find the latest legal job
Senior Associate - Litigation & Dispute Resolution
Category: Litigation and Dispute Resolution | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Come work for a firm ranked in Lawyers Weekly Top 25 Attraction Firms
View details
Associate - Workplace Relations & Safety
Category: Industrial Relations and Employment Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Employer of choice · Strong team culture
View details
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
Equity raisings mark new era for M&A

Equity raisings mark new era for M&A

Work is about to change for capital raisings lawyers, and their M&A counterparts.

STILL flushed from a year-long string of capital raising deals to help bring clients’ balance sheets into the black, capital raising specialists are getting signs that their work is about to change for them, and their M&A counterparts.  


Capital raisings have in the past year, excluding the last quarter, largely been driven by clients’ need to shore up balance sheets. 


But Andrew Pike, corporate and M&A partner at Freehills, told The New Lawyer that “some of the more recent capital raisings that are occurring are to give funding to acquisitions and the like”. 


The recent spate of capital raisings may signal an upcoming increase in mergers and acquisitions, Pike claims.

Pike says recent capital raisings have been “more about funding for growth and acquisitions”. 


More clients, particularly in the resources space and in financial services, are preparing for future growth, he said. 


He predicts an increase of the recent move to more traditional and strategic M&A, and a return of the IPO market. “In some of those cases the capital raisings have been used to provide funding for future acquisitions.”


But Corrs Chambers Westgarth M&A partner in Sydney, Braddon Jolley, said today he doesn't agree we're moving so quickly towards capital raisings being related to acquisitions. 


"I don't see it," Jolley said. "Go back a couple of years, people increased debt and reduced equity and so they have high-leveraging companies. As a result of the global financial crisis that has moved. Now you see companies de-leveraging by changing their debt to equity ratio. Most of the fund raisings that I have seen at the moment relates to that."

 

Jolley says we're still a while off the majority of capital raisings being related to M&A. "A little relates to acquisition work, but it tends to be the exception rather than the average or the common thing now. So I figure, if we do well, we're still 12 months away from equity work being primarily related to acquisitions."


Freehills partner Tony Sparks, however, said earlier this year that July’s Australand Property Group’s entitlement offer to raise $475 million, typified a new “vogue in capital raisings”. It signaled a move to prudent capital raisings, where issuers don’t have an impending date to pay down their debt or refinance their facilities. 


“But they are putting money away for a rainy day and for when markets might improve,” he said. 


Capital raisings, from the middle of this year, moved from being a last resort for companies and funds wanting to raise money, said Spark. 


Freehills has this year acted on the Ten Network capital raising in August, the Goodman Group’s plans to raise A$1.8 billion to strengthen its balance sheet, and Servcorp Limited’s capital raising, acting for the underwriter while Mallesons Stephen Jaques advised Servcorp. 


Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Equity raisings mark new era for M&A
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
microphone
Oct 20 2017
Podcast: One of law’s most infamous alumni – in conversation with Julian Morrow
In this episode of The Lawyers Weekly Show, Melissa Coade is joined by The Chaser’s Julian Morrow....
protest
Oct 20 2017
High Court overturns ‘excessive’ anti-protest legislation
Bob Brown’s recent victory in the High Court over the Tasmanian government was a win for fundament...
Blocked
Oct 20 2017
Changes to Australian citizenship laws blocked
Attempts to beef up the requirements to obtain Australian citizenship were thwarted this week, after...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...