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Anya Cummins on the challenges and opportunities facing Irish M&A

A year on from the last time we sat down with Anya Cummins, Partner and Head of M&A at Deloitte we wanted to see if there is any more certainty around Brexit since Article 50 was triggered. We were also keen to find out what the deal drivers are for Irish M&A and PE investments in the next 12 months. 

Elisa Basili: Has Brexit impacted the Irish M&A and private equity market as expected? Has there been any surprises?

Anya Cummins: It’s difficult to tell to what extent Brexit has impacted on Irish M&A at this stage as we’re still on a road to Brexit, and much uncertainty around what the future will look like remains at this point. However Brexit is an important consideration for most businesses looking at M&A at the moment, and as a minimum those considering major investment decisions are doing so with a view to the potential outcomes of Brexit and the likely impact on their underlying business and the acquisitions being considered. In some cases, the prospect of Brexit is driving increased appetite for investment in the UK by Irish corporates; while in others it means a pause on major M&A decisions until the outcome of Brexit becomes more certain. Some specific industry sectors are also more exposed to Brexit, including those where there is a heavy focus on the export of goods to the UK, and the impact on M&A and underlying valuations in those is perhaps more pronounced. We are also certainly seeing an increased focus in due diligence on foreign exchange exposure, given the significant currency movements over the last year and in some cases the impact on underlying earnings, and that’s something businesses considering sale are focusing heavily on in advance of transactions to ensure the quality of earnings presented and their foreign exchange management is robust.

With regards to private equity, we’ve seen continued increased appetite from UK PE funds investing in the Irish market. We recently advised Sovereign Capital on their investment in insurance broker Arachas, and Volpi Capital also recently invested in IT services provider Version1. Both of these PE funds will join one of our panels at the event to give their perspectives on investment into Ireland in a climate of Brexit uncertainty.

EB: To what extent are international buyers investing in the Irish market and why?

AC: We’re seeing strong appetite from international buyers considering investments in the Irish market. This is both PE and trade, and most of the processes we’re currently involved with have an international angle. On the reverse, we’re also seeing a range of Irish corporates continuing to use M&A as an important lever to expand internationally. This includes One51 who recently made a significant acquisition in the US, and which Alan Walsh, CEO, will discuss in his session at the event.

EB: Which deal sectors show the most promise over the next 12 months?

AC: Based on what we’re seeing at the moment, technology is probably the most active sector for us at the moment and we’ve a number of deals ongoing in this space. There are a number of exciting Irish technology business emerging and attracting the interest of international buyers and investors. Other sectors that are particularly busy include niche high-margin services, industrial products, consumer and healthcare. Overall, the market is very buoyant and I think the advisory community in general is feeling positive about the M&A outlook for the next 12 months. I expect we’ll see a strong mix of outbound and inbound corporate M&A deals across a range of sectors; as well as an increase in private equity activity.

EB: What is on the horizon for private equity and how do you see the market evolving?

The domestic private equity market is buoyant. Cardinal Carlyle Ireland and MML continue to invest heavily in the Irish market – with a number of new transactions this year which they’ll talk through in our PE panel at the event. There are also a number of other funds who have been particularly active this year and continue to drive deal activity across a range of deal sizes and sectors; including Broadlake, BDO Development Capital and Renatus. It’s interesting to see BGF establishing a dedicated fund in the Irish market, and I think everyone will be interested to understand more about their investment ethos and strategy, but overall the domestic private equity market is very active and has been an important driver of M&A activity over the last 12 months. Over the next year, we expect continued significant activity by the domestic funds, coupled with strong inbound interest from private equity from the UK as well as the US, with the US funds in general focusing more specifically on technology opportunities.

If you would like to hear more from Anya she will be speaking at Deal Drivers Ireland on 27 September in Dublin. Click here to find out more and how to book your place.

Elisa Basili Speakers Acuris

Elisa is responsible for speakers and event programmes at Acuris. She supports Debtwire's European restructuring, leveraged finance and direct lending conferences. Elisa sources content for Mergermarket's M&A events in Benelux, France, Ireland, Israel and the Middle East.

Elisa Basili Speakers Acuris

Elisa is responsible for speakers and event programmes at Acuris. She supports Debtwire's European restructuring, leveraged finance and direct lending conferences. Elisa sources content for Mergermarket's M&A events in Benelux, France, Ireland, Israel and the Middle East.

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