Ireland M&A Half-Year Review | 2022

M&A REVIEW|Half-Year2022 July2022 //WILLIAMFRYLLP 02| M&AReview|Half-Year2022 CONTENTS .01OVERVIEW |04 .02KEYTRENDSINIRISHM&A |08 .03DEALFOCUS |10 .04SECTORWATCH |12 .05INBOUNDACTIVITY |16 .06PRIVATEEQUITY |20 .07OUTLOOK |24 .08ABOUTWILLIAMFRY |26 |03 //WILLIAMFRYLLP .01 Overview StephenKeogh HeadofCorporate/M&A M&AReview|Half-Year2022 AftertwoyearsofbattlingCovid-relatedheadwinds,Ireland’seconomyappears,sofar,tobeweatheringthisandotherstorms.TheEuropeanCommissionisprojectinggrowthof5.4%in2022,standingabovetheprojectedratefortheEUandtheeuroarea,withbothexpectedtogrowby2.7%overthesameperiod. Thishealthygrowthisunderpinnedbystrongprivatedemand,promptedbytheliftingofCovidmeasures,withprivateconsumptionsettogrowatarateof5.7%thisyear.TheunemploymentrateinIrelandhasalsoshownsignificantsignsofimprovement,standingat4.8%inApril2022–farbelowthe7.5%recordedthepreviousyear. Russia’sinvasionofUkraine,togetherwithinterestraterises,hasputadampeneronEuropeangrowth,however,withrisingenergycostsandsupplychaindisruptionpromptingcautioninthemarket.Amidstthisdisruption,privateconsumptioninIrelandispredictedtogrowatamoremoderate4.1%ratein2023. Irishdealmakinghasfaredsurprisinglywellagainstthisbackdrop.Whiletherehasinevitablybeenacoolinginthemarketcomparedtoanextremelyactive2021,M&Ahasreturnedtopre-pandemiclevelsofactivityand,inthefirsthalfoftheyearatleast,appetitefordealsremainedundiminished. Atotalof122dealsworth€6.4bnwereannouncedinthefirsthalfof2022.Althoughthisrepresentsa14%decreaseinvolumecomparedtoH12021anda66%decreaseinvalue,itfareswellcomparedtoactivitylevelsbeforethepandemic–therewere94dealsworth€2bninH12018and88dealsworth€2.8bnin2019.Thetopendofthemarkethascontinuedtoseehealthyactivity,withfivedealsworth€500mormoreeachannouncedinthefirsthalfoftheyear.ThebreadandbutterofIrishM&Acontinuestobethemiddlemarket,however,with84%oftransactionswithdisclosedvaluefallingintothispricebracket(between€5mand€250m). PrivateequityfirmshaveremainedactiveplayersintheIrishdealmarket,securingsevenofthetop20dealssofarthisyear. 04| |05 //WILLIAMFRYLLPM&AReview|Half-Year2022 IrishM&AQuarterlyTrends,2016–HY2022 Volume DealvalueinEUR(m) 100€20,000 80 €15,000 60 €10,000 40 €5,000 20 0Q1 Q2Q3 Q4Q1 Q2Q3 Q4Q1 Q2Q3 Q4Q1 Q2Q3 Q4Q1 Q2Q3 Q4Q1 Q2Q3 Q4Q1Q2€0 2016 2017 2018 2019 2020 2021 2022 Numberofdeals 06||07 M&AReview|Half-Year2022 M&ADEALVOLUME 122 DEALS 142 DEALS Thenumberoftransactionsdroppedby14%from142dealsinH12021to122inthefirstsixmonthsof2022.Averagedealvolumesinthefirsthalfof2017,2018 and2019was87deals. H12021 H12022 14% M&ADEALVALUE €6.4BN €18.7BN Totaldealvaluecameto€6.4bninthefirsthalfof2022.Thiswas66%belowthetotalforH12021–anoutlieryear.ExcludingH12020andH12021,theaveragedealvalueinH1ofthepriorthreeyears(2017,2018and2019)was€4.5bn. H12021 H12022 66% DEALS INBOUNDDEALS 92=€5.8BN Therewere92inbounddealsinthefirstsixmonthsof2022,worthatotalof€5.8bn.Thiscomparesto104 dealsworth€14.2billioninthefirsthalfof2021. MEGADEALS 2.2 5 Therewerefivedealsworth€500mormoreinH12022.Thiswaswellabovethehalf-yearlyaveragesince2016. //WILLIAMFRYLLP .02 KeyTrendsinIrishM&A 08| AVG.HY2016- 2021 H12022 |09 //WILLIAMFRYLLP .03 DealFocus IrishM&ASplitbyDealSize 2016 2017 2018 2019 2020 2021 H12022 300 250 200 150 100 50 0 >500m 251m-500m 101m-250m 15m-100m <15m Notdisclosed MyraGarrett Partner,Corporate M&AReview|Half-Year2022 WhileIrishM&Amayhavecooledoffthebackofarecord2021,certainkeyareasofthemarketremainedactiveinthefirsthalfoftheyear.Thefirstoftheseisstrongactivitywithinthemid-marketsegment(€5m–€250m),historicallythemainstayoftheIrishM&Amarket,whichaccountedfor84%ofdealswithadisclosedvaluedinthefirsthalfof2022. Activityatthetopendofthemarkethasalsoremainedrobust.Therewerefivedealsvaluedabove€500mannouncedsofarin2022,worthacombined€4.6bn.WhiledownfromarecordH12021–whereeightdealswithinthispricerangecametoacombined€16.2bn–thenumberofdealsinthispricebracketinjustthefirstsixmonthsof2022isstillhigherthaninanyyearbetween2016and2020. ThelargestdealoftheyearsofarwasSMBCAviationCapital’sacquisitionofaircraftleasingrivalGoshawkManagement,valuedat€1.5bn.Thedealbetweenthetwoprivatelyheld,Dublin-based,lessorswillcreatea€36bnaviationfinancebusiness.IttakesplacewithinaphaseofrapidconsolidationwithinIreland’saircraftleasingindustry,followingIrish-basedlessorAercap’slandmarkacquisitionofUSleasinggiantGECASlastyear. Aircraftlessorshaveweatheredthedisruptionscausedbythepandemicbetterthanotherplayersintheaviationindustry,withaircraftownedbylessorsnowaccountingfor60–65%oftheworld’ssupply,upfrom40–45%pre-Covid.Aircrafttargetsareinhighdemandasfirmsracetogainscaleandprepareforarapidbouncebackpost-Covid,althoughtheindustryhasstruggledwiththeeffectsofsanctionsimposedonRussia.Irishfirms,inparticular,ownaboutUS$4bnworthofplanesleasedtoRussianairlineswhichtheymaynotbeabletorecover. Thefinancialservicesandthetechnology,mediaandtelecoms(TMT)sectorsweredominantintermsofdealvalue.ReflectingtheirinfluenceintheIrishM&Amarketplace,halfofthetop20dealsannouncedinH1targetedfirmse