Quarter 3, 2020 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, 2020
Prepared by Investec Corporate FinanceReview of Irish M&A activity
M&A Tracker Summary, Q3 2020
Quarterly Value and Volume Trend
€12bn €11.4bn 120
98
€10bn 94 100
90
80
€8bn 70 71 80
66
62 58
Deals
€6bn 60
€5.1bn
€4.3bn
€4bn 40
€2.3bn
€2bn €1.7bn 20
€1.0bn €1.0bn €1.0bn
€0.6bn
- -
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Values Volumes
Most Active Sectors (by volume)
12 12
12
Professional &
Media & Publishing IT & Telecoms Technical
Transaction Type (by volume)
27 27 5
Foreign Acquisitions Irish Deals (In-market) Financial Investor
Investec Commentary
• There were 90 deals announced during the quarter, an increase of 55% relative to the second quarter of the year
• Total disclosed transaction value improved versus the first half of the year, with a value of €1.7bn in the third quarter higher than the either of
the first two quarters. In the third quarter only 27 of 90 transactions had a disclosed a deal value
• Notable transactions which were announced during the quarter include US based Madison Dearborn Partner’s proposed acquisition of IPL for
a reported €624m, Roche Holding’s €380m acquisition of Inflazome, and Amdocs’ €157m purchase of Openet Telecom
• Irish companies were active overseas during the quarter, with a total of 27 transactions (26 in Q2’20)
• There were 27 in-market transactions during Q3’20, in addition to 8 transactions being announced involving a UK based buyer of an
Irish business
• The Media & Publishing sector was the most active in the quarter, with 13 transactions announced. It was followed by the IT & Telecoms (12
transactions) and Professional & Technical (12 transactions) sectors
• While the impact of Covid-19 resulted in reduced volumes for the previous quarter, activity levels were up year--on-year in the third quarter of
2020, albeit with lower transaction value in 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 There were 90 deals announced during the third quarter of the year, with a disclosed deal value of €1.7bn. This was a very strong level of activity, given the market backdrop and all the implications of Covid-19, and likely to be much better than market participants would have expected back in March and April. Easing of lockdowns, in tandem with positive economic indicators, no doubt helped participants to push forward and conclude M&A processes. Consequently, deal volume increased from 58 in the second quarter to 90 in the third quarter, not far off the record high of 98 in Q4 2019 – however, quite a number of these deals were likely to have originally been planned to close in Q2. In line with this, a number of high value transactions resulted in a deal value for the quarter of €1.7bn, a material improvement from the first two quarters which recorded a combined deal value of just €2.0bn. Significant Transactions The three largest transactions of the quarter involved foreign acquirers of Irish businesses. US based Madison Dearborn Partner’s proposed acquisition of IPL for €624m, Roche Holding’s €380m acquisition of Inflazome and Amdocs’ €157m purchase of Openet Telecom were the only transactions to have a reported deal value of €100m or more. These three transactions accounted for 68% of the total deal value for the quarter. Foreign Acquisitions Irish plcs were somewhat more active during the quarter, with DCC, Kingspan, Grafton, Uniphar