Quarter 3, 2019 Review of Irish Merger and Acquisition Activity - Corporate Finance - Investec
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Corporate Finance
Review of Irish Merger and Acquisition Activity
Quarter 3, 2019
Prepared by Investec Corporate FinanceReview of Irish M&A activity
M&A Tracker Summary, Q3 2019
Quarterly Value and Volume Trend
€8bn 94 100
€7bn 80
€4.8bn 5.9bn 67 80
€6bn 70
64 62
58 60
€5bn 52 €4.3bn 60
€5.1bn
Deals
€4bn €3.9bn
€3bn 40
€2.3bn
€2bn
€1.3bn €1.3bn 20
€1bn €0.6bn
- 0
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Values Volumes
Most Active Sectors (by volume)
19 9
7
Retail, Food / Food
IT & Telecoms Health & Pharmaceutical
Services, Financial Services
Transaction Type (by volume)
17 15 14
Foreign Acquisitions Irish Deals (In-market) Financial Investor
Investec Commentary
• Q3’19 saw a decline in deal volume following what was a record high for Q2’19. There were 67 deals announced during the quarter,
representing a decline of 29% relative to the highest ever quarterly volume in Q2’19
• There was a sharp increase in transaction value from Q2’19 to Q3’19, with a total combined value of €4.33bn across the
disclosed transactions
• Notable transactions which were announced during the quarter include CRH’s disposal of its European distribution business to The
Blackstone Group (€1.64bn) and Henderson Park’s take private of Green REIT (€1.55bn)
• Irish companies were active overseas during the quarter, with a total of 17 transactions (34 in Q2’19)
• There were 15 in-market transactions during Q3’19 spread across all sectors, bringing YTD in-market transactions to 50
• The IT and Telecoms sector was the most active in Q3’19, with 19 transactions during the quarter. It was followed by the Health and
Pharmaceuticals sector (9 transactions), with the Retail, Food / Food Services and Financial Services sectors all recording 8 transactions
• Q1’19-Q3’19 saw the announcement of 223 transactions, ahead of the previous year, which recorded 188 transactions over the
same period
Notes:
Trade Sale: Acquisition of an Irish corporate by Irish / overseas corporate
Financial Buyers & Investors: Acquisition of, or 20% or more investment in, an Irish corporate by Irish / overseas financial investors including private equity
Overseas Transaction: Acquisition or disposal of overseas corporate by Irish corporate / private equityReview of Irish M&A activity Investec Commentary Q3’19 saw a decline in deal volume following what was a record high for Q2’19. There were 67 deals announced during the quarter, representing a decline of 29% relative to the record-breaking Q2’19. This is in line with global and European M&A trends in which we are seeing a decline in activity. There was a significant increase in transaction value from Q2’19 to Q3’19, with a total combined value of €4.33bn across the disclosed transactions. This increase in value is driven by a number of large disclosed transactions which were announced during the quarter, including CRH’s disposal of its European distribution business to Blackstone (€1.64bn) and Henderson Park’s take private of Green REIT (€1.55bn) The 2 largest transactions noted above accounted for approximately 74% of the total disclosed deal value for the quarter, with the 10 largest transactions accounting for 97% of the total disclosed value. Other notable transactions during the quarter include Pramerica Real Estate Capital’s buyout of York Capital’s stake in Core Industrial REIT, Avenue Capital’s acquisition of a 25% stake in alternative lender Castlehaven Finance and the acquisition of 23 Connecticut highway service plazas by a consortium led by Applegreen. Irish companies were active overseas during the quarter, with a total of 17 transactions (34 in Q2’19). Interestingly, 7 of the aforementioned transactions were acquisitions of UK based companies. One such transaction was Greencore’s