Mergers and acquisitions activity surged by one-third over the last quarter, a new report has revealed, led by strong foreign interest in Australian businesses.
According to Ansarada’s Indicators report, over the last quarter – April, May and June – the Aussie tech sector has driven M&A deals by up to 33 per cent when compared to the previous quarter.
The report noted the US has been a major contributor to this boost in activity, with US-based investors eyeing off the Australian technology space, particularly high-profile SaaS players such as Atlassian and WiseTech.
In addition, it added the last quarter saw a host of Australian tech start-ups secure funding from US investors, including LawPath’s $1.8 million funding from US legal services giant LegalZoom, SeatFrog’s $8 million funding round from Octopus Ventures, Zoox’s $677 million Series B funding round led by Atlassian’s Mike Cannon-Brookes, and Lumitron’s $33 million raise from global investors.
“American capital markets have long been an essential source of capital for Aussie companies and the impact this foreign investment has had on Australia’s economic success is significant,” explained Sam Riley, Ansarada co-founder and CEO.
“We’ve seen strengthening confidence from US investors in the local tech scene, which is a nod to the world-leading innovation coming out of Australia.”
Elsewhere in the report, Ansarada found the real estate sector saw a 25 per cent uptick in new deals commencing, which it noted was largely due to attractive alternative asset classes, such as student housing and data centres.
Further, the report found that the industrials sector saw a 23 per cent increase in new deals, in comparison to the previous quarter.
Conversely, consumer deals are down 30 per cent and while activity eased by 18 per cent in the materials sector, compared to the previous quarter.
“This report is consistent at a macro level with the trends we’re seeing on the ground across the various sectors,” said Kunal Mamik, executive director, Investment Banking Division, Morgan Stanley.
“For example, we saw significant activity in the resources and materials sectors at the start of the year but this has slowed over the last two quarters.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
ATO’s 37% tax on Christmas festivities
By George Morice
Performance anxiety not just a bedroom thing
By Dr Louise Mahler
Accommodating older workers ‘not hard, just different’
By Kim Seeling Smith