Transactions Newsletter – August 2021

As Australia continues to grapple with the impacts of COVID-19, the availability of cheap capital, strong business confidence and the rapid adoption of technology has driven M&A activity to all time highs and we continue to see the pipeline build. Even with all the ‘noise’, our advice to sellers remains the same – careful and thoughtful planning is required to avoid any last minute ‘showstoppers’ on your deal. For buyers, given high valuations are driving much of the activity, now more than ever our clients are focused on setting and validating the deal’s purpose, which must be underpinned by a solid strategy, thorough commercial and operational due diligence and an agile post-merger integration plan to extract value.

FY21 Deals by Industry Sector

Our team provided high quality, cash focused advice on a range of deals across multiple sectors though in FY21 including Transport & Logistics, Healthcare and Aged Care, Water and Waste Services and Mining and Mining Services. The team continues to be active on transactions in Mining and Mining Services, Financial Services, Gaming and Leisure and Education.

 

Mining – 13%

Consumer products – 7%

Construction & engineering – 6%

Food & beverage – 5%

Education – 4%

Technology – 3%

Other- 1%

 

Recent Transactions Activity

We supported Allegro Funds to acquire the Toll Global Express business, providing operational and commercial due diligence, restructuring and deal structuring advice, and support in planning the separation and transformation post acquisition.

Sell side assistance in relation to the divestment of MyLifeMyFinance to Challenger Limited for $35m. Our work included analysis of historical and forecast earnings, loan book and net tangible assets.

Sell side assistance for Xact Solutions, a leading provider of industrial property and supply chain consulting and management services, in relation to the sale to TM Insights, a Next Capital portfolio company.

Due diligence for Ausenco on the acquisition of QCC Resources, a leading coal process and materials handling service provider, from Downer EDI.

Pre-lend due diligence, our scope of work focused on the quality of earnings including analysis of the key business drivers over the forecast and historical period as well assessment of normalised earnings.

We provided financial due diligence with respect to Quintet Yorkway’s majority stake investment in Infrastructure Advisory Group. Our work focused on assessing the quality of earnings, forecast assumptions, working capital along with SPA negotiation assistance.

Engaged by MedAdvisor, a world class medication platform, to assist with their c.USD34.5 million acquisition of Adheris Health. We assisted with financial due diligence, financial modelling, integration and acquisition accounting advice.

RACV engaged McGrathNicol to advise on its acquisition of the remaining 49% interest in Nationwide Group. Our work included buy-side financial modelling & advice including a detailed assessment of the business’ financial forecasts and the underlying assumptions.

Lead Advisor to PresCare Home & Community Care, on its successful sale to MyHomeCare. We initially undertook a performance improvement project engaging with management to materially improve the growth and profitability of the business.

​Advisor for the integration of City West Water and Western Water, to form Greater Western Water. We supported the planning and execution phases of the integration, focusing on project management, risk management, governance, stakeholder engagement and reporting.

Acquisition due diligence for a private consortium. Our scope of work focused on the sources and uses of the capital raise, as well as forecast revenue, earnings and cash flow.

Lead Advisor on the sale of three Residential Aged Care Facilities (250 beds) to Apollo Care. Our role included extensive strategic and governance assistance prior to sale, followed by leading the divestment campaign.

 

Team Growth

Our team continues to grow and we are pleased to advise that Rhyan Stephens (1 January 2021) and Selina Gerner (1 July 2021) have been admitted to Partnership over the last 12 months.

Rhyan joined the team following two decades of executive positions in corporate environments across Asia, Oceania and the Middle East. With a strong focus on operational improvement and supply chain performance, Rhyan’s appointment has strengthened our service offering into key industrial sectors such as manufacturing, procurement, transport & logistics, and eCommerce. His previous work in global commercialisation roles is also of interest to emerging clients in healthcare or biotech who are looking to scale up their IP and monetise their network.

Selina’s appointment augments the firm’s strong Advisory presence in Queensland and further imbeds our Transactions, Strategy & Business Improvement capability on the ground in that market. Selina has worked across a broad range of industries but has recently provided extensive expert advice to health and aged care sector clients including providers and Government departments.

We also welcomed a number of new starters over the last 12 months including James Swan (Director), David King (Director), Tom Shaw (Manager), Brendan Smart (Manager), Jeremy Sher (Manager), Alex Chang (Assistant Manager) and Georgia Lascelles (Senior Accountant).

Thank You

Whilst we are proud of the results achieved for our clients in FY21, we are very proud of the team’s dedication, resilience and support for each other and their communities in these challenging times.  We are grateful for your support and look forward to working together in FY22.

AUTHORED BY

David Barnaby

David Barnaby
Partner, Melbourne
T: +61 3 9038 3188
E: dbarnaby

Christopher Davey

Christopher Davey
Partner, Melbourne
T: +61 3 9038 3137
E: cdavey

Hugh Monaghan

Hugh Monaghan
Partner, Sydney
T: +61 2 9248 9915
E: hmonaghan

Rhyan Stephens

Rhyan Stephens
Partner, Sydney
T: +61 2 9248 9977
E: rstephens

Paul Sweeney

Paul Sweeney
Partner, Sydney
T: +61 2 9248 9914
E: psweeney

Selina Gerner

Selina Gerner
Partner, Brisbane
T: +61 7 3333 9848
E: sgerner

Sean Wiles

Sean Wiles
Partner, Sydney
T: +61 2 9248 9986
E: swiles

Rob Arthur

Rob Arthur
Partner, Sydney
T: +61 2 9248 9974
E: rarthur