Despite headwinds, private equity (PE) activity in Ireland in 2022 continued to be strong with a total of 62 transactions. In line with overall M&A, PE activity in Ireland failed to maintain the exceptional (or anomalous) levels of 2021, with deal volumes and values falling by 19% and 76% respectively, year-on-year. Set against pre-pandemic trends, however, the 2022 numbers were still healthy
Where PE firms continue to have significant capital at their disposal – as much as US$1.96trn according to some analysis6 – geopolitical uncertainty and soaring inflation with resultant slowdown in economic growth are undoubtedly significant contributing factors to this reduction in activity. PE activity in Ireland, both international funds and a small but growing number of Irish firms, continued to be a very material feature of the Irish M&A landscape in 2022.
PE accounted for a fifth of all deals by volume in 2022. While many of these were smaller mid-market transactions (contributing to the fall in deal value), seven of the 20 largest deals of the year were PE-related, with five buyouts and two exits. The biggest PE transactions of the year in Ireland were both exits: Partners Group's acquisition of Version 1 Holdings for €800m, and Motive Partners' sale of Global Shares to JP Morgan for €665m.
While PE investors took a more restrained approach in Ireland in 2022, appetite for companies with a sound business model was and will continue to be there in 2023 (particularly when coupled with a more optimistic outlook). Buy-and-build strategies continue to play out, with firms also prepared to do larger one-off transactions in sectors such as energy and infrastructure. As with previous years, financial services, technology, media and telecommunications and pharma, medical and biotech transactions remained strong, with businesses in these sectors likely to be active in the M&A market in 2023 (although pricing and consideration structuring will be factors in how deals are transacted).
Where a cautious outlook is maintained, rising cost of capital may add to this landscape, particularly for debt driven deals. As with previous years, 2023 (particularly when coupled with a more optimistic economic outlook) investors and funding in 2023 should follow transactions which represent value opportunities or are of key strategic importance. Sustainability factors will also continue to play a much greater role in the attractiveness of every funding opportunity throughout 2023 and beyond. Overall, an optimism for Ireland to continue to attract its fair and an increasing share of PE interest and activity remains.
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