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The report found the Australian economy is returning to an industrials focused marketplace as it recalibrates after a period of pandemic-induced upheaval and shore up domestic resilience in the midst of an uncertain economic environment. Australian M&A activity was dominated by the Industrials sector this year, with the sector holding 31 per cent of total deal flow and an increase in deal volume from 503 to 523, which is 4 per cent growth since the prior Dealtracker period.
The pivot to the Industrials sector is reflective of the Government’s investment in sovereign capabilities over the past three years to encourage activity in the sector.
“The Industrials sector has successfully recaptured investors’ attention, due to an increased focus on supply chain security for Australian businesses”, said Jannaya James, Partner – Corporate Finance at Grant Thornton Australia. “While the importance of innovation through the adoption of new technology remains, we have seen a resurgence in deals in industrial services driven by Government investment in local manufacturing in an effort to improve supply chain resilience.”
The report found merger activity on the decline despite a strong start, with deal volumes dropping 25 per cent in the first half of 2023 compared to the same period of 2022, reflecting a weakening global economy driven by various factors including political fragmentation, trade tensions, inflationary pressures, labour market shortages, and continued geopolitical issues.
Investment Manager (IM) activity declined over the period, as investors took a patient approach to finding opportunities more resilient against economic uncertainty. Corporates proved to be the most active buyers, with 95 per cent of acquirers classified as corporate M&A deals, and 5 per cent as IM or private equity deals.
Similar to previous years, small and medium sized businesses (SMEs) continue to be the predominant acquisition targets, with a high proportion of deals having transaction values of less than $100m.
Australia remains an attractive place to invest, with international investment representing 31 per cent of total deal flow, marginally above the prior comparable period with 30 per cent.
The most popular investors in Australian deals were US and Canadian buyers with 42 per cent of inbound deals, higher than the 30 per cent noted in the prior Dealtracker period. Acquisitions from the Asia Pacific region decreased to 13 per cent of total inbound deals compared with 22 per cent in the previous Dealtracker period.
The 2023 Dealtracker covers transactions during the 18-month period from 1 January 2022 to 30 June 2023. This survey is limited to going concern business sales, excluding those with a significant real estate nature. Grant Thornton’s Dealtracker was first released in 2012 and – now in its ninth edition – has over a decade’s worth of deal activity and analysis to report.
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Grant Thornton releases its 2023 Dealtracker reporting a strong focus on domestic resilience
11 Oct 2023
Grant Thornton has released its 2023 Dealtracker, an analysis of the Australian mergers and acquisition (M&A) and equity markets from the 18-month period from 1 January 2022 to 30 June 2023.
The report found the Australian economy is returning to an industrials focused marketplace as it recalibrates after a period of pandemic-induced upheaval and shore up domestic resilience in the midst of an uncertain economic environment. Australian M&A activity was dominated by the Industrials sector this year, with the sector holding 31 per cent of total deal flow and an increase in deal volume from 503 to 523, which is 4 per cent growth since the prior Dealtracker period.
The pivot to the Industrials sector is reflective of the Government’s investment in sovereign capabilities over the past three years to encourage activity in the sector.
“The Industrials sector has successfully recaptured investors’ attention, due to an increased focus on supply chain security for Australian businesses”, said Jannaya James, Partner – Corporate Finance at Grant Thornton Australia. “While the importance of innovation through the adoption of new technology remains, we have seen a resurgence in deals in industrial services driven by Government investment in local manufacturing in an effort to improve supply chain resilience.”
Grant Thornton 2023 Dealtracker snapshot:
The report found merger activity on the decline despite a strong start, with deal volumes dropping 25 per cent in the first half of 2023 compared to the same period of 2022, reflecting a weakening global economy driven by various factors including political fragmentation, trade tensions, inflationary pressures, labour market shortages, and continued geopolitical issues.
Investment Manager (IM) activity declined over the period, as investors took a patient approach to finding opportunities more resilient against economic uncertainty. Corporates proved to be the most active buyers, with 95 per cent of acquirers classified as corporate M&A deals, and 5 per cent as IM or private equity deals.
Similar to previous years, small and medium sized businesses (SMEs) continue to be the predominant acquisition targets, with a high proportion of deals having transaction values of less than $100m.
Australia remains an attractive place to invest, with international investment representing 31 per cent of total deal flow, marginally above the prior comparable period with 30 per cent.
The most popular investors in Australian deals were US and Canadian buyers with 42 per cent of inbound deals, higher than the 30 per cent noted in the prior Dealtracker period. Acquisitions from the Asia Pacific region decreased to 13 per cent of total inbound deals compared with 22 per cent in the previous Dealtracker period.
The 2023 Dealtracker covers transactions during the 18-month period from 1 January 2022 to 30 June 2023. This survey is limited to going concern business sales, excluding those with a significant real estate nature. Grant Thornton’s Dealtracker was first released in 2012 and – now in its ninth edition – has over a decade’s worth of deal activity and analysis to report.
Experts / Authors
Jannaya James
Jannaya has over 18 years’ experience providing insightful advice to a range of small and large corporations in respect of valuations of shares, businesses and intangible assets for a range of purposes.
View ProfileCarla van den Hoorn
Communications Manager at Grant Thornton Australia
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