Despite the increase in value of deals, the number of merger and acquisition (M&A) deals in the Irish economy are down 11.5pc year-on-year, according to new data from the Investec M&A Tracker, which shows transactions of more than €5.5bn in the first quarter of 2013.
“The first quarter of the year saw the number of reported deals increase from the 51 reported in Q1 2012 to 54 deals, a decrease from the 61 reported in Q4 2012,” said Jonathan Simmons, director of Investec Corporate Finance.
“However, despite the fall in the number of reported deals from Q4 2012, the total disclosed value reached €5,574m, up from the €792m reported during the same quarter of 2012 and an increase on the €1,659m of deal value recorded in Q4 2012.
The really significant level of deal value recorded in Q1 2013 (a level not seen since Q3 2010 when AIB disposed of its Polish operations and Ardagh acquired Impress Holdings) is attributable to the disposal of the Tysabri assets/business by Elan Corporation to Biogen Idec Inc.
As a result of this transaction alone, the health and pharmaceutical sector accounted for 59pc of the total deal value recorded, although this only accounted for 5.6pc in total volume. The next largest sector was financial services, which accounted for 23.7pc of deal value, but only 7.4pc of total volume. This was due to the €1.3bn sale of Irish Life by the State to Great-West Lifeco Inc. of Canada in what would be a significant transaction in any quarter. When the Elan Corporation transaction is removed, Q1 2013 still showed a strong increase in deal value of 40.1pc on Q4 2012.
The Investec M&A Tracker Survey reveals that Irish companies continued to acquire abroad, with 25 foreign acquisitions recorded during the quarter. CRH accounted for 15 of these similar to the 14 transactions recorded in Q4 2012 out of a total of 30 foreign acquisitions by Irish companies.
M&A deals by sector in Ireland
The IT and telecoms and professional and technical sectors each accounted for 13pc of the total deal volume with a total of seven deals each recorded during the quarter.
IT and telecoms saw three transactions disclose a deal value. They were Synchronoss Technologies (through its acquisition of NewBay for €42m), Ladbrokes (through its acquisition of Betdaq Ireland Ltd for a reported €34m) and Saongroup Ltd (with its acquisition of a 90pc stake in ChinaHR.com for €22m).
Only two of the seven deals recorded in the professional and technical sector disclosed deal values (Tekelek Europe and their acquisition of Ingenion Design Ltd for €2.4m and Greenworld International Resources Ltd.’s acquisition of a 76pc stake in 4Front Contracts Management for €0.1m).
The report shows that the building, construction and property sectors saw the most activity in Q1 2013; recording 18 deals during the period, which amounted to 33.3pc of the total deal volume, and driven in the main by the aforementioned transactions by CRH with an reported deal value of €385m.
Individual deals disclosed included the acquisition of Southern Cement Ltd for a reported €22.5m, a 98.75pc stake in Cementos Lemona and the acquisition of Expocrete Concrete Products Ltd for an undisclosed amount through its US subsidiary, Oldcastle Inc. Other deals which took place in this sector include Loews Hotels Inc’s acquisition of Back Bay Hotel, a subsidiary of the Doyle Collection and Palladin Hotels & Resorts’ acquisition of Sheen Falls Lodge for €5m.
The food/food services sector saw a number of Irish PLCs involved in transactions during the quarter. Kerry Group completed two transactions with the acquisition of both Big Train and Orley Foods Ltd for undisclosed amounts, while C&C Group Plc. acquired a 50pc stake in Wallaces Express Ltd.
A number of private companies were also active in the sector, including Tayto Ltd and ABP Foods, who acquired Midland Snacks Ltd and the Debbie and Andrew-Sausage Brand, respectively.