The value of inbound investment and takeover deals involving Irish companies fell by 52 per cent in the first half of the year to $6.08 billion (€6 billion) from a record-breaking six months at the start of 2021, according to EY Ireland, as the corporate world navigates challenging geopolitical and economic headwinds.
However, the number of transactions declined by only 9.3 per cent to 117, EY said. The value of deals in the most recent period was down only 17 per cent from the second half of last year, underscoring how Irish M&A figures, because of the small size of the market, can be skewed by some large accords.
Feargal McAleavey, head of corporate finance at EY Ireland, said that a slowdown in investment “three to four months ago has slowly spread to Europe, with some impact in Ireland”.
While Mr McAleavey said there continued to be a lot of venture capital and private equity money globally looking for investments “there’ll definitely be a pullback in valuations” of private M&A deals, in line with a decline by stocks on public markets in recent times. The MSCI All Country World Index, a gauge of equities globally, has fallen by 17.5 per cent so far this year.
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The biggest inbound deal unveiled during the first half was Canada-based Brookfield Asset Management’s purchase of office owner and developer Hibernia REIT, taking the business off the stock exchange in a €1.09 billion deal.
Tokyo-based Sumitomo Mitsui Financial Group’s €1.5 billion purchase of Irish aircraft lessor Goshawk through its SMBC Aviation Capital unit was the second-biggest transaction. Elsewhere, Swiss private equity firm Partners Group’s agreement in April to take a majority stake in Version 1 is believed to have valued the Irish technology services provider at about €800 million.
In March, Wall Street banking giant JP Morgan said it had struck a deal to buy Clonakilty-based fintech Global Shares, which administers employee share plans for more than 600 corporate clients, in a deal said at the time to have been worth about €700 million.
In a regional context, deal value reduced by 20 per cent for the wider European, Middle East and Africa (EMEIA) region in the first half, according to EY.
Meanwhile, the impact of the macro-economic backdrop and changing investor sentiment appears to be having a more negative impact on the UK, where the value of deals slid 31 per cent to just shy of $115 billion.
