Through our analysis of 1,466 global transactions for the Ag, F&B sector in the 18-month period to December 2022, the global transaction level was consistent with the previous 18-month period. Furthermore, transaction multiples have remained strong – a pleasing result for businesses undertaking divestment activity. This deal activity is despite rising inflation and economic uncertainty, which is impacting capital markets.
However, transaction numbers remain well below pre-pandemic levels, suggesting that businesses remain cautious and considered with investment – likely a combination of organisations remaining risk-adverse and only acquiring where growth opportunities are measurable.
In the past 18 months, the seafood and aquaculture industry have been the big winners for investment activity from an Australian M&A and IPO perspective, accounting for three of the top 10 Australian deals by volume, including the two largest M&A transactions and our two largest IPOs.
Alongside this, tech-enabled businesses have been at the centre of investment and IPO activity. By supporting efficiencies, more informed decision-making, increasing profitability and even sustainability – these businesses have proven extremely attractive acquisition targets.
As stakeholders increasingly demand sustainable practices and Environment, Social and Governance (ESG) remain front of mind for all businesses, AgTech and other businesses with emission reduction missions continue to attract increased investment and deal activity. While these segments are booming, acquisition trends are declining due to increased costs primarily linked to supply chain and inflationary pressures.
Into 2023 and beyond, we expect to see an emphasis on food manufacturing and food waste minimisation – leveraging increases in Federal and State Government investment seeking to secure Australia’s food supply whilst reducing carbon emission, as participants in the sector move towards a more sustainable future.
Find out more about our analysis of global and Australian M&A and equity markets in this Agribusiness, Food & Beverage Dealtracker 2023 report.
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