Key facts and figures:
- 86 M&A deals were announced in 2015, up 21% on 2014
- Disclosed deal values in 2015 totalled $1.8bn, down 65% on 2014 values
- The largest increase in deal volume was in SA’s Industrials and Chemicals sector, which saw 14 deals in 2015, in comparison with five in 2014.
- No deals were posted in the Construction sector in 2015
Andrew Faulkner, Principal – Corporate Finance at Pitcher Partners SA, emphasised the importance of the middle market for M&A activity in South Australia.
“49% of disclosed value transactions in the SA M&A market occurred in the middle market range of $10m and $250m. In fact, 95% of all disclosed value M&A transactions in SA come in under $150 million.
“Middle market businesses in South Australia should be ready to make the most of M&A opportunities as they arise – opportunities are growing, and it’s time for businesses to harvest those prospects.
Andrew Faulkner also pointed to the Energy, Mining and Utilities sector, which is still South Australia’s biggest M&A sector by disclosed value, as well as other growth sectors for M&A activity.
“Total deal value in EM&U and across the SA M&A market decreased significantly on 2014 numbers, but 2014’s M&A market was distorted by a $4.2bn Australian Gas Network mega-deal. If we correct for the impact of that mega-deal, we can see growth in disclosed deal values in 2015, and it’s clear that EM&U is still an important driver of growth in the SA M&A market.
“In such a small market we’re seeing a lot of variation between sectors. Compared to 2014, the six most active sectors for M&A activity have changed quite significantly, with Pharma, Medical and Biotech and Financial Services giving way to Industrials and Chemicals and also Business Services.
“The Technology, Media and Telecommunications (TMT) sector was the most active sector in the SA M&A market in 2016 by number of transactions.”
Andrew Faulkner also said that macroeconomic trends over the next 12 months would spell interesting times for the South Australian market.
“Whilst there’s still a significant question as to the impact of the continued mining downturn, this is somewhat offset by current low interest rates, the low Australian dollar and increasing government support for growth sectors.”
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For a copy of the report or for further comment, please contact:
Andrew Faulkner, Principal – Corporate Finance, Pitcher Partners SA, 08 8179 2800
Sabine Wolff, Media and Communications Advisor, Pitcher Partners, 0419 529 577