APAC Mid-Market M&A Activity Demonstrates Resilience in Q1 FY25 Despite Geopolitical Challenges
Moore Australia today released its APAC Mid-Market M&A Report for Q1 FY25 revealing that, despite geopolitical tensions and foreign investment restrictions, mid-market mergers and acquisition (M&A) activity in the Asia-Pacific (APAC) region has shown resilience. With over 1,500 deals completed in the first quarter, representing 5% growth compared to Q1 FY24, the report highlights the region’s adaptability and continued appetite for strategic consolidation.
The technology and consumer products sectors continue to drive deal flow, with technology accounting for 23% of total deals, matching its performance from the previous year. The consumer products sector has seen increased consolidation, rising from 10% of deals in FY24 to 16% in Q1 FY25, as businesses seek cost synergies in response to sluggish demand and rising costs.
Cross-border M&A, however, has seen a decline, with deals accounting for just 22% of total M&A activity, down from 35% three years ago. The report attributes this decline to increased geopolitical tensions, particularly related to China and foreign investment restrictions. In spite of this, Moore Australia remains optimistic that this trend will reverse in the coming years as new free-trade agreements take effect and foreign investment review processes across the region become more streamlined.
Private equity has continued to play a vital role in the mid-market, with longer holding periods observed as funds wait for valuations to fall in order to meet IRR hurdles. The average deal size in Q1 FY25 was $28 million, in line with recent years, while earnings multiples have increased to an average of 18 times EBITDA, up from 15 times in FY24, reflecting growing confidence among investors in high-growth sectors.
Colin Prasad, Director of Corporate Finance at Moore Australia (VIC/TAS), commented: “The APAC mid-market remains an attractive and dynamic environment for M&A activity. Despite external pressures, businesses in sectors like technology and consumer products continue to drive growth. As geopolitical issues ease, we expect to see renewed strength in cross-border transactions, supported by improved regulatory frameworks across the region.”
Key Findings of the Report:
• 1,540 deals were completed in Q1 FY25, up 5% from the same period in FY24.
• Cross-border deals accounted for 22% of M&A activity, down from 35% three years ago.
• The technology sector accounted for 23% of deals, maintaining its leading position.
• The consumer products sector saw its share of deals rise to 16%, driven by consolidation.
• Buyers paid an average of 18 times EBITDA, reflecting increased investor confidence.
The report provides an overview of the M&A landscape in the APAC mid-market, noting the continued importance of private equity, sector-specific growth and the strategic consolidation of businesses in response to economic pressures.