acquisition of Freshtime UK, its first purchase since completing the disposal of its US operations at the end of 2018. Not all Irish companies sought to acquire abroad, with a count of 15 in-market transactions in Q3’19, bringing YTD in-market transactions to 50. The in-market transactions were spread across all sectors, ranging from Financial Services to Retail and Construction. Irish Life owned Invesco acquired Acumen & Trust during the period, whilst in the retail sector, we saw Dunnes Stores acquire independent retailer JC Savage and Connollys Car Garage acquire Hyundai Galway. In the Construction sector, John Sisk & Son acquired Vision Built Group. Buyouts and acquisitions made by PE owned companies were accountable for 14 transactions during the quarter, as a buy and build theme continues across the Irish market. Notable players in this space include Montagu backed OASIS, Sovereign Capital’s Arachas Corporate Brokers and Capvest’s Valeo Foods, each of which transacted during the quarter. The IT and Telecoms sector was the top performer of Q3’19, with 19 transactions during the quarter. The largest disclosed transaction in the sector was Cellnex Telecom’s €210m cross border acquisition of communication infrastructure provider Cignal. Accenture contributed 6 deals to the sector’s tally. Other active sectors for Q3’19 were Health and Pharmaceuticals (9 transactions), Retail, Food / Food Services and Financial Services (each with 7 transactions). With a deal volume of 67, Q3’19 lagged behind the previous quarter. However, it remained a relatively strong quarter for Irish M&A activity despite global headwinds and market trends. Disclosed deals comprised 21 of the 67 recorded deals, giving a deal value of €4.33bn. Q1’19-Q3’19 saw the announcement of 223 transactions, ahead of the previous year, which recorded 188 transactions over the same period. A consistent Q4 will be important to round off a good year for Irish M&A.
About and Key Contacts at Investec Corporate Finance Investec is a leading provider of independent corporate finance advisory services in Ireland. We have a highly experienced team of professionals working in our Dublin office. With a track record spanning some of Ireland’s highest profile deals, Investec Corporate Finance has become an advisor of choice within the Irish market for leading companies, private equity funds and entrepreneurs. Liam Booth Shane Lawlor Managing Director Director, Head of Corporate Broking Tel: +353 (1) 421 0345 Tel: +353 (1) 421 0347 liam.booth@investec.ie shane.lawlor@investec.ie Jonathan Simmons Tommy Conway Director Director, Head of Equity Capital Markets Tel: +353 (1) 421 0351 Tel: +353 (1) 421 0358 jonathan.simmons@investec.ie tommy.conway@investec.ie Eoin Kennedy Director Tel: +353 (1) 421 0386 eoin.kennedy@investec.ie
Review of Irish M&A activity
M&A Transaction Values and Volumes
€10.0bn
Quarterly Value Trends: Q3 2017 - Q3 2019
€8.0bn
€5.9bn
€6.0bn €4.8bn €5.1bn €4.3bn
€4.0bn €3.9bn
€10.0bn
€2.3bn
€2.0bn €1.3bn €1.3bn
€8.0bn €0.6bn
€5.9bn
€6.0bn- €4.8bn €5.1bn
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
€4.3bn
€4.0bn €3.9bn
€2.3bn
€2.0bn €1.3bn €1.3bn
€0.6bn
-
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Quarterly Volume Trends: Q3 2017 - Q3 2019
100 94
90 80
80
70 67
70 64 62
58 60
60 52
50
100 94
Deals
40
90 80
30
80
70 67
20
70 64 62
58 60
10
60 52
0
50
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Deals
40
30
Q3 2019 Transactions
20
10
0
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
3.0%
> 500m
73.7%
0.0%
251m - 500m
5.8%
3.0%
101m - 250m
9.6%
6.0%
51m - 100m
6.6%
20m - 50m 4.5%
2.5%
< 20m 13.4%
1.9%
Non-Disclosed 70.1%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
Volume ValueReview of Irish M&A activity
M&A Transaction Type
Q3 2019 Activity by Counterparty
Financial Buyers
Trade Sale Overseas Transaction
Financial&Buyers
Investors
