Australian firms less likely to buy than sell in 2015

Australian recruitment businesses are less likely to make acquisitions in 2015 than they were in 2014 but the percentage of those that expect to be on the sell-side this year has increased since last year, according to the findings of a newly released survey.

Thu, 19 Mar 2015

Australian recruitment businesses are less likely to make acquisitions in 2015 than they were in 2014 but the percentage of those that expect to be on the sell-side this year has increased since last year, according to the findings of a newly released survey.

Prepared by corporate advisory firm Acquisiti, M&A Expectations for the Australian Recruitment Sector 2015 points out that as a combined group, half of the 52 participants in the online survey indicated that they would be active players in mergers & acquisitions in 2015, on either the buy-side or sell-side. 

The survey report points out that the findings are “in line with 2014 findings but with more intending to sell than acquire in this period than last”.  

Top benefits of engaging in M&A activity were identified as expanding existing service lines (33.3%), geographical expansion and accessing new clients (both at 28.57%) and entering new market sectors (26.19%). 

The most popular sectors for potential acquisition were identified as ICT (43%). This “comes as no surprise” because of anticipated increases in labour demand in the sector, the report analysis said. ICT was followed by health, medical and/or allied health (26%) and engineering/technical (24%). The least likely sectors to feature in any 2015 list of completed transactions were legal and communications/media and or advertising (both at 2%).

What the report termed “a significant proportion” of respondents – at 38% – indicated that “minimal dependence on the owner” was seen as the top aspect of an opportunity when engaging in M&A activity. Other key positive factors were temporary worker/contractor base and gross profit, both at 33%. 

Of the participants, most of the businesses’ head offices were based in New South Wales, which includes Sydney, and Victoria, which includes Melbourne. Two international firms participated, one from Indonesia and one from Japan. Most of the participating businesses were privately-held, with one public company contributing. 

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