Ireland has done well by hooking itself up to the rest of the world. It brought the country up to speed with the rest of Europe.

The obvious example is foreign direct investment. But FDI wasn’t the beginning and end of it. FDI chose Ireland, in part, because it was already quite outward-looking. Ireland spoke English, which made it easier to keep up to date with the latest ideas. Its diaspora kept us connected to the rest of the North Atlantic economy. And Ireland was an EU member.

Today, lots of global companies have important outposts in Ireland. But those still operate separately from the rest of the Irish economy. 

The next step is for the indigenous Irish economy to get more international. 

One example would be foreign funding of the property industry. Before the Global Financial Crisis, our banks funded property development. Now it’s done mostly by foreign investors through vehicles like REITs, ICAVs and IREFs. In the same way foreign companies funded Irish operations, now foreign investors are funding Irish houses and offices.

The new frontier is foreign investment in indigenous Irish business. In the last decade, foreign lenders and private equity investors have swarmed over the Irish market. For better or worse, Irish foreign influence has made Irish business less distinctively Irish.

“The pint culture has gone out of it. I think it’s probably gone a little bit more American.“

As a corporate finance partner at Grant Thornton, Paddy Dillon has been part of the Irish business scene since the Celtic Tiger era. 

“[I arrived in Dublin in] November 2005, and the town was rocking. There were so many jobs back then, you had your pick,” he said. “I interviewed at about five different places. I was keen to get into banking, which was the hot industry in those days.

“Grant Thornton was a relatively small firm in Dublin at the time. I met with a couple of the partners and really liked them. They gave me lunch at the interview. Which is amazing – the little things. For a 24-year-old who could barely afford his lunch, coming into town doing his interview. To cut a long story short, I really liked the vibe here. It was young, it was dynamic, and it was growing. So I chose here.

“I was on the road nearly every week with Kingspan doing acquisitions in Ireland, the UK, and mainland Europe. I was young, and mad keen to travel. I enjoyed that side of it. So I learned a lot working with that organisation. And as you know, they’ve gone on to great things,” Dillon added.

Kingspan is a company that has grown out of Ireland and into international markets. With private equity investment, the influence goes the other way: investors, often foreign, buying stakes in Irish companies. In both cases, the effect is for Irish businesses to get more international in its style.

“I would say that [Irish people have] become more transactional in business,” said Dillon. “Yes, relationships are important. But people are busier now. So the pint culture has gone out of it. I think it’s probably gone a little bit more American in terms of, people wanting to talk to you if they need you for something, and vice versa,” he added.

The new style of business has been to Dillon’s benefit, he said: “[Grant Thornton is] a challenger brand. We are able to get in places where we might not have been able to get in previously, because clients had strong relationships going back a long time. I think people are open to new advisors, which has been very good for us. Given that we’ve come from a much lower base than some of our competitors.”

“And people are busier now. Business has become a little bit more transactional in Ireland than it was even 20 years ago. And I think Irish businesses have stepped up. They’ve had to. They’re really strong internationally,” he added.

Grant Thornton’s advisory practice has grown up around the booming Irish M&A market: “The corporate finance team [in the early days of Dillon’s career] consisted of three or four people. We did a bit of everything. It was a much smaller business. There were, I believe, it was ten people in advisory in total. We now have close to 500 in advisory.”

The service

Day to day, what does a corporate finance advisor do? “[Selling a business] is a very stressful process. The chances are you only do it once in your life. And the chances are, when we meet them, they’ve never done it before. The company is probably their biggest asset. Most of the entrepreneurs we deal with, all their wealth is in their business. So they don’t tend to take out much and they don’t tend to pay themselves much. So all of their wealth is concentrated in one asset,” according to Dillon, who works closely with some of Ireland’s most successful private companies.

“In our corporate finance, practice, people have to be busy.”

“A big part of our job is supporting people through that process. Not just on the financial side but the emotional side as well. There’s always twists and turns in every deal. You’ve got to try and keep people moving and ‘keep them between the ditches’, as I say. And they’ve got to trust you. That’s what people remember – when you’re in the trenches, that you’re there for the key decisions. That you’re not hard to get hold of.”

What are the key decisions? “There’s various decision trees when you sell a business: Are you going to just talk to one party? If you’re approached by someone, are you going to open it up to others? That has other decisions, then. Are you happy to go exclusively with one? Do you want to bring two people into next round of the process? What risk are you willing to take in terms of how the deal is constructed?”

From restructuring to growth

Today, corporate finance is centred on growth, international expansion, and foreign investment. But it wasn’t always the case. “I’ve worked on a number of deals where my original role was in a restructuring capacity (mainly in the 2008 to 2012 period) and the business has gone on to overcome its challenges and ultimately realise significant shareholder value,” he said.

“When you’re in the trenches with a business and its management, you really develop a strong bond and this has been a source of a significant amount of sale mandates we’ve won over the past five years. So in a paradoxical way the recession and the restructuring we did at that time has been a contributor to our M&A success,” he added.

Which deals stand out? “The sale of Quinn Insurance to a Liberty / IBRC JV back in the day was particularly memorable. It had lots of complexities and twists and to this day I believe we did a very good job in very difficult circumstances. There weren’t many deals of this scale occurring in 2011 so it was great to be leading such a high-profile transaction as a relatively early stage in my career,” said Dillon.

In recent times, Dillon said, the deals are different. They reflect the changing economy: “We did a full sale of a niche engineering business to a private equity fund. It is unusual for PE to acquire a business outright but it spoke to the quality of the business (it had high barriers to entry, was well invested, and diverse blue chip customers) and its management team.”

One problem with this model is the assumption all company owners are on the same page. But that’s often not the case. Even in family businesses, there can be diverging views on what’s best for the business. “Ensuring goals are aligned can be a challenge,” said Dillon. “Different shareholders may have different appetites for risk which can mean that it may be difficult to align views on matters such as M&A. 

“An old boss of mine always said a lot of companies that have gone on to become very successful have had one or two events where they may have had to “put the house on the line.

“This ‘event’ can be organic or inorganic investment, where they have to step out of their comfort zone in terms of risk. This can take the form of leverage or taking on an equity partner. It can pose challenges in all businesses but particularly family businesses, where there may be different views on strategy and appetite for risk. Such events — particularly where equity is being raised — can in some instances act as an inflection point, where certain shareholders exit the business,” he added.

The demands

Once a deal is done, it’s done. All going well, the client probably won’t the services of a corporate advisor again. So Dillon needs to be constantly on the hunt for work. “Being a corporate finance partner is a strange existence,” he said. “Because you finish the year, and you’ve had a good year. And you should really be sitting down for Christmas. But your mind shifts to next year very quickly. And unlike other areas of any practice, we generally start the year with a with a zero. 

“So I was a little bit concerned in December, actually, thinking about this year. That’s the nervous energy you always have to have. We have a team of 50 people. So we’ve got to keep them busy. In our corporate finance, practice, people have to be busy. 

“My wife always says she can tell my mood by how busy we are — like, the busier you are, the better. Managing that constant worry about not being busy – and then being too busy. If you can find that middle ground, you’ve perfected it. But I don’t think anybody ever does.”