Over one third of Irish businesses say they will explore a merger or acquisition transaction this year

• 92% of SMEs plan to invest in the coming months with staff training and recruitment cited as main priorities
• 30% of SMEs have implemented AI technology in their operations and 27% planning to do so in future – with most using it to enhance customer service
• ‘Fear of using technology’ and ‘lack of knowledge / expertise’ among key reasons SMEs are not implementing AI

Over one third (34%) of Irish businesses say they will explore a merger or acquisition transaction this year, while a further 14% are considering the full sale of their business to an outside entity. This is according to research conducted by Bibby Financial Services Ireland, a leading provider of financial support and funding solutions to Irish SMEs.

The Transport sector (24%) is most interested in merger activity, followed by the Wholesale sector (21%) and Professional Services (20%). When it comes to acquisition activity, the Wholesale industry is most interested in purchasing a new business (25%), followed by Construction and Transport (both at 16%). Of those interested in a full sale of the business to an outside entity, Wholesale tops the list at (19%), followed by Manufacturing (16%) and Construction (16%). Other transitions being explored include a Management Buy-Out (17%) or Management Buy-In (16%).

Business confidence among SMEs in Ireland remains strong with 88% feeling optimistic about their prospects for 2025 despite rising business costs and geopolitical volatility. Confidence is highest in the wholesale sector, where 92% feel positive about their future. 7 out of ten businesses say they expect sales to rise over the next six months, with only 5% anticipating a decline. Again, optimism is very strong in the wholesale sector.

Irish SMEs have big plans to invest in the coming months, with 92% intending to do so. When asked how much they plan to invest in their business over the next year, the average figure quoted by businesses, excluding those with no plans, was approximately €193,000. Staff training (35%), recruitment (34%) and digital technology (33%) are among the top priorities for this investment.

30% of SMEs have now implemented AI technology in their operations, with another 27% planning to do so. AI adoption is highest in the wholesale sector (44%) with SMEs primarily using AI for enhancing customer service (57%), marketing and sales (38%), automating operations (36%) and data analysis and decision making (32%).

However, some of the barriers to AI adoption included lack of knowledge (41%), high costs (31%), data security concerns (23%) and fear of using technology (19%). 50% of businesses in Manufacturing and Construction said they hadn’t implemented any AI technology as yet, followed by Transport (48%), Services (46%) and Wholesale (25%).

36% say they feel more confident making major investments now the General Election is over, however, opinions remain divided on whether the new government will provide better support for SMEs, with one-third expecting improvement and another third anticipating no change. The top government measures SMEs would like to see include:

• Providing low-interest loans or grants for expansion and job creation (38%)
• Lowering or stabilising business energy costs (36%)
• Simplifying taxes and introducing tax incentives (33%)

Businesses surveyed said their top opportunities for the next six months are attracting new customers (50%) and expanding their workforce (37%). In the services sector, 61% see customer acquisition as their biggest opportunity, while in the transport sector, hiring staff remains vital. However, businesses engaged in international trade see fewer growth opportunities over the next six months compared to the previous waves.

Mark O’Rourke, Managing Director of Bibby Financial Services Ireland, says the results of this survey demonstrate the optimism and hunger for growth among the Irish SME community despite the challenging geopolitical factors influencing the wider industry.

“Ireland a real hotspot currently for mergers and acquisitions, despite the various economic and geo-political challenges dominating the landscape. In Q1 2025, many transactions involved SMEs, showcasing local entrepreneurs leveraging M&A for strategic expansion."

Our research shows that 34% of respondents are currently looking towards merger and acquisition activity, demonstrating that growth is the still biggest trend of the year, This, however, doesn’t’ surprise us as Irish businesses have consistently shown that they are capable of adapting to change, which we have seen much of recently.

From our perspective, we are finding that Irish companies in Food and Beverage (F&B) are keen to acquire businesses that offer innovative products, technologies, or processes that can enhance their competitive edge. Advancements in food technology, sustainability practices and catering for changing consumer demands are also critical factors here.

And naturally, the Government needs to step up and play its part in supporting our companies to grow. With 36% of respondents saying they feel confident making major investments now that the general election is over, it is crucial that the government support SMEs both large and small by introducing measures such as tax incentives, lower energy costs and low interest loans to encourage job creation and expansion.

While there are promising signs of recovery, the market is changing and geopolitical divisions are continuing to grow. We must be prepared for uncertainty and it is vital the government takes action now to safeguard the future of these businesses.”

If you’re thinking of growing your business through a merger or acquisition, have you thought about how you’re going to fund it? Our blog covers key funding options and considerations to help you prepare effectively for business transition.

About Bibby Financial Services Ireland

Bibby Financial Services is Ireland’s largest independent provider of financial funding solutions to Irish SMEs. Operating across the island of Ireland for 18+ years, the company, on average, facilitates over €1m+ a week in new funding limits – in addition to the millions in weekly payments to existing clients - to enable a range of scenarios including cashflow funding, growth and expansion, management buy-ins and buy-outs, refinancing, corporate restructuring and mergers and acquisitions.