M&A deals close to €9m in Q4

MORE than half of all Irish merger and acquisitions activity in 2006 took place in the final three months of the year.

New figures from finance house Ion Equity reveal that irish firms were involved in deals worth €8.6 billion in the last quarter of 2006 out of a total of 15bn for the year as a whole.

Ion said the full year figure is 22% more than was recorded in 2005, though the final three months are skewed by some major deals, including the €3.6bn takeover of Houghton Mifflin by Riverdeep.

Ion Equity director Joe Devine said the end of 2006 turned out to be a record period for Irish dealmakers.

“Even when you take into account the small number of mega-deals in the fourth quarter, the M&A Tracker figures show that activity involving Irish companies and investors remains at a high level.”

The 77 deals in the fourth quarter of 2006 represent a 35% increase on fourth quarter 2005, and it is very encouraging to see that the deals were spread across a variety of sectors, with no single sector dominating the figures when Riverdeep is excluded.

The media sector represented 29% of all deals by value but just 8% in terms of the number transactions. Ion said there was a much more even spread across industrial sectors in volume terms, with building/construction/property, support services, and industrial each accounting for 16% and IT/telecoms accounting for 15%.

The Riverdeep/Houghton Mifflin, CRH/APAC and Tullow Oil/ Hardman Resources deals accounted for the vast bulk of the €6bn of overseas acquisitions by Irish firms.

There was just over €1.7bn of trade sales of Irish companies, with American buyers accounting for €1.3bn and Irish buyers accounting for €263m.

Ion said the prospects for mergers and acquisitions involving Irish companies and investors in 2007 remains very positive

“There is ready availability of funding, both from inexpensive debt and private equity and both the domestic and the major global economies look as if they will remain in good shape in 2007.

“Inflation is likely to remain low and there are good management teams who will pursue growth through acquisition.

“Obviously, there are some uncertainties such as the geopolitical situation, interest rates and energy prices. But on balance we expect 2007 to be another strong year for mergers and acquisitions with strong valuations, with a continuation of a small number of large flagship deals,” Mr Devine added.