The overall deal value for this period amounted to €5.2bn, marking a substantial 58% decrease by value, year on year (YOY). Notably, 97% of the deals originated from the mid-market segment, which ranges between €5m and €250m in value.
Key findings for the first six months of 2023 include:
- Inbound activity accounted for over two-thirds of Irish M&A deals with 113 inbound deals worth a total of €4.1bn.
- Only three deals worth €500m or more.
- Mid-market segment of deals worth between €5m and €250m was responsible for 97% of transactions.
- Pharmaceuticals, medical and biotech sector accounted for 28% of M&A deal value, versus just 2% during the same period last year.
- Domestic deal values fell from €2.2bn in the first six months of 2022 to €1.1bn this year.
- 34 Irish M&A transactions involving a Private Equity interest, worth €1.69bn which is an 11% and 32% decline in volume and value terms YOY.
Stephen Keogh, Head of Corporate / M&A at William Fry, noted:
Although Ireland’s economy continues to outperform international peers, the mergers and acquisitions market slowed in the first half of 2023, with a minor 2% fall in deal volume but a more substantial 58% decrease by deal value. However, this is in line with an international decline in deal activity caused by factors such as rising interest rates, high inflation and fears of recession.
Looking forward to the remainder of 2023, dealmaking will not slow to a halt, as there is ongoing interest in Irish businesses across a range of sectors, while a tougher economic environment will create plenty of opportunities for M&A activity. We expect reasonably healthy levels of Irish M&A activity in the second half of 2023, but no imminent return to the bumper volumes witnessed in the immediate aftermath of the Covid era.
Deals
Mid-market transactions dominated M&A activity for the first half of 2023, with 97% of transactions falling into this segment. The top end of the market was particularly quiet, with just three deals worth more than €500m announced during the first half.
Sectors
The pharmaceuticals, medical and biotech sector accounted for 28% of Irish M&A activity by value in the first half of the year, versus just 2% during the same period in 2022. Industrials & Chemicals, meanwhile, was the next most active sector by value, accounting for 18% of Irish M&A activity in the first half of the year, up from just 1% during the same period last year. The technology, media, and telecoms sector saw more deals than business services in the first half of the year, with 56 transactions announced, slightly up on last year’s first-half total of 36.
Inbound Activity
As in previous years, a significant percentage of M&A activity in the country involved an international acquirer in the first half of 2023. Inbound activity is reduced YoY, in line with the overall market, but still accounts for just over two-thirds of Irish M&A deals in H1 2023 – 113 of the total 177 transactions – and that includes 16 of the 20 largest transactions.
Private Equity
Overall, the first half of 2023 saw 34 Irish M&A transactions involving a Private Equity interest, worth €1.69bn in aggregate. That marks a 11% and 32% decline in volume and value terms YoY. Five of the top 20 largest deals by value were Private Equity related transactions, including two of the top three deals.
Outlook
The Irish M&A market has been relatively muted in the first half of the year, however there is ongoing interest in Irish businesses across a range of sectors – TMT, healthcare, business services and energy are notable examples. Furthermore, a tougher economic environment will create plenty of opportunities for M&A activity. We expect reasonably healthy levels of Irish M&A activity in the second half of 2023, but no imminent return to the bumper volumes witnessed in the immediate aftermath of the Covid era.
