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Mergers & Acquisitions: Katharine Byrne Provides Insight On The Irish M&A Market

01 April 2019

Katharine Byrne, Partner, BDO Corporate Finance, was invited to provide her insight and views on a number of topics across the Irish M&A market in The Sunday Times.

In the article "Buying Irish", which discusses how international players are driving activity in the Irish M&A market, Katharine attributes the interest in Ireland from overseas buyers to a number of factors, including:

  • The strength of the Irish economy as one of the fastest growing in Europe
  • Our competitive corporation tax rate, and
  • Government incentives for investment in certain industries

Katharine features in the article "Preparation is vital for a smooth M&A process", discussing how companies considering going down the M&A route need to examine exactly what they want to achieve from it: "Before even entering into a deal, the first thing we would advise a company looking at expansion is to ask if it is going to achieve the growth they're targeting. Is it a service they want, is it a geographical consideration, or is it a digital catalyst that's going to enable some sort of digitisation within their own business? Companies always need to be clear at the outset why they're looking at M&A for growth."

She also recommends structuring any transaction with the integration plan in mind to leverage potential synergies, adding: "Also, ensure the team who are responsible for integration are involved throughout the due diligence phase - the success of the M&A depends upon successful integration."

In the article "M&As - the trends and outlook", Katharine mentions how the Irish market remains resilient and robust, despite the ongoing Brexit uncertainty: "The level of reported completions has understandably slowed in the first few months of 2019 as we await the potential outcome of Brexit. However there is still an undercurrent of activity as businesses are getting ready to transact, with buyers focusing on strategic searches and building up their war chests, while vendors are engaging advisors to consider their options and assist in grooming their businesses in order to optimise value".

She highlights the factors currently driving the market including increased access to capital, with new equity and debt funders actively looking beyond their traditional boundaries to get a return on their investment: "This increase in funding is resulting in strong valuations, making it very attractive for vendors to consider selling."

Katharine predicts an increase in activity and free up of capital, following the completion of some key exits from first rounds of Irish private equity funds - such as Carlyle Cardinal's mooted sale of Payzone to AIB: "We also expect to see some more corporate divestments of non-core divisions, as plcs look to reduce costs and increase cashflow".

She notes that increased international competition will also have an impact on activity: "With record levels of dry powder available, there is a lot of competition for good companies, which is resulting in increased cross-border transactions helped by the globalisation of both companies and the M&A dealmakers"

Katharine sees an increasing trend towards the acquisition mid-market companies, particularly scalable businesses with strong management teams, as overseas and domestic companies attempt to respond to challenges posed by an ever changing economic and political landscape: "We are receiving calls every month from European funds seeking opportunities within Ireland. The health sector has already attracted a lot of international health funds and we are now seeing this roll out across other sectors that are considered fragmented but have an opportunity to be scaled, such as the insurance and financial services sectors"

Content adapted from The Sunday Times articles: "Buying Irish", "Preparation is vital for a smooth M&A process", and "M&As - the trends and outlook".