The mergers and acquisitions space has continued its sluggish FY2023, with HLB Mann Judd Sydney’s Australian M&A Review for Q2 FY2023 showing a 40 per cent drop in the number of transactions compared with the corresponding period in FY2022.
A total of 270 M&A transactions were completed in the quarter, down from 452 in Q1 FY2022.
This number is slightly higher than last quarter, which totalled 263 transactions, but continued the trend of year-on-year declines.
There was an even larger drop in average deal size, decreasing from $215 million in Q2 FY2022 to $84 million in Q2 FY2023, which is also down considerably from last quarter’s average deal of $130 million.
HLB Mann Judd said the drop “can be attributed to a drop in the number of transactions with a deal value in excess of $100 million in FY2023 compared to FY2022”.
Among the major deals completed during the period were Aquaculture Australia Company’s $1.68 billion acquisition of salmon farming company Tassal Group, and Thoma Bravo’s $1.06 billion acquisition of aerial technology company Nearmap.
Consumer discretionary, industrials and materials were the top three sectors by the number of M&A deals in the quarter, while the consumer staples and utilities sectors topped the list for deal value.
“As observed in the HLB Mann Judd IPO Watch Australia 2023 Report, the materials sector continues to dominate the market for new listings in 2022. However, the total funds raised from the IPOs fell significantly in 2022 to $1.07 billion compared to $12.33 billion raised in 2021,” the report said.
“Improvements to the IPO pipeline for 2023 are likely dependent on a reduction to macroeconomic and geopolitical uncertainty impacting the investor market, which are also impacting M&A activity in the recent quarters.”