Q3 M&A transactions decline by 29% from Q2’19 while value of transactions increases to €4.3 billion between July and September: Investec M&A Tracker

Investec Corporate Finance has released its latest quarterly analysis of M&A activity, its 56th quarterly analysis since the tracker commenced in Q1 2005, which reviews trade sales, buyouts and acquisitions in the Irish market where the target company or acquirer has a significant presence in Ireland. The Investec M&A Tracker for the third quarter of 2019 shows 67 recorded deals during the period valued at €4.3 billion, a decline in deal volume of 29% from the last quarter (Q2 2019) which was the highest number of transactions since Investec established the M&A Tracker in 2005. The reduced level of M&A activity is in line with global and European M&A trends.

The IT & Telecoms sector saw the most activity in the third quarter of 2019 accounting for 28.4% of total deal volume with 19 deals recorded during the period under review. The Health and Pharmaceutical sector was next, accounting for 13.4% of total deal volume (9 transactions), followed by the Financial Services sector and the Retail, Food/Food Services Sector with seven transactions each. Building, Construction & Property saw the largest value in recorded transactions, accounting for 38.3% of the total at €1.66 billion with Industrial Sector deals amounting to €1.64 million of value.

While the value of transactions increased from Q2’19 to Q3’19, with a total combined value of €4.3 billion across the disclosed transactions, it is noteworthy that two transactions accounted for approximately three quarters of total disclosed deal value for the quarter. CRH’s disposal of its European distribution business to Blackstone was valued at €1.64 billion, while Henderson Park’s take private of Green REIT was valued at €1.55 billion. Other notable transactions during this period include Pramerica Real Estate Capital’s buyout of York Capital’s stake in Core Industrial Reit, Avenue Capital’s acquisition of a 25% stake in alternative lender Castlehaven Finance and the acquisition of 23 Connecticut highway service plazas by a consortium led by Applegreen.
Irish plcs continued to be acquisitive during the quarter, with a total of 17 transactions, down from 34 in Q2’19. 41% of these transactions were acquisitions of UK based companies. One such notable transaction was Greencore’s acquisition of Freshtime UK, its first purchase since completing the disposal of its US operations at the end of 2018.

A total of 15 in-market transactions were recorded during the period spread across all sectors. This brings the total year-to-date in market transactions to 50. Notable transactions include Cellnex Telecom’s €210m cross border acquisition of communication infrastructure provider Cignal. Irish Life owned Invesco acquired Acumen & Trust during the period, Dunnes Stores acquired Independent retailer JP Savage, Connollys Car Garage acquired Hyundai Galway and John Sisk & Son acquired Vision Built Group.

Commenting on M&A activity in the Irish market in the third quarter, Investec Corporate Finance, said: “Having seen the volume of M&A transactions in the Irish market reach a new high water mark in the second quarter of 2019, maintaining that level transactions was always going to be a challenge in particular against the backdrop of Brexit uncertainty domestically and overall reduction in deal activity across Europe and elsewhere throughout the world. That said, recording 67 transactions despite global headwinds and market trends is a strong result and demonstrates a decent market overall. The outlook overall for 2019 is for a steady increase on deal volume when compared with the previous year with a total of 223 transactions recorded in the first three months of this year verses 188 transactions over the same period in 2018. A similar level of activity in Q4 will round off a good year for Irish M&A.”