Mergers and acquisitions activity in Northern Ireland fell in 2023 from the record highs of the previous two years, according to Experian’s latest UK and Ireland M&A Review.
The data analytics company recorded 236 transactions in the north, which represented a decline of 12% from the 269 deals in 2022.
And the recorded value of Northern Irish M&A, at just £442 million, was down 49% year-on-year, the second lowest annual total over the last decade, Experian said.
The market was dominated by small and mid-market transactions - often less reliant on accessing debt funding - as uncertainty over higher interest rates weighed on higher-value M&A, and the biggest local transactions of the year were in the growth capital space.
Radius Housing Association, which manages 13,000 homes and constructs around 400 social and affordable homes in the north each year, secured a £70m sustainability-linked funding package from Barclays, including a £20m green term loan to increase the energy efficiency of its new homes.
In another green deal, Belfast’s Weev.Ie, which builds EV charging infrastructure, received a £50m equity investment from Octopus through the Octopus Sustainable Infrastructure Fund.
Elsewhere, Swedish hotelier Pandox acquired the Hilton Belfast for £40m from US investment group Starwood Capital while property investment company Mussenden acquired the entire issued share capital of Forestside Acquisitions, owner of the Forestside Shopping Centre, for £42m.
The manufacturing sector was the north’s leading source of M&A in 2023 with 60 deals, despite returning a 21% decline in volume year on year.
Experian also recorded strong growth in the number of accommodation and food services deals, which were up by 23% year on year.
Cork hospitality group Cliste Consultants’ £15m acquisition of Inislyn, the holding company for the Radisson Blu hotel in Belfast, was one of the largest transactions in the hotel space, alongside the £11m sale of Nottingham hotelier CRD by Belfast’s Quinn Group and Pandox’s £40m acquisition of Hilton Belfast.
There was a private equity component to the funding of 51 Northern Irish transactions last year, representing 22% of total deal volume. This was down by 31% from the 74 PE-backed deals the previous year.
Deals were usually at the venture capital stage - with outright buy-outs few and far between - and targeting companies operating in biotech, telecoms and software development.
Notable deals included a £35m investment for broadband company Fibrus Networks from infrastructure fund Infracapital and an £9m Series A2 financing round led by MMC Ventures for Cloudsmith, a Belfast-based software supply chain management firm.
Of the 57 firms that made investments in Northern Ireland in 2023, seed capital specialist Techstart was the most active by deal volume, with five completed deals.
Meanwhile Bank of Ireland was the leading provider of debt finance, with Barclays, PNC Business Credit, Ulster Bank and Beach Point also active in the market.
Grant Thornton was recognised by Experian as advising on more deals in Northern Ireland (14) than any other firm in 2023.
Its local managing partner Richard Gillan said: “As the trusted advisory partner for many of the region’s largest businesses, we would like to thank our clients for continuing to entrust us with their most important transactions and we look forward to another busy 12 months.”
