Q&A: Anya Cummins

What is your current role?

My role involves advising companies on acquisitions, disposals and equity capital raisings, across a range of sectors.

What did you do previously?

I joined Deloitte when I left university and trained in the Corporate Finance team. I moved to an M&A boutique in London where I spent five years advising owner-managed businesses on M&A strategy, exit planning, sell-side advisory and private equity deals. It was a great experience – I loved London and the volume of transactions was huge, so I gained exposure to a wide range of deal issues, structures and transaction types. Last year I made the move back home and rejoined Deloitte as an M&A partner.

How does the UK M&A/MBO market differ from that in Ireland, if at all?

The UK M&A/MBO market is very competitive and the private equity market in particular is very mature with a large number of funds competing heavily for businesses across the spectrum of size and sectors. The volume of activity means that for UK businesses, particularly growth businesses, management teams and shareholders are very aware of the exit options and typically start to plan early for exit. This approach is evolving in the Irish market and we’re starting to see shareholders take a longer-term view on planning for sale. Competitive auction processes are also very common in the UK market. In my experience it’s rare that high growth UK businesses would engage in a bilateral negotiation with a single buyer. That’s something we see more of in the Irish market, where transactions can be off-market and less publicised.

What sectors are seeing most transaction activity here?

Technology is particularly active. This is mainly revolving around international buyers and equity providers acquiring, either in whole or in part, high growth Irish technology businesses that are internationalising. Also we’re seeing strong activity in the services sector, industrials and food and beverage. Our Debt & Capital advisory team is involved in a number of debt backed transactions in the healthcare and property sectors. Overall the market is quite dynamic.

What are buyers looking for?

Most buyers will have an acquisition strategy and pre-prepared acquisition criteria against which they are evaluating opportunities. These may include factors such as size, geographic footprint, distribution channels or product/service offering. For trade buyers it’s about factors that add value to their own business, enabling them to accelerate their growth plan. Understanding the acquisition criteria of the buyer is critical.

Timing is also everything. A buyer is looking for a sustainable business, and therefore choosing to sell when the business is well positioned to demonstrate sustainable growth is crucial, as well as when market conditions are ripe. This may mean waiting until key customer contracts are renegotiated, a new product has been proven with some platform sales, succession issues resolved or the integration of a previous acquisition completed.

What can sellers do to achieve maximum value for their business?

Prepare. Any sale or acquisition process is going to involve a significant element of digging into the underlying fundamentals of the business. If a seller is well prepared they can position themselves in the most favourable light and also flag any potential issues that may arise and plan accordingly. I’ve been involved in a number of processes where the seller hasn’t had the luxury of time to prepare, and these types of transactions can be much more challenging. Early tax planning can have a significant impact on the absolute cash extraction for the exiting shareholders.

What are your predictions for 2017?

I’m pretty positive about 2017 and predict good activity across the full spectrum of domestic, inbound and outbound activity in the mid-market. I think we’ll see continued growth in MBO activity, both debt and equity backed, supported by a strong funding environment. I also think we are going to see an increase in private equity activity, and we’re certainly seeing strong demand for these types of transactions, both from private companies and from Irish, UK and US private equity funds.

Domestic activity will be strong where there are clear consolidation opportunities and we are seeing a growing number of Irish businesses looking at acquisitions internationally for the first time.

Uncertainty in the international economic environment may well impact, but overall we’re expecting a strong year of activity.