Trade Sale Overseas Transaction
& Investors
Irish buyer UK buyer US buyer Other Irish seller Acquisitions Disposals Total
Irish buyer UK buyer US buyer Other Irish seller Acquisitions Disposals Total
Value (€ million) €0 €1,629 €5 €250 €2,075 €374 €0 €4,332
Value (€ million)
Disclosed deals €0 0€1,629 4 €5 1 €250 3 €2,075 5 €374 8 €0 0 €4,332 21
DisclosedUndisclosed
deals deals 0 15 4 3 1 7 3 3 5 9 8 9 0 0 21 46
Undisclosed deals
Total number of deals
15 15
3 7
7 8
3 6
9 14
9 17 0 0
46 67
Total number of deals 15 7 8 6 14 17 0 67
Notes:
Trade Sale: Acquisition of an Irish corporate by Irish / overseas corporate
Notes: Financial Buyers & Investors: Acquisition of, or 20% or more investment in, an Irish corporate by Irish / overseas financial investors including private equity
Trade Sale: Acquisition
Overseas of an IrishAcquisition
Transaction: corporateorbydisposal
Irish / overseas corporate
of overseas corporate by Irish corporate / private equity
Financial Buyers & Investors: Acquisition of, or 20% or more investment in, an Irish corporate by Irish / overseas financial investors including private equity
Overseas Transaction: Acquisition or disposal of overseas corporate by Irish corporate / private equity
Q3 2019 Activity by Sector
Q3 2018 Activity by Sector
Q3 2018 Activity by Sector
0.0%
Professional & Technical
1.5%
0.0%
Professional & Technical 4.7%
Retail1.5%
10.4%
Retail 4.7%
Industrial 37.9%
10.4%
9.0%
Industrial 37.9%
38.3%
Building, Construction & Property 9.0%
6.0%
Building, Construction & Property 0.0% 38.3%
Print & Paper
0.0% 6.0%
Print & Paper 0.0% 0.0%
Support Services
0.0% 4.5%
Support Services 0.0% 5.9%
Financial Services
4.5% 10.4%
0.0% 5.9%
FinancialLeisure
Services
& Travel
1.5% 10.4%
0.0% 3.9%
Food/Food
Leisure Services
& Travel
1.5% 10.4%
3.9% 6.7%
IT & Telecoms
Food/Food Services
10.4% 28.4%
1.8%
6.7%
Health
IT &&Telecoms
Pharmaceutical 13.4% 28.4%
0.9%
Media & Publishing1.8%
Health & Pharmaceutical 4.5% 13.4%
0.9%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Media & Publishing 4.5%
0% 5% 10% Volume 20% Value
15% 25% 30% 35% 40%
Volume ValueReview of Irish M&A activity Q3 2019 Transactions by Sector Media and Publishing Acquiror Country Target Country €m Date Independent News & Media plc Ireland Inm Events DAC (49%) Ireland n.d. Jul-19 Keywords Studios plc Ireland TV+SYNCHRON Berlin GmbH Germany 3.7 Sep-19 SKY Network Television Limited New Zealand RugbyPass Limited Ireland 36.1 Aug-19 Total 39.8 Health and Pharmaceutical Acquiror Country Target Country €m Date Bon Secours Mercy Health USA Bon Secours Health Systems Ireland n.d. Jul-19 Connected Health Limited UK Home Care Plus Limited Ireland n.d. Aug-19 Jazz Pharmaceuticals plc Ireland pan-RAF inhibitor programme UK 3.1 Jul-19 Jazz Pharmaceuticals plc Ireland Cavion USA 47.0 Aug-19 LloydsPharmacy Ireland Limited Ireland Median Healthcare Services Ireland n.d. Jul-19 Lucid Group Communications Limited UK Healthcare 21 Group Ireland n.d. Sep-19 Merieux NutriSciences Corporation USA Advanced Laboratory Testing Limited Ireland n.d. Sep-19 Uniphar plc Ireland Durbin plc UK 26.0 Aug-19 Waterland Private Equity Investments BV Netherlands Silver Stream Healthcare Management Limited Ireland n.d. Jul-19 Total 76.1 IT and Telecoms Acquiror Country Target Country €m Date Accenture Ireland Northstream AB Sweden n.d. Aug-19 Accenture Ireland Pragsis Technologies SL Spain n.d. Sep-19 Accenture Ireland Fairway Technologies, Inc. USA n.d. Aug-19 Accenture Ireland Parker Fitzgerald Limited UK n.d. Aug-19 Accenture Ireland Analytics 8 LP Australia 15.0 Aug-19 Accenture Ireland Insitum Consultoria Europa SL Mexico n.d. Aug-19 Blancco Technology Group plc UK YouGetItBack Limited Ireland 5.3 Jul-19 Cellnex Telecom Spain Cignal Ireland 210.0 Sep-19 Hibernia Services Limited Ireland Sabeo Technologies (Enterprise Tech Division) Ireland n.d. Aug-19 Johnson Controls