Irish mergers and acquisitions (M&A) activity has proven remarkably resilient in recent years with both deal volumes and value holding up. But as all investors know, past performance is no indicator of future results. So how is the future shaping up?
Despite global economic uncertainty and geopolitical volatility, Ireland entered 2026 with economic fundamentals that continue to compare favourably with many of its European peers, according to Steven McKenna, founder and chief executive of Stratavera.
The Dublin-based strategic advisory firm, which McKenna established last year, following his tenure as chief executive of Sherry FitzGerald, specialises in strategic transformation and M&A. He believes Irish deals in the year ahead will reward clarity and execution.
“While growth is expected to moderate from recent exceptional levels, the outlook remains positive, supported by strong employment, easing inflation and sustained inbound investment. Ireland’s position as a stable, English-speaking EU gateway continues to attract international capital, providing a constructive backdrop for SME transaction activity,” says McKenna.
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But he reckons three factors are now most likely to influence Irish M&A over the next 12 months.
First comes financing conditions. “In recent years, higher interest rates contributed to a valuation gap between buyers and sellers, slowing transaction momentum. As rates have eased and financing conditions improved, the gap has narrowed, supporting a more positive outlook for deal activity,” says McKenna.
The €5 million to €250 million mid-market remains the engine of Irish M&A. “Private equity (PE) capital remains active, with significant committed capital seeking well-positioned mid-market companies, while trade buyers continue to pursue strategic consolidation,” says McKenna.
However, buyers are more selective and applying greater scrutiny.
“Buyers are also assessing how effectively businesses are integrating digital tools and AI to drive efficiency and defend margins. Due diligence now routinely includes scenario testing around geopolitical risk, trade exposure and future interest rate movements.”
Succession issues are increasingly at play too. Unfortunately, a significant proportion of SME owners are approaching such transitions without a structured exit plan.
“In practice, value is shaped two to three years before a transaction ever reaches the market. Businesses that invest early in leadership depth, governance discipline and predictable earnings profiles consistently achieve stronger outcomes,” cautions McKenna.
Inbound appetite for Irish mid-market businesses remains strong. “The differentiator, this year, will not be revenue growth alone, but the quality of earnings, leadership depth and strategic clarity for future sustainable growth. In an improving but disciplined market, Irish SMEs that prepare early can better choose their timing, increase transaction certainty, and deliver greater value,” he says.
Those two interconnected factors – the availability and cost of capital, plus the quality of seller preparation – will continue to shape Irish M&A activity over the coming year.
“The stabilisation of interest rates across the EU should create a more predictable environment for both borrowers and lenders, having a positive impact on deal structuring,” says Alan Cronin, senior associate in law firm RDJ’s corporate and commercial team.
“In the second half of 2025, we observed that most non-private equity funded acquisitions were financed largely from the buyer’s own resources, without the involvement of external lending institutions. Greater availability of funds from a growing number of lenders suggests a broader cohort of potential purchasers will be able to compete in the mid-market space, the hub of Irish M&A activity.”
He also cautions that seller preparation is key. “Deals are taking materially longer to complete than they were three years ago, and the cost of robust buyer side diligence has risen sharply,” he warns.
“Sellers who invest in thorough presale preparation, conducting their own rigorous financial, legal, and commercial diligence before going to market, are better placed to maintain price and deal terms, facilitate efficient transaction timelines, and navigate the procedural requirements of the Competition and Consumer Protection Commission.”
Consolidation is now a key driver of scale in the M&A market, particularly in the technology, healthcare, and financial services sectors. Competition between established Irish businesses and international buyers, particularly from the US and UK, for quality Irish mid-market assets continues to grow.
“This creates opportunity on both sides: for buyers seeking to accelerate growth through acquisition rather than organic expansion alone, and for owner-managers who have built strong, profitable businesses and are beginning to consider their exit options,” says Cronin.
“Those owners should be under no illusion as to the strength of interest their businesses may attract, particularly where they can demonstrate consistent earnings quality, a defendable market position, and a management team capable of continuity post-transaction.”
But he too is concerned at the risk of under-preparation. “In a market where there is intensive diligence and lengthening regulatory timelines, sellers who come to market without a clear investment narrative, clean financial records, and an awareness of their own risk profile are likely to find themselves at a significant disadvantage on price valuation and the certainty of completion,” he points out.
For those who have done their homework, the outlook is good. “We are expecting a broadly positive backdrop to the M&A market for the coming year, driven by robust macro factors and encouraging seller and private equity dynamics,” says Keith McDonagh, head of corporate finance at business advisory and accounting firm Xeinadin Ireland, which has offices across the country.
Specific sectors continue to see PE-supported consolidation at many levels, while the continuing stable interest rate supports debt leverage to fund trade acquisitions, he says.
Right now, there are a number of key factors influencing M&A activity, including continued availability and interest from PE seeking to deploy capital across many sectors “at realistic valuations with notable upside potential through consolidation or growth,” McDonagh says.
On top of that is a, largely, stabilising macroeconomic environment which encourages businesses to reinvest surplus cash or seek debt solutions. He too cites business demographics as a key driver of activity, with a growing number of founder-led businesses now seeking succession options, having delayed their exit over the past number of years, whether due to Covid, more challenging trading cycles or global uncertainty.
“This delay, coupled with the increases to the Entrepreneur Relief Limit, will encourage more businesses to seek exit options,” says McDonagh.
This budgetary measure, effective from the start of this year, increased the limit from €1 million to €1.5 million, allowing qualifying business owners to pay a reduced 10 per cent capital gains tax (CGT) rate on up to €1.5 million of gains over their lifetime.
There are concerns too, however, points out McDonagh, not least of which are unknown unknowns in relation to the fast pace of technological change.
“The rapid progress in AI can have unforeseen impacts on all businesses. Understanding where these risks arise is key to addressing them,” he points out.
At the same time, environmental, social and governance (ESG) factors continue to be core to decision making for acquirers. “Smaller businesses can sometimes not be as focused on ESG compared to larger businesses, and this can be a unique differential in negotiations,” he explains.
But there are ample opportunities too, for those ready to seize them.
“Good businesses always sell. Start your exit plan early, know your potential buyers and address risks that these may raise in negotiation,” says McDonagh.
In particular, he believes ageing owner-managers and founders should now consider the benefits of changes to Entrepreneur Relief, alongside market dynamics such as whether there is a PE-backed consolidator in their sector. Such activity has already swept through everything from GP practices to family vets.
“Alternatively, maybe you are at the start of your growth journey and would like to take in private equity or other support to secure more rapid growth and avail of [opportunities created by] others exiting your sector,” says McDonagh.
Whatever stage you are at in your journey, “be realistic”, he advises, and get the support you need for the outcome you want. Says McDonagh: “Set your expectations with your advisers, whether that is to secure growth opportunities – or exit planning.”
