Think beyond the exit: Why M&A must be in every Irish company’s growth strategy
David Ahern, a director in KPMG’s finance practice.
M&A is seen as a flexible strategic tool for most successful mid-sized Irish companies, writes , a director in KPMG’s corporate finance practice
For many owners of mid-sized Irish companies, M&A is no longer a one-off exit event. It is increasingly being viewed as a flexible strategic tool to accelerate growth, strengthen market position, address succession and unlock shareholder value.
With sustained international interest in Irish businesses and capital available from a broader range of sources, well-positioned companies now have more options, and greater control over timing, than in the past. In practice, however, that control is strongest where management teams have invested early in being “deal ready”, rather than reacting only when an opportunity arises.
For Irish businesses focused on expansion or international growth, acquisition is often the quickest route to scale, allowing them to add customers, capability, expertise or geographic reach faster than organic growth alone.
That has clear implications for funding strategy. Many mid-sized Irish companies have stronger balance sheets and more dependable cash flows than they sometimes recognise, and unlocking that strength can be the first step in funding an acquisition.
Debt should therefore be seen as a viable option where earnings are resilient, and leverage can be serviced without constraining the business. In other cases, equity, often alongside debt, may be more appropriate, particularly where management is pursuing a more ambitious buy and build strategy or requires greater flexibility.
Partial equity sales are increasingly a tool for owners to release equity and de-risk personally. It is also a means to introduce a new partner while allowing the owner to remain invested in the next phase of growth.
Minority investment can add capital and external perspective without requiring founders to step away, while majority transactions can enable the release of significant value and still retain future upside. A full sale remains the right answer in some cases, particularly where succession is uncertain or a larger platform can take the business further, but it is no longer the default route for every owner.
A wider range of capital The funding landscape for Irish businesses is broader than it was even a few years ago, providing more choice when considering a transaction. At a high level, those options fall into debt and equity capital.
Banks and private credit funds can provide debt funding to support growth or acquisitions while allowing shareholders to retain ownership, provided the business has the balance sheet strength, cash generation and debt capacity to support it.
Equity capital, by contrast, comes from sources such as private equity, family offices and trade buyers, typically involving shared ownership in return for capital, strategic support or a route to liquidity.
Private equity will usually focus on earnings quality, management strength, cash generation, scalability and buy and build potential, while trade buyers are more often driven by strategic fit. Choosing the right source of capital is therefore a strategic choice rather than a purely funding decision.
Whatever route a company pursues, preparation remains a key determinant of outcome for sellers and buyers alike. For sellers, that means understanding how the business will stand up to scrutiny before a process begins.
A credible buyer will typically undertake financial, tax, legal and commercial diligence, and weaknesses in any of these areas can quickly affect value, momentum and certainty. For buyers, the same principle applies.
Being clear on strategy, understanding what is being acquired, assessing how a transaction will be funded and undertaking appropriate diligence are all critical to avoiding execution risk and overpaying. Thorough preparation gives sellers greater control over value and process, while allowing buyers to execute with greater confidence and discipline.
For business owners M&A is best viewed not as a last resort or a distant endgame, but as part of broader strategic planning. In a market that continues to reward preparation, those who engage early are usually better placed to shape the outcome on their own terms.
