“A handful” of interesting tech M&A opportunities

14 Jul 2004

The €108m sale of Irish banking software firm Eontec to Siebel recently is likely to be “the exception rather than the rule in the short term as there are only a handful of interesting technology companies worth significant money in Ireland today,” said Neil O’Leary (pictured), chief executive of Ion Equity in his review of merger and acquisition (M&A) activity in Ireland during the second quarter.

According to Ion Equity’s quarterly M&A Tracker, M&A activity in the Irish marketplace in the second quarter of this year rose by nearly €500m to €2.6bn compared to the second quarter of 2003 in terms of the total value of all disclosed transactions. A significant portion of the activity went to both CRH and Kerry Group as well as the acquisition of the Savoy hotel group by Quinlan Private in a deal worth €1.1bn. The value of the various deals broke the €2.5bn barrier for the first time in over 15 months.

The IT and telecoms sector accounted for approximately 13pc of the overall deal volume during the second quarter and only 5pc of the overall deal value at €124.4m.

M&A activity in the tech sector was dominated by the €108m sale of Eontec to Siebel Systems in April. Other prominent tech deals included Sage’s acquisition of Denver Manufacturing Ltd for €1m in April and its acquisition of Service Software Accounting Package in May for an undisclosed sum; Top Security’s acquisition of Systemhouse Technology for €7m in May; ID Data’s acquisition of Cardbase Technologies for €3.42m in June; and Plasmon plc’s acquisition of Raidtec Holdings for €5m in April.

Another interesting acquisition that was filed under financial services in the M&A Tracker Survey was US Bankcorp subsidiary NOVA Info’s acquisition of Bank of Ireland’s euroConex Technologies in April for €40m.

“In terms of the number of deals, the most active sectors were food, industrial, IT/telecoms and leisure/travel – the latter mostly involving the sale or acquisition of hotels. As with the bigger deals, most of the buyers were Irish, and in the case of smaller deals the main driver is either consolidation in the Irish market or the opportunistic acquisition of overseas assets in the UK.

“In the technology sector, the sale of Eontec to Siebel for the very strong price of €108m suggested to some that the day of rich return from the technology sector are back. But the Eontec deal is likely to be the exception rather than the rule in the short-term as there are only a handful of interesting technology companies worth significant money in Ireland today,” O’Leary said.

“Looking ahead, although most of the underlying economic indicators are good, and financial buyers are finally getting a run for their money from corporate buyers, there is by no means a consensus that we have fair sailing in the medium term.”

By John Kennedy