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Australia records sixth highest deal volume in 2012

Tuesday, 12 February | By Michelle Hammond

Australia had the sixth highest deal volume of any nation last year, according to a new report, which shows total acquisition value in the Asia-Pacific rose 258% from 2011 to 2012.


Right Click Capital, a Sydney-based venture capital firm, has released findings from its Internet DealBook annual report.


Internet DealBook is a global database that tracks angel, venture capital and private equity investment, along with M&A activity, across internet and technology-related private companies.


All the information is collected from public news sources. It is then stored on, and collated from, Right Click Capital’s internal database.


According to the latest report, total acquisition deal value in the Asia-Pacific rose 258% from 2011 to 2012, with average deal values for acquisitions rising from $70 million to $200 million.


The report shows the Asia-Pacific has overtaken Europe with regard to average deal values, and continues to remain higher than North America.


Between 2011 and 2012, the Asia-Pacific’s cumulative deal value jumped 57%, from $5.81 billion to $9.12 billion.


Australia’s cumulative deal value was buoyed by multimillion deals such as APN’s investment in brandsExclusive, and Optus’ $230 million acquisition of Vividwireless.


Encouragingly, Australia had the sixth highest deal volume of any nation in 2012, with 85 deals.


However, the United States was way out in front, recording almost 3,000 deals – more than half the global total of 4,150 – followed by the United Kingdom with 214 deals.


Also in the top five were India with 117 deals, Canada with 93 and Germany with 88. Australia was ahead of China, which had 81 deals in 2012.


Right Click Capital analyst James Whalley says Australian start-ups should welcome the results.


“What we’d like to say is great companies who have great technology… are still getting funded and getting good valuations,” Whalley told StartupSmart.


“When you break it down, I think the 85 [deals] is a fantastic result for Australia and probably shows the interest globally in Australia.


“Maybe a quarter of those deals is with US investors or from a US acquirer.


“Getting funded as an Australian company, or getting acquired by an international company, is more achievable than it has ever been.”


In addition to the US, Whalley says there’s interest coming from Asia, although it will probably take a “year or two” for this trend to present itself in the data.


Meanwhile, eCommerce appears to have taken a backseat as many investors turn their attention to software and services.


“I think eCommerce, as a category, had a tough year – all the concern has been around retail. It’s interesting to see if there is some consolidation in that space,” Whalley says.


“I think software and services is an interesting category because in 2011, deal value [in the Asia-Pacific] was significantly higher at $43 million. That dropped last year to $19 million.


“But if you have a look at the [global] investment that happened last year into software and services, it almost doubled from $6.6 billion to $11.2 billion.


“For the next year or two, the software and services category is one of special interest.”