Irish M&A deals H1 2015: The mid-year William Fry Mergers & Acquisitions Report in association with Mergermarket shows an apparently strong start to 2015 with a total of 45 deals taking place in Ireland, worth €35.1bn. The biggest deal was valued at €32.6bn but it was only Irish for window-dressing or tax purposes depending on the vantage point.
The report says that the "largest deal recorded was in the pharmaceutical sector with the purchase of Ireland’s Perrigo by UK based Mylan for €32.6bn, creating the leading company in generics, over-the-counter and nutritional products."
Perrigo, a US firm became Irish for tax purposes when it purchased Elan, the biotech tech firm that had been reduced to a shell, in 2013. Mylan, a US generic drugs manufacturer, became Dutch last January with its global headquarters in Amsterdam, to avail of tax advantages.
Mylan, which has a 30,000 payroll, has its operational headquarters in Cecil Township, Pennsylvania but it says the headquarters is located in Hertfordshire, England.
Mylan was co-founded by Don Panoz in 1960 and he moved to Ireland in 1969 where he founded Elan, to develop a nicotine patch.
In recent months Mylan was the subject of a takeover bid by Teva, the Israeli generic drugs manufacturer but last week the latter announced that it would purchase the generic drugs unit of Allergan for $40.5bn.
The latter deal will be logged as an Irish M&A deal in Q3 2015 as Allergan became Irish earlier this year as its acquirer Actavis, another American drugs firm, had become Irish for tax purposes in recent years.
All this creates a misleading story on M&A activity but more importantly, it messes up Irish national accounts data.
Apart from the fake inclusion of the €32.6bn deal, other notable deals included the acquisition by Intercontinental Aviation Group (IAG) of Aer Lingus for €817m and the Lone Star Funds purchase of Jurys Inns Group for €911m.
The leisure sector had a total of 12 deals, more in the first half of 2015 than in the full year 2014.
Pharma, medical and biotech (PMB) continues to be a mainstay
The report says: "As might be expected, the PMB sector performed well. Ireland remains the largest exporter of pharmaceuticals among EU countries. PMB deals accounted for 11% and 93% of deal volume and value respectively, with the high value reflecting the significant price paid by Mylan for the acquisition of Ireland’s Perrigo."
"Ireland’s Perrigo" had 10,200 staff at end 2014: 6,500 in US; 2,500 in Israel/ Mexico; 800 in the UK and likely less than 10 in Ireland.
Alternative lenders funding greater percentage of deals
William Fry says: "The funding landscape for deals is revealing new trends. There has been an increase in availability of debt and equity finance, showing renewed confidence in Ireland’s economy but interestingly the source of this funding is changing. Ireland now has the third largest alternative lender market in the EU, worth €2.9tn.
Also on the funding side, a total of eight deals were funded by private equity, with a value of €993m, a decline year-on-year of 33% in volume and 64% in value. This more muted involvement by private equity funds masks the fact that indigenous private equity funds are becoming increasingly active."