NZ M&A Predictor - issue 8 | KPMG | NZ

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.

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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.

© 2017 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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