LAW firm Addleshaw Goddard’s corporate team in Scotland is confident that there will continue to be a strong pipeline of deal activity despite challenges caused by the ongoing pandemic and the impact of Brexit.
With proposed changes to Capital Gains Tax on the horizon for March 2021, the firm expects this to propel the number of businesses looking to be sold ahead of this date and create a rise in the number of merger and acquisition deals completed.
David Kirchin, Addleshaw Goddard head of Scotland, said: “We can’t ignore the challenging year the economy faced in 2020 and whilst the path ahead is still uncertain as the pandemic continues, we have reason to remain optimistic.
“This year, our focus will be on working towards a strong economic recovery and helping businesses improve their balance sheets. This is something we’ve been working on consistently throughout the second half of last year to support clients and it will remain a priority as we move forward.
“Interestingly, values seem to have generally held up well in 2020 and insolvencies are down 40% year on year, which we should take positivity from. We also expect Q1 2021 to remain busy from a M&A perspective given the possible tax changes anticipated in Q2.”
The firm’s corporate team in Scotland reported a strong end to 2020, with a healthy pipeline of transactions going into Q1 2021. Despite reduced transaction activity in the earliest days of the pandemic taking hold in the UK, tech-related activity accelerated and the firm’s expertise in energy, transport and health & social care helped drive a significant volume of M&A, private equity and equity capital markets transactions in the later part of the year.
The team completed significant deals in 2020 which included acting for global payroll services business, activpayroll, on the investment into the company by Tenzing Private Equity. It advised investors on the management buy in and acquisition of F.I.S. Chemicals Limited. The firm also advised the sellers of Symphonic Software on its sale to Ping Identity and the sellers of Targe Towing on its disposal to Forth Ports.
David continued: “We are optimistic that activity levels – particularly those involving private equity – will remain consistently strong as we build on the collective efforts to achieve a strong economic recovery. We can expect to see an increase in the number of deals completed in the and financial services, energy, and tech and flexible investors will capitalise on such potential in these markets.”