Irish M&A Activity Remains Buoyant
M&A Deals increase 14% in 2020 to €9.1bn
The Irish M&A market displayed remarkable strength in 2020 despite a turbulent year. A total value of €9.1bn was recorded in Irish M&A, a 14% increase on 2019, and deal volume remained consistent at 169 deals for the year. These figures are even more impressive when you compare them internationally. In contrast to Ireland, overall European deal volume fell 17% over the same period to 6,760 deals, and value ticked up by a modest 3% to €739.4bn. In particular, the final quarter of the year registered €5.3bn in activity, more than the previous three quarters combined.
Stephen Keogh
Mid-Market Deals
The mid-market continues to successfully fuel the Irish M&A market. A total of 60 mid-market deals (€5m€250m) were announced in 2020 which, despite registering a 9% drop in volume compared with the previous year, still accounted for 85% of deals with a disclosed deal value. The upper end of the market was a highlight of Irish M&A in 2020. A total of 11 deals worth €250m or more were announced in 2020, worth a combined value of €6.3bn. By comparison, only four deals within this price bracket were announced in both 2018 and 2019.
Sector Watch
The technology, media, and telecoms (TMT) sector continued to attract the lion’s share of Irish M&A in 2020, accounting for 25% of total volume and 22% of value, while attracting three of the top ten deals of the year. The largest TMT deal of the year was CK Hutchison’s €600m proposed sale of mobile operator Three Ireland to telco infrastructure firm Cellnex. Activity within the health and life sciences sector also resulted in a series of high-profile deals in 2020. A total of €1.3bn worth of deals were announced within the sector – more than seven times the total in 2019. The largest transaction of the sector in 2020 was Swiss pharma firm Roche’s €380m well-publicised acquisition of biotech startup Inflazome.
Inbound Activity
All the top 20 deals of the year were inbound cross-border transactions. Overall, there were 121 inbound transactions worth €8.8bn announced across the year, a 6% rise in volume and a 16% rise in value on the previous year. UK and US-based buyers were most active in the Irish M&A market, carrying out 47 and 38 deals in the first ten months of the year, respectively. Both countries recorded an uptick in activity compared with 2019, despite the challenges faced amidst the Covid-19 pandemic. US-based buyers were responsible for €3.7bn of total value in 2020, the highest of any inbound country.
Private Equity
Increased private equity activity in the Irish market was a notable trend in 2020. While total M&A activity remained consistent year on year, private equity firms continued to ramp up their presence in the Irish market. A total of 56 PE transactions were announced in 2020, 47% more than in 2019, while value rose 105% to €5.2bn. Thirteen of the top 20 deals of the year had PE involvement – an impressive performance given the challenges deal-makers faced in 2020. Ireland’s PE activity outperformed that of Europe, which fell by 10% in volume terms to 1,973 deals, while value rose by a more modest 26% to €298.8bn.
Outlook for 2021
As deal-makers plan for 2021, there are signs that the era of extreme uncertainty is drawing to a much-needed close. Several positive indicators are behind this renewed sense of optimism: the commencement of vaccine roll-outs was a crucial achievement in the long battle against the virus, while Joe Biden’s US electoral victory is expected to bring greater stability to global markets. Moreover, the long-awaited agreement on the terms of the UK’s exit from the EU (limited though they are) is sure to bring a renewed sense of certainty. All in all, it seems like there are solid grounds for optimism as we survey the Irish M&A market in 2021.