Pitcher Partners is pleased to present its 11th annual Deal Pulse, titled “Moving on up”, which highlights Queensland’s Merger & Acquisition (M&A) activity for calendar year 2024.
M&A activity indeed started “Moving on up”, with the second half of the year seeing a significant rebound from a very slow first half. Whilst we have historically seen deal volumes in the 6 months to December exceed those in the first 6 months to June, volumes on the run into December were at 151 deals up a significant 28% (from the prior year’s 118).
Queensland’s M&A annual landscape rebounded to 272 deals (up 9% on the prior year’s 250) and was again fuelled by 97% of the total deals being below the “large cap” category of $250m+.
Upwards deal volumes were led by:
- an 89% increase in Industrials and Chemicals deals up to 36 deals (19 deals) which focused on machinery, packaging and energy storage businesses; and
- continued strong volumes in Technology, Media and Telecommunications (up 23%), where application software and IT consulting deals dominated.
Transactions of note across the market included:
- Stenhouse Lifting Equipment’s sale to Axel Johnson AB; Digga Australia Group’s acquisition of McCormack Industries.
- Simpro’s acquisition of BigChange, a UK-based provider of job management software.
- Hyne Group’s acquisition of pallet suppliers, Rodpak and Pinetec, and Spicers Group Packaging’s purchase of Signet.
Some interesting trends across specific sectors included:
- Business services up by 63% to 31 deals: childcare saw a return to significant volumes with Embark Early Education acquiring 11 centres across Victoria and Queensland.
- Energy, mining and utilities up by 41% to 41 deals: continuing its upward trends in deal activity, surpassing the 10-year average deal volume of 35.
- Construction: maintained its level of M&A, led by the Construction Services subsector, with the Australian arm of ESG and sustainability firm SLR Consulting acquiring Groundwork Plus and FRC Environmental.
- Pharma, medical and biotech: with only 14 deals completed, saw M&A activity in the sector fell well below the 10-year average. A notable deal was Advent Partners’ investment of $51 million for a 55% stake in Private Emergency Health Australia.
We also saw growth in Queensland:
- businesses “buying up” increasing 11%, driven by the 2nd highest volume we have seen in the acquisition of businesses from interstate; and
- owners “selling out” up 9%, where international acquirers returned to the safe haven of Queensland, where they executed the highest level of deals (51) we have seen since 2021.
Overall, dealmakers are optimistic, and this significant rebound in deal activity (particularly over the last 6 months) provides strong momentum into 2025. Sector deals and multiples can fluctuate each year. While opportunities exist for both sellers and acquirers, understanding the drivers behind sector-specific deal activity is critical for successful deal making.
