What do WA's top M&A advisors predict for 2017? It's a jungle out there
Cannings Purple's Investor Relations M&A Experts: Andrew Rowell, Karen Brown, Warrick Hazeldine and Michael Cairnduff.
If 2016 was the year of diversity in mergers and acquisitions, 2017 will be the year of the hunter and the hunted.
We can expect consolidation in sectors that raised cash in 2016 and there are many companies significantly undervalued that are likely targets as market sentiment improves.
Much of the activity will be in the resources sector — but the past year showed the WA market has a broad base.
As WA’s No.1 communications business for M&A activity, we have unparalleled insights having advised on 17 transactions with a value nudging $3.7 billion in 2016 alone. That represents the lion’s share of the 271 deals in WA, as measured by Business News in its annual review of performance using the BNiQ Search Engine
What we learned last year is that successful transactions require both depth and capacity to handle diverse and complex deals, whether they be across international borders or here in Australia.
Cannings Purple acted as advisers to CBH on the unsolicited $3 billion takeover approach from GrainCorp-backed Australian Grains Champion, as well as to Gold Road Resources on its $350 million sale of a 50% stake to global giant Gold Fields. We advised leading WA seafood producer Mareterram on a proportional takeover by South African big fish Sea Harvest, and helped a consortium of industry stakeholders on the $135 million acquisition of the Perth Markets Authority.
These deals involved Australia’s biggest co-operative, one of the world’s biggest gold mining companies and the WA Government’s first major asset sale to pay down debt — and together required us to engage strong and strategic cross-border relationships.
A key lesson has been that to achieve successful deals requires strategic management of complex stakeholder relationships.
Our team interacts daily with investment banks, legal advisors, government, listed and unlisted companies, community groups, national and international media. We also create and design all M&A communications material in-house, including target statements, bidder statements and scheme of arrangements. Increasingly, cost-effective investor communications requires mapping and implementing social media campaigns. We have found that providing all of these services from a single source helps maintain confidentiality and data security.
We see the greatest success — and the reason we are no.1 in M&A — delivered in those deals where we can provide strategic advice with hands-on implementation support from the start of a deal to its conclusion and beyond.
So what's on the horizon for 2017?
Most key business indicators point to increased confidence in 2017 and Cannings Purple shares that optimism. Low interest rates, confidence in the Australian dollar, and the nation’s stable political system are all positives for increased M&A activity.
Here’s what you need to know for this year’s M&A activity:
M&A comes in all shapes, sizes and sectors. Diversity marked M&A in 2016 with deals across the resources, agriculture, technology, tourism, retail and manufacturing sectors.
Big predators are on the prowl. Strong balance sheets and undervalued assets make for an even more interesting year in 2017.
Australia is coming up trumps with investors. In-bound investment in Australia, with its stable jurisdiction, is on the rise.
Government assets are hot property. Global investment funds are lining up for the next Government asset sale, not least the potential Western Power IPO.
Less might mean more. Strong commodity prices, particularly in iron ore, and undervalued assets are expected to drive consolidation.
The bigger they come, the harder they fall. Complex transactions require skilled stakeholder engagement across boards, shareholders, employees, government, media and others.
Cannings Purple is the no.1 communications agency in WA, and WA's leading mergers and acquisitions advisor. WPP AUNZ is a cornerstone shareholder in Cannings Purple and part of WPP (LSE: WPP; NASDAQ: WPPGY), the world’s largest communications services group. This close working relationship allows us to provide our clients on-the-ground support in any market, and access to a national and international network of communication specialists.
Talk to us about how we can help your M&A transaction achieve your goals. Click here for more information.
Over the past 12 years, the Cannings Purple group of businesses has advised on 115 M&A transactions with a combined total value of US$126,342,000,000 (US$126bn)