Many commentators predicted 2018 as a strong year for M&A - Holding Redlich's experience in the first half of 2018 is consistent with this.
The deals we have been involved in to date strongly suggest it's a time for strategic and opportunistic acquisitions in the market - particularly the mid-market sector. This is driven to some extent by low interest rates as well as developing technology and business confidence.
However, worldwide deal failure rates were higher in 2017 than at the start of the Global Financial Crisis and Australia had the third highest deal failure rate globally.
Hot Topics & Trends
- There has been an increase in the use of earn outs in M&A transactions, particularly as institutional buyers seek more comfort on valuations and sellers seek to share in the increased synergies and growth of the business post-acquisition.
- FIRB retains an active interest alongside the recently created Critical Infrastructure Centre (CIC), in advising the Treasurer across a vast number of industry sectors.
- The market focus on privacy and data has risen as expected with considerable activity around mandatory data breach reporting and the EU General Data Protection Regulation.
- The recent ipso facto changes to the Corporations Act, which stay the enforcement of contractual rights on the occurrence of certain insolvency related events, are not expected to impact M&A transactions significantly.
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