DealTrends FY2023

Welcome to KWM’s DealTrends FY23, our annual market report on Australian Private M&A deals between 1 July 2022 and 30 June 2023.

Recent years have shown how quickly tides can turn in the deal-making environment. Initial uncertainty generated by the COVID-19 pandemic was followed by strong deal making conditions including low interest rates, high levels of available capital and strong industry confidence.

FY23 saw these favourable conditions shift under the weight of steep increases in global and domestic interest rates in response to a COVID stimulus-driven inflationary environment.

Key call outs and trends in the DealTrends FY23 report include:

• the median deal value was $53m (down almost 50% from FY22). The median deal value for competitive sale processes was almost $200m (down approximately 60% from FY22).
• while deal values dipped, foreign investment approvals continue to feature prominently, with the ever-increasing complexity of the FIRB regime requiring approval in almost 40% of all deals,  a steady increase over a number of years.
• cross border activity has picked up following the COVID pandemic, comprising 60% of all deals. The US continues to be the most common offshore jurisdiction involved in transactions.
• deferred consideration and earn-outs played a prominent role during the COVID pandemic, and this continued in FY23, featuring in over 40% of all deals.
• the prevalence of anti-bribery warranties (56%) and cyber security warranties (34%) reflect buyers’ continued focus on reputational risk.