NZ M&A Predictor: Issue 8
NZ M&A Predictor - issue 8
Buoyant global M&A market coupled with weakened NZ dollar - is likely to attract higher levels of offshore investment in 2016.
Signals point to strong offshore investor interest in 2016
The March 2016 report shows that a buoyant global M&A market – coupled with a weakened New Zealand dollar - is likely to attract higher levels of offshore investment here in 2016.
The predicted appetite and capacity for deal-making among New Zealand companies is looking modest; while global capacity is up 13%. This could see foreign investors and institutions taking a stronger interest in our local companies. The sought-after sectors are likely to include dairy and beef, property (including aged care), R&D-led manufacturing businesses, honey, healthcare and education.
Key findings from the March 2016 M&A Predictor Issue:
- In New Zealand, market confidence is up 1% since December 2014; while capacity (based on net debt/EDBITDA) is expected to be down 1% by December 2016.
- Globally, we’ve seen a 13% increase in capacity, which coupled with a low kiwi dollar, will likely drive strong foreign investment interest.
- Local IPO activity continues to be subdued, given the recent volatility in New Zealand equity markets and slight easing in valuation multiples recently. In theory, a quiet IPO market will pave the way for more M&A transaction volume.
- Australian private equity players are showing continued strong interest in New Zealand assets, with many having recently raised new funds and looking to invest a greater amount in New Zealand and be more flexible with regard to minimum “cheque size” and deal structure.
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