Irish M&A outlook promising despite Brexit, Trump concerns

New figures show deal value declined 51% in Ireland last year as activity rose by 3%

The €14.9 million acquisition of Cork-based Tyco by Johnson Controls was the largest deal of 2016

The €14.9 million acquisition of Cork-based Tyco by Johnson Controls was the largest deal of 2016

 

M&A activity in Ireland rose by 3 per cent last year but the value of deals slumped, new figures show.

A total of 129 mergers and acquisitions occurred last year however, volume fell 21 per cent from 72 deals to 75 between the first and second half of 2016.

Deal value was down 51 per cent over the year, declining from €8.6 billion to €4.2 billion, according to data compiled by William Fry and Mergermarket.

The €14.9 million acquisition of Cork-based Tyco by Johnson Controls, a US maker of car batteries and heating and ventilation equipment, was the largest deal recorded in Ireland last year.

Other notable Irish deals last year included Verizon’s $2 billion acquisition of Tallaght-based Fleetmatics and Sumitomo’s €850 million purchase of fruit distributor Fyffes.

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Outbound deals accounted for 40 per cent of all Irish deals in 2016, higher than several European peers including France, the UK and Germany.

Shane O’Donnell, head of Corporate and M&A at William Fry said teh decline in deal volumes in the second half of the year reflected a more muted M&A landscape globally.

In 2016, global M&A volume fell 4 per cent while value dropped by 18 per cent.

Private equity buyouts accounts for just under a third of all Irish M&A deals between €15 million and €100 million last year.

Technology, media and telecommunications (TMT) remains a critically important sector to Irish M&A, but 2016 saw year-on-year volume and value fall by 46 per cent and 48 per cent respectively, the report shows.

“Despite current uncertainty, the expectation is that Irish deal activity will rise this year,” said Mr O’Donnell.

“ Given the climate around Brexit and the US elections, it is likely that the first quarter will be slower but there is likely to be a strong pick-up in the second and third quarters of 2017 as the geopolitical landscape becomes clearer. This could lead to capital markets opening up again, and that may drive further M&A activity,” he added.