US and Canadian companies actively investing in Australia’s M&A market

The Australian mergers and acquisitions market remains active, offering opportunities for both buyers and sellers in the small and medium enterprise (SME) sector. Despite a slight decrease in overall deals compared to previous reports, the resilience of the Australian M&A market is evident.

The Grant Thornton Dealtracker report highlights the continual interest in small enterprises, which may be due to factors like innovation, niche market positions, and the flexibility often found in smaller organizations. While larger deals may face more scrutiny and caution in the current economic climate, the SMB market remains a dynamic area for transactions.

Jannaya James, Partner – Corporate Finance at Grant Thornton Australia, expects deal activity to soften in the short term due to ongoing market uncertainty. While there is still investable capital available, there is a cautious approach towards deploying it. The report anticipates a stabilization of deals in the next 12 months but suggests a lower likelihood of a return to historical levels of initial public offerings (IPOs) due to market volatility.

The Grant Thornton Dealtracker snapshot reveals insights into recent transaction trends. While there was a rebound in deals in the first half of 2023, the final quarter of 2024 saw a decrease in deals due to global economic uncertainty. Overseas buyers, constituting 36% of transactions, increased their focus on Australia, despite facing challenges such as regulatory scrutiny. Investment Managers saw heightened activity, particularly in the technology sector, as they looked for growth opportunities.

IPOs continued to decline, with small and medium-sized businesses being preferred targets for acquisition, mainly for deals under $100 million. The median deal EBITDA multiples increased to 8.3x, exceeding the long-term average, driven by rises in multiples across sectors. The US and Canada were the leading acquirers of Australian businesses, followed by European and Asia-Pacific buyers.

The Dealtracker 2025 covers transactions between July 2013 and December 2024, focusing on ongoing business sales. Grant Thornton’s decade-long analysis of deal activity provides valuable insights into the evolving M&A market landscape in Australia.