William Fry: Irish M&A market resilient compared to rest of Europe and world

William Fry: Irish M&A market resilient compared to rest of Europe and world

Mark Talbot

Ireland’s M&A market proved to be resilient with a growth in deals volume compared to falls in Europe and the rest of the world, new analysis from William Fry shows.

The firm has issued its annual report on Irish M&A activity in 2023, which records a total of 334 qualifying deals, an increase of 10 per cent on the previous year. The total deal value came to €11.8 billion, down by 20 per cent.

Mid-market transactions again dominated in 2022, with 254 transactions out of 334 having values of between €250m and €500m. The larger end of the market had slightly reduced levels of activity with five transaction worth more than €500m in 2023, down from a total of seven in the same category in 2022.

The financial services sector was the largest sector by value and accounted for 35 per cent of the deals in 2023. In terms of deal volume, the technology, media, and telecoms (TMT) sector was once again the dominant sector within the market.

Approximately two-thirds of the deals in 2023 involved an overseas bidder with 225 transactions overall. Collectively, those deals were valued at €11.3bn, or 96 per cent of the total value of M&A transactions in 2023. This included 19 of the largest 20 transactions.

While the volume of the inbound activity was up slightly by two per cent, the value of inbound transactions declined 12% per cent.

UK-based acquirers were the most active accounting for 80 transactions while US acquirers were responsible for 50 deals in the year. The number of transactions between Irish parties rose by 30 per cent in 2023 from 84 deals to 109.

Private equity (PE) activity decreased in 2023 with 58 transactions down 11 per cent from 65 in 2022. Collectively, the 58 transactions were worth €2.2bn.

Mark Talbot, a corporate/M&A partner at William Fry, said: “Against a global backdrop of negative economic and political news, Ireland’s M&A market in 2023 proved to be resilient.

“The number of deals, at 334, was up 10 per cent and compares very favourably to the performance of the wider European market (down 11.4 per cent) and global markets (down 15.8 per cent) for the year.

“However, the aggregate value of Irish M&A deals reached just €11.8bn, down 20 per cent compared to 2022.

“It should be noted, however, that dealmaking in Ireland remains very healthy by historical (pre-Covid) standards. A large proportion of Irish M&A activity is driven by non-Irish acquirers whose appetite to do higher value deals was somewhat diminished in 2023 by factors such as rising interest rates, high inflation and political instability.”

Looking ahead to 2024, he continued: “The outlook for M&A in Ireland during 2024 is mixed. On the one hand, a more stable interest rate environment coupled with Ireland’s resilient economic performance will encourage positivity, with many Irish companies continuing to punch above their weight.

“Conversely, it will be difficult for the Irish market to avoid the considerable risk that negative international factors could lead to a conservative approach being taken by strategic and PE buyers in 2024.

“Ireland faces a national election at some point in the next 15 months. The potential for significant policy changes not only in Ireland but also in the jurisdictions of our largest FDI acquirers seems unlikely to help encourage more active dealmaking in 2024.

“Finally, new rules seeking to control the foreign (i.e. non-EEA) acquisition of strategic Irish businesses are due to come into force early in 2024. Observers will be keenly watching the manner in which the new procedures are implemented.”

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