Ronald Attard: Regional "players" interested in acquiring professional services providers in Cyprus

The Country Managing Partner of EY Cyprus, Ronald Attard, reveals that regional "players" are showing interest in acquiring professional services providers in Cyprus, in an interview with InBusinessNews as part of the "IN Business Forecasting 2025" series.

Ronald Attard notes that regarding the trend of mergers and acquisitions in the professional services sector, there is noticeable activity globally, with major players seeking further growth through acquisitions and mergers.

In this context, he highlights that some activity in mergers and acquisitions is expected in Cyprus as well. He adds that EY has already begun receiving interest from regional "players" considering the acquisition of professional services providers in Cyprus.

Attard emphasises the significant steps taken to improve the investment climate in Cyprus, including recent initiatives such as the launch of a campaign to reposition the country’s image and economy, which have left a positive impact in this direction.

"Cyprus continues to attract investors," he stresses. Discussing the professional services sector, he identifies the lack of specialised professionals as one of the sector's most pressing issues.

This issue, he explains, arises from the increasing demand for skills in areas such as cybersecurity, data science, and digital consulting, alongside evolving needs in more traditional fields like accounting.

Read his interview below.

How do you think the Cypriot economy will perform in the coming year? How optimistic are you about its prospects?

Cyprus repeatedly proves that it is not only capable of managing crises but also of turning them into opportunities for progress and prosperity. This is reaffirmed as the country maintains steady and dynamic growth despite pressures mainly stemming from external factors.

According to the European Commission's Autumn 2024 forecasts, Cyprus’ growth in 2024 is expected to reach 3.6%, with the positive momentum continuing at a growth rate of 2.8% in 2025 and 2.5% in 2026.

These forecasts are supported by recent upgrades of Cyprus' economy by rating agencies, which have placed the country in the "A" investment grade for the first time in 13 years.

This development convincingly reflects the substantial progress Cyprus has made in fiscal and public debt indicators.

At EY Cyprus, we share the optimism reflected in these projections and believe the future looks promising for the country. Inflation is expected to decline, while rising wages will enhance household purchasing power and consumption.

Additionally, the fiscal balance will remain surplus-driven, supported by the continued rise in revenues and prudent expenditure management.

What do you see as the biggest risks to the country’s economy? What should be prioritized to ensure its growth trajectory?

We live in an era where everything is changing rapidly and continuously. We recognize the multi-faceted and complex risks that we face, which inevitably affect the stability of nations, organizations, and, of course, our lives.

These risks span human, economic, environmental, technological, and geopolitical challenges, which are interconnected and place high demands on everyone.

In our sector, developments and changes are particularly complex and occur at an unprecedented pace. Rapid technological advancements require constant adaptation to remain competitive and meet client expectations.

Clients are demanding greater value, more personalised services, and faster delivery times. Additionally, there is growing pressure to adopt sustainable practices and address ESG issues, both in internal operations and in services provided to clients.

On top of this, the talent shortage persists due to the increasing demand for specialized skills in areas like cybersecurity, data science, and digital consulting, as well as evolving needs in traditional areas like accounting.

Moreover, global economic instability, geopolitical tensions, and market volatility further affect clients’ budgets and the demand for services, posing challenges to growth and stability.

Addressing these issues requires strategic planning, investments in technology and talent, and a focus on delivering meaningful value to clients.

In the rapidly evolving world we live in, where every moment brings new challenges and opportunities, the ability to adapt and continuously evolve is the key to success.

What does Cyprus need to do to become an even more attractive destination for foreign investments? And how important are these investments for the economy?

First, we should acknowledge the significant steps taken to improve Cyprus’s investment climate. Recent initiatives, such as the launch of a campaign to reposition the country’s image and economy, have left a positive mark in this regard.

Cyprus continues to attract investors interested in traditional activities such as sales, marketing, and the establishment of headquarters.