International Ireland Aspro Crest Limited UK n.d. Jul-19 MarketStar Corporation USA Product2Market Ireland n.d. Sep-19 OASIS Ireland Archive Document Data Storage UK n.d. Aug-19 Pico Quantitative Trading LLC USA Corvil Limited Ireland n.d. Jul-19 Taoglas Limited Ireland Firmwave Limited Ireland n.d. Aug-19 Terra S.p.A. Italy Rubelite Technologies Limited Ireland 4.0 Jul-19 The Sage Group plc UK Ocrex Limited Ireland 55.0 Sep-19 TransPerfect Translations International USA MoGi Group Ireland n.d. Sep-19 Xenon Venture Equity USA Metricfire Limited Ireland n.d. Sep-19 Xpring USA Logos Network Ireland n.d. Sep-19 Total 289.3 Food/Food Services Acquiror Country Target Country €m Date Dawn Farm Foods Limited Ireland Haas GmbH Germany n.d. Sep-19 Fane Valley Co-op UK Robert Smyth & Sons Ireland 17.3 Jul-19 Goode Partners LLC USA Strong Roots (Undisclosed Stake) Ireland n.d. Aug-19 Greencore Group plc Ireland Freshtime UK Limited UK 62.0 Sep-19 ISIF, Management Ireland West Cork Distillers Limited (62%) Ireland 18.0 Sep-19 The Hershey Company USA Fulfil Nutrition (Undisclosed stake) Ireland n.d. Aug-19 Valeo Foods Ireland Yellow Chips B.V.; Kettle Foods Limited Netherlands, UK 73.0 Sep-19 Total 170.3 Leisure and Travel Acquiror Country Target Country €m Date Extreme Event Ireland Ltd. Ireland CityScape Ireland n.d. Jul-19 Total 0.0 Financial Services Acquiror Country Target Country €m Date Arachas Corporate Brokers Limited Ireland Murray & Spelman Limited Ireland n.d. Jul-19 Avenue Capital Group USA Castlehaven Finance (25%) Ireland 250.0 Aug-19 Baker Tilly Chartered Accountants Ireland Barr Pomeroy Limited Ireland n.d. Sep-19 Bluechip Financial USA Arachas Financial Planning Ireland 4.5 Aug-19 DMS Governance Limited Ireland Host Capital Limited UK n.d. Sep-19 Element Global USA Clarinova Limited Ireland n.d. Aug-19 Invesco Limited Ireland Acumen & Trust Designated Activity Company Ireland n.d. Aug-19 Total 254.5
Review of Irish M&A activity Q3 2019 Transactions by Sector Support Services Acquiror Country Target Country €m Date Indeed Ireland Operations Limited Ireland Blackstone Point Limited UK n.d. Jul-19 Meptagon Group Israel BMD & Co. Limited (75% Stake) Ireland n.d. Sep-19 Spencer Stuart USA MERC Partners Ireland n.d. Jul-19 Total 0.0 Building, Construction and Property Acquiror Country Target Country €m Date Pramerica Real Estate Capital USA Core Industrial REIT plc Ireland 94.0 Aug-19 Henderson Park UK Green REIT plc Ireland 1,551.0 Aug-19 John Sisk & Son Limited Ireland Vision Built Limited Ireland n.d. Aug-19 Kingspan Group plc Ireland WeGo Floortec GmbH Germany 13.0 Jul-19 Total 1,658.0 Industrial Acquiror Country Target Country €m Date AxFlow Sweden Induchem Components Limited Ireland n.d. Jul-19 AxFlow Ireland Irish Pumps & Valves Limited Ireland n.d. Jul-19 Beauparc Utilities Limited Ireland WERS Waste Limited Ireland n.d. Aug-19 EP UK Investments Limited Czech Republic Tynagh Energy Ltd (80% Stake) Ireland n.d. Sep-19 OQEMA AG Germany Fusion Bespoke Manufacturing Limited Ireland n.d. Aug-19 The Blackstone Group USA Europe Distribution Business of CRH plc Ireland 1,640.0 Jul-19 Total 1,640.0 Professional and Technical Acquiror Country Target Country €m Date John O'Connor Solicitors Ireland Peter Morrissey & Company Ireland n.d. Jul-19 Total 0.0 Retail Acquiror Country Target Country €m Date Investor Consortium incl. Applegreen plc Ireland Project Services LLC USA 204.0 Aug-19 BoyleSports Ltd Ireland Reva Racing Limited (5 shops) Ireland n.d. Aug-19 Connolly Bros. Car Sales (Sligo) Limited Ireland Langtonville Limited t/a Hyundai Galway Ireland n.d. Jul-19 Dunnes Stores Ireland J.C. Savage Supermarket Ireland n.d. Jul-19 Eason and Son Limited Ireland Trading Businesses of Six Franchised Stores Ireland n.d. Aug-19 Gowan Group Limited Ireland Opel Automobile Ireland Limited Ireland n.d. Jul-19 Flavour Warehouse Holdings Limited UK Total Vapour Limited Ireland n.d. Aug-19 Total 204.0
