Executive summary

After a record year, Australia’s M&A boom shows no sign of stopping and the mid-market is set to continue playing a starring role in this uptrend.

While Australia is still dealing with the impacts of the COVID-19 pandemic and the Omicron outbreak, dealmakers are confident in their ability to yield value from the Australian M&A market. Indeed, positivity in this year’s research once again runs high: respondents give Australia an 80% confidence score when rating the current environment for M&A, based on the ease of doing deals, sourcing opportunities and other factors crucial to yielding value from these transactions.

When we last conducted this survey, the confidence rating sat at 81%, which at the time was surprising given the outstanding levels of volatility and uncertainty in both the local and global markets. There was also skepticism about whether the rebound that had developed in the latter half of 2020 would continue in 2021.

This indicator, however, proved to be spot on, providing valuable insight into perceptions of the deal environment and its challenges and abundant opportunities. That an equally large number of dealmakers remain confident once again augers well for another bumper year in Australian M&A in 2022.

This is not to deny there will be bumps along the road to recovery. There may yet be further problems related to the pandemic. Due diligence is proving challenging and anxieties about the valuation gap between buyers and sellers remain on the minds of investors, particularly in light of likely interest rate increases. Additionally, the impacts of scheduled government elections are unknown, especially given the increased powers at the state level. History shows there is always some level of slowdown in activity in the quarter leading up to a federal election. Nevertheless, this research indicates that the strong performance of Australia’s M&A market can be sustained over the course of 2022. Dealmakers are hugely optimistic about the prospects for Australia’s economy and eager to pursue further transactions. Many are specifically looking to the mid-market (deals valued between AU$10m and AU$250m), a particular bright spot for dealmaking in Australia and one where 88% of respondents say they will increase their investments in 2022. This on the back of a year where mid-market deal values and volumes were relatively strong. The vast majority of respondents are looking to Australia rather than other markets in Asia Pacific, which speaks to the quality of the market. It goes without saying, then, that the Australian market, especially the mid-market, is very much open for business.

80%

Respondents give Australia an 80% confidence score when asked to rate the current environment for M&A in the country, based on factors such as ease of doing deals and sourcing opportunities

POSITIVE