Despite recent laments from London corporate pundits over a depressed deals market, the view of many is that the Irish market is bucking global trends.
Stephen Keogh, William Fry’s head of corporate, says: ‘From a transactional point of view, the big feature this year so far has been a smaller amount of multi-billion deals and probably a lower average deal size, but all of our data is pointing to a similar volume of transactions this year compared with last year, which is kind of surprising given there’s so much negative global sentiment out there.’
Pointing to the Irish market’s anomalous resilience, he notes: ‘Global M&A is at its lowest level since the start of the pandemic, falling 38% to $1.3trn in the first half of 2023. Irish M&A volume only fell by 2%, which is pretty spectacular. It doesn’t take an awful lot to move the dial, so two or three very big transactions would keep a lot of us busy for much of the year, and we’ve had more than our fair share of those.’
David Widger, managing partner of A&L Goodbody, says a ‘chunky mandate’ for the firm was advising NatWest on the closure of its subsidiary, Ulster Bank, which completed last year. Geoff Moore, managing partner of Arthur Cox, notes that his firm was also involved, advising Permanent TSB on the landmark acquisition of €7.6bn of assets from Ulster Bank as it departed the Irish market.
Michael Jackson, managing partner of Matheson, is also sanguine, observing: ‘There has been a noticeable pick-up in activity since August. Maybe the fact that everyone finally got a chance to recharge after a few years of Covid restrictions on travel has added a new sense of energy!’
Jackson points to a lengthy list of standout matters, including advising Circle Internet Financial on all aspects of its announced transaction to go public through a business combination with Concord Acquisition Corp, a publicly-traded SPAC, placing an enterprise value of $9bn on Circle, as well as acting for MariaDB on its business combination with NYSE-listed SPAC, Angel Pond Holdings Corporation, reflecting a combined enterprise value of $672m.
Will Carmody, who in January 2023 succeeded Declan Black as Mason Hayes & Curran’s managing partner, has had a good run of it so far, pointing to 7% revenue growth to €114m (still the only elite Irish firm to publish its financial performance) and standout matters including advising AIB on the sale of a non-performing loan portfolio known as Project Sycamore to a consortium led by Cerberus and LCM Partners.
Many are cognisant of the opportunities that the country’s dynamic tech sector has to offer. Asserts William Fry’s managing partner Owen O’Sullivan: ‘Ireland has managed to be an outlier, economically, to a lot of the other jurisdictions, partly due to a life sciences and pharma bounce, which has passed since the pandemic. But tech could be interesting. We are heavily engaged with and love that space. A lot of interesting global tech companies are based in Ireland, so we want to get our fair share of that activity.’
Widger points to a standout instruction for A&L Goodbody, advising CluneTech on the €575m sale of its Immedis business, while several others report an uptick in demand for employment advice, given the rise in redundancies in the tech sector.
Carmody notes that Mason Hayes & Curran has been busy advising Meta subsidiaries Instagram and WhatsApp on regulatory engagements in the European Union and on various GDPR compliance issues.
However, it is clear that, in spite of Ireland’s relative fiscal bullishness, the worst repercussions of the coronavirus pandemic and also the cost-of-living crisis wrought in part by the ongoing conflict in Ukraine, have yet to play out.
And while hybrid working may have been a lifesaver during various protracted lockdowns – it has now become something of a double-edged sword. Many of Ireland’s law firm leaders report the decline of footfall in the capital caused by the continuing trend of working from home, prompting the demise of small businesses and a knock-on effect on the local economy. Indeed, if there is more than a hint of foreboding in the air, it seems inevitable that this will have an impact on the business of law in Ireland and on the types of work firms are preparing to handle.
As Keogh explains: ‘Pressure on the commercial property market is pretty severe in Ireland, and then throw in rising interest rates. People are sitting on their hands, waiting to see what sort of revaluations are set by the big funds that might move first because they might have redemptions coming up and might have to sell something, which would set a new valuation threshold. That’s the most-impacted sector of the Irish legal market still.’
‘There has been a noticeable pick-up in activity since August. Maybe the fact that everyone finally got a chance to recharge after a few years of Covid restrictions on travel has added a new sense of energy!’ Michael Jackson, Matheson
O’Sullivan agrees: ‘The funding associated with that is quiet too. As we’ve learned from previous downturns or soft markets, people are very reluctant to call it. Whether that’s a ticking bomb, no-one really knows.’
Adds Jackson: ‘We have many senior lawyers who have experience of the financial crisis and of the issues that it threw up, and our restructuring team is the largest of any in the market. Our balance sheet is healthy, and we believe that we are well prepared both for further growth and for a downturn.’
For now, Ireland’s legal community is sanguine without being arrogant. There are clear challenges on the horizon and, as experience of previous downturns has shown, hubris never pays. LB