Deals such as Blackstone’s €800 million swoop for data centre business Winthrop Technologies boosted Irish mergers and acquisitions activity in the three months ended June 30th, new figures show.
There were 108 mergers and acquisitions involving Irish companies in the second quarter of this year, according to stockbrokers Davy, which says that the figure was 21 per cent ahead of the 89 transactions completed in the preceding three months.
The second-quarter figure was 11 per cent down on the same period in 2023, but Davy’s review of the Irish M&A market notes that there were a higher than usual number of deals in the three months to the end of June last year.
Its analysts expect about 400 transactions this year “which compares very favourably with historic levels, as the market looks to have now settled at a structurally higher level of mergers and acquisitions activity”.
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US investment giant Blackstone’s purchase of a 50.7 per cent stake in Winthrop, valuing the Irish data centre specialist at €800 million, was among the bigger deals done in the three months to June.
This followed investor Starwood’s move to take a significant stake in Echelon earlier in the year, underlining the popularity of Irish-linked data-centre businesses with overseas buyers.
Others included DCC’s take over of Next Energy Solutions for €105 million and renewables group Copenhagen Infrastructure Partners buying a majority stake in solar and wind power developer Elgin Energy for €292 million.
While many transactions involved the sale of Irish businesses to overseas buyers or private-equity players, Irish companies buying up others at home or abroad also featured.
One of the biggest was listed food and ingredients group, Glanbia, buying US-based Flavor Producers for about €280 million.
Technology and telecoms was the most active industry, accounting for 21 deals; and business services was next with 20, says Davy.
Easing inflation and lower interest rates should boost mergers and acquisitions here and abroad, Davy believes.
Donough Kilmurray, the firm’s chief investment officer, says inflation is falling the targets set by central bankers in the United States and Europe, but more slowly than expected, and possibly because of weaker growth.
“This means that central banks will be able to gradually cut interest rates as expected, although we won’t be returning to the past decade of rock-bottom rates,” he adds.
Markets expect relatively small interest rate cuts, according to Kilmurray, who calculates that the cost of money will remain well above average for this century.
However, the firm notes that the start of actual and forecast rate cuts in Europe, the US and UK will boost mergers and acquisitions activity in the second half of this year.
Deal values in the second quarter of this year were down 21 per cent at €1.8 billion, but the report points out that this figure covers only “disclosed values”.
Parties revealed the value of just 13 per cent of transactions in the second quarter this year, against 17 per cent during the same period in 2023.
Globally, activity remained consistent with the number of transactions down 4 per cent in the second quarter but their value up by one tenth, as the number of transactions exceeding $1 billion increased.
There were four worth more than $10 billion, including US oil giant ConocoPhillips’s $23 billion acquisition of Marathon Oil.
The biggest deals of the year so far:
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