29 Jan 2018

Corporate Finance M&A Quarter 4 2017 Review

Reported deals in Q4’17 of 52 shows a decline in volume on the previous quarter, however it is in line with reported activity in Q4’16.

While this figure falls someway short of the 65 deals recorded in Q3’17, it should be pointed out that it remains in line with the average number of deals recorded since Q1’15. Q4’17 volume exceeded Q3 and Q4 2016 which were undoubtedly impacted by the Brexit referendum result.

While the UK economy continues to suffer from low growth and higher inflation, the overall European economy is gathering pace and this is seen closer to home with Ireland poised to be the fastest growing economy in Europe for a fifth year in a row. This continued vote of confidence in the Irish market should ensure strong M&A activity in 2018, by both domestic and international firms.

Total disclosed deal value for Q4’17 was €5.9bn. This figure is somewhat flattered by the €3.5bn acquisition of Eir by the NJJ Group. The deal was signed and announced during the quarter but remains subject to regulatory approval.

IT and Telecoms continues to be the most active sector with 13 transactions recorded in the quarter combined with a healthy spread of transactions across a number of other sectors including Food/Food Services and Health and Pharmaceuticals.

Irish companies continue to be active in overseas acquisitions with 25 transactions completed. There were 10 in-market transactions involving domestic acquisitions by Irish companies, a slight increase on Q3’17. Irish PLC’s are recognised as having had a busy Q4’17 with Kerry Group and Kingspan announcing multiple transactions as well as DCC and Total Produce also completing acquisitions during the quarter.

The level of trade sale activity involving international companies acquiring Irish businesses continued to be strong during the quarter with a number of significant transactions occurring such as Pandox’s acquisition of the Jurys Inn Group for a reported value of €907m.

Other notable transactions involving the sale of Irish businesses during the quarter included Euronext’s €137m acquisition of the Irish Stock Exchange, the €42.5m sale of Blue Tree Systems to Orbcomm Inc, the sale of Lily O’Brien’s to Polish company, Colian, the €100m sale of Clavis to Ascential, the €67m sale of Merlyn Industries to Norcros plc and the €130m sale of Friends First Life Assurance Company to Aviva plc.

Valuations are strong at present and we believe the current market and indeed for the remainder of 2018 will be favourable for vendors.

A number of Ireland’s large private companies were active during the quarter including Musgraves, who made two acquisitions, Kepak Group, who acquired certain Moy Park assets, Panda Green with a further UK acquisition and the Irish Times’ acquisition of Landmark Media.

We expect 2018 to be a strong year for M&A activity.

To view this report in full, please click here.

About Investec Corporate Finance

Investec is a leading provider of independent corporate finance advisory services in Ireland. We have a highly experienced team of professionals working in our Dublin office. With a track record spanning some of Ireland’s highest profile deals, Investec Corporate Finance has become the advisor of choice within the Irish market for leading companies, private equity funds and entrepreneurs.