Dealmakers
Australian mid-market M&A
The Australian M&A market is at a crossroads
The view ahead for dealmakers presents equal parts challenge and opportunity.
In our recent survey of dealmakers, the mood of the market for 2025 is one of wary optimism. Even amid persistent challenges (domestic political impacts and ongoing economic headwinds), ambition remains strong, although sentiment has become more circumspect.
Dealmakers gave the Australian M&A landscape a 69% rating, the lowest outlook rating in four years. It’s a signal that today’s market dynamics are forcing even the most seasoned dealmakers to pause and rethink their intentions.
The year ahead is set to throw up its fair share of surprises. If macroeconomic pressures ease and confidence returns, the market could rebound further and faster than expected. Nowhere is this more evident than in the mid-market, where succession planning, founder exits and consolidation are creating fertile ground for dealmakers. That’s not to say the mid-market hasn’t faced its share of challenges thanks to stubborn interest rates and inflation.
These challenges are likely to remain, but the current climate comes with opportunities too. For those willing to embrace this uncertainty, 2025 could be the year where aspiration meets opportunity as the next big chapter in Australian M&A unfolds.
Dealmaking in Australia: 2024 in numbers
Looking to 2025
While deal volumes remain below pre-pandemic activity, these lower levels signal a maturing market where quality is paramount. Dealmakers are playing it smarter, betting on fewer but larger and more impactful deals.
The Australian market, known for its stability and strategic opportunities, is drawing interest from those ready to think big. As the market evolves, several key themes are emerging that will transform how deals get done:
- Selective investment strategies: Dealmakers are becoming more discerning, prioritising quality over quantity.
- Market maturation: Australia’s M&A market has reached a stage of greater sophistication, and so deals are becoming more intricate, requiring enhanced due diligence, innovative structuring and deeper industry expertise.
- Economic uncertainty: Global economic conditions are influencing M&A activity. These factors are causing dealmakers to approach transactions with heightened caution, as economic unpredictability and higher costs of capital pose challenges to valuations, financing and long-term performance projections.
Key sectors and deal drivers
Spotlight on sectors
Respondents reflect on which sectors will be hotspots for mid-market M&A, and which may experience distress in 2025.
Leadership transitions driving deals
Generational leadership transitions are poised to be a game changer in the mid-market across 2025.
Mid-market businesses, which form the engine room of Australia’s economy, often have long-standing family or founder-led leadership structures. With many of these leaders approaching retirement, the urgency to develop and execute succession plans has intensified.
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