Mid-market M&A to rise 30 to 40%: Mergermarket

Mergermarket created the report in collaboration with Pitcher Partners, analysing the state of mid-market M&A and the trends that will impact the space in 2017.

The data reflected Australia’s progression towards a service-based economy. The leisure sector contributed 17 per cent of the total mid-market deal volume in 2016, equal with the energy, mining and utilities sector, and up 2 per cent on 2015.

“This is an initial marker of the country’s progress in its shift towards a services-led economy,” the report said.

“More significantly, mid-market deals are driving activity in the sector, with mid-market volumes making up almost three quarters (70 per cent) of the sector’s 2016 M&A activity.”

Mergermarket noted that mid-market acquisitions can be an effective growth strategy for many companies in this environment.

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“As Australia’s economy continues to transition, mid-market acquisitions enable buyers to achieve inorganic growth, where organic growth is slow to transpire,” it said.

“Australian corporates target mid-market businesses to add value, particularly those that have established a favourable track record without having grown too large to handle.”

Business services was another significant sector, contributing 12 per cent of mid-market M&A volume in 2016. Others included technology, media and telecommunications (10 per cent), consumer (10 per cent) and financial services (9 per cent).