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John Glennon, Managing Partner of RSM Ireland, shares the trends and growth the firm has experienced in the transactions industry in Ireland and globally, writes Siobhán Maguire.
Drivers of transactions activity are very strong in the current climate. That’s according to John Glennon, Managing Partner of RSM Ireland, who explained how over the last 12 months, RSM has seen an increase in transactions valuation advice being sought - a sure sign of an improving economy as equity value is restored to balance sheets, following a prolonged period of depressed valued and negative equity.
“As well as strong economic growth the cost of funding is currently low,” said Glennon. “The banks are lending at very competitive rates, many corporates have cash on their balance sheets and private equity firms are very active, including Irish, UK and US firms. These drivers of transactions and the large capacity to do deals are positive and all the indications are good for the foreseeable future.”
According to Mergermarket, a media company who provide analysis and data on the M&A market, the value of Irish mergers and acquisitions rose 370 per cent between 2017 and 2018. The Irish transactions industry experienced a record 163 deals with a combined value of €76 billion in 2018. These figures far overshadow the previous year’s 151 transactions at a value of €16.2 billion.
“However, although no one has a crystal ball, you don’t have to be an economist to know that this is cyclical so anyone considering selling their business, now is certainly, a good time,” said Glennon. “Access to finance and attractive interest rates will change over time as global economic conditions change or geo-political challenges emerge. There isn’t always going to be a queue of buyers.”
RSM’s multi-disciplinary team of corporate finance, restructuring, tax and management consulting professionals are working with clients across a range of sectors to help them plan for their future across all stages of the business lifecycle. In exploring options with clients, particularly where a purchase or sale transaction is likely, RSM often work with colleagues across RSM member firms worldwide to expand the potential market. This has proven very successful for clients where RSM has worked jointly on transactions in UK and US markets.
Glennon also heads up the transatlantic FDI group in RSM Europe. In his work in this area he is seeing an increase in the level of transaction activity between us and Europe with US$200 billion of deals announced each way for 3 of the last 4 years. There is also increasing interest from Silicon Valley investors in European emerging companies.
Glennon added that Brexit has dominated business and political commentary for three years, and yet it remains unclear what impact the UK’s eventual exit from the European Union will have on the Irish business landscape.
“What we do know is that Brexit will undoubtedly bring about significant challenges across a range of sectors and the uncertainty to date has led to an increase in FDI and related transactions,” he said. “This is opening up opportunities for us to build relationships with new entrants to the marketplace, such as the larger US and UK law firms, who have been active over the past 12 months in setting up bases in Ireland.
“Financial services companies have also been particularly pro-active about relocating to Ireland with some very high-profile relocations of financial services firms from the UK and US recently - Barclays and Bank of America Merrill Lynch. Our Consulting team are heavily involved in helping clients to stress test their businesses for a no deal Brexit scenario, preparing contingency plans for readiness.”
As seen in Sunday Business Post 23rd June, 2019 - https://www.businesspost.ie/focus-on/rsms-expertise-drives-clients-businesses-right-direction-446650