and Glanbia all contributing to the total deal count for the three months. Private companies and financial buyers dominated Irish activity, and foreign acquisitions were prominent yet again. There were a total of 27 transactions involving an Irish buyer of a foreign owned business. Some noteworthy foreign acquisitions include Kingspan’s acquisition of the steel division of Romania based TeraPlast for €85m and Glanbia’s acquisition of Canadian company Foodarom Group for €38m. In-Market Transactions In-market deals, where both buyer and seller are Irish companies, accounted for 30% of total deal volume, with 27 transactions recorded in the quarter. These were spread across a number of sectors with Financial Services, Food/Food Services and Retail, all seeing four transactions each. Uniphar continued to be acquisitive, purchasing Hickey’s Pharmacy Limited for €60m and MML acquired a stake in CG Power Systems for an undisclosed amount. Financial Buyers & Investors There were a number of notable transactions involving financial buyers during the quarter, including the aforementioned Madison Dearborn Partners proposed acquisition of IPL. Others included Greencastle Capital’s acquisition of Joe Media UK, Stanley Capital’s €45m purchase of Noden Pharma and Laidir Investments purchase of Patrona Underwriting. Media & Publishing This quarter the Media & Publishing sector drove activity levels in the market, with 13 deals during the period, representing 14% of total volume. Keywords Studios was particularly acquisitive, acquiring Coconut Lizard for €2m, Maverick Media for €4m and Heavy Iron Studios for €11m during the quarter. Q1-Q3 2020 The first three quarters of 2020 saw 219 transactions being announced with a combined value of c. €3.7bn. In comparison to previous periods, the first three quarters of 2019 saw 222 transactions with the value of these transactions recorded at €5.9bn, showing that overall deal volume has remained largely stable. This is consistent with what is being reported internationally and indeed across a number of our international offices. Outlook for Q4 2020 M&A activity during Q3 2020 was better than anticipated in this uncertain economic environment, with strong activity levels by volume for the period. The anticipated material reduction in deal volume didn’t occur, however, we suspect that a more muted performance in Q4 2020 and Q1 2021 deal volume is likely, with buyers waiting to see the outcome of a number of macro issues, for example Brexit negotiations, before committing to finalising deals. It is also likely that less new deals and processes commenced in Q2 and Q3 than would ordinarily be the case such that there are deal processes working through the systems towards completion in Q4’20 or Q1’21. Furthermore, the second wave of Covid-19 in the last few weeks has led to some renewed pessimism, with more restrictive and lengthier lockdown restrictions anticipated throughout the winter period. This too could have a blunting effect on any prospective M&A activity, particularly in those sectors most affected by any form of lockdown or other restrictive measures. Jonathan Simmons is a Director with Investec Corporate Finance (jonathan.simmons@investec.ie +353 87 637 0984)
