Investors continue backing strong growth stories despite economic uncertainty, with advisers reporting a widening gap between high-quality assets and the rest of the market
Scotland’s corporate finance market has remained resilient during the first half of 2026, despite ongoing economic and geopolitical uncertainty.
Advisers, investors and dealmakers report healthy levels of capital and continued appetite for acquisitions and investment opportunities, particularly across technology, energy transition, life sciences and professional services.
However, the market has become increasingly selective, with buyers focusing on businesses that offer strong growth prospects, strategic relevance and clear routes to profitability.
While quality assets continue to attract competitive interest, deal timelines have lengthened and valuation expectations have become more disciplined as investors navigate a more cautious environment.
David Beveridge, managing director, Macdonald Henderson
“Q1 2026 saw another surge in Scottish M&A deals in the mid-cap market.
“The factors are varied and include the surge in retirement of business owners, sustained interest of Nordic, US and European buyers.
“There is also the perception of significant macro-economic headwinds and geo-political risks leading many business owners to conclude that the” time is right” to sell-up.”
Oliver Hoffman, head of M&A at Forvis Mazars
“A buoyant M&A market is reliant on a high level of confidence but, with the macro-economic and geo-political picture as it is, this is somewhat lacking at the moment.
“As a consequence, what we are seeing is a very polarised deal market.
“There is a strong level of transaction activity involving businesses where there is a very close strategic fit between buyer and seller and/or where there is a compelling growth story.
“But for businesses without these attributes, the market is much slower.”
Mark McRae, corporate finance partner at Armstrong Watson
“Life sciences, technology, renewables, and professional services tend to be the highest performing sectors with patents or IP increasing value and ‘invest ability’.
“There remains strong private equity capital, increasing cross‑border interest and resilience in these core sectors.
“However, the market remains uneven with extended deal timelines, heightened diligence, valuation sensitivity, and macroeconomic uncertainty continuing to constrain volumes.
“Traditional sectors like manufacturing, engineering, and retail face pressure on revenue, profits and therefore buyer valuations.”
Tom Boulton-Jones, partner at Brodies LLP:
“The Scottish M&A market has performed strongly in 2026, with activity across several sectors.
“Energy transition remains a key driver, as investors increasingly adopt dual-track strategies combining renewables, enabling infrastructure and selective conventional assets.
“Technology also continues to be a significant source of activity, as does food and drink.
“Overseas investors and private equity remain active, supported by undeployed capital.
“Despite some caution linked to geopolitical and economic volatility, we expect deal activity to stay robust through the second half of the year.”
Angela Toner, deal services partner, RSM UK
“Scotland’s deal market has shown real resilience, with steady activity despite ongoing macroeconomic uncertainty.
“Buyers remain selective, prioritising high-quality assets and proven management teams, while valuation expectations are continuing to reset.
“We’re seeing strong demand for private equity-backed bolt-ons as founders seek pragmatic succession routes. Funding conditions are easing, supporting improving confidence. Activity is particularly strong across financial services, the built environment and infrastructure, where investors continue to back scale, recurring revenue, and long-term growth fundamentals.”
Neal Allen, partner and head of deal advisory, HNH Group
“So far in 2026, an extremely busy Q1 led into a very quiet April, probably relating to a convergence of Easter holidays and the tax year end, as well as the perennial economic uncertainty. “However, we are seeing signs of an upturn in activity, and perhaps more encouragingly, stronger and well-run businesses are seeing more opportunity to grow, which in turn should lead to more deal flow.
“So far though, investor interest remains rooted in a smaller number of sectors, which is something we are keen to rectify.”
Samantha O’Neill, M&A associate director KPMG and Emerging Dealmaker of the Year 2025
“Deal activity picked up in Q1, with buyers remaining disciplined on strategically aligned transactions, while valuations are increasingly driven by forward‑looking assumptions.
“Carve-out activity is rising as corporates focus on core strengths, creating opportunities for buyers to acquire quality assets.
