International buyers drive record levels of M&A activity in Ireland

13 Aug 2021

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Law firm William Fry said the technology, media and telecom sector accounted for the highest number of M&A deals in the first half of 2021.

Mergers and acquisitions in Ireland reached a record high in the first half of this year, marking a strong recovery after the tumultuous financial year in 2020, according to William Fry.

The Irish law firm’s latest half-year review of M&A activity in Ireland found that the total value of M&A deals increased to €19.6bn in the first six months of 2021, which is eight times more than the €2.4bn recorded in the same period last year.

The number of M&A deals also shot up to 106 this year from just 80 last year, marking a 33pc increase. This includes nine high-value deals exceeding €500m each, with six deals valued at more than €1bn each.

Stephen Keogh, partner and head of corporate at William Fry, said that the record high in M&A activity is a continuation of the momentum built in the final quarter of 2020.

“International buyers – both corporate and private equity – have been a key driver of this activity, with the value of M&A conducted by overseas bidders totalling €15bn, nearly twice as much as the whole of 2020,” he added.

Tech and renewables sectors soaring

Tech, media and telecom (TMT) has emerged as the sector with the highest activity, accounting for 27pc of all M&A deals in the country in the first half of the year. This is closely followed by financial services, consumer goods and the renewables sector.

Financial services, however, accounted for the highest total value in deals, with 32pc market share. This was largely due to a major AIB-Ulster Bank deal and an aircraft leasing deal.

“Competition within high-growth sectors such as TMT, healthcare and consumer served to push up valuations, and activity shows no signs of slowing down,” Keogh said.

The acquisition of a stake in Galway-based fintech Planet by Advent International was the largest TMT deal this year, which valued the company at €1.8bn. This was followed by Dublin-based Navitas’ merger with US company Live Oak at a €785m valuation.

In the solar and wind renewables space, there was Aker Horizons’ €675m acquisition of Irish wind and solar company Mainstream Renewable Power.

Ireland ‘vulnerable’ to future Covid-19 waves

An EY report last month found that Ireland was benefiting from a global surge in M&A activity, with more deals involving Irish targets in the first six months of this year than in the whole of 2020.

The new William Fry report said that the half-yearly performance is indication that Ireland is open for business and that international private equity funds with access to large amounts of capital will continue to search for attractive acquisition targets.

“Overseas buyers will continue to be drawn to Ireland’s business-friendly economy, thriving multinational scene and homegrown talent,” it said. “With the macroeconomic picture continuing to improve, the stage looks set for a stand-out year for Irish deal-making.”

However, William Fry cautioned that protectionism could increase post-pandemic, referring to the EU’s recent guidelines on FDI. The report also noted that dealmakers will likely keep an eye out for G20 discussions on a minimum corporate tax.

“Furthermore, Ireland’s reliance on international investment means that Ireland’s M&A market is particularly vulnerable to future waves of Covid-19 in key trading markets such as the US and UK,” it added.

Vish Gain is a journalist and copywriter with Silicon Republic

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