Strong New Zealand Deal Activity Continues Into 2023

PwC New Zealand analysis finds an active pipeline of M&A opportunities

Strong levels of merger and acquisition activity in New Zealand have continued during the first quarter of 2023, with trade buyers remaining key players in deal flow.

Today, PwC New Zealand has launched the latest edition of its M&A Quarterly Update exploring the key trends in merger and acquisition (M&A) activity across New Zealand in January to March 2023.

Analysis by PwC reveals there is still strong levels of deal activity:

Q1 2023 saw 54 deals announced or completed, an increase from the 45 deals announced in Q1 2022.

Trade buyers remain significant players in deal flow, accounting for 74% (40 deals) of deals announced during the first quarter.

27 of the 54 deals (50%) in Q1 involved a New Zealand-based buyer.

Technology, Media, Telecoms (TMT) and Financial Services have dominated the industry sector deals during the first quarter, with 13 deals each.

PwC New Zealand Corporate Finance Leader and Partner Regan Hoult says,

“Transactions are taking longer and people are being more cautious, but we believe that is reversion to norms (following a period of exuberance) rather than outright risk aversion.”

Given the changing economic conditions, recapitalisation and restructuring activity is on the rise. PwC New Zealand Partner Stephen White says restructuring M&A (RMA) solutions should be considered alongside other options to address operational or financial challenges and reposition businesses for growth.

“The RMA approach requires disciplined preparation and marketing, and is often executed under a condensed timetable. While formal restructuring processes may remain relevant, RMA is arguably an option which can deliver superior outcomes in the right circumstances.”

Another key trend is the unprecedented demand for due diligence services seen over the past few years. PwC New Zealand Partner Russell Windsor says with economic headwinds and market volatility, due diligence is now even more essential to the deal process.

“Understanding what a ‘new normal’ looks like, and where the business expects to be in the next 12 - 24 months, is difficult given trading history has been impacted by a number of factors over the last few years, and given the current change and volatility we are seeing in the macro environment. It's important to ensure you have a well articulated, robust and agile 6 - 12 month plan, supported by your latest results and supportable assumptions that align to your strategic objectives,” says Russell.

This analysis forms the basis of the Q1 2023 edition of M&A Quarterly Update, a quarterly publication from PwC New Zealand. More information can be found at https://www.pwc.co.nz/services/mergers-acquisitions-valuations/first-quarter-of-2023.html

ENDS

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ENDS

Nga mihi mahana

Sophie Buchan (she/her)

PwC | Senior Communications & Marketing Executive

Mobile: +64 212019457

Email: sophie.j.buchan@pwc.com

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