Saturday 24 August 2019

Irish M&A tally slumps to €2.1bn in first quarter on economic fears

Waiting delivery: Domino’s Pizzas and Cheltenham sponsors BetBright has agreed deals
Waiting delivery: Domino’s Pizzas and Cheltenham sponsors BetBright has agreed deals
John Mulligan

John Mulligan

The value of Ireland-linked mergers and acquisition activity plunged in the first three months of the year to just €2.1bn from €20bn in the first quarter of 2018, figures compiled for the Irish Independent reveal.

The slump tallies with a sharp decline in M&A activity across the world.

There has been a marked slowdown in the period as investors and businesses fret about geopolitical issues such as Brexit and its wider implications. That has also caused turmoil for sterling. There's also a wider malaise over the global economic outlook.

Data compiled by Refinitiv shows there were 77 M&A deals with Irish involvement in the first quarter of 2019, which is down from the 85 notched up in the first three months of 2018.

A number of deals involving Irish companies were announced in the first quarter of the year, but most have yet to be completed.

They include the €18.5m takeover of Dublin-based Dedsert, which trades as BetBright, by 888.

Deals included the €18.5m takeover of Dublin-based Dedsert, which trades as BetBright, by 888
Deals included the €18.5m takeover of Dublin-based Dedsert, which trades as BetBright, by 888

Also on the list is the decision by UK-listed Domino's Pizza UK to buy a 15pc stake in Irish firm Shorecal, the vehicle owned by Charles and Adrian Caldwell in Northern Ireland and which owns a number of Domino's Pizza outlets in Ireland, for €12.5m.

Last week, Dublin-based financial services firm IFG said it had agreed to a €240m sale to UK private equity firm Epiris. That deal was not included in the value of deals collated in the survey.

Connor Manning, a partner at Irish law firm Arthur Cox specialising in corporate and commercial law, agreed there had been a slowdown in M&A activity.

"It's fair to say that the volumes would be down in the first quarter compared to last year," he said.

"We don't know whether that is relating to Brexit, or whether it's relating to something wider in terms of whether this is the start of a downturn or not."

He said investors should have a "good sense" by the summer of how the environment is playing out.

"Even in a downturn, we'd expect to be pretty active, but the nature of the deals might change slightly," he added.

The data prepared by Refinitiv shows that during the first quarter Arthur Cox was the joint top leading legal adviser to deals with an Irish link.

It has worked on four deals with a total value of $233.8m (€208.3m).

However, in the first quarter of 2018, it worked on 11 deals with an aggregate value of $547.8m (€488.1m).

Rival law firm McCann FitzGerald touched just one deal during the first quarter, according to Refinitiv, but had worked on nine in the first three months of 2018.

Figures from Refinitiv last week showed that global mergers and acquisition activity fell 17pc in the first quarter. In Europe, activity tumbled 67pc to $927bn, according to the data.

Irish Independent

Also in Business