Holding RedlichM&A Review

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Commentary and insights

There have been mixed reports about Australian M&A activity over the last year. While some sectors are faring very well indeed (healthcare and technology), others are struggling to keep up (retail).

This mixed outlook is consistent with what our M&A team continues to see nationally.

Overall, 2019 was a busy year for Holding Redlich’s team who have been involved in a number of significant deals across many key industries. We set out a selection of these key deals in our latest M&A Review.

It has been particularly busy for the team in the areas of healthcare, technology, property and hotels.

Our team, based in Melbourne, Sydney, Brisbane and Cairns, covers the full spectrum of M&A transactions, both in the public markets domain and by private treaty. We advise across a range of industries, including healthcare, property and hotels, agribusiness, transport, financial services, technology and media and telecommunications.

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Deals in 2019

Our team was busy with a range of deals in 2019 assisting both buyers and sellers in a range of complex corporate transactions, involving cross-border transactions and private equity and fund managers.

We set out below a selection of the deals across various sectors that our team has been involved in:

HEALTHCARE

Advised Regional Radiology Group on its sale to I-MED Radiology, a medical imaging and radiology clinic network.

Advised on the sale of Northern Cancer Institute’s cancer centres at St Leonards and Frenchs Forest to GenesisCare, a leading provider of oncology services.

Advised MFI Radiology Group on the sale of its radiology centres across Australia.

Advised ASX-listed company, Hydrix Limited on the acquisition of Asia Pacific distribution rights for the world’s first FDA-approved implantable heart attack alerting device.

Advised the owners of a leading Australian pharmaceutical product on the sale of its business to a listed New Zealand healthcare products wholesaler and distributor.

Advised ISPT on the establishment of a $200 million property mandate for HESTA to invest in the healthcare sector.

Advised a home services provider in its sale of business to a multinational home care company.

MANUFACTURING & ENGINEERING

Advised one of Australia’s biggest independent hydraulics and water business on a majority sale to Allegro Funds and a subsequent bolt-on acquisition.

Advised Hunter Industries, Inc. (a US privately owned business) on the acquisition of Lumascape, an Australian based global manufacturer of products for the irrigation, outdoor lighting, dispensing technology, and custom manufacturing sectors.

TECHNOLOGY

Advised a US technology business on its entry into the Australian market through the acquisition of a respected IT services provider.

Advised the owners of privately owned Australian business, Huon IT, on the sale of the company to Japanese owned Kyocera.

Advised the seller of Projection “Scenario Advantage Workforce” IT software and services business division to Damstra Holdings Limited.

Advised the seller in connection with sale to, and subscription by, US venture capital fund in emerging Brisbane-based brand automation platform business.

Advised a UK-based high net worth individual on his early-stage investment in an Australian start-up sports technology company.

Advised the purchaser on the acquisition and subsequent joint venture of an ag-tech company that specialises in mobile gully systems (for growing plants).

Advised the purchaser on the acquisition and subsequent reversal of a cryptocurrency exchange from an ASX-listed company.

Advised Australian marketing specialist, outfit.io, in connection with investment by a US technology fund.

PROPERTY & HOTELS

Advised a privately owned property development, investment and advisory business on the acquisition of a development property through a trust structure.

Advised on the acquisition of the Punthill Hotel in Spring Hill, Brisbane.

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Advised on the acquisition of the Mayfair Hotel and Adabco Boutique Hotel by Australian investment and funds management business Elanor Investors Group.

BROADCASTING

Advised Southern Cross Media Group on the outsourcing of its Australia wide television and radio broadcast transmission services involving the sale of assets and provision of long term broadcasting services.

FINANCIAL SERVICES & INSURANCE

Advised Japanese-headquartered insurance group Tokio Marine on its acquisition of a specialist underwriting agency operating in the bank assurance market from management shareholders and Insurance Australia Group.

Advised Japanese-headquartered insurance group Tokio Marine on its acquisition of a specialist underwriting agency in the accident and travel insurance space from Insurance Australia Group.

HUMAN RESOURCES & WELLBEING

Advised Randstad on the acquisition of Aurec Group, a specialist in technology recruitment, contractor management, payroll, migration and professional services.

Advised a global wellbeing solutions business on the acquisition of the Australian arm of an employee assistance and wellbeing business.

RETAIL & DISTRIBUTION

Advised the owners of a leading national wholesale tyre distributor on the sale of its business to a trade buyer with extensive national and international operations.

Advised Reverse Corp on the sale of online contact lens businesses (including “1800 Contacts”) to Coastal Contacts (Aus).

Advised on the acquisition of the Atlas Group vehicle rental business.

EDUCATION

Advised an Australian e-learning company on their investment in a China-related e-learning platform.

Advised the purchaser on its acquisition and roll-up of a childcare centre in Victoria.

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Hot topics and trends

Australian M&A saw some very high notes last year including a record-breaking deal volume. The strong performance was driven by favourable factors including low interest rates, robust debt capital markets and increased cross-border transactions. The middle market continued to see the largest proportion of M&A activity, with notable transactions happening in the energy, mining and utilities, consumer and banking sectors.

CROSS BORDER DEALS

We expect M&A activity to continue this trend in the coming 12 months. We anticipate higher cross-border deal flows with the continuing fall of the Australian dollar encouraging foreign investment from North American and Japanese companies wanting to do business in Australia.

NEW WHISTLEBLOWER POLICIES

Investors should also be mindful about the implementation of new whistleblower policy requirements. This took effect from 1 January 2020 for public companies, large proprietary companies and trustees of a superannuation entity.

EMPLOYMENT ISSUES

With a number of underpayment scandals hitting Australian companies in 2019, payroll integrity is fast becoming a key focus area for due diligence in M&A transactions. Both buyers and sellers are keen to identify and address any potential issues before they threaten to derail a transaction.

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Key contacts

Darren PereiraPartner Sydney

T +61 2 8083 0487

darren.pereira@ holdingredlich.com

Brendan WykesPartner Sydney

T +61 2 8083 0432

brendan.wykes@ holdingredlich.com

William KhongPartner Melbourne

T +61 3 9321 9883

william.khong@ holdingredlich.com

Alyn TaiPartner Melbourne

T +61 3 9321 9834

alyn.tai@ holdingredlich.com

Trent TaylorPartner Brisbane

T +61 7 3135 0668

trent.taylor@ holdingredlich.com

Carl Hinze Partner Brisbane

T +61 7 3135 0630

carl.hinze@ holdingredlich.com

Lyn NicholsonGeneral Counsel Sydney

T +61 2 8083 0463

lyn.nicholson@ holdingredlich.com

William KontaxisSenior Associate Sydney

T +61 2 8083 0481

william.kontaxis@ holdingredlich.com

Georgia MilneSenior Associate Sydney

T +61 2 8083 0423

georgia.milne@ holdingredlich.com

Yvonne O’ByrneSenior Associate Brisbane

T +61 7 3135 0667

yvonne.o’byrne@ holdingredlich.com

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