Last year proved to be an extremely strong year for Irish merger and acquisition (M&A) activity according to the seventh edition of William Fry’s Annual M&A Report published today. A total of 143 deals worth €14.9bn were announced over the year, representing a 5.9% increase in volume.
The figures show that Private Equity (PE) dealmaking experienced impressive growth during 2017 with a total of 37 deals worth €12.2bn, more than double the value of all announced PE deals in 2016.
Midmarket deals accounted for 93.5% of total volume, up from 82.4% in 2016 while inbound dealmaking expanded in 2017 to 93 deals worth €14.4bn. This inbound activity also spanned a variety of sectors highlighting the diverse range of growth-oriented businesses coming to market.
In 2017, there was a total of 37 announced PE deals worth €12.2bn representing a 141% value increase compared to 2016, and with deal volume reaching its highest annual total on record. International acquirers accounted for the bulk of this activity, with the top ten PE deals of 2017 all conducted by overseas bidders.
Interest from foreign investors continues to act as a major driving force behind Irish M&A activity. A total of 93 deals worth €14.4bn conducted by overseas acquirers in 2017 has the highest annual volume on Mergermarket record (since 2001). The largest inbound deal was Canada’s Vermillion Energy and Luxembourg-based holding company CPP Investment Board acquisition of a 45% stake in Royal Dutch Shell’s Irish gas assets in a deal valued at €830m. Inbound activity in the financial services sector was also popular, attracting four of the top 10 inbound deals of the year.
However, the figures show that megadeals were less prevalent in Ireland in 2017, with just three deals with a disclosed value of over €500m announced during the year. This was down from a record 10 transactions in 2016, when a flurry of tax inversion deals served to increase overall deal value.
Irish M&A value in 2017 was dominated by Dubai Aerospace’s €6.9bn acquisition of Dublin-based AWAS Aviation Capital – the largest deal of the year. In second place was French telecom company Iliad’s €3bn acquisition of a 64.5% stake in eircom group.
According to the report, 2017 saw a surge of activity in the fintech sector, a continued important driver of Irish M&A activity. William FRY believe strategic buyers and PE investors are attracted by potential growth prospects and the willingness of financial services companies to collaborate on investment deals. A key deals in this sector was Allied Irish Banks €30m investment in payments fintech firm TransferMate.
Commenting on the research, Partner and Head of Corporate/M&A at William Fry, Shane O’Donnell said, "We expect Ireland to remain attractive to international investors this year, however, uncertainty remains. The ongoing Brexit negotiations will be closely monitored by dealmakers while the ECB’s winding down of its QE program over the coming months may constrain their ability to access capital in 2018. Ireland will also face new challenges in attracting foreign investment due to sweeping changes to US tax rules."
He added, "Despite this unpredictable macroeconomic climate, it is expected that Ireland's strong economic fundamentals will continue to outweigh external destabilising factors and that 2018 will continue to see healthy levels of M&A activity. For Ireland, the M&A outlook appears bright."