Qld deals climb despite global jitters over Trump, Brexit

QUEENSLAND mergers and acquisitions climbed 26 per cent to $7.6 billion in the first half of the year, led by a mega-deal involving cancer treatment operator Icon Group.

Dr Ian Irving Haematologist (left), Dr Brett Robinson and Icon co-founder Stuart Giles at the Icon Cancer Care clinic in Townsville. Picture: Fiona Harding

QUEENSLAND mergers and acquisitions climbed 26 per cent to $7.6 billion in the first half of the year, led by a mega-deal involving cancer treatment operator Icon Group.

Pitcher Partners Queensland Deal Pulse report shows 146 takeover transactions in the past six months, up 12 per cent on the average number of deals in past half yearly periods.

The $1 billion sale of a majority stake in Brisbane-based Icon Cancer Group to a consortium led by QIC and Goldman Sachs dominated deals in the first half of the year.

Pitcher Partners corporate finance partner Warwick Face said the buoyant M&A environment came despite a global downturn in takeover activity.

Other major deals in the first half included Collins Foods’ agreement to acquire 28 KFC restaurants located around Australia from Yum! Brands for $110.2 million and Vinci Construction International’s offer to acquire Seymour Whyte for $113 million.

Mr Face said that while deals at the top end had slowed, Queensland M&A had accelerated further as companies sought growth and takeover targets looked at succession plans. Under its new investors, Icon is looking to expand its cancer clinics into Asia further.

The market had seen a change in the sectors attracting the most deals, with technology, media and telecommunications (TMT) being replaced by medical-related transactions.

“While technology deals are still taking place, 2017 is seeing strong growth in pharma, medical and biotechnology and also consumer related transactions,” he said. Mr Face said total M&A deals are expected to top last year based on the resilience and strength of the local market.

“In light of the transactions we are aware are in progress, we expect to see a strong run into Christmas,” Mr Face said. “This is despite concerns at the beginning of the year that global forces such as Brexit and Trump would impact M&A confidence.”

The tourist sector continued to see more deals with Ingenia Communities Group acquiring Cairns Coconut Holiday Resort for $50 million. In agriculture, Ambalindum Station and Numery Station were acquired by Hewitt Cattle Australia for $50 million.

Last year, the number of M&A deals rose 10 per cent to 284 but the total value of transactions fell 67 per cent to $5.6 billion.

Most M&A deals in Queensland are valued between $10 million and $250 million, reflecting the fact the state’s economy is largely based on small-to-medium sized companies.