Review of Irish M&A activity 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. Jonathan Simmons Liam Booth Director Managing Director Tel: +353 (1) 421 0351 Tel: +353 (1) 421 0345 jonathan.simmons@investec.ie liam.booth@investec.ie Shane Lawlor Tommy Conway Director Director Tel: +353 (1) 421 0347 Tel: +353 (1) 421 0358 shane.lawlor@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
€12bn €11.4bn
Quarterly Value Trends: Q3 2018 - Q3 2020
€10bn
€8bn
€12bn €11.4bn
€6bn €5.1bn €4.3bn
€10bn
€4bn
€8bn €2.3bn
€2bn €1.7bn
€0.6bn €1.0bn €1.0bn €1.0bn
€6bn €5.1bn
- €4.3bn
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
€4bn
€2.3bn
€2bn €1.7bn
€0.6bn €1.0bn €1.0bn €1.0bn
-
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Quarterly Volume Trends: Q3 2018 - Q3 2020
120
110
98
100 94 90
90 80
80 71
120 70 66
70 62
110 58
60 98
100 94 90
50
90 80
Deals
40
80 71
30 70 66
70 62
20 58
60
10
50
-
Deals
40
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
30
Q3 2020 Transactions
20
10
-
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
> €500m 1.1%
36.5%
€251m - €500m 1.1%
22.2%
€101m - €250m 1.1%
9.2%
€51m - €100m 4.4%
15.7%
€20m - €50m 6.7%
11.6%
15.6%
< €20m
4.7%
Non-Disclosed 70.0%
- 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
Third Quarter 2020
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) €89.7m - €218.2m €433.5m €668.9m €299.1m - €1,709.3m
ValueDisclosed
(€ million)deals €89.7m 5 - 0 €218.2m 3 €433.5m5 €668.9m2 €299.1m
12 -- €1,709.3m
27
Disclosed deals deals
Undisclosed 5 22 0 8 38 55 25 12
15 -- 6327
Undisclosed deals of deals
Total number 22 27 8 8 811 5
10 57 15
27 -- 9063
Total number
Notes:
of deals 27 8 11 10 7 27 - 90
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 Overseas
Sale: Acquisition of anAcquisition
Transaction: Irish corporate by Irish
or disposal of /overseas
overseascorporate
corporateby 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 2020 Activity by Sector
0.0%
Professional & Technical
0.0%
0.0%
0.0%
Professional & Technical
Retail 0.0% 12.2%
0.0% 41.7%
Retail
Industrial 12.2%
12.2%
0.1% 41.7%
Industrial
Building, Construction & Property
12.2%
13.3%
0.1%
0.0%
Building, Construction &Print
Property
& Paper
0.0% 13.3%
0.0%1.3%
Support Services
Print & Paper
0.0% 8.9%
Financial 0.0%
Services 1.3%
Support Services 6.7%
8.9%
Leisure & Travel 0.0%
0.0%
Financial Services 0.0% 6.7%
Food/Food Services 0.0% 4.8%
Leisure & Travel 10.0%
0.0%
IT & Telecoms 17.4%
Food/Food Services 4.8%
13.3%
10.0%
Health & Pharmaceutical 33.4%
IT & Telecoms 8.9% 17.4%
13.3%
Media & Publishing 1.4%
Health & Pharmaceutical 14.4% 33.4%
8.9%
- 5% 10% 15% 20% 25% 30% 35% 40% 45%
Media & Publishing 1.4%
14.4%
Volume Value
- 5% 10% 15% 20% 25% 30% 35% 40% 45%
Volume ValueReview of Irish M&A activity Q3 2020 Transactions by Sector Media and Publishing Acquiror Country Target Country €m Date DMG Media UK One Fab Day website Ireland n.d. Jul-20 Evad IT Ireland North Dublin Publications Ltd Ireland n.d. Jul-20 Greencastle Capital Ireland Joe Media UK UK n.d. Jul-20 Keywords Studios Plc Ireland Coconut Lizard UK 2.2 Jul-20 MPS North America US Highwire Press Ireland 0.9 Jul-20 Independent News & Media Plc Ireland Auto Records Ltd Ireland n.d. Jul-20 Linton Capital LLP UK Maximum Media Network Limited Ireland n.d. Jul-20 Reach plc UK Independent Star Limited (50% Stake) Ireland n.d. Jul-20 Studio Media Ireland Darwin CX Canada 4.8 Aug-20 Keywords Studios plc (AIM:KWS) Ireland Maverick Media Limited UK 4.0 Aug-20 Rocket Sports Ireland Benchwarmers.ie Ireland n.d. Sep-20 Sunrise Medical Germany