The total value of deals in 2004 will be higher than the €7.4 billion worth of mergers and acquisitions (M&A) recorded in 2003, according to Joe Devine, a director with corporate finance firm Ion Equity.
The latest statistics compiled by the firm show that deals worth €1.6 billion were transacted in the Irish M&A market in the third quarter of 2004, down 40 per cent on the second quarter. However, the value of deals in Q3 2004 matches that in Q3 2003, but the number of individual deals transacted, fell from 56 to 43.
But the prospects for corporate finance activity in the final quarter of the year are positive, says Devine, with speculation about Warner Chilcott and SeanQuinn/Wentworth continuing. He says that the outcome of these deals, and year-end announcements from CRH, should mean that the total value of deals in 2004 will be higher than in 2003.
Third quarter
As summer is traditionally a quiet period for M&A activity, the fall in Q3 was expected. However, Devine says that the €1.6 billion figure is significant, as both CRH and Kerry Group, two of Irelands most acquisitive companies did not feature at all in the third quarter. ‘When you also consider that the previous quarter included one exceptional deal - Quinlan Private’s €1.1 billion acquisition of the Savoy Hotel Group, then the third quarter figures show a continued high level of activity and that M&A activity remains in a healthy state,’ he added.
One of the most striking features of the period under review in the survey, was the continued buying of Irish assets by both Irish and British companies. These accounted for 57 per cent of the total value of the deals in the third quarter, and notable transactions included the Grafton Group’s €353 million acquisition of Heiton Holdings, Precinct’s €117 million acquisition of Gresham Hotels, and Wolseley’s €183 million acquisition of the Brooks Group.
Musgrave’s €89 million acquisition of ADM Londis in the UK accounted for more than half the value of overseas acquisition by Irish companies.
The sharp fall in the value of overseas acquisitions by Irish companies from €825 million in Q3 2003 to €174 million in Q3 2004 largely reflects the absence of any acquisition activity by CRH and Kerry Group. |
