Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kiwi firms engage in positive Merger & Acquisition deals

13th March 2014

Market confidence on the rise as Kiwi firms engage in positive Merger & Acquisition (M&A) deals

The current merger and acquisitions climate is seeing plenty of ‘positive’ deals to drive company growth and expansion, according to KPMG New Zealand’s latest M&A Predictor.

The good news story for New Zealand continues – with the latest M&A Predictor figures showing both rising capacity and confidence.

Tony McNaught, KPMG NZ’s Head of Mergers and Acquisitions, says the market is active and buoyant.

“The kind of deals we’re now seeing in the marketplace can be characterised as positive deals. Companies are making proactive, growth-based decisions – they’re seeking out opportunities for enhanced earnings and performance.”

This is a very different picture from the M&A climate a few years ago, says McNaught.

“We’re seeing fewer deals being done because the banks have stepped in, or because poor profitability has left firms cash-strapped. It’s certainly a different beat from the more negative drivers for M&A activity we have seen over the last few years.”

The future climate has different implications for business owners, depending whether they are looking to acquire or divest.

“For business owners who are thinking of selling, this latest M&A Predictor indicates there are currently a healthy number of buyers in the market,” explains McNaught.

“On the other side, if you’re looking to grow by acquisition, you’re going to have a decent amount of competition. And based on the latest forward multiples, the price you’re likely to pay is on the rise.”

KPMG New Zealand’s March 2014 M&A Predictor found:

• The outlook for M&A activity in New Zealand remains ‘very positive’ for the next 12 months.
• Market confidence is up 12% since June 2013, with capacity expected to be up 8% by December 2014.
• Confidence levels across the Asia Pacific region, including Australia and China, have increased markedly since mid 2013.
• New Zealand’s Initial Public Offering (IPO) activity during 2013 was at a 10-year high, with 10 new listings. IPO activity during 2014 is also expected to be strong.

About KPMG’s M&A Predictor
The Predictor is a forward-looking tool, published every six months, that helps our clients consider trends and expectations in merger and acquisition (M&A) activity. By tracking important analyst indicators up to 12 months forward, it examines the appetite and capacity for M&A deals. The rise or fall of forward price to earnings (P/E) ratios offers a good guide to overall market confidence, while net debt to EBITDA (earnings before tax, depreciation and amortisation) ratios help gauge the capacity of NZ firms to fund future acquisitions.

KMPG International also releases a Global M&A Predictor twice a year which provides a similar analysis by sector and country across the globe.

About KPMG New Zealand
KPMG is focused on fuelling New Zealand’s prosperity. We believe by helping New Zealand’s enterprises succeed, the public sector do better and our communities grow, that our country will succeed and prosper.

KPMG is one of New Zealand’s leading professional services firms, specialising in Audit, Tax and Advisory services. We have 825 professionals who work with a wide range of New Zealand enterprises – from privately owned businesses, to publicly listed companies, government organisations, and not-for-profit bodies. We have offices in Auckland, Wellington, Christchurch, Hamilton, Tauranga and Timaru.

Globally, KPMG operates in 155 countries; employing more than 155,000 people in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (”KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news