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Inbound M&A deals reached record €8.8 billion in 2020

17 Feb 2021 / business Print

Inbound M&A deals a record €8.8B in 2020

The William Fry M&A Review for 2020 shows a total value of €9.1 billion for the year, a 14% increase on 2019.

Deal volume remained consistent at 169 deals for the year, despite a turbulent year. 

The final quarter of the year registered €5.3 billion in activity, more than the previous three-quarters combined.

The review was published today, in association with Mergermarket.

Key findings for 2020 include: 

  • Total inbound volume reached a new record of 121 deals worth €8.8 billion,
  • Deal value rose 14% to €9.1 billion despite caution around the pandemic,
  • Q4 registered €5.3 billion in activity, more than Q1-Q3 combined,
  • Private equity activity jumped significantly by value and volume with 56 deals worth €5.2 billion,
  • There were 11 deals worth €250 million or more, compared to only four similar deals in 2019 and 2018,
  • A total of 60 mid-market deals (€5million-€250million) were announced in 2020 (85% of total deals),
  • The technology, media, and telecoms (TMT) sector accounted for 25% of total volume across several key sectors.

William Fry head of corporate and M&A Stephen Keogh said: “Despite the volatile economic climate in 2020, the Irish M&A market’s performance was very strong, matching 2019 deal activity by volume and exceeding it by value by 14%.

“These figures are even more impressive when you compare them internationally.

“In contrast to Ireland, overall European deal volume fell 17% over the same period, and value ticked up by a modest 3% to €739.4 billion." 

Deal splits

The mid-market continues successfully to fuel the Irish M&A market. A total of 60 mid-market deals (€5 million-€250 million) were announced in 2020 which, despite registering a 9% drop in volume compared to the previous year, still accounted for an impressive 85% of deals with a disclosed deal value.

A total of 11 deals worth €250 million or more were announced in 2020, worth a combined value of €6.3 billion.

Much of the activity at the top end of the market took place in the second half of 2020, after dealmakers had had a chance to come to terms with the effects of the pandemic and price in its effects.

The top five deals of the year were all announced in H2.

Sector watch

The technology, media, and telecoms (TMT) sector continued to attract the lion’s share of Irish M&A in 2020, both in terms of volume and value accounting for 25% of total volume and 22% of value, while attracting three of the top ten deals of the year.

The largest TMT deal of the year was CK Hutchison’s €600 million proposed sale of mobile operator Three Ireland to telco infrastructure firm Cellnex.

Activity within the health-and-life sciences sector also resulted in a total of €1.3 billion-worth of deals – more than seven times the total in 2019.

The largest transaction of the sector in 2020 was Swiss pharma firm Roche’s €380 million well-publicised acquisition of biotech startup Inflazome.

Inbound activity

All the top 20 deals of the year were inbound cross-border transactions. Overall, there were 121 inbound transactions worth €8.8 billion announced across the year, a 6% rise in volume and a 16% rise in value on the previous year.

UK and US-based buyers were most active in the Irish M&A market, carrying out 47 and 38 deals in the first ten months of the year, respectively.

Both countries recorded an uptake in activity compared to 2019, despite the challenges faced amidst the pandemic.

US-based buyers were responsible for €3.7 billion of total value in 2020, the highest of any inbound country.

William Fry’s head of inward investment Andrew McIntyre pointed out that last month, IDA Ireland reported 246 new investments and a net increase of almost 9,000 jobs.

Private Equity

A total of 56 PE transactions were announced in 2020, 47% more than in 2019, while value rose 105% to €5.2 billion. Thirteen of the top 20 deals of the year had PE involvement.

Ireland’s PE activity outperformed that of Europe, which fell by 10% in volume terms to 1,973 deals, while value rose by a more modest 26% to €298.8 billion.

Outlook

Stephen Keogh concluded that the era of extreme uncertainty is drawing to a close.

“Several positive indicators are behind this renewed sense of optimism: the commencement of vaccine rollouts was a crucial achievement in the long battle against the virus, and Joe Biden’s US electoral victory is expected to bring greater stability to global markets.

“Moreover, the long-awaited agreement on the terms of the UK’s exit from the EU (limited though they are) is sure to bring a renewed sense of certainty. All in all, it seems like there are solid grounds for optimism as we survey the Irish M&A market in 2021.”

He predicted regained certainty in 2021 with a gradual global economic recovery from the virus crisis, coupled with greater geopolitical stability in the form of the UK-EU trade deal, as the backdrop for a more confident Irish M&A market in 2021.

Tenth edition

This is the tenth edition of William Fry’s Irish M&A review, published with underlying data from the Mergermarket database.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland