Annual Review 2006 - PwC
Annual Review 2006 - PwC
Annual Review 2006 - PwC
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Why?<br />
Our<br />
Clients.<br />
Private<br />
Equity<br />
In a year that has been the biggest ever for mergers and<br />
acquisitions, private equity has been a hot sector with<br />
high-profi le local bid speculation and activity concerning<br />
Coles Myer, Qantas, PBL, Seven, BIS Cleanaway, Flight<br />
Centre, Independent Liquor, DCA, Rebel Sports, 3M and<br />
APN catching the public spotlight.<br />
Mergers and acquisitions<br />
turned over US$3 trillion<br />
globally and 25 per cent of<br />
global IPOs have come from<br />
PE-sponsored businesses.<br />
As EBITDA (earnings before<br />
interest, taxes, depreciation<br />
and amortisation) multiples<br />
reach decade-high levels, PE<br />
funds are increasingly focused<br />
on portfolio company value<br />
creation opportunities, including<br />
bolt-on investments.<br />
34<br />
PricewaterhouseCoopers<br />
The pressure to deploy available<br />
capital, exacerbated by the<br />
infl ux of new global entrants<br />
and signifi cant local fundraising<br />
activity, has seen an increase in<br />
deal size and the emergence of<br />
multi-billion dollar ‘club deals’ –<br />
which have driven fund appetite<br />
into new sectors. Current hot<br />
sectors such as media,<br />
transportation and logistics,<br />
retail and healthcare will<br />
progressively be joined by<br />
resources, listed property trusts<br />
and infrastructure investments.<br />
The signifi cant surge in the<br />
volume and size of high-profi le,<br />
PE-backed P2P (public to<br />
private) transactions over the<br />
past 12 months has raised the<br />
profi le, strength and credibility<br />
of the PE sector. The increasing<br />
availability of leverage funding<br />
will enable PE funds to outbid<br />
corporates, aggressively driving<br />
change through a more fl exible<br />
post-completion operating<br />
model.<br />
While the current wave of<br />
Australasian PE activity has<br />
been impressive, international<br />
trends indicate the best is yet<br />
to come. One in four global<br />
mergers and acquisitions<br />
transactions are PE-backed<br />
versus one in 10 in Australia.<br />
The sector will continue to raise<br />
larger funds and focus on P2P<br />
activity within the top 200 ASX<br />
listed category. This will ensure<br />
a vibrant IPO and secondary<br />
buyout market in two to three<br />
years’ time as PE funds<br />
commence exiting their<br />
investments.
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