Strong year for Irish mergers and acquisitions

Outbound deals accounted for half of all Irish-related merger and acquisition (M&A) transactions last year; the highest level on record, new data shows.

Strong year for Irish mergers and acquisitions

According to the latest annual Irish M&A Review, from law firm William Fry, 2015 saw a decline in deal volume — from 120 to 104 — but a surge in transaction value from €45.3bn to €189bn, largely driven by Pfizer’s takeover of Allergan and Bohai Leasing’s purchase of aircraft lessor, Avolon.

The pharmaceutial, medical and biotech sector accounted for 12% of deal volume.

Of arguably greater significance, however, was the rise in volume of technology, media and telecommunications-related deals and the aforementioned rising number of outbound deals.

That, according to Shane O’Donnell — head of corporate and M&A at William Fry — shows that “Irish businesses are now strong and confident enough to grow their global footprint”.

He added: “This growth in deals has been encouraged by the easier access to affordable funding in 2015, largely driven by the ECB’s €1.1tn quantitative easing programme.

“Whilst the global macro-economic outlook for 2016 shows uncertainty over the varying degrees of recovery across Europe and the slowing down of China’s economy, Ireland is still forecast to experience economic growth and we would expect M&A deals to continue strongly this year.

“Much of Ireland’s continued growth in M&A can be attributed to greater access and choice in source of finance, reflecting a return to more stable investment opportunities.

“Ireland continues to attract capital from other sources including debt financiers and private equity. This trend of debt funding is likely to continue in 2016,” the report said.

The 50% rate of outbound deals was higher than that recorded in other countries such as France (31%); Germany (29%) and the UK (28%).

Although outbound deals accounted for a greater volume of transactions, inbound deals dominated by value, with nine out of 10 largest deals by value in 2015 involving foreign bidders – four from the US; three from Europe and two from the Asia-Pacific region.

The leisure services sector accounted for 13% of Irish deal volume, with notable transactions being Lone Star’s purchase of Jurys Inn for €900m and the €30m acquisition of Adare Manor by the McManus family.

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