Leckey and Firefly Ireland n.d. Sep-20 Keywords Studios Plc Ireland Heavy Iron Studios US 11.3 Sep-20 Total 23.1 Health and Pharmaceutical Acquiror Country Target Country €m Date Stanley Capital UK Noden Pharma DAC Ireland 44.8 Jul-20 Merck Sharp & Dohme Limited US Dunboyne Manufacturing Facility of Takeda Dunboyne Biologics Limited Ireland n.d. Aug-20 Fineos Corporation Holdings Plc Ireland Limelight Health, Inc. US 63.6 Aug-20 Beaver-Visitec International Ireland Limited Ireland John Bannon Limited Ireland n.d. Aug-20 Orpea SA France Brindley Healthcare Limited (50% Stake) Ireland n.d. Sep-20 Uniphar PLC Ireland Hickey's Pharmacy Limited Ireland 60.0 Sep-20 Roche Holding AG Switzerland Inflazome Ltd. Ireland 380.0 Sep-20 Uniphar plc (ISE:UPR) Ireland Diligent Health Solutions, LLC US 23.1 Sep-20 Total 571.5 IT and Telecoms Acquiror Country Target Country €m Date HyperGrid US iQuate Limited Ireland n.d. Jul-20 Nostra Systems Ireland Brandon Global IT Limited Ireland n.d. Jul-20 KN Network Services (IRE) Limited Ireland ARCC Communications Ltd UK n.d. Jul-20 Amdocs Limited US Openet Telecom Limited Ireland 157.3 Jul-20 Modern Hire US Sonru Limited Ireland n.d. Jul-20 Eutelsat Communications S.A. France Bigblu Broadband Plc (UK and European satellite broadband activities) Ireland 43.5 Jul-20 Welltel Group Limited Ireland Intellicom Ireland Ltd Ireland 5.5 Aug-20 Endava plc US Comtrade Digital Services Limited Ireland 60.0 Aug-20 DeepVerge plc (AIM:DVRG) Ireland Modern Water plc (AIM:MWG) UK 27.3 Aug-20 Epic Games US SuperAwesome Ireland n.d. Sep-20 TEKenable Ltd. Ireland Greenfinch Technology Limited Ireland n.d. Sep-20 Gigas Hosting, S.A. (BME:GIGA) Spain Ignitar Ireland 2.9 Sep-20 Total 296.6 Food/Food Services Acquiror Country Target Country €m Date M&P O’Sullivan Ltd Ireland Assets of Brennan's Caterworld Limited Ireland n.d. Jul-20 United Molasses (Ireland) Ltd Ireland Greencore Group Plc (Molasses trading business) Ireland 17.2 Jul-20 Dawn Meats Group Ltd. Ireland Dunbia Limited (30% Stake) UK n.d. Jul-20 Intervet Inc. Netherlands IdentiGEN Ltd. Ireland n.d. Aug-20 Astanor Ventures; Wakeup Capital Ireland MagGrow Ireland 6.0 Aug-20 Carlow Craft Brewery Ltd Ireland Eight Brands of Boyne Brewhouse Ireland n.d. Aug-20 Glanbia Plc Ireland Foodarom Group Inc. Canada 38.3 Aug-20 Iceland Seafood International hf. (ICSE:ICESEA) Iceland Carrs & Sons Seafood Limited Ltd Ireland 6.5 Aug-20 Alivira Animal Health Limited Ireland Ireland Provet Veteriner Urunleri San. VeTic. A.S (Provet) (40% Stake) Turkey 14.6 Sep-20 Total 82.6 Financial Services Acquiror Country Target Country €m Date DMS Group Ireland Oligo Swiss Fund Services Switzerland n.d. Jul-20 IFAC Ireland Cashminder Ireland n.d. Jul-20 St Jarlath’s Credit Union Ltd Ireland Glenamaddy Credit Union Limited Ireland n.d. Jul-20 Irish Life Assurance plc Ireland Clearview Investments & Pensions Limited Ireland n.d. Aug-20 Irish Life Assurance plc Ireland APT Workplace Pensions Limited/APT Wealth Management Limited Ireland n.d. Aug-20 Laidir Investments Ltd Ireland Patrona Underwriting Limited Ireland n.d. Sep-20 Total 0.0 Support Services Acquiror Country Target Country €m Date Cross Rental Services Ireland Acclimatise Limited Ireland n.d. Jul-20 Johnson Controls International plc (NYSE:JCI) Ireland EuroPAC Alarmcentrale/EuroPAC Telefooncentrale Netherlands n.d. Jul-20 Johnson Controls International plc (NYSE:JCI) Ireland Qolsys, Inc. US n.d. Aug-20 Bunzl Plc UK Abco Kovex Limited Ireland n.d. Aug-20 Kollect on Demand Holding AB (publ) (OM:KOLL) Sweden BIGbin Waste Technology Limited Ireland 0.5 Aug-20 Renatus Ireland CRS Mobile Cold Ireland n.d. Sep-20 LRN Corporation US Interactive Services Limited Ireland n.d. Sep-20 Beauparc Utilities Limited Ireland LSS Waste Management Limited UK 21.8 Sep-20 Total 22.3
