Strong M&A growth fuelled by sector consolidation but political uncertainty prompts caution
Strong M&A growth fuelled by sector consolidation but political uncertainty prompts caution
Katharine Byrne, Head of the BDO Deal Advisory team and a member of the BDO International M&A Group recently featured in The Irish Times Special Report on Mergers & Acquisitions. Read her commentary below.
Globally, 2024 saw a staggering level of political change, notes Katharine Byrne, a partner in deal advisory at BDO. “Over 60 countries went to the polls and the outcomes proved to be tough for the incumbents,” she says.
In fact, Byrne says Ireland outperformed global M&A market activity with a 10 per cent increase in the total number of transactions and a significant rise in the level of private equity-backed deals. This trend, she notes, is underpinned by the strength of the Irish economy and the opportunity for consolidation across certain industries such as healthcare and financial services.
The success of Irish companies in international expansion and the role of private equity in supporting ambitious management teams have attracted more international private-equity funds into Ireland.
Notable deals included LGT’s investment in H&MV Engineering alongside Exponent, the sale of a majority stake in Corlytics to Norwegian fund Verdane and the sale of majority stake in Winthrop to US PE group Blackstone.
“At a smaller level we are seeing a lot of consolidation with the private equity-backed Fairstone Group making multiple acquisitions in the wealth-management sector and Melior’s renewables platform Ohk Group completing their fourth acquisition,” adds Byrne.
Moving into 2025, Byrne agrees that the outlook for M&A in Ireland remains strong. “Confidence levels across Irish companies and their capital providers is improving and we expect PE to continue to invest strongly into 2025 as interest rates begin to fall,” she says.
“Strategic buyers will also need to deploy some of the high levels of cash as they seek to add to capability, but we also predict a number of divestments as large corporates refocus on their core business.”
Yet all agree that regulatory and policy changes will continue to affect M&A activity, influencing approval processes and creating uncertainties around outcomes and timelines. “Dealmakers must also address challenges related to foreign direct investment restrictions and security considerations,” Byrne says, adding that M&A processes face increased scrutiny due to evolving data privacy laws, cybersecurity threats, and regulatory frameworks focused on ESG. “These factors are influencing how companies structure, evaluate, and execute deals.”