US firms swoop for innovative Scottish businesses

US firms swoop for innovative Scottish businesses

US businesses have spent over £2bn on M&A deals involving Scottish companies in the last two-and-a-half years, according to new research.

The growth has been driven in particular by increasing activity in the manufacturing sector with 15 Scottish companies being acquired by US firms.

This included the sale of cabling and network infrastructure solutions business, Brand-Rex, to US-based Leviton Manufacturing.

Consumer businesses have also caught the eye of investors across the pond, with 11 deals, while the technology, media and telecommunications (TMT) sector recorded a further 10.

Edinburgh’s TMT scene has been the focus of much of the attention attention, with companies such as Skyscanner attracting major inward investment.

The travel search specialist struck a deal with US venture capital group Sequoia Capital which valued the business at £493m in October 2013. 

Combined, companies from these three sectors alone accounted for 73.47% of inbound investment from the US during the period.

The research, from Deloitte’s inaugural USUK M&A Deal Monitor, comes shortly after the Scottish Government announced plans to establish a manufacturing centre of excellence, part of a wider programme to promote science, technology, engineering and mathematics (STEM).

Cahal Dowds, chairman of Deloitte’s corporate finance advisory business, said: “This deal activity reveals some of the strongest drivers of growth in the Scottish economy.

“Historically, we’ve had a solid manufacturing and industrial base – and judging by the deals involving US companies that remains the case.

“But complementing these traditional industries are some of the new and exciting technology companies emerging as the unicorns and household names of tomorrow.

“Scotland also performed very strongly in the consumer business sector, demonstrating the diversity of its economy.”

Last year inbound M&A activity from US buyers into the whole of the UK reached £32.7bn, while outbound M&A from the UK to the US was worth £25.6bn.

By volume, US acquirers completed 322 deals in the UK, while the UK concluded 176 deals in the US last year, but increasing deal activity in every quarter.