By Mark Williamson

SCOTLAND could see a flurry of deals next year amid generational change and concerns about a potential tax reform but political uncertainty will weigh on the market an expert has said.

Boris Johnson’s crushing win in the general election prompted a surge in share prices amid talk in the City that the result could prompt a big rise in mergers and acquisitions activity.

Some said the result could encourage firms to make expansion moves they may have put on hold during the stalemate at Westminster that followed the Brexit vote in 2016.

However, a leading dealmaker in Scotland, David Leslie, poured cold water on hopes the election result would lead to big changes in attitudes.

He said despite Mr Johnson’s determination to get Brexit done big uncertainty remained about what it would mean for many firms and the markets they operated in.

“For anyone in business it’s all about how things unfold now,” said Mr Leslie noting the importance attaching to issues such as what Brexit will mean for cross-border trade and flows of people.

Mr Johnson's decision to put a one-year limit on trade talks with the EU reignited fears of a no-deal Brexit and saw the pound give up the gains it made after the result of the election was announced.

“I know how long it takes to negotiate deals,” said Mr Leslie, who spent years running the Scottish corporate finance operations of accountancy giant PwC.

Mr Leslie noted the result has created a special complication in Scotland. With the SNP winning 48 of the 59 seats in Scotland, demands for another independence referendum are likely to increase in volume.

“Independence is going to come back into play,” said Mr Leslie, noting: “It adds that uncertainty.”

However, he added: “It’s a factor but I don’t think it will stop or majorly impede deal flow.”

Mr Leslie reckons big corporations working in global markets will be prepared to carry on doing deals.

A range of big transactions have been completed this year, including the £320 million takeover of Falkirk bus-maker Alexander Dennis by Canada’s NFI Group.

The fall in the pound since the Brexit vote has made it cheaper for overseas firms to buy UK assets but Mr Leslie reckons it has provided the icing on the cake for buyers rather than driving deals.

Similarly, an increase in the pound may not result in a surge in outbound M&A activity.

Concerns about a trade war between the US and China and what that might mean for the economy persist.

But there appears to be no shortage of ambition in boardrooms across Scotland however uncertain the macro picture may be.

“I’m just amazed at the resilience of people in boardooms, people are genuinely just getting on with it,” said Mr Leslie.

The Leslie Corporate Finance business he chairs is working with a range of firms that are focused on growth.

Some factors could help stoke activity in Scotland, in which small and medium sized enterprises make up the bulk of the business population.

Mr Leslie noted there are many good family-owned businesses in which shareholders or executives have been in place for years and are ready to hand on the baton to a new generation. Some people have had enough of uncertainty.

Succession issues could encourage owners to sell up while the prospect of a cut in Entrepreneurs Relief may make some reluctant to wait too long.

“People may think should I get a deal done in case that relief is taken away,” said Mr Leslie.

He noted many private equity houses have raised huge amounts of cash that they are keen to put to work.

Sectors that could see most activity include technology, with firms that have developed enabling software that allows businesses to complete important tasks more efficiently likely to be in demand.

Belfast-based advisory firm HNH recently showed confidence in the prospects for deal activity in Scotland by backing a move by four corporate finance specialists to establish a new office in Edinburgh to target SMEs.