Irish M&A outlook optimistic despite global volatility according to executives

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Irish M&A outlook optimistic despite global volatility according to executives

Over 4 in 5 (81%) of Irish business leaders expect this year’s Irish deal activity to match or exceed prior years despite geopolitical uncertainty.

Investor confidence is cited as the single most important factor influencing deal activity with Tech, Agribusiness and Health/Life Sciences as the sectors likely to attract most interest.

These results are revealed in the annual KPMG M&A Outlook report for 2017.

Key findings include:

  • Vast majority of respondents forecast 2017 M&A levels at or above 2016 levels;
  • Strategic fit will be the key investment motivation for shareholders ahead of expanding customer base or cost/operating synergies;
  • Debt and cash reserves will remain the primary source of acquisition funding;
  • Disposals to strategic/trade concerns are considered the most obvious exit route;
  • A lack of suitable targets may inhibit deal volumes in 2017;
  • Stable local political landscape critical to inward investment;
  • ROI tax regime generally supportive of M&A activity.

Ireland ahead of the UK for Irish deal activity reversing places versus 2016

In a change from last year, Ireland is seen as the more likely source of deal targets for Irish M&A executives, overtaking the UK as the most popular source for deals. Less than half expect that M&A will be negatively impacted by Brexit in the short term.

Commenting on the findings, Mark Collins, Partner and Head of Transaction Services at KPMG in Ireland said: “Despite the various headwinds, we remain positive on the overall outlook for M&A activity in 2017. Dealmaking will continue to play an important role for Irish organisations in achieving their strategic objectives, but will have to do so navigating even choppier waters.”

Michele Connolly, Partner and Head of Corporate Finance at KPMG in Ireland added: “We see a range of options for ambitious and nimble businesses looking to take advantage of opportunities with debt funding the preferred source of capital for deals. Whilst the global outlook remains unpredictable, strategic fit and price will be the drivers of activity. Most respondents appear to have already started to factor political uncertainties into their thinking and recognised that businesses can't simply stand still.

Article Published: 26/01/2017