Sales of firms up 10% but value fell

The number of merger and acquisition (M&A) deals increased by 10% in the first nine months of 2012 but the value of the deals completed fell, the NCB Corporate Finance M&A Tracker Survey found.

A total of 167 deals were reported in the first three quarters, representing a 10% increase on the 152 deals completed in the same period last year.

Irish corporates investing abroad helped push up the number of deals completed in the third quarter, increasing to 33 from Q2’s 28 deals.

“Once again, foreign acquisitions by Irish companies saw a considerable level of deal activity during the quarter with thirty three deals recorded, up from the 28 deals recorded in quarter two. The largest transaction in this sector was Ardagh Group’s acquisition of Anchor Glass Container Corporation for a reported €720m,” the survey states.

Ireland’s largest firm, CRH, had a busy quarter with 16 of the 60 transactions completed in the quarter done by the Irish-quoted company.

“The total value of all deals surveyed in quarter three 2012 was €2,478m in comparison with the €540m recorded in quarter two 2012 and €4,571m in quarter three 2011,” the report states.

Director of NCB Corporate Finance Jonathan Simmons said: “The financial and building, construction and property sectors recorded a decrease in deal transactions. The surprise performer was the industrial sector driven primarily by two transactions by Ardagh Group and Petroceltic International.”

The industrial sector accounted for 58% of the total value of deals, or €1,299.9m. In terms of deal volume, the industrial sector recorded 10 deals.

The building, construction and property sector recorded eight deals in Q3, including Kingspan’s acquisition of Thyssenkrupp Construction and Rigidal Industries LLC, for a combined value of about €97m. The health and pharmaceutical sector recorded five deals valued at €101m, driven by United Drug’s completion of three acquisitions, Pharmexx GmBH, Bilcare Global Clinical Supplies and Drug Safety Alliance.

“Surprisingly, the financial sector reversed its own trend recording its lowest number of deals in recent years. The sector saw three deal transactions in Q3 2012, down from a peak of 11 recorded in Q3 2011.”