Business Acquistions in Scotland

Scottish businesses are hot property for national and international buyers looking to extend their reach. It’s a great time to be a business owner here in Scotland. Scottish business failures are running at an eight year low, while business confidence is at its highest point for three years. The business news pages have been awash with deals involving Scottish companies over the past couple of years. It’s all an indication that prospective purchasers have Scotland well and truly on their radars when it comes to hunting out potentially lucrative opportunities.

More than a few Scottish business owners and entrepreneurs are seeing their modest investments transformed into huge windfalls as buyers offer millions to ensure they have a presence in the country.

Foreign buyers set sights on Scottish brands

The Brown-Forman Corporation is one of the latest international businesses to stamp its mark on the Scottish landscape with the purchase of three distilleries over the past couple of years. The US drinks giant, which boasts brands including Jack Daniels and Woodford Reserve, bought up the BenRiach Distillery Company, which operates the BenRiach, Glendronach and Glenglassaugh distilleries, for an impressive £285m. This isn’t a bad result for owner Billy Walker who started distilling at BenRiach with just £1m back in 2004. His family’s personal stake in BenRiach is now valued at £95m. He called the price paid for the business “astonishing.”

A number of hopeful drinks firms from all over the world were reportedly eager to offer large sums for the business. The increasingly affluent Asian market is a serious growth region for the luxury product and drinking single malt Scottish Whisky is seen as something of a status symbol.

Brown-Forman’s Chief Executive, Paul Varga, explained: “The acquisition of these super premium brands will allow Brown-Forman to re-enter one of our industry’s most exciting and consistent growth segments, Single Malt Scotch Whisky.”

And it’s not just Scotland’s Whisky that is whetting international buyers’ whistles. It seems they also have their sights set on some of our market-leading travel businesses. Skyscanner, the hugely popular online flight and travel comparison tool based in Edinburgh, was bought up by Chinese travel firm Ctrip.com in a high-profile £1.4bn deal. The three graduates who set the company up own around 30 percent of the business between them, valuing their windfall at some £400m.

Barrhead Travel is one of the leading travel retail firms in the UK and it has now attracted the attention of the American Travel Leaders Group, which has agreed to buy the Glasgow-based firm for an undisclosed amount. Travel Leaders Group chief executive, Ninan Chacko, stated, “Barrhead is a great addition to our family of brands. It’s an innovative, award-winning travel business that is on a trajectory for continued growth.”

English businesses look to establish Scottish presence

As well as the international interest, other UK firms have also been keenly buying up Scottish companies in an attempt to expand their offering, extend their geographical reach or add to their expertise.

Towards the end of 2017, Manchester-based Concept Life Sciences paid an undisclosed sum for Edinburgh-based bio-tech business, Aquila BioMedical. Aquila was spun out of the University of Edinburgh in 2011 and specialises in pre-clinical contract research in the area of immunology, amongst others.

The Executive Chairman of Concept Life Sciences, Michael Fort, said that “together” the firms “will provide high quality, integrated solutions.”

Meanwhile, Baldwins Accountancy Group, a firm previously only operating offices in England, has expanded into Scotland with its purchase of Springfords and Campbell Dallas in October last year. Baldwins has offices in most regions of England and has now moved north of the border through this latest acquisition.

David Baldwin, the Director of Baldwins, explained how the move will help the business establish a presence in Scotland and suggested more Scottish buyouts could be on the cards in the future: “Joining forces with Campbell Dallas and Springfords will lead to further growth for both businesses.

“It is very exciting for Baldwins to have offices in Scotland for the first time and we are looking to add further practices to our group. These two deals represent a major step forward for the group.”

Scottish firms expanding through acquisition

Although it is clear that the market for buying up Scottish businesses is healthy, there’s another side to this story as Scottish businesses look to expand by pursuing their own acquisitions.

Scottish aviation firm Cloud Global Group, which is based at Glasgow Airport, has recently purchased Carlisle-based Border Air Training and Fly Scenic Scotland in a deal that it hopes will help it in its goal of establishing new divisions to feed its expansion.

Meanwhile, in Edinburgh, testing services firm Exona has also been looking to extend its reach outside of Scotland with its purchase of Yorkshire-based Insight NDT. The value of the deal has not been disclosed but Insight NDT achieved revenues of around £2m back in 2015.

It’s the right time for a move into Scotland

It’s clear that the market for both buying and selling businesses in Scotland is thriving and for any budding entrepreneurs out there, buying an established business north of the border could be a wise move. At the same time, if you already have an established business in the UK, extending your reach by buying a Scottish business can help you to grow geographically and in terms of customer base. Offering your products or services in Scotland, or adding on an existing Scottish operation with an established Scottish customer base can be a lucrative strategy. It’s certainly one that entrepreneurs and business owners all over the world are enthusiastically signing up for.

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