PwC’s Jason Morris says deal market battling to turn intent into completion

However, a more selective market is emerging, where only the best-prepared, best-positioned businesses are securing deals, while others stall before reaching the line.

Across the quarter, around 30 completed transactions point to a market that is functioning, but under tighter conditions.

Buyers are active, private equity funds still have capital to deploy and corporates continue to reshape portfolios, yet the path from process to completion has become more complex.

Jason Morris, market senior partner at PwC, said there is no shortage of activity beneath the surface, even if that is not always reflected in outcomes.

He said: “There’s a lot of signs in the market of things trying to happen, but the number of outcome deals, completions, is low.

“For every deal that’s getting reported just now, there’s probably more than one, maybe two others, that just are not getting over the line. That tells you how hard it still is to complete.”

That tension between activity and completion is shaping the current market.

Processes are taking longer, diligence is deeper and buyers are more cautious in committing capital.

The result is a narrower funnel, where only a proportion of opportunities translate into deals.

At the top end of the market, however, demand remains strong.

High-quality businesses with a clear growth story, strong positioning and credible management teams continue to attract interest and, in some cases, premium valuations.

Jason said: “Prize assets that are well presented are going for high values and are heavily sought after.

“Buyers, particularly private equity, are willing to pay more to secure a really strong platform asset, because they see the opportunity to build from that and create further value through follow-on acquisitions.”

That appetite is most visible in sectors with strong structural drivers.

Technology and data-led businesses, professional financial services, healthcare and pharma, renewables and infrastructure-related services are all continuing to draw attention.

Across the deal list, the pattern is clear.

Transactions are being driven by strategy rather than expansion for its own sake.

International buyers continue to target specialist capabilities, with deals involving Volaris Group’s acquisition of Edinburgh tech firm Zonal highlighting sustained appetite for software and technology assets that can be scaled within larger platforms.

Corporate activity is also playing a role with listed groups are under pressure to focus on core operations, with deals involving AG Barr and FirstGroup reflecting ongoing portfolio reshaping and a sharper focus on where value is created.

Away from those high-performing assets, the picture is more challenging.

For mid-market businesses without a clear point of difference, the market has become significantly tougher.

Jason said: “It is still very much a buyer’s market unless you are going after a prize asset.

“The more run-of-the-mill, general businesses are finding it much harder to attract capital or achieve strong multiples, particularly if they haven’t put a lot of preparation into how they come to market.”

That shift is changing how deals are structured and executed.

Bilateral transactions are becoming more common, with buyers approaching specific targets that align with their strategy, rather than relying on broad auction processes.

For businesses outside that immediate field of interest, the bar is higher.

A solid trading performance is no longer enough as investors are looking for differentiation, defensibility and a clear route to growth.

That is placing greater emphasis on preparation.

Advisers are working with companies earlier in the process, helping them refine their strategy, strengthen their data and build a clearer narrative around value creation.

Jason said: “You really need to work hard at what your message is that’s going to catch the attention of capital.

“It’s about understanding exactly how your business fits with what investors or buyers are looking for, and then proving that through data, performance and a clear growth plan.”

Leadership is also a defining factor and investors are placing increasing weight on the strength of management teams, particularly in sectors where execution is critical to unlocking growth.

“Without strong leadership, even the best product or innovation will not get commercialised.

“You need a management team that can clearly articulate the value proposition, understand the customer and the competition, and demonstrate how the business can scale in a way that delivers returns.”

There are signs that conditions are improving with interest rates having eased, inflation stabilised and confidence has recovered from the lows of the past two years.

More businesses are coming to market and there is a growing expectation that deal volumes will increase.

However, the nature of the market has changed as capital is now more selective and more targeted, and the days of broad-based competition for assets have, for now, receded.

Instead, the market is becoming more disciplined and the businesses that are succeeding are those that combine strong fundamentals with clear strategic positioning and a credible growth story.

For Scotland, that presents both an opportunity and a challenge.

The deal market remains active and capable of supporting growth, but success is increasingly dependent on how well businesses prepare and position themselves.

The message from this quarter is clear with deals still getting done, just not by default.

In a more selective market, preparation, clarity and execution are now the defining factors that determine which businesses make it across the line.

• This interview was carried out before the outbreak of the Iran conflict which has materially affected the deal outlook for 2026

Evelyn Partners deal highlights demand for scale in professional financial services

One of the clearest signals from this quarter’s deal activity came from professional financial services, where scale, positioning and long-term preparation combined to deliver a standout transaction.

The sale of Evelyn Partners’ wealth management arm shows how the right asset can still generate strong competition and premium outcomes, even in a more selective market.

It stands out as one of the most significant transactions of the period, underlining both the continued consolidation in professional financial services and the strength of demand for high-quality assets.

PwC advised on the deal, having worked with Evelyn Partners over more than a decade as it evolved into a scaled platform business.

The transaction attracted strong interest and competitive tension, reflecting the premium placed on businesses with clear market position, recurring revenues and the ability to grow further through acquisition.

Jason Morris said the deal was a clear example of how the right asset can cut through a more selective market.

“That was a hotly-contested process and a really strong outcome, built on years of growth and positioning.

“It shows that if you have a business with scale, strong fundamentals and a clear opportunity to build further, there is still significant appetite from buyers.”

The deal also reinforces a wider trend across the sector, where firms are seeking scale to manage costs, invest in technology and meet regulatory demands, driving continued M&A activity.

Five takeaways from Scotland’s deal market in Q1

1. Buyers are in control Outside a small group of prize assets, this remains a buyer-led market.

2. Top assets are still attracting premiums Well-prepared, high-quality businesses continue to command strong valuations.

3. Mid-market deals are harder to close Without a clear growth angle, many businesses are struggling to secure exits.

4. Capital is flowing to growth sectors Technology, professional financial services, healthcare, renewables and infrastructure services dominate activity.

5. Preparation now drives outcomes Stronger positioning, better data and early adviser input are increasingly decisive.