Irish law firms dominate M&A but deal boom belies falling values

The data shows that despite a foray into the market by international players, domestic law firms have maintained their dominance as key advisors to Irish operations, but in contrast global investment banks are taking on financial advisory mandates.

The value of all of this activity fell by 69% to just over USD 30.5 billion (EUR 29 billion), roughly in line with 2012 figures when Ireland was still suffering from the effects of the financial crisis.

Much of the drop can be attributed to a lack of megadeals last year compared to 2021, when just two transactions accounted for almost half of the year’s value.

The other factors are mostly global and are expected to continue into 2023, although local conditions remain relatively positive.

“It is likely that global mergers and acquisitions in 2023 will continue to be impacted by higher inflation, higher borrowing costs, central bank interest rate hikes, the war in Ukraine, economic uncertainty in the US and Europe, and increasing regulatory scrutiny, particularly in the US. be impacted,” said Ian McFarlane, Refinitiv Country Manager Ireland.

A&L Goodbody topped the legal advisor chart after being involved in 54 deals valued at nearly $4.6 billion. Last year, A&L continued to top the list for both deal size and value, having advised on 84 deals valued at nearly $64 billion.

A&L said investors were slowing portfolio growth out of caution about the economy, but buyers would be active but “choosy”.

“Buyers are definitely more cautious about the assets they want to acquire,” said Richard Gray, partner and head of M&A at A&L Goodbody.

“With debt markets not being as open as they used to be, buyers are having to fund from their balance sheets or with very expensive debt. You will definitely continue to see M&A, but only in certain sectors.”

He said energy and infrastructure would be a hot sector in Ireland, with offshore wind and broadband likely to see “very significant spending”.

Goldman Sachs topped the ranking of financial advisors, which is dominated by global investment banks. The Wall Street giant advised on nine deals worth $10.6 billion. Goodbody Stockbrokers was the only local investment bank in the top 10 after advising on Brookfield Asset Management’s delisting and take-private of Hibernia Reit – one of the biggest deals of 2022.

Overall, transactions worth US$10.8 billion involved an Irish target, down 63 per cent from 2021. Inbound M&A involving a foreign buyer reached US$9.8 billion, while domestic transactions reached just under US$1 billion , a six-year low.