Accounting network Grant Thornton has released the findings of its 2023 Agribusiness, Food and Beverage Dealtracker, an analysis of the Australian mergers and acquisition and equity market activity in the Agribusiness, Food and Beverage (Ag, F&B) sectors for the 18-month period ended 31 December 2022.

Despite global economic uncertainty, the impacts of severe weather events, and global supply chain issues, the Dealtracker shows a stable level of deal activity which remains consistent with the previous reporting period – suggesting a quiet confidence in Australia’s Ag, F&B sector.

However, transaction numbers remain below pre-pandemic levels, indicating that businesses remain cautious and considered with investments.

Australia ranked 5th in the world by merger and acquisition deal volume (consistent over the historical reporting period) with 67 deals

Tech-enabled businesses were at the centre of investment and IPO activity. This confirms businesses that invest in technology increase profitability and data enabled decision making capabilities are attractive acquisition targets.

ESG also remains front of mind in all acquisition activity. Businesses with sustainable practices and dedicated Environment, Social and Governance (ESG) strategies are shown to be in demand, with stakeholders being clear about their ESG requirements and direction in acquisition activity.

“The Australian Agribusiness, Food and Beverage industry continues to show resilience throughout this Dealtracker’s reporting period, which we have also witnessed from the industry over recent years. As a result, Australian Agribusiness, Food and Beverage businesses remain an attractive investment opportunity for domestic and foreign buyers,” said Cameron Bacon, Corporate Finance Partner at Grant Thornton.

“Our assessment of the acquisition data shows Australia is a key player in the global sector and presents opportunities to ensure long-term global food security through the development of AgTech and increased production efficiencies.”

Over this 18-month reporting period, transaction multiples remained steady combined with an increase of 3.7 per cent in global merger and acquisition deals and with 73 global IPOs being recorded – the second largest volume of IPOs in an 18-month period since Grant Thornton’s Dealtracker began in 2011.

Close to 73 per cent of Australian businesses sold were acquired by domestic buyers, albeit with a number of these domestic buyers having majority foreign ownership.

The Asia Pacific region remains Australia’s biggest foreign investor in Agribusiness, Food and Beverage, with the USA and Canada the next largest. Investment manager activity was strong and consistent with longer term levels, which may be indicative of future increases in merger and acquisition volumes.

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