INTHEBLACK October/November 2024 - Magazine - Page 42
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2024 MERGERS AND ACQUISITIONS UPDATE
Mergers and acquisitions (M&A) play a crucial role in shaping the
business landscape. Stephen Craig CPA, M&A expert and partner at
Pitcher Partners Melbourne, shares insights into the latest M&A trends
in Australia and what is on the horizon in the next financial year.
STEPHEN CRAIG CPA,
PITCHER PARTNERS
CAUTIOUS OPTIMISM
“The highest [confidence score] we have
achieved is 81, and that was a really good
lead indicator into 2021, which was a boom
year for M&A. In 2023, that number dropped
to 75. Not a huge drop, but the overall
declining movement was again a good
indicator for the challenges that the market
faced in 2023. At that point in time, the
market was dealing with multiple rate rises
– inflation was certainly in the headlines.
“Fast-forward to November last year when
we took that result of 77 per cent – so a
slight increase there. We viewed that really
as cautious optimism of the market.”
MID-MARKET CHALLENGES
“I have positioned the mid-market as stable
and the larger cap as more volatile. We are
seeing a little bit of the opposite in the last
six months. The mid-market has seen a bit
of a drop-off in terms of value and volume,
whereas the overall market driven by the
larger caps has probably been far more stable.
“Actually, an increase in deal value and
a smaller drop off in terms of volume. We
are reading into that as a couple of bulge
bracket deals, which are probably propping
up the values.
42 INTHEBLACK October/November 2024
“I think all these cost pressures that
we have talked about are potentially
impacting the mid-market more greatly
than some of the larger businesses.”
LOOKING AHEAD
“The question mark around the next
12 months is, where do the economic
conditions take us? Six months ago,
we thought rates were going to drop.
“Right now, I do not think there are any
lead indicators as to which way it is going
to head, so that is probably the biggest
challenge. Are things going to get tougher?
Is there a potential rate increase out there?
Or are these rate cuts going to eventuate?
“It is not all about interest rates. I know
that is sort of been something I have been
talking about a bit, but overall business
sentiment, are we going to see cost
pressures start to reduce? Are we going
to see cost of living start to come under
control and where is that going to take
us? I think caution is going to remain,
certainly in the near future.
“I think everyone is looking for those
indicators as to is it upwards or
downwards? There is uncertainty at
the moment.”
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