The M&A market slows in the first half of 2023
There has been a global decline in M&A deal value this year due to rising interest rates, tighter bank lending, recession fears and inflation. According to a recent report in the Financial Times, global dealmaking is at the lowest level in 10 years as high interest rates and a tougher antitrust environment have deterred M&A activity.
The Irish market has not been immune to this slowdown in dealmaking. The first half of 2023 saw a year-on-year decline in M&A activity of just 2% in volume but a significant 58% decline in value. Most transactions (97%) during this period were in the mid-market segment, having valuations of between €5m and €250m. There were very few mega deals, with only three deals worth more than €500m announced.
Positive outlook for the life sciences sector
The pharmaceuticals, medical and biotech sector accounted for 28% of Irish M&A activity by value in the first six months of 2023. The largest new deal by value announced in the Irish market in 2023 was the purchase of the Irish-headquartered Amryt Pharma by the Italian company, Chiesi Farmaceutici, for €1.343bn. Other significant deals in the sector announced this year include Haemonetics’ €30m investment in Vivasure Medical, which produces vascular closure devices, and Advanced Medical Solutions’ purchase of Connexicon Medical. These deals reflect a global surge in transactional activity in the pharmaceuticals and biotech industry in the first half of 2023 which, according to a report in the Financial Times, is being propelled by “large cash reserves amassed by Big Pharma during the coronavirus pandemic and investor concerns about future growth prospects.”
Amgen completes acquisition of Horizon Therapeutics
In a further boost to dealmaking activity in the sector, Amgen’s $28bn acquisition of Horizon Therapeutics was completed on 6 October 2023. This landmark transaction was announced late last year. It was then challenged by the US Federal Trade Commission (FTC) on the basis that it represented an undesirable degree of consolidation in the pharma sector. The FTC’s objections were overcome in September 2023, paving the way for the deal to close earlier this month. It will be interesting to see whether this represents the start of a shift away from an increasingly tough stance by regulators on proposed consolidation transactions in the sector in recent times.
For a more in-depth analysis of the Irish M&A market in the first half of 2023, click here to download our full report.
Contributed by Caroline Corcoran & Ronan Holohan