The Rise and Rise of Private Equity

In Brief

In the last decade the Irish private equity (PE) industry has grown rapidly, which is reflected in the growing level of deal activity, even during the past months since Covid-19 struck. PE will have an important part to play in Ireland’s economic recovery from the Covid-19 pandemic.

Irish PE

The domestic Irish PE market was, until relatively recently, at an early stage of its lifecycle but in recent years it has generated some strong momentum - backing an increasing number of successful Irish businesses. Stories of successful exits include H&MV Engineering (MML Ireland), Merlyn Showering (Broadlake) and AA Ireland (Cardinal Carlyle Ireland).

In more recent years a number of international PE houses have been drawn to the Irish market. Recent transactions by international PE funds include Chill Insurance (Livingbridge), Centaur (FTV Partners) and Arachas (Madison Dearborn/HPS).

We are seeing more and more international funds competing for Irish assets on the majority of Irish PE deals – particularly for businesses of scale and those with an international footprint.

The Role of PE

PE has a key role to play in supporting the recovery of the Irish economy post Covid-19, by supporting Irish businesses to accelerate growth both organically and via M&A, while also allowing founders and shareholders to de-risk personally. We see a very active and well-funded domestic and international PE industry remaining attracted to Irish businesses who are often highly export focused and may also represent a Brexit hedge for those funds with UK centric portfolios. Funding levels are high and, for resilient businesses, there is significant interest from the PE investor community.

That being said, Covid-19 has created a level of caution amongst investors, which is reflected in their due diligence requirements, deal terms and mechanics and enhanced focus on sustainable earnings before interest, taxes, depreciation, and amortization (EBITDA) upon which a valuation can be derived. Strong legal, tax and corporate finance advice is a must!

Conclusion

The private equity industry was not immune to the challenges that arose in 2020, which resulted in market volatility and uncertainty. However, PE firms have embraced the new reality, proving very agile and resilient. PE is here to stay and will have an important part to play in Ireland’s economic recovery from the Covid-19 pandemic.

According to market sources, Stephen Walker "is a pleasure to deal with." He has experience in corporate and capital markets transactions.

Stephen Walker

Corporate/M&A | Chambers Global 2021

According to market sources, Stephen Walker "is a pleasure to deal with." He has experience in corporate and capital markets transactions.

Stephen Walker

Corporate/M&A | Chambers Europe 2021

Very capable team strong at advising growing Irish companies on inbound M&A and private equity investments. Provides a ‘legal health check’ risk identification and mitigation service.

Stephen Walker

Corporate, Commercial and M&A | Legal 500 EMEA 2021