Mergers and acquisitions in Ireland continue to grow apace, with plenty of interest from international investors as well as those closer to home. This is according to leading business advisory and accounting firm Azets Ireland.
“The environment at the moment is strong,” said David Lucas, partner and head of corporate finance at Azets Ireland. “Interest rates are coming down and corporates have access to cheaper capital as a result, which is driving more action in mergers and acquisitions. I would be very upbeat about M&A activity in Ireland in 2025.”
Lucas says that strong interest from international investors and the Irish reputation for strong entrepreneurial activity are also helping to push the market forward. “Brexit has been a strong driver – there are a lot of international corporates that are looking at Ireland as an alternative to the UK,” Lucas said. “We are well positioned. A lot of major corporates are here, and we’re one of the best in the world – if not, the best – at entrepreneurial activity. Entrepreneurs don’t like to sit still, they want to grow. There are two ways to grow – organically or through M&A activity – and M&A is a faster route to growth.”
The range of sectors experiencing M&A activity is wide and diverse, according to Lucas. “The insurance brokering sector has been very busy, and I would expect life and pensions to become busier over the next few years. There has been a lot of recent activity with many accounting and law firms merging and I can see this extending to the wider professional services sector. Businesses with recurring revenue streams are considered attractive, eg security, fire safety. Ireland’s indigenous healthcare, software and tech companies have always garnered international attention.”
The main challenge, Lucas says, is picking the right target and ensuring the synergy is there post-deal. Due diligence is all-important. “Sophisticated buyers in Ireland know they need to do thorough due diligence; banks will expect this too. Taking the time to analyse the quality of earnings can help buyers understand the business’ potential and plan the next stage. There can be fear of doing something wrong, but once you choose the right advisers, that fear goes away.
“Sourcing the right funding is always an important consideration. From an investment point of view, Ireland has seen a rapid increase in Irish-based private equity funds which has stimulated activity as well as continued investment from the UK and further afield. The banking landscape is slightly less competitive with only three local banks, which is far fewer than a few years ago. Demonstrating a strong repayment profile is key to unlocking cheaper sources of finance.”
Preparation is key. “For sellers, this is probably the most important transaction of their lives, so it’s imperative that they surround themselves with the right team to ensure they get the deal that’s right for them and maximise value. Selling a business can take many months, so it’s important to be prepared.”
Entrepreneurs don’t like to sit still, they want to grow. There are two ways to grow – organically or through M&A activity
As a company, Azets Ireland has worked on some high-profile M&A deals over the past few years. As an example, Lucas and his team recently completed advisory on the sale of Monaghan-based bus company Matthews Coaches to FirstGroup PLC, a UK-based transport operator listed on the London Stock Exchange that had previously invested in Aircoach.
“We’ve grown a lot in the last few years, and are very active in the €5 million to €50 million SME space,” said Lucas. “I think our real selling point is that we give incredible customer service, a real 24/7 offering. We always say that you only sell your business once so you need that support throughout the entire process. It can be very stressful and all-encompassing, so we try to take as much of the pressure and deal management off our clients as possible."
As part of a wider international company, Azets Ireland can avail of strong support from other offices at home and abroad. “We’re an independent accountancy firm with access to a large number of international colleagues. We advise along every step of the way, making sure clients highlight all the positive points about their companies and position themselves in the best possible light and then helping to run a competitive process that adds value, for instance through the deal structure. You also need to work with a strong legal adviser who can work alongside you on the deal and ensure that everything that is commercially agreed has been documented correctly to protect the client. Another important consideration is maximising your tax position; we have a tax division that can loop in with us to advise our clients.
“It’s so important to make sure you have the right adviser on your side – one with the experience, connections and know-how to support you as you navigate the biggest deal of your life.”
For more, see www.azets.ie