News

Aug 21, 2023

What you need to know about mergers and acquisitions in Australia in 2023

This could be the year for business owners in the transport industry to either

This could be the year for business owners in the transport industry to either divest or invest in droves.

Business-to-business service provider, Morgan Shaw Advisory, which works with medium size companies, said there is tremendous opportunity in the market despite recession concerns.

Transport is among the sectors in Australia currently experiencing pent-up demand and those businesses that are in a stable financial position will remain of interest as an acquisition target.

This may, according to Morgan Shaw Advisory, be because these businesses present opportunities that counteract the overall economic trends or have stable and forecastable future cashflows.

Scott's Refrigerated Logistics is a recent example of a significant transport and warehousing company which in recent months entered voluntary administration and is now preparing for liquidation. Updates are expected to follow in the coming weeks based on the outcome of upcoming creditors meetings.

In February, international construction company, Webuild, acquired Western Australia-based engineering and construction solutions company, Clough Group.

Earlier this year, Woolworths Group announced it was exploring joint value creation opportunities with a specialty retail business in Australia and New Zealand.

Meanwhile, a historic truck manufacturing site was purchased for $95 million.

Last December, Capral expanded its operations through acquisition.

Financial services company, Macquarie, points to electrification, digitisation, Environmental, Social and Corporate Governance (ESG) and public-private partnerships with government in policy priority areas (energy, defence, education, health, security) as specific areas that will be in high demand during post-pandemic recovery.

In light of Covid-related disruption, businesses might also be looking to scale up, enter new market segments and consolidate.

With a shortage of skills across Australia, business may also acquire new talent.

Professional services company, PricewaterhouseCoopers (PwC), has reported uncertainty and volatility will bring challenges and create opportunities in mergers and acquisitions this year.

While merger-and-acquisition activity has slowed from the ‘record-setting highs in 2021’, 58 per cent of Australian CEOs told PwC that delaying deals is not something their company is considering in the face of economic challenges in the next 12 months.

Investors who take advantage of the slowing economy, Pwc said, and use it as a chance to make strategic acquisitions at a reasonable price will see the highest returns.

PwC said a total of 1,699 deals were announced locally in 2022 (down from 2,118 in 2021). Publicly disclosed deals reached $78 billion USD (down from $195 billion USD in 2021).

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