Optimism amid uncertainty for NI businesses in 2019

10 January 2019

Author: Neasa Quigley
Practice Area: Corporate - M&A

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Carson McDowell's deal pipeline for the first few months of 2019 is "very positive", partner Neasa Quigley has commented, although the firm remains cautious of what lies ahead for the year when it comes to Brexit.

Quigley made the comments after an "extremely busy" 2018 for Carson McDowell in terms of merger and acquisition activity and private equity transactions.

Notable deals included the sale of Lagan Group’s building materials business to Breedon Group for more than £400m; the sale of Abbey Insurance to private equity fund Capital Z Partners; a £60m private equity investment in Lowe Rental which facilitated an exit by MML Capital; the acquisition of 3V Natural Foods by SHS Group; the sale of Simple Power to Foresight Group; and the sale of Belfast International Airport to VINCI Airports.

In 2019, Quigley said she expects further investment and M&A activity in the technology sector – particularly cybersecurity – as well as consolidation in the financial services and professional services markets.

She added that her team is expected to be busy in the first quarter of the New Year, although it would be "hard to predict" levels of activity beyond Q2.

"Any forecast for 2019 has to begin with the impact of Brexit.

"We are hearing that uncertainty around Brexit is already affecting some local businesses directly in terms of their workforce, with it becoming more difficult to retain and recruit essential workers.

"Management are also having to devote time to planning for uncertainty and away from their businesses, although I have some concern that the level of contingency planning happening among SMEs is still quite low.

"The most likely scenario is a slowdown in the market, though activity could accelerate again once the situation becomes clear – even if that is a no deal."

Quigley added that local political uncertainty and the absence of a functioning Stormont Executive is also hampering key infrastructure projects, such as North-South Interconnector.

"It’s an essential energy infrastructure project, which Carson McDowell is advising on, to enable the island of Ireland to take full advantage of the single electricity market, enhance energy of supply and deliver costs savings to the consumer – all of which will help underpin economic activity in Northern Ireland," she said.

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