The last few years have seen a radically changed landscape for M&A activity in Northern Ireland but, with an increased level of deals having been reported in 2012, a notable sense of confidence has returned to the market in recent months. However, the latest data from Experian shows that there have been 32 M&A and equity capital market deals to date in Northern Ireland in 2013 – a decrease of 24 per cent in the volume of deals recorded in the same period last year, with value also decreasing by 17 per cent.
This drop in deal volume and value may have been due to a ‘wait and see’ approach by some corporates. In the latter half of 2012, when lots of decisions would have been made, there was talk of a triple-dip recession and a generally unclear economic picture. This would certainly have affected decisions by corporates on whether or not to invest in M&A at the time.
Thanks to stronger-looking economic indicators, people now seem to be more optimistic that deals which just weren’t happening 18 months or two years ago could now transact and I believe that this could be reflected in the level of deal activity coming through in 2014.
For the past two years A&L Goodbody has been consistently ranked by Experian as the most active legal adviser in the Northern Ireland market place by both value and volume of deals, having advised on over £980m of transactions to date in 2013. Not only have we seen increased activity in the energy, agri-food and technology sectors, but we are also seeing other sectors begin to move and have acted on a number of high profile deals such as the acquisition of Belfast International Airport by ADC and HAS Airports and the purchase of BRS by GolfNow.
Overseas investment remains a significant driver of activity and deals such as the acquisition of Aepona by Intel, which we also acted on, and Proofpoint’s purchase of Maildistiller are indicative of a continued interest in Northern Ireland companies from investors outside the province. We have noticed a real uplift in US interest in particular – partly to do with the favourable US dollar/sterling exchange rate, but also the island of Ireland’s position as a good bridge-head into the UK market and Europe.
As more deals are done, this will drive the confidence that will get us back to a normal market. The difference this year is that people are actually doing deals rather than just talking about them, which is good news for the local economy.