Thursday, March 24, 2011
A THIRD of Irish businesses are planning to expand — via merger or acquisition (M&A) — this year, according to a new survey.
The latest International Business Report (IBR), from international accountancy and financial consultancy giant Grant Thornton, shows a significant upsurge in business confidence in Ireland with 35% of Irish business owners planning M&A activity during 2011 — 6% more than at this time last year.
"After two very difficult years for Irish businesses and the Irish economy we’re starting to see more confidence with business owners," according to Michael Neary, corporate finance partner at Grant Thornton Ireland.
However, while the survey shows that Ireland is ahead of the European and global average — at a European level, 28% of businesses plan to grow via M&A activity; while 34% have similar aims, on a global scale — he said the ongoing issue of access to credit from banks remains a concern.
"The good news is that we’re seeing an increase in the number of well-capitalised businesses looking to expand, but access to credit to get deals over the line is still a challenge. On the other side of the coin, there are still many businesses suffering cash flow pressure and these businesses are assessing if a merger or sale is an option," he said.
"There are banks lending in the Irish market, but approval criteria is tough."
The latest annual Grant Thornton research — which surveyed more than 11,000 companies across the world — showed that the BRIC economies of Brazil, Russia, India and China ultimately lead the way, with 44% of companies there looking to grow via acquisition this year.
In China, alone, some 45% of businesses have ambitious expansion plans.
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