M&A still strong despite slowdown in late 2022

A total of 300 qualifying deals were recorded within the Irish M&A market in 2022, a drop of 2% since 2021, which was considered an outlier year.

The total deal value came to €14.8 billion, 38% lower from the figure recorded in 2021.

This figures exclude the US$28 billion offer by Amgen for Horizon Therapeutics, announced in December.

Key findings in 2022

Key findings for Ireland in 2022 include:

• 216 inbound cross-border transactions, worth a total of €12.5 billion,
• Seven deals worth €500 million or more,
• Total value of M&A activity in 2022 of €14.8 billion, with 86% of deals worth between €5 million and €250 million,
• A total of 300 transactions represented a 2% decrease from 2021 levels – after2021 saw the most deals on record,
• The financial-services sector featured prominently in deals across 2022, accounting for 51% of Irish M&A by value,
• Ireland’s tech sector continued to be an important focus for M&A, with technology, media and telecoms (TMT) accounting for 22% of all deals by volume during 2022,
• Set against pre-pandemic levels of activity, 2022 private-equity (PE) activity was strong, with a total of 62 transactions.

Stephen Keogh, (head of corporate/M&A at William Fry) noted: “Ireland is not immune to the headwinds buffeting the global economy.

‘Significant challenges’

“Rising interest rates, persistently high inflation, slower growth in Western markets, war in Ukraine and global supply-chain disruption all present significant challenges.

"Ireland appears, however, to be weathering the storm more comfortably than many other countries, and the economy continues to outperform. 

“While the bumper M&A year of 2021 was always going to be difficult to match, the data for 2022 is strong, despite something of a slowdown in the second half of the year.”

Megadeals

Mid-market transactions dominated M&A activity in Ireland in 2022.

Almost nine in ten Irish M&A deals fell into the mid-market segment, with transaction values of between €250 million and €500 million. The larger end of the market was also active, with seven transactions worth more than €500 million in 2022 having a total aggregate deal value of €11.5 billion.

Only 2021, with nine large deals worth €16.2 billion (the most on Mergermarket record), exceeded these 2022 totals.

Financial-services sector

The financial-services sector accounted for more than half of Irish M&A by value. The sector accounted for four of the 15 largest deals in Ireland in 2022.

In terms of deal volume, the technology, media, and telecoms (TMT) sector was the dominant sector within the market. 

With significant transactions, such as Partners Group's acquisition of Version 1 and JP Morgan's acquisition of Global Shares, the TMT sector accounted for 22% of all M&A deals by volume in Ireland during 2022. 

The property and infrastructure sector saw an uptick in activity from investors, accounting for 15% of Irish M&A by deal value last year – up from just 2% in 2021.

Pharmaceuticals, medical and biotechnology accounted for 12% of deals by volume in 2022, with the year ending on the ‘mega-deal’ announcement of Amgen's recommended takeover of Horizon Therapeutics plc for US$28 billion.

Inbound deals

Overseas acquirers conducted 216 inbound transactions in the country in 2022, one more than in 2021, but the total deal value for inbound transactions fell by almost a third to €12.5 billion. 

All but three of the 20 largest deals of the year were in-bound cross-border transactions, showing that interest in Irish business is truly global, Keogh points out.

British acquirers accounted for 72 deals last year – more than any other country – but buyers also came from the US, accounting for 60 transactions. In value terms, Japanese buyers led the way, driving €7 billion worth of M&A deals, with the US in second place, at €2.2 billion.

Last year saw 84 deals that involved domestic players only, down marginally from a total of 92 in 2021. Those included the acquisition of Hibernia REIT by Benedict Real Estate for €1.1 billion.

Private equity

PE activity remained strong, with buyers leading on a total of 62 deals worth €2.6 billion. PE accounted for a fifth of all deals by volume in 2022, with many smaller mid-market transactions contributing to the fall in deal value.

Seven of the 20 largest deals of the year were PE-related, with five buy-outs and two exits. The biggest PE transaction of the year in Ireland were both exits: Partners Group’s acquisition of Version 1 Holdings for €800 million, and Motive Partners’ sale of Global Shares to JP Morgan for €665 million.

Outlook

Stephen Keogh concluded: “Irish M&A has proven itself to be extremely resilient over the past few years, seen through the impressive levels of deal activity throughout the global pandemic.

“The remarkably strong market for deal-making witnessed in 2021 continued during the first and second quarters of 2022, before easing in the second half.

“The question is whether that slowdown continues or even accelerates in 2023 – the current global economic picture suggests that a cautious approach would be wise.”

However, he added that many advisers were reporting strong pipelines of work.