06 Mar 2018 | 10.54 am
M&A Deal Volume Up By 6% In 2017
William Fry analysis
06 Mar 2018 | 10.54 am
Private equity deal-making totalled 37 deals worth €12.2bn, more than double the value of all announced PE deals in 2016. Willliam Fry also found that mid-market deals accounted for 93.5% of total volume, up from 82.4% in 2016. International acquirers accounted for the bulk of this activity, with the top ten PE deals of 2017 all conducted by overseas bidders.
Meanwhile, inbound deal-making expanded in 2017 to 93 deals, worth €14.4bn.
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.
Key sectors in terms of M&A deal volume in 2017 included business services (+16%); telecoms, media and technology (TMT) (+15%); financial services (+14%); and consumer (+13%).
Megadeals were less prevalent in Ireland in 2017. Three deals with a disclosed value of over €500m were announced during the year. This was down from a record 10 transactions in 2016.
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 William Fry’s report, 2017 saw a surge of activity in the fintech sector, a continued important driver of Irish M&A activity. A key deal in this sector was AIB’s €30m investment in payments fintech firm TransferMate.
The consumer sector experienced the sharpest rise in deal volume year-on-year – increasing from 8% to 13%. The largest sector deal saw Church & Dwight acquire hair growth vitamin supplement producer, Viviscal, from Irish beauty products company, Lifes2good, for €150m.
The TMT sector accounted for 15% of 2017’s M&A deal volume and 25% of its value. Apart from Iliad’s acquisition of eir, the next highest valued deal of the year in this sector was Vector Capital’s €281m purchase of Experian’s cross-channel marketing business, followed by Australian investment firm AMP Capital Investors’ €156m purchase of a 78% stake in telecoms firm enet.
Outbound M&A saw its share of volume increase in 2017 – from 39% to 42%, with a total of 93 deals worth €9.4bn. Three of the top five deals of the year were undertaken by global building materials group CRH Plc, which employs an estimated 87,000 people at around 3,800 locations worldwide.
Shane O’Donnell (pictured), partner and head of corporate/M&A with William Fry, said that Ireland is expected 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,” O’Donnell said.
“Ireland will also face new challenges in attracting foreign investment due to sweeping changes to US tax rules. 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.”