Software and services is set to be the “hottest sector” for mergers and acquisitions in 2017, according to Right Click Capital.
The company’s Internet DealBook Report 2016 has shown that software and services accounted for nearly a third of all Australian M&A deals (excluding IPOs) in the 2016 calendar year, comprising 42 of the total 135 deals.
“Looking to 2017, the hottest sector to keep an eye out for in Australia will be the software and services sector, for both investments and acquisitions,” said Right Click Capital co-founder Ben Chong.
Mr Chong also said that 2016 had seen a “proliferation of small stage investment capital, with seed rounds being done at low six-figure values” for fledgling businesses, which he said was in keeping with global trends.
“At the same time, given that there’s a growing pool of investors in Australia and abroad with greater access to pension money, there is the potential for larger cheques being written for companies of scale,” he said.
Cumulatively, Australia saw $2.88 billion in non-IPO merger and acquisition deals, with the average deal size being $30.92 million, the report said.
This was comprised of $405.99 million in investments and $2.47 billion in acquisitions, with the average deal sizes sitting at $5.72 million and $112.2 million respectively.