Business Irish

Sunday 24 September 2017

Fees fall to €120m on Irish financial deals so far in 2017

Fyffes chairman David McCann – the firm was sold for €751m
Fyffes chairman David McCann – the firm was sold for €751m
John Mulligan

John Mulligan

Investment banking fees paid so far this year in relation to deals that involved Irish entities have hit $131.2m (€120.4m), according to figures compiled for the Irish Independent by Thomson Reuters.

But that's the lowest amount for the first three-and-a-half months of the year since 2013, when the figure for the period was $74.6m (€68.4m).

The latest figure relates to transactions up to almost the middle of April, and is spread across activity in bonds, equities, loans as well as mergers and acquisitions.

The figures for debt and equity deals relate to issues by Irish issuers. For mergers and acquisitions (M&As), the fees paid are connected to any M&A activity that included any Irish entity.

The data shows that the bulk of the fees paid so far this year, $60.7m (€55.7m), were for work on bond deals.

Loans activity generated $35.3m (€32.3m) in fees, while M&As accounted for $23.1m (€21.2m). Equity issues accounted for the remainder in fees.

The most lucrative year in the past decade for investment banking fees for Irish-related deals was 2007, when a total of $905.9m (€831.4m) was paid, according to the Thomson Reuters figures.

The figure plunged by about two-thirds in 2008 to $320m (€293m), just as the financial crisis really started to unfold. The amount reached a nadir of $254m (€233m) in 2012, before rising again. Last year, it was $560.9m (€514.7m). Irish M&A activity totalled about €169bn in 2015. The planned takeover by Pfizer of drug company Allergan would have added another €143bn to that tally, but the deal was called off in 2016.

Last year, mergers and acquisitions activity in Ireland included the €751m takeover by Japan's Sumitomo of fruit firm Fyffes.

That provided work for Irish firms William Fry as well as Davy Corporate Finance.

Greencore also agreed to pay $747m (€685m) to buy US firm Peacock Foods. Irish law firm Arthur Cox provided legal services on the deal.

The figures also show that just two Irish-owned firms are ranked among the top-tier providers of legal services in almost €4.2bn of mergers and acquisitions so far this year that have involved Irish entities.

A&L Goodbody and McCann FitzGerald are the only two Irish companies to feature among the top legal advisers to such deals that have been transacted to the middle of April, according to the data.

A&L Goodbody has been legal adviser on a total of four deals worth a total of €161m in the period that involved Irish entities, ranking it joint number one after Eversheds Sutherland based on the number of deals handled.

McCann FitzGerald is ranked joint fifth on the same basis, having provided legal services in two deals worth a total of €160m in the period.

Top deals with Irish involvement in recent months included the spin-off by Johnson Controls of its automotive parts business, with the acquisition of Tyco International.

The merger was an inversion that saw Johnson Controls move its legal address to Ireland. A&L Goodbody provided legal services on the transaction.

One of the biggest deals so far this year involving an Irish firm is Dublin-based aircraft lessor Avalon's $10bn (€9.2bn) acquisition of the aircraft leasing business of CIT.

Avolon, co-founded and headed by Domhnal Slattery, is owned by China's Bohai, which is part of the HNA conglomerate. No Irish legal or financial advisers worked in that deal, however.

McCann FitzGerald has advised Allianz-Irish Life Holdings (AILH) this year on the recommended acquisition by Allianz Europe of the AILH unit for €160m. Allianz Europe bought the remaining 33.5pc stake in AILH that it did not already own.

Irish Independent

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