Market conditions are now ripe for baby boomers who are looking to sell their businesses, according to KPMG New Zealand’s M&A Predictor.
The latest indicators continue their upward positive trend – with a strong rise in predicted earnings, and a healthy corporate appetite for deals.
According to Ian Thursfield, KPMG NZ’s Head of Mergers and Acquisitions, the current opportunities are particularly strong for larger privately-owned businesses. This is because higher sale prices are starting to drive divestment activity in this market.
“For years there’s been a lot of talk around the pipeline of Baby Boomers and the expected wave of succession-based sales,” says Thursfield.
“But the reality is that people have been hanging on to their businesses longer. What we’re now seeing, finally, is that strong activity and prices are drawing some of these people out. Prices are now at comparable levels to 10 years ago, and business owners are becoming more inclined to sell into this market.”
Ian Thursfield says this trend is likely to be welcomed by New Zealand-based investors.
In other results from this issue of the M&A Predictor, domestic take-over activity has also been fairly buoyant in the past six months, which is in keeping with the US trend. KPMG has been involved in two recent capital markets transactions – namely Dorchester and Acurity Health Group
Ian Thursfield says the upcoming election is not expected to have a major impact on the M&A market; albeit the mega-cap deals and IPO activity are expected to slow until the new Government is formed.
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