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The data in this report was compiled from several sources including S&P Capital IQ, the Australian Securities Exchange, Mergermarket, IBISWorld, transaction surveys, company announcements and other publicly available documents.
We consider this consolidated mutli-source analysis – supplemented with our own proprietary sources – to provide the most comprehensive insight into recent Australian deal activity.
This survey is limited to going concern business sales, excluding those with a significant real estate nature.
Deal volume is on a positive trajectory compared with previous Dealtracker periods, driven by strong M&A activity for the most part across both Investment Manager (“IM”) and corporate acquirers during 2017. This has been assisted by a surge in Information technology sector acquisitions lead by corporate bidders intending to expand their technological capabilities and opportunistic IM bidders identifying growth opportunities.
Overseas purchasers comprised 31% of transactions, up from 28% in the previous Dealtracker period to continue the upward trend evident in prior years. There has been strong and continued appetite for Australian investments primarily from the US and Canada, as Australia is regarded as a safe-haven given its relative political and economic stability which strengthens its international reputation.
The IPO market has continued to stabilise post the high activity level observed in 2015, with an overall decline of 4% in the total value of IPO proceeds during the Dealtracker period, compared with the preceding 18 months. The slower activity was felt particularly in the higher end of the market, and is a result of increased global market volatility throughout the period, however H2 2018 finished with a strong rebound in capital raises.
There was a continued growth in IM activity in the current Dealtracker period particularly in comparison with the period of high exit volumes in 2013 to 2015. This was driven by improved fundraising conditions for managers. Compared to the previous Dealtracker, IM interest shifted towards Information Technology and Industrials sector consolidation opportunities, and away from the Consumer Discretionary sector.
The median multiples of EBITDA across the market as analysed during this Dealtracker period were strong for transactions in the $20+ million revenue ranges fueled by the weight of funding available for high quality businesses. Standout sectors included niche consumer discretionary providers and consumer staple providers driven by food security and branded food opportunities.
