M&A Insights 2023 in review – A cross border deal insight guide

Key Contacts: Eoghan Doyle – Partner  |   Andrew Tzialli – Partner

We are delighted to introduce the sixth edition of the Philip Lee M&A Insights Guide.

In this edition we review deal activity across 2023 and consider the outlook for the year ahead. This guide has been created in partnership with Experian, the global information services company, using their comprehensive database of business and financial information which monitors and tracks the behaviour of businesses in the UK and Ireland.

The guide is generated from processing over 60 million records a month, taken from over 600 of the latest and most up-to-date sources of UK and international business data. This data is trusted and used daily by over 35,000 organisations to inform their business decision making. The Experian database utilised for this guide holds more than 600,000 global M&A transactions, supported by data from more than 250 of the world’s foremost professional advisory firms.

While 2023 started poorly, as the year moved on M&A activity in Ireland in 2023 remained relatively strong, where we saw a record number of deals recorded, while the value of deals overall declined. The deal volumes experienced in Ireland went against the grain globally, where deal activity struggled, largely due to rising interest rates, geopolitical instability and concerns about an imminent recession.

As with previous years, the UK and the USA remained the strongest source of inward deal flow to Ireland, followed next by France, where inward deals rose 42% year on year. Once again, technology was the leading sector for inward deal flow, making up 70% of the inbound deals completed in 2023 in Ireland. Looking outward, Irish based deal makers were more active globally in 2023 than in previous years, where 141 deals were closed in 32 different countries (compared to 24 in 2022), and representing values of €31 billion in 2023 Vs. €19 billion in 2022. In 2023, as was the case in previous years, the UK and the USA were the busiest markets for Irish based bidders (mirroring inward activity).

Like many other countries, the UK economy and M&A market have suffered as a result of global influences, such as interest rates, inflation, valuations, macro-economic concerns and political instability. In addition, the lingering impacts from Brexit continue to be a substantive contributing factor to the downturn in UK M&A activity. As a result the decline in M&A volume and valuations seen in Q4 of 2022, continued into 2023. The fact that aggregate values of reported M&A was the lowest in Experian records for 20 years is concerning and when compared to the data reported during the global recession we witnessed in the middle of the period.

That said, there are diamonds amongst the rough. Global investors continue to show significant appetite in UK businesses. We saw an increase in the number of divestments, minority stake transactions and joint venture agreements, as well as a surge in the number of employee/management buy-outs last year. Against the predominately downward trends, outbound deal value held up well despite the falling volume of deals recorded in 2023, with £29bn worth of outbound transactions representing 7% upturn year on year. UK acquirers and investors continued to show significant appetite for US (96 deals) and Irish (72 deals) businesses in particular.

Read the full guide here.

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