That is in stark contrast to a more optimistic picture just over the border where 57% of respondents expect an increase in deal volume.
The more subdued outlook in Northern Ireland is, in part, down to the ongoing political stalemate at Stormont, the survey revealed.
Russell Smyth, Partner, Corporate Finance, KPMG in Ireland said:
“Northern Ireland respondents were asked whether the ongoing political uncertainty in Northern Ireland will have a negative impact on deal activity. It is no surprise that the overwhelming majority of respondents believe it will.
“Let’s hope we see the return of a fully functioning Executive sooner rather than later in 2018.”
The survey also questioned M&A professionals on the impact of Brexit on the sector.
Russell Smyth said:
“While Brexit features on the radar of deal makers, there is no consistent view in either jurisdiction on its likely impact on deal activity, suggesting too much uncertainty remains to predict its impact on business or business decisions.”
The sectors which respondents expect to be most active in 2018 in both jurisdictions will be agribusiness and food, technology and healthcare.
In the Republic, 55% of respondents expect debt to be the primary funding source compared to just 42% in Northern Ireland where cash reserves are expected to be more prevalent, possibly representing a more cautious approach to funding.
Despite a more cautious approach and well-publicised headwinds, there are a number of positives which will boost the M&A market in the coming year.
Russell Smyth said:
“Strong capital availability in the market, including increased private equity and alternative lender activity, and more developed M&A strategies among both Northern Ireland and Republic of Ireland corporates will ensure a healthy pipeline of deals are completed in 2018.”
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