The north-east has long been a hub of economic activity and that shows no sign of stopping as we move through 2025. Uncertainties may abound on a global scale, but the energy sector in Scotland remains buoyant and a continuing source of investment.
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For Alasdair Freeman, an energy M&A specialist at Burness Paull, there is plenty to be positive about. Recent months have seen a steady flow of activity and signs are good for the foreseeable future.
Alasdair said: “We’ve had a strong set of transactions over the past year. I sit on our Houston desk, and we saw a good amount of investment from the US. It’s a positive development that they are spending and investing on this side of the pond again.”
Of course, this investment stems from the fact that American companies continue to show a strong interest in the north-east’s energy sector.
Having recently visited the US, Alasdair noted: “I was over last month, catching up with people, and while there’s uncertainty around elections and policy changes, energy remains a priority. Transactions continue to take place, and I’m encouraged to think that what we saw last year will continue.”
Tech at forefront of deals
One of the key drivers of this investment is the Scottish technology sector, particularly firms that develop innovations for the energy industry.
Alasdair noted that the north-east of Scotland has long been regarded by US investors as a hub for cutting-edge solutions.
He continued: “They’ve always looked at the UK as a source of quality businesses—especially the north-east. They see it as an entrepreneurial area where new products and solutions are constantly emerging. Rather than starting from scratch, larger US firms are looking to Scotland as an incubator for high-potential businesses that they can help scale globally.”
Global upheaval can drive investment
While global energy policies remain uncertain, Alasdair pointed out that this very uncertainty is often a catalyst for investment.
“The world is changing geopolitically, and that places a sharper focus on energy security,” he said. “In many ways, that drives investment rather than discouraging it. Businesses involved in energy—whether oil and gas, renewables, or tech solutions supporting the transition—are all seeing strong interest from investors.”
Auctions a sign of strong market
Looking ahead, there is much to be optimistic about in the M&A landscape over the next 12 months. The start of the year has already seen high levels of activity, with strong investor interest across various sectors. Auctions, in particular, have been booming, with a healthy number of buyers actively pursuing small and medium-sized enterprises.
Alasdair added: “For these businesses, they can start off with a vision of what they want to do, but there comes a point where that’s as far as they can take it. At that stage, an exit of some kind is necessary.
“The North East has always been strong at nurturing start-ups and growing them to a small or medium-sized level, but in the past, securing a successful exit wasn’t always straightforward. Now, there’s a greater appetite from investors and buyers, meaning businesses that have reached that point are in a much stronger position to transition and evolve.
“If you’re looking to exit, you will find a buyer. The demand is there, and processes are becoming more competitive. The market is active, and that’s a very positive sign.”
Bright times ahead in 2025
With sustained investment from the US, growing interest in energy technology, and a strong appetite for acquisitions, 2025 is shaping up to be another dynamic year for M&A. While challenges remain, the underlying fundamentals suggest continued deal-making opportunities, particularly in Scotland’s energy sector.
For businesses considering their next steps –whether seeking investment or looking for an exit – there are plenty of reasons to be optimistic.
To learn more visit the Burness and Paull website.
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