M&A deals set to rely on succession planning, says Pitcher Partners

Pitcher Partners has revealed succession planning will be one of the most important factors driving mergers and acquisitions (M&As) this year in Australia’s mid-market.

The firm recently released its Dealmakers Report in partnership with Mergermarket, which highlighted that dealmakers were “playing it smarter” with fewer but larger deals as they felt underwhelmed by the preparedness of some business leaders.

The report showed that 97 per cent of respondents said they were actively hunting for Australian M&A deals in 2025, with 60 per cent planning to invest in the mid-market.

Pitcher Partners also revealed a significant demographic change had been occurring in Australian boardrooms and business headquarters which had been dubbed as “the silver tsunami.”

According to the report, 85 per cent of respondents said succession planning would be a key driver of mid-market M&A in 2025, up from 37 per cent in 2024.

Despite this, dealmakers shared they were sceptical about how well some departing business leaders had planned for their exit, with one in four having reported that owners were underprepared.

Pitcher Partners Sydney partner, Andy Hough, said wary optimism was the popular mood among dealmakers, but Australian prospects should continue to attract significant attention as international dealmakers were discerning.

“Australia’s strategic importance within the Asia Pacific region remains unparalleled, and dealmaking in 2025 will be about making the right move, not every move,” he said.

“The market signals are that investors are interested in making deals with those who are well-prepared and can demonstrate a compelling vision, which includes doing the legwork that will aid the business in changing hands.”

Pitcher Partners said developing exit strategies and succession plans had taken on new urgency as mid-market businesses were often family-operated or had founder-led leadership, as well as almost half of SME owners being over 50.

The Australian M&A landscape was given a 69 per cent rating, dropping from 77 per cent in 2024 and the lowest outlook rating in four years.

Despite this, Hough said Australia remains a compelling investment destination as a stable regulatory framework and thriving sectors kept it on the radar of dealmakers.

Hough added this was highlighted in the M&A results from 2024, a 30 per cent increase from 2023 with $138.9bn in deals completed.

“This data signals a level of maturation for Australia’s M&A market, where the ‘easy wins’ of earlier years are mostly exhausted,” he said.

“As a result, deals are becoming more intricate, requiring enhanced due diligence, innovative structuring and deeper industry expertise.”

The report revealed that 85 per cent of respondents said the sectors ripe for deals in 2025 included technology, media and communications, all of which had been fuelled by the integration of technology.

The industrial and chemicals industry was also noted as an optimistic sector for dealmakers, with 62 per cent of respondents highlighting the strategic role it would play in Australia’s transition toward sustainability and advanced manufacturing.

Hough said there were challenges for dealmakers, but if macroeconomic pressures eased, confidence returned and business owners had strategic exit plans, the market could rebound further and faster than expected.

“For those ready to act, the next 12 months could represent a rare window of opportunity to secure high-quality assets at attractive valuations,” he said.

“The Australian market, with its stability and strategic opportunities, is drawing interest from those ready to think big, but founders and leaders must not mistake that interest for blind faith.”