M&A activity in Republic hits record high

The number of mergers and acquisitions involving businesses in the Republic hit a record of 94 in the three months ended June 30th, new figures show.

Investec Corporate Finance's Mergers & Acquisitions (M&A) Tracker, which monitors sales, buyouts and acquisitions involving companies with a significant Irish presence, shows the value of such deals was €963 million in the second quarter of 2019. The investment advisor recorded 94 transactions over the three months, which it says sets a new record, surpassing the previous high of 87 set in the final quarter of 2007.

Irish building materials manufacturer CRH's €300 million sale of its shutter and awnings operation to Stella Holdings was the biggest deal done during the three-month period.

DIY and builders' supplier Grafton's €131 million purchase of Netherlands-based Polvo BV came second. Dutch group Mediahuis's purchase of newspaper publisher, Independent News & Media for a reported €102 million was third.

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Investec highlighted AIB and First Data's joint acquisition of payments processor, Payzone for €86 million, and investment advisor Brewin Dolphin buying Investec Wealth & Investment for €44 million as notable deals done over the three months.

Spain's Grupo Cafento's €30 million swoop for Java Republic and UDG Healthcare's purchase of Putnam Associates for €54 million were among the period's other significant transactions, Investec said.

The firm pointed out that Irish public-listed companies were less active than normal during the quarter, but said that privately-owned organisations continued to do deals.

Acquisitions

Several private equity majority-owned companies continued to make acquisitions including Montagu-backed Oasis acquiring three companies (two Dutch and one Irish), while Exponent-owned Enva acquired Associate Reclaimed Oils in the UK.

Jonathan Simmons, director of Investec corporate finance, said the first half of this year had been particularly busy for mergers and acquisitions, with 156 deals done, ahead of the 118 recorded in the first six months of 2018.

“Our analysis shows a significant reduction in deal values,” he added. “While this may suggest a less active market it has always been Investec’s view that the number of transactions can easily distort the market.”

IT and telecoms accounted for 23 transactions during the three-month period, making it the most active industry. The next biggest by number was health and pharmaceuticals with 15.

Building and property claimed the biggest value, with deals in this sector coming with a total price tag of €300 million. Financial services-related mergers came to €130 million.

Investec recorded 18 "in-market" transactions involving Irish companies buying out rivals in the same industry. Along with the AIB First Data-Payzone deal, Dublin stockbroker Davy Group bought Metis Financial Planning for an undisclosed sum. These in-market purchases included four in leisure and travel, the highest-profile of those was Neville Hotels buying Druids Glen Hotel & Golf resort for €45 million.

On the basis of current activity, Mr Simmons predicted that the number of mergers and acquisitions in the second half of this year could revert back to normal levels.