At the same time, new activities such as educational centres, research and development, and industrial production—highly attractive in Europe—are also drawing significant investment interest.

The results of EY’s survey on the attractiveness of Cyprus confirm this upward trend, showing cautious optimism regarding foreign direct investment (FDI) activity in the country in the future.

According to our survey, about 57% of investors (compared to 29% in our last survey in 2022) plan to establish or expand their operations on the island over the next year. However, these results still fall short of the European average of 72%.

The Cypriot government should continue its ongoing efforts to restore investor confidence and the country's reputation. These efforts must persist amid criticism and allegations related to money laundering and corruption.

As part of this strategy, the government can leverage its diplomatic relations and partnerships to promote positive developments. Additionally, international investors operating in Cyprus can serve as ambassadors to strengthen this message further.

How do you foresee your company’s sector performing in 2025? Are there issues that concern you?

In today’s evolving landscape, our clients increasingly seek our specialised, multi-disciplinary expertise and broad knowledge across our areas of specialisation.

EY has 400,000 people worldwide with diverse skills working across a comprehensive range of services, collaborating to help our clients shape their future with confidence.

This belief is so central to us that we’ve placed the phrase “Shape the future with confidence” at the core of our new “All in” strategy, reflecting our unwavering commitment to creating meaningful value and strengthening trust in capital markets despite the challenges we collectively face.

As part of this strategy, we make deliberate, disciplined choices to focus on areas with clear demand, such as transformation, managed services, and sustainability, supported by investments in technology while maintaining our commitment to audit quality.

What major trends and changes do you anticipate in your sector, and what are the key challenges?

We are part of an ever-evolving sector with complex challenges continuously shaping our work.

Rapid technological advancements require immediate adjustments to maintain competitiveness and meet client expectations for greater value, more personalized services, and faster delivery.

Equally important is the application of ESG criteria to ensure the planet’s sustainability, which also enhances companies' relationships with local communities, improves sustainability, and strengthens their reputation.

At EY, we aim to achieve net-zero carbon emissions by 2025. We are steadily progressing in this direction, having reduced absolute emissions globally by more than 43% since 2019.

At the same time, as leaders in the sector, we provide advisory services on ESG regulations and specialised consulting.

A strong trend emerging in the Cypriot business landscape is mergers and acquisitions (M&A). Will this be prominent in your sector as well?

Indeed, we observe increased M&A activity globally, accompanied by signs of recovery following interest rate reductions. However, market uncertainty persists due to geopolitical developments and conflicts.

Recent U.S. elections have been interpreted positively by markets, seen as a step toward greater stability.

In the professional services sector, there is notable global activity, with major players seeking further growth through mergers and acquisitions.

Beyond expanding market share, these transactions often aim to acquire expertise and technology through such deals.

At EY, for instance, we recently invested in a professional services company specialising in ESG and sustainability, aligning with our goal of becoming one of Europe’s largest players in this area. Technology and the need to invest in it for competitiveness and sustainability also play a significant role.

This aligns with findings from the 2024 EY CEO Outlook Pulse survey. Companies unable to bear the cost of such investments may become acquisition targets. Within this framework, we anticipate some M&A activity in Cyprus.

As EY, we have already begun receiving interest from regional players considering acquiring professional services providers in Cyprus, aiming for local market entry, geographic expansion, and the acquisition of expertise and specialisation, particularly in the ICT sector.

What can we expect regarding your organisation's development plans and strategy in 2025?

At EY, we recently launched our new “All in” strategy, developed through a diverse and inclusive process leveraging our extensive expertise across our highly connected global network.

“All in” reflects our unwavering commitment to creating meaningful value and strengthening trust in capital markets, helping us collectively navigate challenges.

This approach will help us fulfill our purpose: building a better working world for EY’s clients, people, society, and the planet.

As we enter 2025, we envision helping organisations shape their future with confidence. To this end, we will continue asking the best questions to provide the best answers, paving the way for a more sustainable and hopeful future.