Sector Watch - M&A Half Year Report 2022
Financial services was the dominant sector in Irish dealmaking, accounting for 32% of total Irish M&A deal value in the first six months of the year. Activity within the aviation finance sector was bolstered by the largest deal of H1 overall – SMBC Aviation Capital’s €1.5bn acquisition of aircraft leasing rival Goshawk Management. In total, financial services generated €2.1bn-worth of deals in H1.
Another major deal in the financial sector this year was Allied Irish Bank’s (AIB) acquisition of Ulster Bank Ireland’s mortgage portfolio. The transaction sees AIB take control of a portfolio of mortgages worth €5.7bn, which, according to Mergermarket, has an estimated equity value of approximately €432m.
Consolidation within the insurance sector – specifically insurance brokerages – continues to be a major trend driving financial services dealmaking. In the largest such deal of H1, US-based insurance broker AssuredPartners acquired Gallivan Murphy Insurance Brokers for the sum of €100m. With fragmentation still widespread across the market, consolidation shows little sign of slowing down.
TMT also continued to be a dominant sector in the Irish dealmaking scene in terms of deal value, taking up 29% of total Irish M&A deal value in the first six months of the year.
The sector dominated the top end of the market, accounting for six of the 20 largest transactions during this period. Total deal value, however, failed to reach 2021 levels, with a half-yearly deal value of €1.9bn, down 57% year-on-year.
The largest TMT deal of H1 was the €800m acquisition of IT consultancy firm Version 1 Holdings by Swiss private equity firm Partners Group. Version 1 has enjoyed significant growth under its ownership by UK-based PE firm Volpi Capital, reportedly tripling in size since it was bought in 2017. IT services providers are continuing to see rapid growth as businesses seek to implement their digital transformation strategies and shift to cloud services.
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Another significant TMT deal which shows the value of home-grown fintech providers is US banking giant JP Morgan’s €665m acquisition of Global Shares, a cloud-based provider of share plan management software. The purchase, which aims to create a new client acquisition channel for JP Morgan’s wealth management business, is one of the largest exits of an Irish fintech on record.
Tech valuations reached very high levels in 2021 and the beginning of 2022, as displayed in the US$1.25bn funding round for Flipdish, a technology provider to restaurants. However, the recent global decline in tech stocks in the public markets will likely have an impact on private company valuations.
Dealmaking within the renewables sector has become an emerging trend to watch. Driven by the global pressure to reduce carbon emissions, businesses across a wide range of sectors are using M&A as a tool to prove their green credentials.
This trend is generating a healthy amount of activity within the energy, mining and utilities sector, which saw its share in total Irish M&A volume rise to 8% of all deals in the first half of 2022, up from 4% in 2021. The largest transaction of H1 was the €575m investment in solar and wind power plant Mainstream Renewable Power by Japan-based conglomerate Mitsui & Co. According to Mainstream, the deal will accelerate its transition to become a global renewable energy leader.
The Irish government has committed to increasing the share of renewables electricity to 80% by 2030. More deals can be expected as investors look to gain a slice of this high-growth market, while energy firms will seek to boost their renewables capacity through acquisitions.
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2 年Thanks for sharing
Managing Partner at Beara Mergers
2 年Thanks Elaine!