Monday, March 13, 2023

Merger and acquisition activity set to increase

Last year, 125 deals were completed, and MinterEllisonRuddWatts predicted that this year would be even busier, regardless of whether New Zealand’s borders open to visitors as anticipated.

According to the law firm’s recent study, the technology, financial services, and healthcare industries are still hot, with food and beverage projected to be a big part of future acquisitions.

“With demand and supply increasing, we foresee another big year for M&A,” said Neil Millar, a corporate partner, and private equity expert who added that local and global market dynamics were driving the flurry of deals.

“The extraordinary financial stimulus worldwide has boosted the global economy, creating a massive pool of capital looking for a home,” he said, noting that many of the domestic deals have exceeded $100 million.

“International buyers are experiencing fierce global competition for assets and that is prompting them to look further afield for opportunities.”

A substantial number of investors had already arrived in New Zealand to look for deals, and the number was likely to rise when international border restrictions were removed, while Millar stated that investors were willing to conduct transactions entirely online.

“The arrival of these large investors has created another exit option for the (relatively) mid-sized New Zealand and Australian private equity firms seeking to divest investments held here in New Zealand.

“We are also seeing many local private business owners deciding that now is the time to sell. They’ve seen large, high-profile, privately held companies come to market and achieve great outcomes, and they are keen to follow suit.