Recent Trends in Corporate Finance in Ireland Peter Crowley…

1、Recent Trends in Corporate Finance in Ireland Peter CrowleyChief Executive, IBI Corporate Finance30 March 2006ContentsIntroductionRecent Activity in the Irish MarketTrends in the Irish Capital MarketsLooking to the FutureSummaryAbout IBI 2Section IIntroductionIntroductionJust completed my 6th year a

2、s CEO of IBI a period characterised by unprecedented levels of market activity and record fee levelsIn addition to the historic strength in our plc franchise, a growing driver of activity has been the emergence of a healthy mid-market in private company activity. Ted Webb leads our activities in tha

3、t area.Activity driven by all the factors evident in the UK market together with specific local factors in particular the confidence generated by 14/15 years of uninterrupted economic growth4Key DriversLow corporation tax ratesLow CGTStrength of property marketPeriod of uninterrupted economic growth

4、Educated labour forceInternational trade/open economyStrong consumer demand (boosted by SSIA spend)Boost from immigrant populationIrish EconomySupportive market conditionsLow interest ratesDebt market liquidity and aggressive local banking competitionAvailability of private equityHigh net-worth inve

5、storsAbility to form syndicatesStrong competition for quality assetsStrong management teamsSuccession and estate planningMarket consolidationDiversificationM & A Activity5Section IIRecent Activity in the Irish MarketRecent Activity in the Irish MarketEsat TelecomElan AerFi GroupCRHHibernian GroupHam

6、burg AirportOcean CommunicationsChase de Vere Eircell Eircom Esat Digfone IN&M GreencoreTSBICCGolden ValeJefferson Smurfit Green PropertyElanMusgravesFirst Rate Travel BWG FoodsBIAMGolden Pages AllfirstElanCRHRiverdeepArnottsDunloe EwartJefferson SmurfitGrafton GroupThe Savoy GroupFirst ActiveClonda

7、lkin Group CRHTullow OilKerry GroupJarvis Hotels Waterford WedgewoodSmurfit/KappaDanske Bank Jurys Hotels SuperquinnMeteor CRHThe Savoy GroupKingspan7Deal Volumes/Type Upward trend in volume of deal flow from 2000 to 2004 (140% increase overall)Value of deals continued to rise in 2005 despite lower

8、volumeGrowing frequency of smaller but still substantial deals now being undertaken (69% of 2005 disclosed deals valued at less than 50m)Private equity/MBO deals now form a much more significant portion of the Irish deal landscape 23% of deals in 2005 compared to 8% in 20008Corporate Finance Activit

9、y by SectorThe Industrial and Retail sector accounted for the highest proportion of deals in 2005 (19%), replacing Food and Food Services (down from 20% in 2004 to 10%)IT and Telecoms sector showing a strong recovery (now up to 14% of deals) after the dot crash in the early 2000sThe Financial Servic

10、es sector is a continuing driver of deal activity (14% of deals) followed by Support Services & Logistics and Leisure & Travel (both at 9%)9Deal Types: Cross-Border V Domestic Due to the open nature of the Irish economy, cross-border deals form the vast majority of transactions in Ireland (74% of de

11、als in 2005). Growth in in-bound activity from 2003 on, indicates strategic buyers comfortable with economic outlook However, the volume and proportion of domestic and outward bound deals is on the increase with 30 such transactions in 2005 (or 26%), compared to only five in 2000 (8% of total deal a

12、ctivity) This reflects the increasing scale of Irish companies and the enhanced financial resources available to them 10Section IIITrends in Capital MarketsOverseas Strategic Acquirers Active in Irish MarketStrategic overseas buyers back in the landscape, attracted by the impressive Irish growth rat

13、es; examples include the following:CompanySectorEmap, UKMediaJohnston Press, UKMediaBT Group, UKIT & TelecomsDanske Bank, DenmarkFinancial ServicesLandsbanki, IcelandFinancial ServicesImprint, UKSupport ServicesStericycle, USAWasteWolseley, UKConstructionVWR International, USAHealthcareSmiths Group,

14、 UKIndustrial & RetailUTV, UKMediaCertain media driven concerns about overheating of the Irish economy have been allayed for Irish investors12Irish Companies Active OverseasIrish companies are increasingly active in overseas markets; prominent examples include the following:CompanySector(s)CRHConstr

15、uction & IndustrialKerry GroupFood & FoodservicesBank of IrelandFinancial ServicesGrafton GroupConstruction & IndustrialTullow OilOil, Gas & ExplorationGreencore GroupFood & FoodservicesSmurfit Kappa GroupIndustrialQuinn GroupIndustrial, Financial Services & LeisureDCCHealthcare, Industrial, IT, Foo

