Quality not quantity: Silver tsunami driving deals for 2025

Succession planning will be one of the most important factors driving mergers and acquisitions in Australia’s mid-market in 2025, but dealmakers are feeling underwhelmed by the preparedness from some business leaders. 

Dealmakers are playing it smarter, with fewer but larger and more impactful deals amid greater competition for targets across the coming 12 months, according to Pitcher Partners’ new Dealmakers Report, compiled in partnership with Mergermarket.  

Nearly all respondents (97%) said they are actively hunting for Australian M&A deals this year and 60% say they plan to invest in the mid-market. 

As the massive demographic change known as the silver tsunami gathers pace in Australia’s boardrooms and business headquarters, 85% say succession planning will be a key driver of mid-market M&A in 2025, a marked increase from 37% in 2024.  

However, dealmakers are sceptical about how well some departing business leaders have planned for their exit, with 1 in 4 reporting that owners are simply unprepared for a sale. 

Andy Hough, Partner at Pitcher Partners Sydney, said the mood among dealmakers was one of wary optimism, and Australian prospects should continue to attract significant attention, but international dealmakers would be ever more discerning. 

“Australia’s strategic importance within the Asia Pacific region remains unparalleled, and dealmaking in 2025 will be about making the right move, not every move,” Hough said. 

“The Australian market, with its stability and strategic opportunities, is drawing interest from those ready to think big, but founders and leaders must not mistake that interest for blind faith. 

“The market signals are that investors are interested in making deals with those who are well-prepared and can demonstrate a compelling vision, which includes doing the legwork that will aid the business in changing hands. 

Mid-market businesses, crucial to Australia’s economy, often have family- or founder-led leadership but with nearly half of all small business owners older than 50, developing exit strategies and succession plans has taken on new urgency. 

While 50% of dealmakers say sellers are generally well-prepared with clear and actionable plans, 25% report that owners are simply unprepared for a sale.  

“Owners that prioritise the work that goes into preparing a business for sale can better respond to the market, avoiding or catching early any issues that can potentially create delays, valuation misalignment or even deal failures,” Hough said.  

Dealmakers gave the Australian M&A landscape a 69% rating, a notable drop from 77% in 2024 and the lowest outlook rating in four years, which is a reflection on the market dynamics. 

Persistent inflation, uncertainty on when interest rates may fall and a shaky domestic property and construction market are giving even the most seasoned dealmakers reason to pause.  

However, Australia remains a compelling investment destination, with a stable regulatory framework and thriving sectors keeping it firmly on the radar of shrewd dealmakers, as was shown in the latter part of last year.   

Deal values posted a much stronger finish to 2024 than expected, with about AU$138.9bn in deals completed last year – a 30% uptick from 2023.  

This data aligned closely with global M&A trends, where slight increases in deal volumes were accompanied by a more pronounced recovery in transaction values.  

“This data signals a level of maturation for Australia’s M&A market, where the ’easy wins‘ of earlier years are mostly exhausted,” Hough said. 

“As a result, deals are becoming more intricate, requiring enhanced due diligence, innovative structuring and deeper industry expertise.” 

Among the sectors ripe for deals in 2025, technology, media and telecommunications (TMT) again stands out according to 85% of respondents, fuelled by integration of technology. 

Dealmakers were also optimistic about the industrials and chemicals industry, with 62% of respondents noting the strategic role the sector has to play in Australia’s transition toward sustainability and advanced manufacturing.  

Distressed deals are more likely to emerge in real estate, construction, and agribusiness due to consistently high interest rates, tightening financial conditions, and pressure on businesses that rely on external capital.  

Hough said the challenges for dealmakers are real, but if macroeconomic pressures ease and confidence returns, the market could rebound further and faster than expected.  

“For those ready to act, the next 12 months could represent a rare window of opportunity to secure high-quality assets at attractive valuations,” Hough said.