15 Aug 2019 | 12.53 pm
Private Equity Buyers Driving Deal Flow
William Fry Mergers & Acquisitions Review
15 Aug 2019 | 12.53 pm
The deal value of large-scale mergers and acquisitions increased by 24% in the first half of 2019, inflated by the Abbvie/Allergan mega-deal.
That’s according to the mid-year William Fry Mergers & Acquisitions Review, whose key findings were:
- There were 75 deals in H1 2019, down from 93 in H1 2018
- The value of deals increased to €2.5bn
- There were 21 private equity transactions worth €1.8bn, a 74% rise on H1 2018
- Inbound M&A value totalled €2.2bn
- Technology, media and telecom accounted for 55% of disclosed deal value (€1.4bn) and 22% of deal volume (17 deals)
- Financial services recorded 11 deals, representing 15% of all announced deals.
William Fry partner Shane O’Donnell (pictured) commented: “Brexit, concerns that the global economy is reaching the peak of the cycle, and escalating trade tensions between the US and China have all contributed to dealmakers’ reasons for pause.
“The impact of this geopolitical uncertainty was observed in Q4 2018, and with dealmakers no clearer on how these matters will conclude, the slowdown carried over to Q1 2019 — but we have seen a marked improvement in Q2.
“While Ireland’s market has offered compelling value and opportunity for domestic and international investors, dealmakers are likely to adopt a more cautious approach until a clearer picture emerges of Ireland’s economic future.”
Highlights of the first six months activity included US-based pharma group Abbvie’s agreement to acquire Allergan in an $86 billion (€77.4 billion) blockbuster deal, while Belgian publishing company Mediahuis took Independent News & Media private in a deal valuing the company at €146m.
Ireland continues to draw M&A interest from international buyers, the report says. Inbound M&A value in the first six months totalled €2.2bn, a 28% increase, though volume dipped from 65 to 53 deals.
By sector, technology, media and telecom once again headed the pack, with 55% of deal value and 22% of volume, followed by financial services in terms of volume, with 11 deals.
On the outlook for the future, O’Donnell said: “The Irish economy is one of the fastest growing in Europe. The ease of transacting and its low corporate tax rate make the country an attractive option for overseas buyers and private equity firms, who have been the main drivers of deal flow over the last six months.
“Opportunities in the fast-growing but robust sectors of technology, financial services and life sciences will also continue to draw local and international interests as corporates continue to deploy capital in these hot industries. The easing of trade tensions and Brexit reaching a stable outcome could bring significant improvements. Further, Ireland’s solid fundamentals suggest that it will continue to deliver plenty of M&A opportunities for buyers who want to invest in H2 2019.”