After two very quiet years on the merger and acquisition front, the big-game hunters of the investing world – the private equity firms and investment bankers – are once again starting to make waves.
Yesterday in Brisbane, the Queensland Government launched the $7 billion float of QR, the railway and infrastructure business that is better known as Queensland Rail. It’s the biggest float in years and one that has been squarely pitched at mum and dad shareholders, with a prominent mainstream marketing campaign and incentives for retail shareholders.
This morning, reports have been swirling that private equity firms KKR and TPG are considering a $2 billion-plus bid for the wine assets of Foster’s Group, in what would be one of the biggest private equity deals anywhere in the last few years.
No word on whether the bid will actually go ahead as yet, but it does show that the private equity players are back in the groove – and Australia, where the economy is good and the environment is relatively stable (the hung parliament probably is the only question mark), is clearly a key target.
An improvement in the IPO market and renewed activity in the private equity sector is great news for entrepreneurs, mainly as it signals an improvement in asset values, which will be very welcome following the GFC.
But the news should particularly give some hope to entrepreneurs who have been thinking about exiting their business.
As we reported recently, anecdotal evidence suggests up to 50% of all business sales are failing to go through, mainly because nervous lenders aren’t prepared to give loans to the purchasers of these business.
However, strong IPO and private equity markets five entrepreneurs another great option to exit.
In the last strong period for private equity markets, entrepreneurs and rich list members such as John Van Lieshout, James Packer, Kerry Stokes, sold some or all of their assets to private equity.
Super Cheap Auto founder Reg Rowe, Andrew Abercrombie, Kerr Nielsen, Graeme Wood and Rod Jones were amongst those to boost their wealth via a float, although most remain involved in their company in some way.
Which wealthy entrepreneurs might sell up this time around?
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
