The Irish market will continue to attract interest from private equity investors in 2023, according to new analysis from Taylor Wessing Ireland.

There were over 300 private equity deals completed in Ireland in 2021 and again in 2022.

The law firm now anticipates an increase in  transactions  this year due to the record level of cash reserves held by private equity firms.

Taylor Wessing estimates that the global private equity industry currently has around $3.7trn of “dry powder”, which is cash a firm has on hand which is waiting to be invested.

The firm’s Irish boss and M&A partner Adam Griffiths pointed to the recent acquisition of Seattle-based software company Qualtrics by US private equity group Silver Lake in a deal worth $12.5bn (€11.3bn). 

“[The Qualtrics deal] is an indication that the existing “wall of capital” is still looking to find a home, and that more transactions will be executed this year in Ireland,” he said.

However, Mr Griffiths warned that these deals may take longer to close than in previous years as transactions are subjected to “heavier due diligence” due to lingering economic uncertainty.

“Despite the renewed market sentiment, in 2023, dealmakers might have to fight harder, for longer, to get the job done,” he said.

Mr Griffiths said that tech companies remain well-placed to benefit from private equity interest despite recent challenges for the sector which thrived over the pandemic.

“Last year some 30pc of all deals were in tech and, if management teams can come to terms with reduced valuations, tech companies remain well-placed to receive serious attention,” he said.

Private equity funds are also expected to be more flexible in 2023, with many embracing minority ownership and partnership options instead of pursuing majority ownership, which may be “more attractive to prospective sellers.”

Taylor Wessing has also noted a rise in “secondary” buyouts where a private equity fund sells a company to another fund. These deals are already popular in the US and UK.

Last week, waste management firm Enva, which was owned by UK private equity firm Exponent, was acquired by US-based private equity group I Squared Capital in a deal which is understood to be worth over £600m (€670m).