{"id":45844,"date":"2023-10-20T15:46:44","date_gmt":"2023-10-20T15:46:44","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/one-in-three-australian-corporates-are-looking-to-buy-startupsmart\/"},"modified":"2023-10-20T15:46:44","modified_gmt":"2023-10-20T15:46:44","slug":"one-in-three-australian-corporates-are-looking-to-buy-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/one-in-three-australian-corporates-are-looking-to-buy-startupsmart\/","title":{"rendered":"One-in-three Australian corporates are looking to buy – StartupSmart"},"content":{"rendered":"
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Corporate acquisition intentions are at a four-year high, meaning plenty of buyers for small business owners keen on making an exit.<\/p>\n

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According to accountancy Ernst & Young\u2019s latest annual Capital Confidence Barometer, 34% of Australian corporates hope or intend to merge with or acquire another company in the next 12 months.<\/p>\n

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Graeme Browning, the managing partner of transaction advisory services at EY, tells SmartCompany<\/em> that after several years of cost-cutting and internal productivity drives, growing through acquisition is one of the only options left open to many corporates, given the slow rate of overall economic growth.<\/p>\n

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After the global financial crisis, he says, medium-sized to large companies focused on repairing their balance sheets, which Browning says most were able to do fairly quickly.<\/p>\n

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But even though they\u2019ve had the cash to invest in acquisitions, most have been reluctant.<\/p>\n

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\u201cWhat\u2019s been lacking is confidence in the economic outlook, both in Australia and globally,\u201d he says. \u201cBut what\u2019s happening now is that the United States is growing, China continues to grow, and Europe, well, it\u2019s been quiet, so it\u2019s seen as stabilising.<\/p>\n

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\u201cAs a result of these factors, sharemarkets around the world have been increasing fairly significantly, and confidence has started to turn. People in corporations are thinking much more about growth rather than weathering the storm.\u201d<\/p>\n

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Of the 150 Australian executives surveyed by EY, 70% said their companies would be focusing on growth over the past 12 months, which is double the figure from last year.<\/p>\n

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And for that, one in three companies are looking at mergers or acquisitions.<\/p>\n

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\u201cMost of the companies acquired are going to be smaller companies,\u201d Browning says. \u201cFor small businesses, that\u2019s a great opportunity that hasn\u2019t been around for years to sell, or sell down.<\/p>\n

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\u201cAnd right now, there are more buyers than sellers, because corporates have little choice. They\u2019ve squeezed most of the costs out of their business already, and have to look for other strategies to achieve growth.\u201d<\/p>\n

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Because of the small sample size, EY doesn\u2019t break down the results by industry. However, speaking anecdotally, Browning says he doesn\u2019t think the drive to acquisitions is particularly focused around one sector of the economy.<\/p>\n

 <\/p>\n

\u201cFrom my own observation, it\u2019s a fairly broad-based transaction market at the moment,\u201d he says. \u201cThere are transactions happening right across almost all sectors. I think the reason for that is there\u2019s been a transaction drought for a number of years, so there\u2019s quite a broad-based pent-up appetite to do deals. It hasn\u2019t been just one sector that\u2019s missed out.<\/p>\n

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\u201cWith all the initial public offerings we\u2019re seeing, there\u2019s no particular pattern or sector dominating at the moment.<\/p>\n

 <\/p>\n

\u201cBasically, this is a very good opportunity. If SMEs are looking to sell, larger companies, as well as private equity, are looking to buy.\u201d<\/p>\n

 <\/p>\n

This story first appeared on SmartCompany.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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