Companies worth €18.9bn bought and sold in 2013

Companies changed hands to the tune of €18.9bn here last year, a drop of around a quarter compared with 2012.

In value terms, a small number of very big international pharmaceutical deals dominated last year’s activity, according to an M&A Annual Review report prepared by William Fry solicitors.

The number of deals was up, however, and the €500m-and-up range doubled last year.

The €6.5bn takeover of Ireland-based Warner Chilcott by Actavis was the biggest deal of the year, followed by the €4.9bn sale of Elan to Perrigo. Both deals were driven in part by the tax regime here, according to William Fry’s Bryan Bourke who heads up the firm’s Corporate and M&A practice.

Another big driver of large scale M&A is the ongoing sale of state assets. Great West Life Co’s €1.3bn acquisition of Irish Life, the sale of Bord Gais Energy and AIB’s sale of Ark Life for €414m all fall into that category.

In fact, none of the year’s 10 biggest transactions featured an Irish buyer making acquisitions here or abroad.

In aggregate, inbound M&A accounted for 99pc of deals by value last year – thought to be the highest ever.

In 2012, inbound deals added up to 83pc of the total. It’s a significant shift from 2010 and 2011 when deal flow was mainly driven by Irish firms expanding abroad.

The trend of international buyers targeting Irish corporate assets mirrors to some extent what is happening at the upper end of the commercial property market and at the banks – where foreign private equity houses are snapping up big loan portfolios or real estate assets themselves.

Away from that distressed space, Bryan Bourke said the private equity sector was far less active in the strategic corporate M&A space.

By value, private equity- backed buyouts were at their lowest level since 2008, and there were just four leveraged buyout exits. One area where buyout houses are seen as active is telecoms, media and technology (TMT), where private equity houses were sellers of a number of relatively niche companies snapped up by strategic investors.

TMT was busy across price ranges. Telefonica’s agreed €850m sale of O2 here to 3 owner Hutchison Whampoa, chaired by Li Ka-shing was the biggest deal but other large transactions included the sale of infrastructure business Towercom for €120m.

A particular feature in the TMT space is the sale of tech savvy, venture or private equity backed companies to strategic buyers. IBM’s €92m deal to buy software firm the Now Factory and Rupert Murdoch’s News Corp’s €18m acquisition of Mark Little’s Storyful are strong examples.

In terms of the outlook for next year, William Fry anticipates more of the same, with foreign buyers set to dominate as the great Irish sell-off continues.

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