Pitcher Partners is pleased to present our “Building Tomorrow” report on Queensland merger and acquisition (M&A) activity for the calendar year 2022.
Queensland M&A has remained remarkably resilient despite the overall reductions in deal volumes and values. In a future driven by optimistic outlooks, we see a market levelling out after some historic highs:
- Volumes – 296 deals (down 12% on 2021 and its 337 deals); and
- Values – $17.6bn (down 60% on 2021).
There seems a notable sense of strategic consideration compared to 2020 and 2021 with due diligence taking longer as investors shake off the uncertainty of the past years. Investors are particularly interested in ensuring the businesses they are acquiring are resilient. Other sector trends of note include:
- Construction: huge growth in this sector doubling 2021’s deal volume to 22 deals. Nearly half of these were in Engineering Services, reflecting the fact Queensland is ‘building tomorrow’ in the lead up to the 2032 Olympics.
- Business services is seeing continued growth across the Child Care sub sector including investment by Private Equity.
- Leisure: 2021’s stellar growth sector, led by transactions in smaller hotels and motels has moderated. Whilst pub transactions continued at lower levels, we also saw transactions in gaming and fitness.
Whilst the market has certainly not stopped, it is fair to say volumes have headed back into the more normal range. As we come down from the heady highs of previous bumper years, let’s hope this strategic step change to slower dealmaking can build the foundation for a strong return.
We would be pleased to discuss in more detail any questions regarding the report, or our observations on the drivers of divestment and acquisition in your sector.