20 Sep 2010

More private takeover deals likely - survey

7:14 am on 20 September 2010

Renewed availability of cash coupled with investors' disatisfaction with the country's capital markets and finance companies will fuel a rise in private company takeover deals over the next few years, according to a mergers and acquisitions expert.

A survey by accountancy firm Grant Thornton of more than 7000 private companies in New Zealand found nearly 40% of them plan to grow by acquisition over the next three years - well above the global average of 26%.

Grant Thornton corporate finance manager Sean Abe says that's because New Zealand has come out of recession in better shape than most countries.

As a result, he says, company owners can now expect higher prices, while sellers are also now in a better position to buy.

Mr Abe says wealthy investors in particular now view private companies as more attractive investments, compared to other options on the market.

He says while there's been a lot of interest in international companies buying New Zeland firms recently, the survey shows that more than a quarter of New Zealand companies are considering overseas acquisitions as a way of expanding into new markets.