Review of Irish M&A activity
Q3 2020 Transactions by Sector
Professional and Technical
Acquiror Country Target Country €m Date
Sia Partners & Company France Pathfinder Execution Ltd Ireland n.d. Jul-20
Coonan Cawley Solicitors Ireland Kevin M. Houlihan & Co Solicitors Ireland n.d. Jul-20
Management Ireland Drury Porter Novelli Ireland n.d. Aug-20
Granite Digital Ireland Connector Ireland 1.0 Aug-20
Accenture plc (NYSE:ACN) Ireland Organize Informacao Ltda Brazil n.d. Aug-20
Accenture plc (NYSE:ACN) Ireland Creative Drive, Inc. US n.d. Aug-20
NFP Corp US HMP Insurance & Pension Ireland n.d. Aug-20
Gellify Digital Investment Italy Bit2Win business of Accenture plc Ireland n.d. Sep-20
Accenture plc (NYSE:ACN) Ireland SALT Solutions AG Germany n.d. Sep-20
Global Risk Partners Limited UK Crotty Insurance Brokers Ltd Ireland n.d. Sep-20
Teneo US Kotinos Partners Ireland n.d. Sep-20
Accenture Plc Ireland N3, LLC US n.d. Sep-20
1.0
Industrial
Acquiror Country Target Country €m Date
MML Capital Partners LLP Ireland CG Power Systems Ireland Limited Ireland n.d. Jul-20
Technimark LLC US Tool & Plastic Industries Ltd. Ireland n.d. Jul-20
Ardmac Limited Ireland Cental Engineering Ltd Ireland n.d. Jul-20
Kingspan Group Plc Ireland Wetterbest SA; TeraSteel S.A. Romania 84.9 Jul-20
Madison Dearborn Partners, LLC US IPL Plastics Inc. Ireland 624.1 Jul-20
Kingspan Group Plc Ireland Trimo d.d. Slovenia n.d. Aug-20
Cambus Teoranta Ltd. Ireland Hypotube manufacturing business of Merit Medical Systems, Inc. n.d. Sep-20
DCC LPG Limited Ireland NES Group Inc. US n.d. Sep-20
DCC Plc Ireland Primagaz Nederland BV Netherlands n.d. Sep-20
OLMA Industries LP Ireland Commercial Vehicle Group, Inc. (NasdaqGS:CVGI) US 3.3 Sep-20
Designer Group Engineering Contractors Limited Ireland FKM Mechanical Ireland n.d. Sep-20
712.2
Retail
Acquiror Country Target Country €m Date
Chadwicks Group Ltd. Ireland Daly Bros. North East Ltd. Ireland n.d. Jul-20
Management Ireland Cash & Carry Kitchens Ireland n.d. Aug-20
Mr. Price Ireland Star Buys Ireland n.d. Aug-20
Perrigo Company plc (NYSE:PRGO) Ireland OTC Self-Care Brands Eastern Europe n.d. Aug-20
Independent Vetcare Limited UK Haiku Veterinary Management Ltd Ireland n.d. Aug-20
Independent Vetcare Limited UK Vetstore Limited Ireland n.d. Aug-20
Grafton Group plc (LSE:GFTU) Ireland Gdc Paints Limited UK n.d. Aug-20
Highfield Veterinary Group Ireland O’Dwyer & Jones Veterinary Clinics Ireland n.d. Sep-20
BoyleSports Ltd Ireland HughesBet Retail Portfolio Ireland n.d. Sep-20
Next Plc UK Victoria's Secret (United Kingdom and Ireland business) (51% Stake) Ireland n.d. Sep-20
Greenergy Fuels Holdings Limited UK Amber Petroleum Ireland n.d. Sep-20
Total 0.0Review of Irish M&A activity Methodology The information in this report relates to transactions announced during the second quarter of 2020. 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
Prepared by Investec Corporate Finance Telephone: + 353 1 421 0000
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