Corporate finance house Ion Equity has predicted a strong year for merger and acquisition activity in Ireland after a 22 per cent rise to more than €15 million in the valuation of deals in 2006.
With new research indicating that the value of mergers and acquisitions involving Irish companies more than trebled in the fourth quarter of 2006 to €8.6 billion, Ion Equity director Joe Devine said the prospects for deals in 2007 were very positive.
"There is ready availability of funding, both from inexpensive debt and private equity and both the domestic and the major global economies look as if they will remain in good shape in 2007. Inflation is likely to remain low and there are good management teams who are likely to be intent on pursuing growth through acquisition," Mr Devine said.
"Obviously, there are some uncertainties such as the geopolitical situation, interest rates and energy prices. But on balance we expect 2007 to be another strong year for mergers and acquisitions with strong valuations, with a continuation of the pattern of a small number of large flagship deals," he said.
While the fourth quarter of 2006 was a record period for Irish dealmakers, Mr Devine cautioned that the figures are distorted to some degree by a small number of very large deals.
These included Riverdeep's €3.98 acquisition of Houghton Mifflin, the sale of London City Airport by Dermot Desmond for €1.1 billion, CRH's €1 billion acquisition of APAC and Tullow Oil's €900 million purchase of Hardman Resources in Australia.
