M&A driven by National Growth Focus: EOFY Reflections

Found in: Blog

After such a dynamic period in all of our lives, the last 12 months is worthy of reflection as we consider what the next year will hold. 

Last year was certainly a dynamic time, particularly for Western Australia.  WA has been extremely fortunate on 2 levels. Resulting from a mixture of good fortune and good management, the impact of COVID has been “light touch” in this state, and in Australia more broadly.  Despite the effects of the pandemic, WA’s mineral exports continue to grow and create a domino impact in the local and national economy.

In Grondal Bruining’s corporate and commercial practice, there was a steady increase in business confidence and work from the start of the financial year. By December work levels had returned to pre-COVID levels and were solid and consistent.  However, following the Christmas break, things have really taken off.  It was as if the Australian business community decided it had had enough of being spooked by the risk of COVID and needed to get on with business.  Our firm has been extremely busy in the first half of this year, and I understand that has been the same for most in the Perth business community.

I believe COVID is driving much of this increased activity.  The chaotic impact that COVID has had internationally has influenced Australian businesses to focus their growth initiatives within Australia.  We have seen a number of transactions where local companies have looked to expand their Australian footprint, whether it be east coast businesses seeking a foothold on the west coast or vice versa.  For example, in the last year we advised Austal in relation to the strategic acquisition of its first east coast port facilities, we advised Baileys on its sale to Evergreen driven by Evergreen’s wish to expand its market presence in WA, and we are advising a large WA business on its potential trade sale to a large east coast player looking to round out its national footprint. 

Australia’s COVID performance undoubtedly makes it an attractive jurisdiction for international growth initiatives from offshore companies.  Evergreen is owned out of the UK, and its acquisition of Baileys reflects an international view that Australia is a good place to invest at this time.  In advising Lacour Energy with the divestment of a windfarm project, we saw strong interest from a number of international parties looking to invest into the Australian renewables space.  Further, in advising Linear Clinical Research (one of Australia’s premier clinical trials providers), we noted that they are experiencing significant uptick in work with many international sponsors moving their clinical trials work to Australia.  

And of course, international stimulus intended to counteract the impact of COVID on international economies is driving the demand for our natural resources.  This has flow on effects for the Australian resources industry and the broader economy.  We saw this firsthand in advising our mining services client Aquirian in taking this opportunity to IPO (along with a number of other resources dependent businesses).

So while COVID has obviously had a detrimental effect on many parts of the Australian economy, many sectors of the economy appear to have found that COVID has been a positive impactor.

It is hard to know where COVID will lead us into FY2022 and beyond.  An effective vaccination program around the world may mean we return to “normal”.  But as we are seeing, that is not an easy thing to achieve especially if the virus continues to mutate.  Whatever happens, the effects of the international stimuluses should be long lasting. Australia’s performance and attractiveness is likely to lead to a step change in how our country is viewed for growth opportunities by local and international business alike (at least in the medium term).  As a result, I believe our economy will continue to be strong for at least the next few years, provided Australia continues to manage COVID as effectively as it has to date.

Having said all that, I’ll be glad when “normal” returns if only to be able to see family in Melbourne again!  I can only hope that by then Carlton’s fortunes will have turned for the better and I will be able to enjoy an afternoon at the MCG (although I think I’m more confident about the Australian economy than I am about that happening – sigh!).

 

Don’t hesitate to contact Gary Thomas to discuss your M&A plans, commercial law and corporate law requirement on +61 8 6500 4375.

ABOUT GRONDAL BRUINING

Grondal Bruining is a commercial law and litigation firm located in West Perth, Western Australia. As a team, we are fully committed to providing the highest quality legal services, with a focus on power & utilities, oil & gas, resources and other commercial and industrial areas.

The team at Grondal Bruining is renowned for providing outstanding benefits to clients accepting matters where we can deliver an uncompromised fee advantage, specialised legal advice and service excellence. Grondal Bruining clients and referrers benefit from direct Principal access and an experienced and flexible legal team with extensive local knowledge and business networks. We are sought for our personal, proactive and professional approach to delivering the highest quality commercial and corporate outcomes and have been widely recognised as leaders in our fields by external ratings directories.

 Limited Liability by a scheme approved under Professional Standards Legislation.

Disclaimer and Terms of Use.