16、d & OilUnited DrugHealthcareKingspanConstruction & IndustrialAlphyraElectronic Payment ProcessingGlen DimplexIndustrial13Emergence of HNW Investors as Nimble Aggressive BuyersIrish HNWs have become key players in overseas property transactions and now are also beginning to diversify into non-propert

17、y related transactionsAcquirerTargetPropertyQuinlan PrivateThe EstateQuinlan PrivateThe Savoy Hotel GroupSloane CapitalStandard Chartered Bank HQQuinn GroupThe Belfry Hotel & Golf ClubSloane CapitalUnilever HQBOI Private BankingIT Tower, BrusselsWarren Private ClientsGoldman Sachs Building, Fleet St

18、BOI Private BankingCit de Retiro, ParisBOI Private BankingStuten 12, StockholmNon-propertyKaytermJarvis HotelsFruitfieldNestl IrelandBarry FamilyBatchelorsLonghill InvestmentsMaybin Support Services Select Retail HoldingsSuperquinn14International Private Equity regards Ireland as a 2nd Home MarketTh

19、e following is a selection of private equity firms who have invested in Ireland:Madison DearbornMerrill LynchSummit PartnersMontague3iHGGraphiteBarclaysBC PartnersBridgepointWarburg PincusElectraCinvenProvidenceBabcock & BrownPermiraAlchemyLegal & General15Steady stream of Public to Private Transact

20、ionsThere has been a relatively high number of take private transactions in Ireland in recent years, notable examples of which include:TargetSectorValueJurys DoyleLeisure1.06bnAthlone ExtrusionsIndustrial55mAlphyraIT and Telecoms93mArnottsRetail255mSherry FitzgeraldReal Estate25mRiverdeepIT and Tele

21、coms320mDunloe EwartBuilding & Construction197mGreen PropertyBuilding & Construction1.05bnJefferson SmurfitPrint & Paper3.6bn16Trends in Capital MarketsCompanyMkt Cap(bn)AIB 7.3BoI 7.0Elan 4.5CRH 4.0Smurfit Group 2.7Irish Life 1.6Kerry Group 1.6Independent News& Media 1.2AWG 1.0NIE 1.1CompanyMkt Cap

22、(bn)Elan 17.5AIB 11.5BoI 10.5CRH 10.3Ryanair 5.1IL&P 3.2Smurfit Group 2.7Kerry Group 2.5Anglo Irish 1.3IndependentNews & Media 1.2CompanyMkt Cap(bn)AIB 15.7CRH 13.3BoI 12.9Anglo 8.8Ryanair 6.4Elan 4.9IL&P 4.7Kerry Group 3.5Grafton 2.2Eircom 2.1Greater Concentration of Top 10 Companies within ISEQ17T

23、rends in Capital MarketsRe-emergence of Concentration on Financial Stocks18Trends in Capital MarketsKey LeaversESAT TelecomGolden ValeICC BankJones GroupClondalkin GroupKey LeaversHeitonsGreen PropertyArnottsJefferson SmurfitJurys DoyleGrowth in Net Leavers from the ISE19Trends in Capital MarketsA n

24、umber of key trends are noticeable in the ISEQ Index in recent years despite growth in the overall index:Decrease in the number of listed companiesA general increase in concentration with the top 10 companies now accounting for c. 80% of the overall market cap of the indexSteady stream of take priva

25、tes has disimproved spread of exposure for investors to the Irish economic story. Financials now account for c. 45% of total indexAIM/IEX emerging as a meaningful source of activity and fundingNow 33 Irish companies on AIM20Section IVLooking to the FutureLikely Active SectorsHealthcare driven by inf

26、rastructure deficitWaste / Environmental consolidation and new technologiesMedia / New Internet impacted by global consolidationFinancial Services new entrants and disintermediationBusiness Services outsourcingRetail consolidation of local operators22HNWs to emerge as aggressive non-property investo

27、rsNeed to diversify from property exposureDesire for return (and increased interest rates) will focus investors on benefits of equity risk premium in broader corporate dealsIncreased sophistication of key playersWall of liquidity No repeat of previous boom/bust cycleHigh confidence levels and abilit

28、y to move quickly will give them an edge23Crossroads for the ISE?Ongoing trend of public to privatesApart from Aer Lingus, few new entrants - possibly Airtricity, Smurfit Kappa in timeFlow of small companies onto IEX/AIM offers some hopeFurther concentration of index in the financials not healthyPos

