While some businesses have suffered significantly as a result of the impact of the pandemic, there remains significant private money in the marketplace and investment, with some firms experiencing record periods. Ulster Business looks at the M&A marketplace in 2022 and beyond
When the pandemic struck, there was far from a clear picture as to how it could impact investment and deals being done by firms of all shapes and sizes across Northern Ireland.
But if 2021 and the beginning of this year are anything to go by, there’s continued investment in the M&A and deals market, with private equity money as well as high-net-worth individuals, or business owners with surplus cash reserves.
That market has meant some of our leading law firms have witnessed their busiest periods, dealing with a series of major high-profile deals and smaller transactions along the way.
“Mills Selig has completed a record-breaking year in terms of our combined deal value and growth of the firm overall,” John Kearns, senior partner, Mills Selig, said.
“We were involved in numerous high-value deals across property, green energy, hospitality and technology, as well as acting for clients in Brazil, US, Canada and Asia.”
And according David Rowan, partner corporate M&A at A&L Goodbody, following a buoyant 2021 for corporate M&A “that momentum looks set to continue through to the end of 2022 with Northern Irish businesses continuing to attract interest from both domestic and overseas buyers while also looking at investment opportunities outside Northern Ireland”.
He says there remains a strong pipeline of deals for both the second and third quarters of this year.
“After a busy start to the year, we have a strong pipeline of deals for both the second and third quarters across all sectors,” he said.
“Technology, healthcare, manufacturing and energy and infrastructure sectors are attracting significant interest.”
Some of its notable work in the last year included big name deals such as the £775m sale of Euro Auctions to Ritchie Bros.
“That follows a strong 2021 where ALG acted as lead advisor on a number of high profile transactions in NI... (there was also) the sale of Balcas by SHV Energy, the £87m sale of Merchant Square in Belfast and the investment in Learning Pool by Marlin Equity Partners, to name but a few.”
And there is “a lot of activity in the corporate space, particularly with restructuring and M&As,” according to John Kearns of Mills Selig.
“No one could have predicted the patterns we have seen across the market in the past two years, but businesses have remained resilient following the weight of the pandemic,” he said.
“We also noted a shift in the mindset of many business owners, who, after slowing down for the pandemic years, have since opted for exit strategies or restructuring of their business. Private equity is also strong, with an appetite to invest and acquire local business across NI.
“Another area of growth has been investment from high-net-worth individuals, or business owners with surplus cash, who have invested in start-ups and fledging companies which has given the economy the reboot it needed, but the Ukraine situation, as well as the anticipation of interest rates and increased costs due to inflation, are speedbumps which we are currently enduring.”
David Rowan of A&L Goodbody says “private equity (PE) – originating both locally and overseas – remains particularly active on the ‘buyside’ of the market and we would expect this to continue”.
“This is despite the competitive nature of the market currently as PE can present a very attractive option for sellers due to its access to funding and agility in the deal process,” he said.
“As environmental, social and governance (ESG) factors become increasingly important for all participants, including PE funds, investors, shareholders, lenders and regulatory bodies, it is important for Northern Irish businesses to ensure sustainability remains an area of focus and the energy and infrastructure sector is likely to see particular interest with this in mind.”
And looking ahead, John Kearns said he expects to “manage a lot of investment opportunities for our clients, who are eager to secure and protect their assets.
“We believe we will also continue to see the increase of the curve in terms of restructuring and M&A. We aim to future proof our clients to ensure success and positive results. Mills Selig will continue to do this by offering a full team approach across all areas of our legal expertise, from corporate, to property, to litigation, to construction and beyond.
“As a business ourselves who are local and independent, we remain strong and driven in terms of our vision for the future, which we grow closer to year on year, and that is to be the go-to legal firm for high value and complex matters in Northern Ireland.”