Private equity record for Scots mid-market firms
Private equity investment into Scotland’s mid-market firms reached a record £3.5 billion last year, while the overall UK figure fell.
KPMG’s latest analysis reveals that 51 deals were completed in 2022 in the £10 million to £300m range, a 69% uplift on the 41 deals worth £2 billion in 2021. This was ahead of the previous peak of £2.69bn in 2019.
The year began on a strong footing with significant activity in the first quarter before economic and geopolitical headwinds gathered pace, although not enough to hamper Scotland’s overall performance.
Scotland was the only area of the UK to record an increase in deal value and volume compared with 2021.
Across the UK, mid-market deals cooled considerably last year with 680 deals worth £46bn. a fall of 19% in volume and 12% in value.
Graeme Williams, KPMG’s head of corporate finance mergers and acquisitions for Scotland, said: “Last year was tough for the investment market, but it’s no fluke that Scotland bucked the downward trend. Scotland is still vulnerable to global headwinds, but our breadth and depth of mid-market businesses provided welcome cover.”
Investors shied away from sectors reliant on consumer spending as inflation in supply chains and the high cost of living squeezed profit margins and reduced revenues.
However, other sectors maintained resilience to the downturn, notably “in sectors where there’s a strategic imperative for change, such as energy transition, where Scotland has healthy credentials”, Williams said.