‘Bumper year’ for M&A activity in NI, report shows

Commercial property action ‘subdued’

The latest M&A review in the North by business analysts Experian shows a 37.7 per cent year-on-year increase in the number of deals completed between January and September.

The latest M&A review in the North by business analysts Experian shows a 37.7 per cent year-on-year increase in the number of deals completed between January and September.

 

The total value of merger and acquisition deals in the North hit a record £2.03 billion (€2.3 billion) over the first nine months of 2018, according to a report.

The latest M&A review by business analysts Experian shows a 37.7 per cent year-on-year increase in the number of deals completed between January and September.

This compares to the £1.48 billion worth of deals agreed over the same period in 2017.

According to Experian it has been a “bumper year” for deal makers in the North.

“This is the first time ever that deal values have risen above £2 billion at this point in the year, and 2018 is shaping up to be, by some way, the most valuable year for Northern Irish M&A,” Experian said.

However, the business analysts also said that although there has been a major hike in the total value of deals, there has been a drop in the number of deals that have been completed this year so far.

During the first nine months of 2017 there were 156 transactions but to September of this year this had fallen to 128 transactions.

Experian’s research suggests that at the smaller end of the market there has been a slowdown in deals while there has been a major jump in volumes at the top end.

Lagan buyover

Overall, the latest M&A report shows acquisitions have taken the lead over mergers during 2018 with the largest acquisition to date the £455 million debt-and-equity funded buyover of the Lagan Group in April by UK construction materials group Breedon.

The second largest deal in the North this year was in June when Orion Resource Partners acquired Dalradian Resources, the Canadian company that wants to develop a gold mine in Tyrone, in a £306 million deal.

In the latest report Experian highlights that private equity investment has been less prominent in Northern Ireland during 2018 with deals down by almost 50 per year-on-year in volume terms.

Although it acknowledges that some deals are still taking place with the biggest so far achieved by Devenish Nutrition which secured €118m of funding from the European Investment Bank (EIB), Ulster Bank and Danske Bank in August.

When it comes to the top deal makers in Northern Ireland during 2018, Experian said the Belfast law firm Tughans is in pole position ranked on deal volume with 34 transactions completed while A&L Goodbody is leading the value table with more than £1 billion worth of transactions concluded, and EY dominates the financial adviser table on both volume and value.

Commercial property

Meanwhile, a separate report from Lambert Smith Hampton (LSH) also shows there has been a significant slump in commercial property investment in the North during 2018 with year-to-date total investment standing at £121 million which it claims is 52 per cent down over the same period in 2017.

The latest LSH Investment Transactions Northern Ireland report outlines that commercial property investment in the third quarter of this year was “subdued” and totalled £53.2 million while overall activity in the market “remained low at 38 per cent below the five-year quarterly average”.

Martin McCloy, director of capital markets at LSH said: “The uncertainty continues regarding the exact detail of the withdrawal and future relationship agreements between the UK and EU. A blueprint for the future trade and security partnership should further increase confidence amongst investors and the commercial property market.”