After a volatile 2023, Australian mergers and acquisitions rebounded in 2024 and into 2025. Yet beneath the headline surge in deal values, the mid-market — transactions typically in the A$20m–A$500m range — has been slower to recover. Participants are contending with tighter diligence, shifting financing options, and the early impacts of a major regulatory reset.
Despite these headwinds, deals are still getting done. Sponsors and strategic buyers remain active where assets offer resilient earnings, clear growth stories, or exposure to structural tailwinds.
What’s Driving Activity
Recent mid-market deal flow shows familiar patterns. Software and business services have continued to attract attention, alongside technology, infrastructure, energy, healthcare, pharmaceuticals, financial services, logistics and mining services. These sectors offer recurring revenues and / or links to long-term trends.
On the public markets, high-profile approaches such as ADNOC and Carlyle’s interest in Santos highlight the appeal of large-cap Australian resources assets. In the mid-market, bids like Adamantem’s for Apiam Animal Health underline private equity’s appetite for defensible, domestically focused platforms.
Key Market Trends
- A new regulatory landscape. Australia is phasing in a mandatory, suspensory merger control regime. From July 2025, parties can voluntarily notify deals, with mandatory notification beginning January 2026. Even for smaller transactions, buyers will need to plan earlier for antitrust review, add time for regulatory engagement, and prepare more robust competition submissions.
- Private credit filling the gap. With banks cautious, private credit funds are stepping up, offering unitranche and mezzanine solutions, as well as NAV facilities for sponsors running buy-and-build strategies. These lenders are fast, flexible, and increasingly central to getting mid-market transactions across the line.
- Corporate carve-outs on the rise. Listed and private corporates are refocusing portfolios, and private equity is ready to step in. Successful bidders are those with proven separation playbooks and credible value-creation strategies — particularly in tech carve-outs and adjacent services.
- Foreign capital returning. A softer Australian dollar and relative economic stability are drawing North American, European and Asian investors back to the market. Cross-border buyers bring competitive tension but also extend diligence around supply chains, cyber security, and ESG risks.
- Timing effects. Some buyers are pushing to close transactions before the new merger regime bites, while others are waiting for greater clarity on thresholds and information requirements. This has created uneven monthly volumes and a premium on preparation.
The Private Equity Pulse
Private equity remains the heartbeat of the mid-market. Dry powder is plentiful, and 2018–2020 vintages are driving both exits and redeployment. Sponsors are doubling down on buy-and-build, assembling national leaders from fragmented sub-A$100m revenue targets in healthcare, logistics, specialist distribution, aged care, education, and software.
Exit routes are opening slowly. IPOs are tentatively returning, but trade sales and secondary buyouts remain the most reliable paths. With private credit support, sponsors are increasingly running dual-track processes to keep timelines tight and bidders competitive.
Deal structures are also evolving. Earn-outs, rollover equity, and deferred consideration are being used more frequently to bridge valuation gaps and give founders or corporates more certainty.
How to Succeed in Today’s Market
For both buyers and sellers, success in the current environment comes down to preparation and positioning:
- Start competition analysis early. The ACCC is sharpening its approach, and even mid-sized deals may draw closer scrutiny.
- Line up financing before exclusivity. Private credit providers expect to be engaged early; pre-agreed term sheets give bidders an edge.
- Be carve-out ready. Corporates should prepare separation accounts and transition service frameworks; acquirers must budget for execution costs.
- Tell a growth story. Businesses with recurring revenues, defensible niches, or exposure to healthcare and the energy transition attract the broadest buyer interest — and stronger multiples.
Outlook
Australia’s mid-market M&A is selective rather than subdued. The coming regulatory shift will reshape timetables and processes, while private credit and private equity continue to set the pace. Cross-border competition is intensifying, and corporate carve-outs promise a steady pipeline of opportunities.
For those prepared with financing, regulatory foresight, and a clear growth narrative, high-quality transactions are getting done — and often at attractive valuations. In 2025, agility and preparation are the key factors in closing deals.