Boom year predicted for M&A

A BOOM year for mergers and acquisition (M&A) activity for 2007 is predicted in Ireland, with growth of 30% to 40% in both value and volume expected.

This is according to Ed Lucus who is speaking today at Deal Drivers Ireland, an event focused on M&A at the Berkeley Court Hotel in Dublin.

The predicted increase would mean that deals worth €11bn to €12bn will take place in 2007, said Mr Lucus who is Editor of Remark Magazine.

He said Telecoms, Media and Technology (TMT) is expected to dominate in terms of the volume of deals taking place this year, with up to 40 such deals anticipated in 2007.

Software and telecoms deals are mainly dominated by British and US companies, but internet and media deals mostly involve Irish buyers, he said.

While TMT deals are big across Europe, the volume of TMT deals in Ireland is far higher, he advised.

Riverdeep could make headlines as they have been linked with Reed Elsevier’s Educational unit, according to Mr Lucas.

He predicts that TMT M&A activity in Ireland is likely to take place in the middle range, with lots of deals expected as the tech sector emerges from the dot.com slump.

Comparing Ireland to countries with economies of comparable sizes, such as Denmark, M&A activity here is still relatively low but we are catching up fast, he said.

The total number of deals was down 2% for Europe in 2006, but the value was up 31% to €1,056 billion.

Last year saw 120 deals in Ireland — a 41% hike on 2005. The value of deals in 2006 (€8.4 billion), meanwhile, was up 75% on 2005 (€4.8 billion).

Last year also saw 50 overseas deals by Irish companies AIB, BOI, Anglo Irish Bank, CRH (25 deals worth €2.5 billion between 2001 and 2005) and Kerry (15 deals worth €1.17 billion between 2001 and 2005).

The Smurfit Kappa IPO is likely to prompt more IPO exits by Private Equity funds holding Irish portfolio companies, according to Mr Lucas.