Irish merger and acquisition (M&A) activity grew 48pc during the last quarter of 2004 to €3.7bn, compared with €2.5bn a year earlier. However, the number of deals involved fell to 50 compared with 56 a year earlier. IT and telecoms acquisitions activity accounted for some 10pc of the overall deal volume but valued at €5.78m only 0.2pc of the value of deals.
According to the survey by Ion Equity, Irish buyers have bought a much greater proportion of foreign assets. However, purchases by overseas buyers such as Danske Bank’s acquisition of National Irish Bank for €1.4bn contributed greatly to the increase in M&A activity.
M&A acactivity in the IT and telecoms sector included Norkom’s acquisition of Belgian firm Data4s, US firm Clearwire’s purchase of a 75pc stake in Net2Cell, Smart Telecom’s purchase of a minority share in BBCL, AEP Systems’ acquisition of Netilla Networks and Mentec’s acquisition of UK firm Systation for €5m.
“The trend of Irish individuals and corporates being major buyers of assets continues, further demonstrating Ireland’s increased wealth,” said Ion Equity director Joe Devine.
Looking forward to 2005, Devine said: “Given the positive trading conditions, we expect the trends established in 2004 to continue on to 2005. The Irish corporate landscape will continue to be characterised by a relatively small number of flagship deals and anecdotal evidence suggests that valuations have by no means hit any sort of ceiling.
“The exuberance surrounding recent AIM flotations is a good indication of current confidence and selective investments will continue to generate good returns for shrewd investors keen to seek out value,” Devine said.
By John Kennedy