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‘There is still a lot of capital looking for a home’, says Allens M&A partner
Head of corporate at Allens, Tom Story, has commented on the outlook and opportunities in Australia’s merger and acquisition market, as “strong momentum” from 2021 continues this year.
Jess Feyder
Mr Story spoke with Lawyers Weekly about the outlook of Australia’s M&A market in the second half of 2022. “We think the outlook for the Australian economy for the remainder of 2022 will be reasonably favourable versus the rest of the world,” said Mr Story.
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“Inflation is lower than other countries, household balance sheets are in good shape, our equity market is less exposed to a pullback in tech and high growth stocks, and our strong resource exposure acts as a natural down-side hedge.
“Whilst activity levels will likely moderate over the remainder of the year as the market adjusts to higher interest rates and global inflationary pressures, we expect that the Australasian M&A market will continue to perform strongly relative to global markets.”
Mr Story discussed where key opportunities may arise in 2022: “We think transactional lawyers will still see activity in 2022 in areas such as healthcare, digital infrastructure, resources — particularly critical minerals — and energy related assets.”
Upon being asked about how lawyers can best serve clients in the remainder of 2022, he responded: “There is still a lot of capital looking for a home. The best M&A lawyers will have a strong grasp on their clients’ businesses and the operating landscape and will be proactive in seeking out opportunities for them.
“They will also work closely with sector specialists within their firms to bring high quality, specialist advice to support acquisition plans.”
Mr Story’s foresight has served Allens in the first half of 2022, with Allens being announced to have topped the mid-year M&A league tables for deal value, having advised on deals valued at more than $45 billion for the first half of 2022.
Allens ranked first for deal value in the Australasian M&A league tables in both the Mergermarket and Bloomberg rankings and second in the Refinitiv rankings. The firm also topped Mergermarket’s rankings for announced private equity buyout deals in the Asia Pacific region (excluding Japan).
“It has been an extraordinarily busy first half for M&A deal activity, particularly in Australia and New Zealand with more than $140 billion worth of deals announced. The strong momentum from 2021 certainly continued into 2022,” said Mr Story.
Allens’ co-head of private equity Mark Malinas also commented: “We are pleased in particular to have been able to work with our private capital clients to navigate an increasingly complex deal market.
“Despite global headwinds, we are still seeing strong appetite from private equity and infrastructure sponsor clients for high quality Australian assets, particularly in sectors such as healthcare, technology and digital infrastructure.”
