MERGER AND acquisition (MA) activity in Ireland may continue to languish at historic lows, but the drop in deal volumes appears to have bottomed out, according to the latest MA tracker survey published by NCB Corporate Finance.
Just 28 deals were completed in the third quarter of 2009, a 53 per cent reduction in activity compared with the 60 transactions in the same quarter in 2008. According to the report, however, the number of deals seems to have stabilised at approximately 30 transactions per quarter over the past year.
In 2008, when the overall value of mergers and acquisitions involving Irish companies fell by more than 70 per cent, the average number of quarterly deals was 55.
Total deal value in the third quarter declined to €993 million, a drop of 20 per cent on the €1.245 billion during the period a year ago.
Deal values, however, did manage to register a 317 per cent increase in value on the €238 million recorded in quarter two 2009, the lowest reported quarter on record.
This significant increase in deal values was by and large the result of two sizeable transactions which accounted for €837 million – more than 84 per cent – of all MA activity in the quarter. Discounting Johnson and Johnson’s €632 million acquisition of an 18.4 per cent stake in Elan and the acquisition by CC group plc of Anheuser Busch InBev’s Scottish and Northern Ireland assets for €205 million, the remaining 26 deals had a combined deal value of just €156 million.
“While the third quarter of 2009 showed no real change in the level of MA activity by deal volume over the fourth quarter of 2008 and the preceding two quarters of this year, the number of deals seems to be stabilising,” said Jonathan Simmons, director of NCB Corporate Finance.
“Continued talk of green shoots in the US along with the recent uptake on MA activity on the international stage gives some grounds for optimism,” he added.
Significantly, quarter three saw a number of businesses being acquired from bank-appointed receivers or bank-driven restructurings.
These included four acquisitions of former Newcourt Group plc businesses – Federal Security, Ecom Interaction Services, Loss Control Services and Sigmar Recruitment Consultants – and Top Oil’s acquisition of Sweeney Oil.
