Last week, Pitcher Partners released its third annual M&A report in conjunction with Mergermarket's Dealmakers: Mid-Market M&A in Australia 2017.
The report found that globally, M&A activity was down by 4 per cent in 2016, while in Australia it was up 12 per cent, mostly due to a strong last quarter.
Looking at the mid-market deal activity in Australia in particular, deal numbers dropped 17 per cent but a strong last quarter indicated a potentially positive 2017.
“Year 2016 saw a 17 per cent decline in mid-market deal activity compared to the prior year. But the year finished strongly with a flurry of deal-making activities, resulting in solid deal pipelines heading into 2017,” Pitcher Partners partner Michael Sonego said.
“We expect the upswing in activity to continue well into 2017.”
Mr Sonego expects deal volumes in the first-half of 2017 to be up 30 to 40 per cent when compared to the same time in the previous year.
“While this size of increase may not translate through to the end of the year, we’re tipping that the 2017 year will finish well ahead of 2016, and up by more than 20 per cent in terms of volumes.
Mr Sonego told Accountants Daily that this means good news for accountants.
“For those who work in the deal space, which is things like due diligence and M&A advisers, there's going to be more activity,” he said.
“So while last year was down in the mid-market, we're expecting that it will be up quite significantly this year which will mean more work for everyone and more activity.”
He continued, “It feeds into other areas as well so for a deal, you also require tax structuring and advice to get the deal through.”
While clients want maximum value from their accounting, Mr Sonego warns against accountants overselling themselves and attempting work outside of their scope.
“[Clients] also want the advisers to be honest about their capability. So stick to what they know and do best,” he said.
“The thing with deals is there's a role for many advisers so you shouldn't extend beyond your skill set and capability. Sticking to what you know will ensure the client is satisfied."
Mr Sonego pointed to political uncertainty and elections as having a negative impact on M&A activity last year, and hopes that a more stable environment will result in more deals.
“Political uncertainty and elections always slow M&A activity, and 2016 was no exception.
“With another election not due until late 2019, our only wish for 2017 is that the Turnbull government works as a team to advance Australia and stabilise our political standing, leading to an even more fertile environment for deal making.”
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