Close to one-third of family businesses expect to take part in merger and acquisition (M&A) activities over the next three years, according to a new survey.

A study of private businesses - with turnovers of up to €150 million - by Mergermarket found that 29 per cent of their owners expect to take some part in mergers and acquisition activity over the next three years.

Ted Webb of IBI Corporate Finance, one of the companies that commissioned the study, said yesterday that the businesses either expected to buy other businesses or to be bought.

He said that as family-owned operations increasingly hired professional managers to run the business, more of them have begun looking at acquisitions as a means of growing their business, diversifying their activities and entering new territories.

In terms of overseas mergers and acquisitions, Mr Webb said that companies tended to look at either the UK or the US. He explained that this was because both countries are English speaking and have a similar business culture.

Of the companies that believed they could potentially be bought, 48 per cent of them said that the buyer would be most likely to come from the Irish market, with 32 per cent pinpointing the UK.

Over 70 per cent of the companies surveyed said that in a sale situation, they would be happy to provide warranties as part of a sale process, while 59 per cent were "totally confident" about the state of their business.

David Widger, partner with A&L Goodbody Solicitors, one of the study's other sponsors, said that the companies surveyed recognised the importance of securing commercial contracts, safeguarding intellectual property and ensuring compliance.

"These results clearly show that while businesses may not be actively considering a disposal, they should still ensure that their commercial contracts are tied down and there are no problematic issues in relation to regulatory, compliance or intellectual property matters," he said.

Bank of Ireland Private Banking and Kennelly & Twomey Tax Advisers were also involved in commissioning the survey.

The study found that while 57 per cent of companies questioned had had a Revenue audit over the past three years, the majority were confident about their tax position. All the companies surveyed were family-owned.