2021 was a record year for global M&A activity and Western Sydney was no exception. While the market took a breather in 2022, there were still a solid number of deal completions in Australia's third largest economy.
2021 was a record year for global M&A activity and Western Sydney was no exception. While the market took a breather in 2022, there were still a solid number of deal completions in Australia’s third largest economy.
This article focuses on:
Transaction values are included in this article to the extent that deal values have been publicly disclosed.
Western Sydney M&A volume was stronger in 2021 compared to 2022 with 29 transactions closed in 2021 compared to 24 in 2022. The total transaction value of M&A deals amounted to $3.7 billion in 2021 compared to $541 million in 20221 .
The higher value of M&A transactions in 2021 was driven by the take-private of Bingo Industries Limited by a consortium led by CPE Capital Pty. Ltd. including Macquarie Infrastructure and Real Assets (MIRA) for a total amount of $2.7 billion and the acquisition of Bay Audio Pty Limited by Amplifon S.p.A for an amount of $550m.
The story of Bingo Industries highlights the transformation of a small family-owned skip bin business in Western Sydney. Founded by the Tartak Family in 2005, the business is now a large fully integrated recycling and waste management company remaining headquartered in the region. MIRA acquired the company via a scheme of arrangement where shareholders received an all-in cash consideration of $A3.45 per share - at the time representing a 33% premium to Bingo’s one-month volume-weighted average share price - or a mixed cash and unlisted scrip alternative of $A3.30 per share. Bingo’s strong achievements and position in the marketplace, robust asset base and capable management team attracted MIRA and represents another successful exit of a large business grown out of Western Sydney.
Deloitte was pleased to advise Bay Audio Pty Limited, a Western Sydney based company, on its sale to Amplifon S.p.A, a company headquartered in Milan, Italy. Bay Audio was incorporated in 2006 and built a network of retail stores selling hearing care products. The transaction allowed Amplifon to expand its presence in Australia and gain access to the core east-coast market through leveraging over 100 of Bay Audio’s retail stores creating significant value and synergy potential. Furthermore, for Amplifon, the deal solidified their position in Australia by establishing another stronghold by way of Bay Audio’s Parramatta headquarters.
During 2022 services (6 deals), manufacturing (5 deals) and accommodation, food and tourism (5 deals) were the most active sectors.
The majority of Western Sydney businesses sold were acquired by NSW and international buyers. NSW entities acquired 6 businesses in 2021 and 7 businesses in 2022. Of the total 24 Western Sydney deals in 2022, interstate sales accounted for 17% compared to 38% in 2021.
Growth in the number of businesses acquired by Western Sydney based entities continued in 2022, increasing from 2 in 2021 to 6 in 2022.
International buyers continue showing interest in Western Sydney based businesses with 7 acquisitions completed in 2022 compared to 10 in 2021. Cross border transactions mainly included investors from USA, UK, Italy, China and Canada.
Three Western Sydney businesses were sold to private equity funds and venture capital given their strong growth potential, including:
The M&A outlook is positive for Western Sydney given:
Participation of international investors in Western Sydney includes great examples like Amazon opening its new first robotics fulfilment centre in Kemps Creek during 2022, Hitachi setting up an R&D centre that will attract advance technology jobs and innovation and Microsoft’s proposed $1.3b data centre in Kemps Creek.