.
It found confidence among the region’s dealmakers, with 90% expecting to complete deals within the coming year.
The study, conducted at the firm’s recent M&A forum in Aberdeen found, perhaps unsurprisingly, the energy sector continues to dominate deal expectations. Eight out of 10 of the north east’s dealmakers expect the oil and gas industry to be where deals are most likely to occur while a third (33%) believe Scotland’s growing renewables sector will see deal activity in the next 12 months.
Cross-border transactions are also expected to feature in the coming year, with North America (86%) anticipated to be the region most likely to feature deals with Scottish businesses ahead of the Far East (38%).
Marianne Lipp, director of transaction services at KPMG in Aberdeen, said: “Our research demonstrates growing confidence among the region’s dealmaking community, albeit this may be more apparent in particular sectors than others.
“While confidence in energy remains high, both for renewables and traditional oil and gas, other sectors continue to experience challenges with just 5% expecting to complete retail deals in the year ahead.”
Access to funding remains a concern for close to a third of those asked while nearly three-quarters of respondents cited a gap between buyer and seller price expectations as the greatest barrier to deal completion. However, Aberdeen’s dealmaking community appears optimistic, with 43% already seeing increased price convergence and a third expecting this within the next 12 months.
Concerns about the economic environment continue to reduce confidence in traditional sources of finance with just 38% viewing banks as routes for growth funding while for 90% private equity continues to hold the most promise.