“Meanwhile, sectors less exposed to AI, such as food & drink and industrials, are seeing renewed interest, supported by improving funding conditions.
“However, geopolitical tensions and renewed inflation have reintroduced headwinds, while ongoing tax uncertainty is being closely monitored by UK business owners considering exits.”
Derek Shaw, Director, Entrepreneurship and Investment, Scottish Enterprise
“Scotland’s early-stage investment market remains strong and resilient despite wider economic uncertainty.
“A supportive innovation ecosystem is driving new company formation and expansion.
“Strong university research, active investor networks and success attracting international investment, alongside Scottish Enterprise’s co-investment funds, are sustaining steady investment activity in 2026.
“Investors are prioritising businesses with revenue visibility, scalable technology and clear paths to profitability. Valuations have moderated from 2021 peaks, with greater emphasis on capital efficiency and experienced management teams.”
Brian Aitken, partner at Nevis Capital and chair of Scotland Dealmakers Awards judging panel
“The M&A market remains a mixed picture.
“Valuations continue to soften in sectors like software, while buyers gravitate towards engineering services which is seen as more resilient.
“A lot of quality deals are still getting done in the Scottish market, particularly where pricing is realistic on both sides.
“A nervousness around the economic outlook means that processes are taking longer, but deal flow remains strong and I expect completions to pick up meaningfully through the second half of the year.”
Alan Robertson, partner, Maven Capital Partners
“So far 2026 has proved quieter than many hoped with deal processes and diligence taking longer.
“Macroeconomic uncertainty has weighed on decision making and existing shareholders have been called upon to provide increased support across portfolios.
“AI continues to reshape the technology landscape, yet simultaneously presents genuine opportunities for businesses harnessing it intelligently.
“The good news is that there is significant capital available for deployment over the remainder of 2026.
“For ambitious Scottish companies with a market leading product and who are well prepared for a fundraise, investors are ready to back them.”
David Amos, Head of Structured Finance, Royal Bank of Scotland
“The Scottish corporate finance market has been resilient in H1 2026.
“We have successfully supported a number of transactions and are carrying strong momentum into H2 with a healthy pipeline.
“Activity levels reflect a continued ability of corporates and investors to identify and execute on value-enhancing opportunities.
“This is underpinned by access to a supportive – and in many cases highly competitive – debt market.
“Deal flow has been most prominent in defensive, essential-service sectors, including infrastructure services, business support services and food & drink manufacturing, where earnings visibility and resilience continue to attract both capital and investor interest.”
Roger Mayor, partner, Corporate Finance, HNH
“The level of opportunities in the market remains strong, with sellers actively looking at transaction options, coupled with strong levels of PE capital and trade buyers seeking to deliver growth through M&A.
“However, wider market uncertainty remains high leading to increased execution risk and longer transaction timelines. Buyer appetite and value is increasingly dependent on the underlying quality of the asset and the sectors they face in to, with a widening gap between higher and lower quality assets.”
Barry McCaig, partner, Pinsent Masons
“We’ve found that the market has remained resilient in the face of geopolitical and economic uncertainty.
“When you add in the evolving impact of AI, all of these factors make it a uniquely uncertain time. That said, we advised the Farmer family on the sale of Farmer Autocare and Drax Group plc on its recommended takeover of Bluefield Solar and they would be outstanding deals in any quarter.
“Deal activity continues to centre on sectors such as energy and energy transition, business services, and manufacturing and industrials. We think we might see an uptick in transactions in the next couple of quarters within the defence sector.”
Claire Cramm, Investment Manager at PXN Group
“The Scottish deal market has had a strong first half, with healthy activity and a robust pipeline coming through.
“What has changed is how deals are getting done, with more syndication and more considered structures around risk.
“While the market is undoubtedly more cautious than in recent years, the quality of companies coming through is incredibly encouraging.
“From our perspective backing high-growth businesses across Scotland, we continue to see ambitious founders building genuinely exciting businesses here.”