There is no businessman on the planet that intends to ask “What is M&A?” as such transactions belong to the usual deal-making operations. The success of data room m&a in Australia depends on multiple factors but there is no reason to deny the importance of the sophisticated environment for the deals’ accomplishment. It means that a decent M&A data room should better be involved.
Today a data room for M&A is not identical to the usual depositories. Not many years passed since merger and acquisition data rooms looked like depositories packed with hard copies of the selected papers. A terrestrial data room for M&A was not the most convenient one: the deal partakers were expected to take business journeys to visit M&A data room personally. Eventually, the files must be examined so the deal-makers had no alternative variants and were collaborating via terrestrial venues.
But the launch of several innovations gave businessmen a chance to exploit more progressive technology – virtual data rooms for mergers and acquisitions. Actually, they perform the identical duties as old-school depositories but all the files are being digitalized and placed in the cloud instead of being preserved in hundreds of folders on the shelves of a PDR. According to an endless list of virtual data room reviews, the launch of M&A VDR has a great effect on the quality and speed of projects’ execution.
Data Rooms in M&A 2019-2020
The number of deals in Australia decreased in the of 2019. However, their value grew up rather significantly. Statistics show that in comparison with the 2018, the number of transactions went down by 26% in the Q1 of 2019. But the average value of the deal increased from $84 million (first quarter of 2018) to $ 97 million in the first quarter of 2019.
This tendency can be explained by that the number of smaller deals has decreased. But in general, the Mergers and Acquisition market in Australia is quite active. The most significant activity was happening in Real Estate, Industrials, and Consumer Discretionary. But Healthcare and Energy industries made the most expensive deals.
It’s important to notice that almost all the big transactions made over 2019 involved virtual data rooms as a realm to exchange documents and decide on certain matters. It only proves the importance of this technology. Also, this trend shows that data rooms became the core of any deal.
The most expensive deals in Australia in the first quarter of 2019
Let’s begin with the Energy sector. The first deal was related to the Kestrel mine located in the Bowen Basin. PT Adaro Energy acquired 80% of the stake of Rio Tinto plc for $2.918.93 million. Also, Glencore Plc acquired 100% of Queensland Coal Pty. Limited for $2.21.02 million.
Moving to Healthcare, China Grand Pharmaceutical, and Healthcare Holdings Limited acquired 100% of Sirtex Medical Limited for $29.9 million. In the Materials sector 100% of Avanco Resources Limited was bought by OZ Minerals Limited for $13.1 million. And in Information Technology Turn Left Distribution Pty Ltd was completely acquired by Cellnet Group Limited for $7.95 million.
What to expect in the future?
The mid-market can expect a 67% increase in the number of deals. And in general, Australian businesses, both small and large-scale, are expected to remain rather active when it comes to Mergers and Acquisitions. Virtual data rooms allow companies to look overseas. Therefore, entrepreneurs and investors don’t have to limit themselves only with local options anymore.
Even looking at the worldwide M&A activity, we can tell that companies become more and more active, selling, and buying stakes. And the market will get only hotter over time. Therefore, if you still haven’t implemented a data room in your company, you should fix this situation and prepare for profitable deals in advance.
TOP M&A Data Room Providers
Possessing the knowledge of what is data room m&a the one still has to understand the peculiarities of his own M&A as every transaction differs from others in terms of the tools needed. Therefore, to fulfill the transaction successfully it is required to find the ideal virtual data room for M&A. The major step towards the right environment selection is a careful virtual data room comparison. You may spot enough M&A data room providers operating in Australia. We will focus on 6 virtual data room providers which can be treated as efficient vendors:
- Merrill Database
- SmartRoom VDR
Each of these data room providers has an extended practice in being involved in merger and acquisition transactions. They do not operate exclusively in Australia that is why it is easy to exploit these platforms for transborder and large-scale deals that imply the involvement of the geographically remote deal-makers. Every vendor mentioned has its own peculiarities that should be discussed separately.
Pros of Using Data Room M&A Without Troubles
If the one wants to perform M&A in Australia and has a clear vision of which data room m&a would be the best for the goal fulfillment then the only thing left is to collaborate with the right virtual data room providers. From the moment when the best virtual data room is chosen the one may enjoy the endless flow of pros inherent to M&A VDR. The majority of M&A data room providers do their best to follow the formal requirements and to give the clients the positive impression that would make them search out data room services when they need a functional and safe spot for deal-making the next time.
The following aspects make a virtual data room for M&A a highly demanded instrument:
- A considerable amount of time can be saved as owing to a data room M&A runs faster;
- A cloud-based data room for M&A eliminates the need to visit the repository: it is possible to view the files via any gadget that connects to the Internet;
- The file system intrinsic to the best data rooms helps users find the required papers in a few clicks;
- It is much easier to continue a meaningful conversation with partners via VDR M&A services;
- The digital environment proves to be more than secure;
- The utilizing of a Web-based depository is comparatively cheap.
Eventually, the pluses which the client would come across depend primarily on the data room providers he teams up with. While the basic traits and the basic selection of pros are more or less identical for the most of M&A data room providers the virtual data room comparison emphasizes that each vendor has something interesting to offer.
Review of M&A deals in Australia in the first quarter of 2020
You might feel like Australian companies weren’t so active at the beginning of 2020 since the number of transactions went down. But that’s the false impression because the value of completed deals was much higher than in 2019. The statistics show that in the first quarter of 2020 Australian companies completed 237 deals, while in the Q1 of 2019 the number reached 329 deals (most of them were done thanks to data room providers).
However, on average, the size of the deal increased greatly – in the first quarter of 2019 it reached $97 million, and in the Q1 of 2020 the average is $152 million. This tendency appears because the average transaction value of deals over $100 million increased significantly – from $468 million in the first quarter of 2019 to $710 million in the Q1 of 2020.
What sectors were the most active?
There are three main sectors that held the largest number of deals in the first quarter of 2020 in Australia: Consumer Discretionary, Real Estate, and Healthcare fields. However, if we are to rank sectors by the value of the deal, the top ones will be Consumer Discretionary and Healthcare fields.
What were the biggest deals?
The largest transaction value in the Q1 of 2020 had five deals held by Australian companies, and here are the two biggest ones. During the largest deal, Nippon Paint Holdings Co. Ltd. acquired 100% of DuluxGroup Limited for $4,333.5 million. And the second-biggest deal was Mitsubishi UFJ Trust and Banking Corporation acquiring 100% of Colonial First State Global Asset Management for $4,200.0 million.
So even though we saw fewer deals in the first quarter of 2020 than we had in the Q1 of 2019, the market is rather active with the value of deals growing and with virtual data rooms for m&a it can become more effective.