| Considerable interest internationally in Irish deals |
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| Respondents answered the following question: ’What is the level of international interest in Irish M&A deals and what are its characteristics?’ as follows: |
ABN AMRO
As the Irish constituent of an international corporate finance house it is our experience that international interest mainly relates to the larger deals (>E100 million). In addition, there is rapidly growing interest in technology deals irrespective of size.
AIB Corporate Finance
There is a considerable level of international interest in Irish M&A, indeed I would estimate that 90 per cent plus of all Irish M&A deals involve a foreign acquirer. We in AIB Corporate Finance have been involved in many transactions in the last year where a foreign company has acquired or invested in an Irish company, examples include the acquisition of Hibernian Group plc by CGU plc of the UK and the acquisition by First Data Corporation of the US of a minority interest in Fexco.
The high level of international interest in the Irish economy can be attributed to many factors include the lack of in market consolidation opportunities in Ireland, the desire amongst foreign companies to gain exposure to the Irish economy and the low ratings of many quoted Irish companies. In addition many Irish corporates have reached a scale where the party that can most easily digest their acquisition and pay a premium price are typically foreign.
BDO Simpson Xavier
There is still considerable international interest in Irish companies particularly for international companies following their customers to Ireland. Therefore they need to acquire a business to service these customers in case they get lost to competitors. However, for businesses with high exposure to the Irish economy there is a worry that the Irish economy is over heated. This has been generated largely by articles in the Financial Times which have not been totally fair to the Irish market. Considerable effort has to be made to educate the international market as to the underlining trends and the reasons for the Irish economic success story.
CFM Capital
In 2000, the CFM Capital M&A survey recorded that foreign buyers spent some ?10.4 billion on Irish owned or connected companies. This was obviously dominated by the telecom sector with the sale of Esat and Eircell. Interest in Ireland has significantly increased over the recent years with the progression of the Celtic Tiger. Activity by foreign companies in Ireland has been dominated by the IT & Telecomms sectors will financial services has also featured.
Davy Stockbrokers
I think the difference is more in the nature of individual management teams rather than sectoral. Insurance which has traditionally been a conservative and risk averse sector has seen massive consolidation in the last couple of years. In Ireland the CGU/Hibernian/ Norwich tie up has been a by-product of consolidation elsewhere. Also Irish Life has expanded aggressively following the Irish Permanent deal with TSB and an increased presence in the banking market. International investment bankers tend to have an interest only in large deals by Irish standards where there is a prospect for fees of ?1 million and upwards. This usually means a deal size in excess of ?100 million.
Goodbody Stockbrokers
In our view there is a high level of international activity/ M&A interest in Irish companies in the technology/telecoms sector. Value (relative to the US market for example) or the desire to acquire specific technology drives this. The global success of companies such as Iona Technologies, Parthus and Baltimore has alerted international players to the high quality of companies and management teams in Ireland. The stg?100m acquisition of BCO Technologies in Belfast by Analog Devices is a good example of a major US company being attracted to the IP and skills built up by an Irish company.
KPMG
There is very strong international interest in acquiring Irish companies. This interest derives from our buoyant economic growth, relatively low interest rates, low corporate tax rates and presence in the euro-zone.
ICC Bank
International interest in Irish deals is partly related to an investor’s interest in having a European-wide focus, partly related to interest in a growth economy, and partly related to the intrinsic value proposition in the prospect at individual deal level. Obviously, expertise at a local level is important, for selection of prospects and control. Increasingly, in recent years, international interest has supported investment in Irish enterprises, and this has been evident from the number of companies raising funds via markets such as Nasdaq. Furthermore, international interest is evident from the participations made by international companies in the funds operated and managed by venture capital firms here.
NCB Stockbrokers
We find that there is significant international interest in the larger transactions, such as in the financial and telecoms sectors, but less interest in smaller transactions. UK advisers continue to look closely at the market. We expect to see a lower level of international interest in 2001 for as long as the major global economies continue to experience turmoil.
PWC
Privately owned Irish businesses continue to be attractive to international buyers, especially from the US and UK. Acquirors are looking to benefit from the strong Irish economic story and from the massive capital expenditure program envisaged in the National Development Plan. Retail, building materials and support services are sectors to watch. |
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| Article appeared in the April 2001 issue.
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