Pitcher Partners’ mid-market M&A update saw 903 deals valued at $117.9 billion recorded for the first three quarters of 2018, with 17 deals valued above the $1 billion mark.
The corresponding period from the year before saw 805 deals valued at $67.8 billion.
Mid-market deals, valued between A$10 million and A$250 million – continued to buttress dealmaking in volume terms, accounting for 72 per cent of transactions and posting another quarter of positive growth in deal volume and value terms.
North American bidders accounted for 31 per cent of deal volume and 35 per cent of deal value for foreign buyers in the mid-market, followed by European bidders at 18 per cent volume and 21 per cent value.
“Interest in Australian assets is intensifying, particularly among North American buyers due in part to structural similarities in business practices and analogous levels of sophistication,” said Pitcher Partners partner Michael Sonego.
“Australia and North America have a long history of doing business, which lends greater confidence and certainty to both parties when transacting.”
According to the report, private equity and venture capital (PE/VC) also contributed to dealmaking in Australia.
There were 29 deals valued at A$2.3 billion in Q1–Q3 2018, a 24 per cent decline in deal volume but an uptick of 18 per cent in value terms. Additionally, 46 per cent of participants in PE/VC investments were from foreign funds, exemplifying international interest in the Australian market.
“Globally, the availability of investment funds is presently high, with investors seeking quality assets in which to deploy their funds. The rise of inbound investment from North America, driven by strong competition among North America’s 2,500 PE firms, has led to a valuation increase for Australian assets, creating increased competition for Australian PE firms,” said Mr Sonego.
Last week, EY’s Australasian Capital Confidence Barometer found that a record 99 per cent of Australian executives believe the M&A market will remain strong over the next 12 months.