Gilbert + Tobin’s ‘Takeovers + Schemes Review’ provides an analysis of the public mergers and acquisitions that took place in Australia last year that were valued at more than $50 million.
Commenting on the review, Gilbert + Tobin’s co-head of corporate and M&A, Neil Pathak said “we have analysed the data, drawn our conclusions on 2018 and have looked into our crystal ball for what 2019 might hold” for public M&A.
The review recorded 49 transactions valued at more than $50 million over the calendar year, which it said represented a 19.5 per cent increase on 2017 activity.
It went on to consider that “the story is similarly positive when measured by transaction value”, with total transaction value sitting at approximately $48.7 billion, compared with 2017’s value of $41.6 billion.
“Transaction activity was at a seven-year high”, Mr Pathak explained, noting too that 2018 saw a “significant improvement in success rates”.
Providing an optimistic outlook for the year ahead is the continued activity across sectors including professional services and healthcare, and the number of private equity firms seeking to deploy capital, the review has explained.
Considering cashed-up private equity firms as highly acquisitive, Mr Pathak explained they were willing to deploy approximately $13.6 billion on targets in a range of sectors”.
This positive outlook is despite increased scrutiny, especially for foreign bidders as flagged by the review, with 59 per cent of all transactions being made by foreign bidders.
Foreign acquisition was led by acquirers from North America and Asia, with a decrease in Chinese bidding activity, the review showed.
Domestically, the financial services royal commission has been a “regulation game changer”, as emphasised in the review.
It has “galvanized public scrutiny of large corporates and will embolden regulators including ASIC and the ACCC to more proactively and aggressively scrutinize corporate activity in coming years”, according to Mr Pathak.
“The change in landscape together with an increase in government funding for regulators and regulatory action all mean that we can expect corporate regulators to be more proactive and aggressive in 2019”, the review read.