Pitcher Partners report reveals 2032 Brisbane Olympics boost to Qld construction deals

The Queensland construction sector has doubled its merger and acquisition activity as businesses jockey to take advantage of an unprecedented infrastructure rollout.

A WAVE of infrastructure projects in the pipeline has sparked a surge in merger and acquisitions within the construction and engineering sector while overall M&A volumes have returned to normal levels after 2021’s “year of the mega deal”.

Business advisory firm Pitcher Partners’ latest Deal Pulse: Queensland Building Tomorrow reported $17.9bn worth of disclosed M&A deals compared to the unusually high figure of $44.3bn in 2021 that was fuelled by nine transactions of more than $1bn.

Overall volumes fell to 296 deals compared to 337 in 2021 of which there were 190 in a barnstorming final six months of that year.

The biggest deal announced in 2022 was the ANZ’s $4.9bn acquisition of Suncorp Bank which still needs regulatory approval.

ANZ announced plans to pay $4.9bn for Suncorp Bank in 2022.

Pitcher Partners’ Warwick Face said 2022 saw a return to more normal conditions.

“While the market has certainly not stopped, it is fair to say M&A activity is trending back into the more normal range … after the year of the mega deal,” he said.

“Recent interest rate upward movements are expected by many to have further negative impacts, however given the largely middle market nature of Queensland’s M&A these are expected to be less profound.”

The report found deal-makers were building for tomorrow by strategically investing in businesses that can respond to their changing markets, and also the needs of end consumers.

Mr Face said with the 2032 Brisbane Olympic Games less than 10 years away, construction and engineering businesses were gearing up, and 2022 saw a doubling of M&A activity to 22 deals from 11 in 2021.

“Construction and engineering was the standout sector for us,” he said.

“There’s a pipeline of infrastructure projects out there and the sector is seeing all the investment that will come in the future.”

There was a doubling in mergers and acquisitions in the construction and engineering sector from 11 to 22 in 2022.

Technology, media and telecommunications was the largest sector for deals for the fourth year in a row at 52 while leisure, which was the big growth sector of 2021, dropped to 22 deals from 30 in 2021.

The energy, mining and utilities sector completed 24 deals in 2022 worth $4.83bn, compared to 35 in 2021 worth $25.76bn.

Last year Swiss group Zero Carbon Investek took a 100 per cent stake in Clive Palmer’s QNI Metals for $2bn and included a possible further investment of $800m to replace the coal and gas fired steam and power generator with solar. QIC Private Equity’s took a 50 per cent stake in New Zealand-based smart metering company Vector worth $1.2bn.

Mr Face said Queensland will continue to see high levels of M&A inquiry.

“Deal makers still have optimism around the state of the M&A market and continue to divest and invest where they see value,” he said.

“Due diligence appears to be taking longer as investors wish to ensure the rollercoaster ride

of 2020 and 2021 stabilises, and the businesses they’re acquiring are resilient.”