According to Grit Young, M&A partner at EY, this could be Ireland’s “year of start-ups” as international capital pours in to take advantage of fast-growing companies in hot sectors.
There is currently a pipeline of companies in attractive sectors such as technology, cleantech, pharmaceuticals and healthcare – including spin-outs from universities,” she said.
“Ireland is one of the countries that investors are looking to to provide solutions in these areas.”
Discussing the big money interest in the startup scene here, she cited €1 billion first-quarter investment deals for Irish “unicorn” software firms Flipdish and Wayflyer, led by Tencent and JP Morgan respectively.
“What’s interesting is that these Irish companies are scaling from abroad but not relocating their headquarters out of Ireland,” Ms Young said.
“The size of the talent pool here has always been an issue because when you scale you need a lot of people, but workers are everywhere now.”
M&A investments of €16 billion were made in Ireland last year as investors looked for deals.
According to EY’s latest CEO survey, more than half of Ireland’s CEOs are planning mergers and acquisitions in 2022 as deal bonuses continue and companies look to rapid growth.
All but one of the 30 Irish respondents to the global survey said a deal fell through in 2021 either due to the pandemic or a regulatory issue, showing how active the M&A market is at the moment.
“There are many companies that are looking for expansion or operational additions rather than transformative deals,” Ms Young said, adding that intense competition for assets meant many companies were disappointed with failed bids.
While technology, healthcare and financial services have dominated M&A activity in recent years, buyers are now looking to the energy and travel sectors for deals based on optimistic growth projections in these areas.
Ms Young said mergers and acquisitions would be a key growth driver for economic activity in Ireland as companies scramble to develop skills quickly to remain relevant.
“If [companies] “Trying to react to big trends, say in geopolitics, you may need to act quickly,” she said.
“And the private equity story right now is buy and build.”
https://www.independent.ie/business/irish/hot-m-and-a-market-promises-even-more-investment-in-irelands-year-of-the-start-up-41539999.html Hot M&A market promises even more investment in Ireland’s ‘Year of Start-ups’