What is driving activity
Portfolio rationalisation and strategic focus are the dominant corporate themes. Boards are moving with greater urgency to refine business models, disposing of non-core assets and doubling down on growth adjacencies. Scrip consideration is becoming more common as a mechanism to align interests and mitigate valuation dislocation.
Private capital is adapting. Sponsors are leaning into bilateral and public-to-private deals to gain control and certainty. On the exit side, a shortage of long-duration capital for traditional leveraged buyout assets is encouraging new approaches such as continuation funds and longer-hold vehicles that better match asset profiles and investor horizons.
Navigating headwinds
Execution risk is a defining feature of the current environment. A changing regulatory environment, longer regulatory timelines and more complex approval processes are extending sign-to-close periods, making preparation for regulatory approvals a key gating item. The new ACCC merger regime is expected to add some near-term friction, but also greater predictability once established.
Valuation remains another key pressure point. Targets are working to evidence earnings quality and consistency, while buyers are underwriting value through forecast synergies and platform roll-ups. Transactions with clear industrial logic and disciplined value-creation levers are most likely to succeed.
The 2026 outlook
The pipeline for 2026 looks stronger. Corporate consolidation and carve-outs, and infrastructure-adjacent assets are expected to feature prominently, with complex and bilateral transactions leading the way. If interest rates ease and the United States deal momentum continues, Australia typically follows suit after a short lag.
Practical implications for deal teams
Build valuation credibility through recurring revenue, contracted growth options and consistent performance in line with strategy.
Front-load regulatory, stakeholder and transition planning to preserve deal value.
Pursue bilateral pathways where strategic logic and execution readiness align.
For exits, consider continuation funds or longer-hold structures suited to asset life cycle and investor appetite.