Accountancy firm Anderson Anderson & Brown (AAB) has taken top spot in a second quarter review of UK and Ireland mergers and acquisitions (M&A).
The 13 deals that the firm worked on made it the most active financial advisor in Scotland during the year to date, according to Experian.
Fellow accountancy firm BDO came in second place having advised on nine, with RSM taking third position with six deals.
In terms of value, investment banking company Evercore topped the table on £472m worth of deals, followed by stockbroker Cenkos Securities on £321m. Investment bank DC Advisory and communications consultancy Instinctif Partners jointly took third, having both advised on the SMS sale of its metering assets to Equitix.
Experian’s assessment of the Scottish M&A market said that the second quarter saw a sudden drop-off in activity as the pandemic worsened. While the third quarter saw no further deterioration in deal volumes, there has also been no sign yet of a return to normality for deal making in Scotland.
The total number of deals announced in the year to date has fallen by 65%, with values down 70%. Scotland recorded just 165 deals worth £2.3bn in this reporting period, in comparison to 465 deals worth £7.6bn during the same period last year, according to Experian.
The impact of Covid-19 was most apparent in the small cap segment, where volumes fell by 83% from 248 deals in 2019 to only 42 in 2020. Mid-market deals fell 41% in volume, but fared slightly better in terms of value and down by a third.
M&A activity across all sectors remains subdued, according to the report, 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, compared to 257 deals worth £2.95bn during the same period in 2019.
The bulk of deal activity took place in the professional services, manufacturing and info-comms sectors. Support services delivered the highest values, with £1.2bn worth of deals recorded, up 86% year-on-year.
Where detailed funding arrangements were disclosed, private equity backed deals represented just over 28% of the total volume of deals in the first nine months of the year, compared to 11% in the same period last year.
The Scottish Investment Bank and Scottish Enterprise were the most active investors, with numerous other private equity and venture capital firms supporting the growth strategies of Scottish businesses. Debt funding supported just under 5% of Scottish deals, with Ares Management, Shawbrook Bank, NatWest and Clydesdale and Yorkshire Bank each supporting two deals apiece.
The largest deal announced in the third quarter saw Edinburgh-based NuCana, which develops pharmaceutical products designed to treat life-threatening or debilitating diseases, raise £62m in a public offering of American Depositary Shares.
This was closely followed by Standard Life Aberdeen’s Pension Property Fund selling its Tesco Extra supermarket asset in Newmarket to Supermarket Income REIT for £61m in July.