29、ition in global exchange consolidation as yet unclear24Future Trends / RulesIrish economic backdrop to remain positive - favour “soft landing” view with low level of accompanying indigestionLevels of M & A / market activity to remain high further departures from ISE likely driven by private equityBi

30、ggest potential risk (although limited) is a series of highly levaraged defaults followed by a debt liquidity squeezeModest levels of interest rate increases not likely to dampen activity undulyA drift towards labour market inflexibility through embracing “European-Style” labour laws would cause pro

31、blems for inward investmentGlobal liquidity generally and particularly high levels of local market liquidity will continue to drive strong demand/competition for assets25Section VSummarySummaryIrish Stock Exchange at an all-time highValue of deal activity in the market likely to continue at historic

32、ally high levelsIreland is still the fastest-growing economy in the EU, although infrastructure deficiencies and emerging risk of lack of competitiveness remain a concernConcerns that the Irish economy was overheating have disappeared for international strategic acquirers Certain sectors remain part

33、icularly buoyant, e.g. healthcare, Media/IT, financial services, outsourcing, waste/alternate technologiesIncreasing number of overseas financial investors/private equity players looking at Ireland for investment opportunitiesIrish high net-worth investors looking abroad for property underpinned opp

34、ortunities in addition to seeking to diversify away from property investments into trading businessesGlobal liquidity equally evident as a market driver in Ireland assisted by particularly high levels of local investor liquidity buoyed by business confidenceThe Future Remains Bright27Section VIAbout

35、 IBIIntroduction to IBIIBI is Irelands longest-standing corporate finance house with 40 years experience in the Irish marketIBI is an independent, wholly-owned subsidiary of Bank of Ireland Market Cap c.15 billionIBI has consistently been ranked the leading corporate finance adviser in Ireland and h

36、as advised more companies than any other Irish adviserOnly specialist CF adviser operating on a 32 country basis, North and SouthWe have significantly expanded our private company/client activities in recent years seek to bring our public company ethos to a broader range of clientsIBIs team of 23 ex

37、perienced professionals has an unparalleled long-term track record in advising on a wide range of complex public and private transactions 29Introduction to IBIIBI is the leading Irish Corporate Finance house having consistently advised on more transactions in the Irish market than any other player R

38、ated No. 1 Irish Corporate Finance Advisor2005Rated No. 2 Irish Corporate Finance Advisor2004Rated No. 1 Irish Corporate Finance Advisor2003Rated No. 1 Irish Corporate Finance Advisor2002 IBI Corporate Finance was the Merger and Acquisitions adviser with the most deals under its belt last year. It w

39、as involved in fourteen deals with more than 1.7bn, according to mergers & acquisition intelligence source, Mergermarket (RTE Radio, 6 January 2006) No. 1 Adviser in Irish transactions30IBI Credentials Transaction ExperienceUnrivalled track record of sound advice in high-profile transactions Private

40、 EquityGovt/Semi-StateTake-overs & BuyoutsIPO“Sell-Side”/ Public Offers31Sample Public Company DealsAdviser to Jurys Doyle Hotel Group plc on the 1.25bn offer by JDH Acquisitions plcAdviser to Heiton Group plc on the 353m recommended offer by Grafton Group plcAdviser to Bank of Ireland Group on its

41、US$184m acquisition of 71.5% of Guggenheim Alternative Asset ManagementActed for Unidare plc in relation to the 55m Class 1 disposal of Daalderop BV, capital distribution and related party transactionAdviser to Jurys Doyle Hotel Group plc on the 260m Class 1 disposal of the Jurys Ballsbridge Hotel,

42、the Towers and the Berkeley Court apartments to Padholme Acted as joint lead manager of the C&C Group plc 398m Global Offer and listing on the Irish and London Stock ExchangesAdviser to Kayterm plc on the Stg159m recommended offer for Jarvis Hotels plcAdviser to the Independent Committee of the Boar

43、d of Arnotts plc on the 257.3m recommended offer by Nesbitt Acquisitions LtdAdviser to Renlin Ltd, the management teams bidding vehicle, on the 25.8m MBO of Sherry FitzGerald Group plcAdviser to Green Property plc on the 1.05bn recommended offer by Rodinheights LtdAdviser to the Independent Director

44、s of the Board of Jefferson Smurfit Group plc on the 3.6bn takeover by Madison Dearborn PartnersAdviser to Murryhill Ltd on its Stg35.2m recommended cash offer for PGA European Tour Courses plcAdviser to e Island plc on its 3bn offer for eircom plcAdviser to Golden Vale plc on the 253m recommended offer