CORPORATE LAW
“The private equity houses are looking at good businesses here and backing good management,” John-George said. “What they’re looking for are businesses with maintainable profits and good management teams, ones they can build businesses around, that they know are competent enough to manage bolt ons.” In addition, M&A activity is being driven by the need for businesses here to achieve a bigger scale in order to remain competitive on the global stage. The sector which has streaked ahead in that activity is IT, but others are expected to follow suit, tapping up private equity houses for funding – some of which still can’t be tapped from banks – as well as knowledge and direction, John-George said. “The old mind-set in Northern Ireland which was sceptical of outside investment is dissipating and there is much more maturity in businesses here who understand the benefits it can bring.” Finally, foreign direct investment from competitor companies is likely to ramp up in the years ahead, again helping to drive the deal sector.
Ciara Lagan, John-George Willis, John McGuckian and James Donnelly, Tughans’ Corporate Partners.
historical baggage etc, but inevitably we’re starting to catch up in particular sectors such as IT, transport and in aggregate manufacturing equipment manufacturing.”
But while they’re on the rise, valuations are still low compared to the rest of the UK, as witnessed by the Kainos flotation.
That catch up has been witnessed in some of the recent transactions which have taken place where higher valuations than expected have been achieved.
Since launching on the stock market at around £1.75-a-share at the start of the summer, Kainos shares have since rallied to over £2.46.
He points to the purchase of Lurgan company Sawyers Transport by US firm Agro Merchants, the investment in Total Mobile by Lyceum Capital, and in particular to the floatation of IT company Kainos.
But there are other factors which point toward an increase in deal activity in the near future, including the emergence of the large private equity houses, such as Carlyle Group, Oaktree and their ilk.
NOVEMBER 2015
“If you take a look at the market, we already have Brazilian ownership in Northern Ireland and it’s only a matter of time before Chinese buyers emerge. We are aware of a particular Chinese food conglomerate looking for investment opportunities in the food sector in Northern Ireland. Armed with those driving factors, the future looks bright for the Northern Ireland corporate transaction world. “I am confident we will see a steady uptrend in deal activity,” John George said. “The proof of the pudding is that I can see the large accountancy firms here rebadging very good insolvency practitioners as corporate financiers, and that encourages me to invest in my own people.”
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