The announcement of the privatisation of Spotless by Pacific Equity Partners (PEP) for just over A$720million represents the largest Australasian PE-backed buyout of 2012 so far. PEP’s initial offer of A$2.63 per share in November 2011 was rejected, as was a subsequent bid of $2.68 a share which took the company value to A$711million. A final offer of A$2.71 per share, A$0.30 above the market price, was accepted by Spotless at the end of April 2012.
Australasian buyout activity has fluctuated, especially since the economic downturn. The aggregate value of buyout deals reached its peak in the last quarter of 2006, when it hit $4.9billion. This value fell sharply, as it did in other continents, with the onset of the global financial crisis. A trough in aggregate value of deals was reached in Q3 2009; only four deals were completed in the region, the aggregate value of which was negligible in comparison to the peak in Q4 2006. Since then there have been two secondary peaks in buyout activity, Q2 2010 and Q1 2011, when aggregate value reached $2.4bn and $3.2bn respectively. However, in each of the subsequent quarters the aggregate value of PE-backed buyouts has once again fallen close to the post-Lehman low.
There has been less volatility in Australasian buyouts in terms of numbers, and there has been an average of 13 deals completed per quarter between Q1 2006 to Q1 2012. The most notable fluctuations from this mid-point are during the post-Lehman trough and the buyout boom-era between 2006 to early 2007.
Almost half way through Q2 2012, the aggregate value of Australasian buyout deals has already shown signs of recovery and has increased from the previous quarter, although this is largely attributed to the announcement of the recent privatisation of Spotless. Despite this, the continent may be a compelling investment area for those investing in developed countries, especially as the outlook is less favourable in other developed regions, notably the eurozone.