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Merger & acquisition activity on the rise

Merger & acquisition activity on the rise

Merger & acquisition activity on the rise

The levels of merger and acquisition (M&A) activity reached its highest level in six years in the first three months of 2011.

The first quarter of 2011 showed deal volumes at their elevated levels of 2010, according to the NCB Corporate Finance M&A Tracker Survey published today.

There were 57 deals recorded during the three-month period, marking a 58.3pc increase on the same quarter in 2010.

Jonathan Simmons, director of NCB Corporate Finance, said, “What is noteworthy is that the average quarterly deal volume over the last four quarters was 44 compared to 32 in the corresponding four quarters of 2009-2010 demonstrating a resilient improvement in quarterly deal volumes since the lows seen in mid 2009 of only circa 30 deals per quarter.”

At €921.6m, total deal value in quarter one 2011 shows an increase of 82.5pc on the €505m recorded in the same quarter last year.

However, Simmons pointed out that whilst deal volumes were up on the last quarter in 2010 deal values decreased by 64.3pc to €921.6m.

The building, construction & property sector accounted for 31.6pc of the deal volume with a total of eighteen deals recorded during the quarter. This was due to a substantial amount of activity by CRH who recorded a total of 13 acquisitions and investments at a total cost of €135m.

Once again, foreign acquisitions by Irish companies saw the most deal activity during the quarter with twenty-seven deals recorded.

A number of Irish Plcs were involved in M&A this quarter, with Kerry Group Plc completing two acquisitions: acquiring a 50pc stake in Ebi Cremica Food Coating Ltd for €5m while also acquiring Headland Foods Ltd for an undisclosed amount.

Commenting on the outlook for the rest of the year Simmons said, “As we predicted at the end of 2010 the continued uncertainty regarding the outlook for the Irish economy in general has continued to impact the M&A market. However, despite the dip in total value in quarter one 2011 over quarter four 2010 we remain upbeat that 2011 M&A activity levels will broadly match, or exceed 2010 levels, with the active sectors remaining financial services, food/food services and IT/Telecoms as well as further distressed transactions.”