Headline deals masks undercurrent of cautiousness

The opening months of 2026 saw a flurry of corporate activity in Scotland, set against a backdrop of improving confidence but ongoing pressure around costs and funding.

Credit: Fentimans | Credit: Fentimans

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A defining theme was strategic consolidation, with businesses building scale through acquisitions.

Of the 36 deals tracked, 27 were acquisitions, with activity led by trade buyers and advisory-driven roll-ups, particularly in professional services.

Paul Turner, partner at AAB, said momentum was returning but with greater scrutiny shaping transactions.

“We’ve seen a real uptick in owners exploring exit options, with early-stage exit planning becoming a clear theme. Deals are taking longer, diligence is deeper, and businesses face greater pressure to be genuinely deal-ready before coming to market, reflecting more cautious buyers despite improving confidence and stronger underlying activity.”

Among the quarter’s standout transactions was NatWest Group’s £2.7bn acquisition of wealth manager Evelyn Partners, marking the bank’s largest deal in recent years and accelerating its shift towards fee-based income.

Consumer brands also featured, with AG Barr acquiring Fentimans and Frobishers for more than £50m, expanding its position in the growing adult soft drinks market.

International interest remained evident, with Edinburgh-based Zonal acquired by Canadian firm Volaris Group, while AAB continued its expansion into Ireland through the acquisition of O’Connor Pyne & Co.

Elsewhere, FirstGroup’s purchase of Hills Coaches underlined continued consolidation in transport.

Paul Scullion, head of corporate at Burness Paull, said improving conditions were being matched by more disciplined dealmaking.

“The corporate transactional market has been steady, with a sense of cautious optimism returning as interest rates stabilise and financing conditions improve.

“Private equity firms are increasingly active, particularly in bolt-on acquisitions, as part of buy-and-build strategies, while deal structures are evolving to bridge valuation gaps between buyers and sellers.”

While headline deals pointed to renewed confidence, the underlying market remained defined by selectivity, longer timelines and a focus on quality assets.

Natwest makes statement of intent with Evelyn acquisition

NatWest agreed to acquire wealth manager Evelyn Partners for £2.7bn, marking its largest deal since the financial crisis.

The business, owned by Permira and Warburg Pincus, manages around £69bn of client assets.

The transaction will more than double NatWest’s wealth assets to about £127bn and create one of the UK’s largest private banking and wealth platforms.

Strategically, the move accelerates NatWest’s shift towards fee-based income, targeting higher-margin advisory and investment services. Completion is expected in summer 2026, subject to regulatory approval

AG Barr acquires Fentimans

Irn-Bru maker AG Barr completed a deal for around £38 million to swallow Fentimans, the Hexham-based botanical brewery and fizzy drinks brand, in a move funded through a combination of cash and debt.

At the same time, the Cumbernauld-based maker of “Scotland’s other national drink” confirmed that it had closed a deal at the end of its financial year to January to buy Devon-based juice business Frobishers for £13m. The deals are two of the iconic Scottish firm’s largest of recent times.

Zonal bought by Volaris Group

Edinburgh-based hospitality technology provider Zonal was bought by Canadian firm Volaris Group.

The backing by Volaris is intended to create opportunities to accelerate the Scottish company’s next-generation software, while maintaining the business as an autonomous and independent subsidiary.

Zonal’s portfolio comprises electronic point of sale and hospitality technology products.

Its customers include Mitchells & Butlers and Pizza Express. The financial terms surrounding the deal were not disclosed but the acquisition sees Zonal CEO and shareholder Stuart McLean step down from the business.

AAB makes further moves into Ireland

AAB, the acquisitive Scottish-founded accounting and business services group, extended its reach in Ireland after agreeing a deal to take on accountancy practice O’Connor Pyne & Co.

Founded more than 20 years ago, O’Connor Pyne & Co has built a reputation for delivering a broad range of professional services to clients across the country.

AAB - formerly Aberdeen-headquartered Anderson Anderson & Brown - plans to scale its operations in the Munster region of Ireland significantly over the coming two years through a combination of organic growth and selective acquisitions.

FirstGroup moves for Hills Coaches

Aberdeen-headquartered transport giant FirstGroup confirmed the acquisition of Hills Coaches of Wolverhampton, signalling continued confidence in the sector.

The acquisition will be operated by First Bus and forms part of the group’s strategy to grow a high-quality, diversified coach portfolio.

Hills Coaches, founded in 1965, operates a fleet of 22 coaches and employs 40 people.

The business operates from a depot in Wolverhampton and provides a range of services including private hire, day excursions and long-term contracts. Over the past two years, FirstGroup has completed a number of coach business acquisitions.