The first half of 2019 has been strong for the Irish M&A market, according to William Fry’s Mid-Year M&A Review for 2019 in association with Mergermarket. While overall deal volume has dropped, value is up, while private equity and overseas investments have also been significant.
Findings in the report include:
Private equity is a major contributor to Irish M&A – Private equity deal value totalled €1.8bn in the first six months of 2019, a 74% increase from H1 2018, with private equity firms accounting for three quarters of overall deal value in H1 2019. Deal volume has also risen from 19 deals to 21 deals.
Likely contributors to this activity include the fact that Ireland will be the only English-speaking country in the EU once the UK leaves, an attractive prospect for North American companies looking to acquire in the EU. Mature private equity firms are also interested in Irish companies, buoyed by Ireland’s steady GDP growth, as this presents Irish companies as attractive deal targets. As well, with the $1.8tn of dry powder that private equity firms have access to, they are now looking to younger markets like Ireland to deploy this capital.
To add to this, the Irish government is making moves to support private equity investment in the country, approving the drafting of the Investment Limited Partnership Bill that aims to make the jurisdiction more attractive to fund managers.
Ireland is expected to be one of the fastest growing markets in the EU – GDP growth is forecast to moderate at 3.8% in 2019, less than the 7.2% and 6.7% in 2017 and 2018 respectively, however, Ireland is still expected to be one of the fastest growing markets in the EU. Meanwhile, unemployment is set to fall to 5.4% and inflation is not expected to rise above 1%. Despite this, the M&A market is a mixed bag as deal volume is down, yet deal value is up by 24% to €2.5bn.
Ireland is an attractive destination for foreign direct investment (FDI) – Dublin has been ranked as the most attractive large city for FDI investment according to FDI Intelligence. With the lowest corporation tax rates in the EU (12.5%) and the support of the IDA, a specialist agency set up to support inward investment, Ireland presents itself as a favourable country for FDI. In fact, inbound M&A value in H1 2019 totalled €2.2bn, a 28% increase on H1 2018, and overseas investors led the five largest deals in Ireland during H1 2019.
Looking ahead, the outlook for H2 2019 in the Irish M&A market looks promising, as the Irish economy is one of the fastest growing in Europe, making it an attractive prospect for private equity and overseas buyers. Furthermore, with Brexit potentially reaching a stable outcome soon, this could bring further significant improvements to the Irish M&A landscape.
WE ARE READY WHEN YOU ARE
Call Benchmark International today if you are interested in an exit or growth strategy or if you are interested in acquiring.
Europe: Carl Settle at +44 (0) 161 359 4400 / Settle@BenchmarkCorporate.com
Americas: Sam Smoot at +1 813 898 2350 / Smoot@BenchmarkCorporate.com
Africa: Anthony McCardle at +27 (0) 21 300 2055 / McCardle@BenchmarkCorporate.com
ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximising solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.