Review of Irish M&A activity Methodology The information in this report relates to transactions announced during the third quarter of 2019. Financial consideration is shown in EURO (€), and is based on disclosed figures or market or media estimates at the time each deal was announced. In cases where the deal consideration was in a foreign currency, the equivalent amount in EURO (€) has been calculated using the exchange rate that was in force at the time of the original transaction announcement. Certain transactions which have been announced but which are subject to approval by the Competition Authority are shown on the assumption that approval will be forthcoming. Disclaimer Investec Europe Limited (Investec Europe) has issued and is responsible for production of this publication. Investec Europe Limited trading as Investec Europe is regulated by the Central Bank of Ireland. Registered in Ireland Number 222173. Registered office The Harcourt Building, Harcourt Street, Dublin 2, D02 F721. This publication should be regarded as being for information only and should not be considered as an offer or solicitation to sell, buy or subscribe to any financial instruments, securities or any derivative instrument, or any other rights pertaining thereto (together, “investments”). Investec Europe does not express any opinion as to the present or future value or price of any investments referred to in this publication. This publication may not be reproduced without the consent of Investec Europe. The information contained in this publication has been compiled from sources believed to be reliable, but, neither Investec Europe, nor any of its directors, officers, or employees accepts liability for any loss arising from the use hereof or makes any representations as to its accuracy and completeness. The information contained in this publication is valid as at the date of this publication. This information is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the matters discussed herein. This publication does not constitute investment advice and has been prepared without regard to individual financial circumstances, objectives or particular needs of recipients. Readers should seek their own financial, tax, legal, regulatory and other advice regarding the appropriateness or otherwise of investing in any investments or pursuing any investment strategies. Investec Europe operates exclusively on an execution only basis. An investment in any of the investments discussed in this publication may result in some or all of the money invested being lost. Past performance is not a reliable guide to future performance. To the extent that this publication is deemed to contain any forecasts as to the performance of any investments, the reader is warned that forecasts are not a reliable indicator of future performance. The value of any investments can fall as well as rise. Foreign currency denominated investments are subject to fluctuations in exchange rates that may have a positive or adverse effect on the value, price or income of such investments. Certain transactions, including those involving futures, options and other derivative instruments, can give rise to substantial risk and are not suitable for all investors. Investec Europe (or its directors, officers or employees) may to the extent permitted by law, own or have a position in the investments (including derivative instruments or any other rights pertaining thereto) of any issuer or related company referred to herein, and may add to or dispose of any such position or may make a market or act as a principal in any transaction in such investments or financial transactions. Investec Europe’s conflicts of interest policy is available at https://www.investec.com/en_ie/legal/IE/terms- and-policies.html
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