Skip to content Skip to footer

Loading Results

PwC New Zealand M&A Quarterly Update

For the Fourth Quarter of 2021

Welcome to the latest PwC New Zealand M&A Quarterly Update. 

In this edition, we look at M&A in New Zealand from October to December 2021 and find that New Zealand deal activity has reached new heights with 107 deals completed or announced during the quarter. We also examine what’s driving deal activity in the consumer sector and outline why commercial due diligence is important and the benefits it has for transactions.

New Zealand deal activity continued at record levels in Q4 2021

Record levels of deal activity continued in Q4 for 2021 with 107 deals completed or announced. This completes a significant year of deal activity in New Zealand with 219 deals completed or announced during 2021, an increase of 376% on 2020 deal volume. 

Deal volume in 2021 was also up 133% (i.e. more than double) on 2019 volumes indicating that deal flow has not only returned to pre-covid levels, but has significantly exceeded it. 

We anticipate deal flows will remain strong for 2022 as trade buyers continue to pursue growth through acquisition due to organic growth (both domestic and international) being challenging. Financial investors will also look for return opportunities in private markets given the high valuations and limited returns available in public markets.

Number of deals per quarter 2019 to 2021

In Q4 2021 a record 107 deals were announced or completed.

Number of deals by sector and buyer type for Q4 2021
Number of deals by country and buyer type for Q4 2021

What the data reveals

Source: MergerMarket, CapitalIQ, Factiva, and Thompson Reuters Eikon and compiled by PwC.

Activity from local buyers increased again during Q4, indicating continued strong levels of interest from New Zealand buyers.

61 of the 107 deals announced or completed during Q4 involved a New Zealand buyer.

International cross-border M&A activity increased significantly during the final quarter of 2021.

46 cross-border M&A deals were announced in Q4 compared to 17 in Q3. In Q4 we’ve seen significant deal flow from buyers based in Australia (24), the USA (12) and Europe (8).

This growth indicates the current desire of corporates to expand globally (backed by strong cash reserves), PE firms with significant amounts of capital to deploy, and an increasing readiness to complete cross-border deals remotely.

While TMT again dominated deal flows during Q4 with 24 deals, there was a broad spread of deal activity. 

Five sectors recorded 10 or more deals, indicating a diverse range of strong M&A.

Activity from private investors and PE firms was strong throughout Q4, accounting for 30 of the 107 deals.

The activity was diverse and spread across 10 different sectors.

Playback of this video is not currently available


Phil Wheeler M&A video

Why commercial due diligence is important in deals

Independent commercial due diligence has been a key risk management and value creation tool in deals internationally for some time and is becoming an increasingly important factor in New Zealand. In this article, we explore what commercial due diligence is, why it’s important for buyers and sellers, and the benefits it brings to a transaction environment.

Watch Phil Wheeler, Partner - Deals Strategy, discuss the importance of commercial due diligence.

Click on the tabs below to learn more.

What is it?

Commercial due diligence is an analysis of the core business model and competitive positioning of a target company, to identify and where possible quantify any uncertainties that impact valuation. This definition covers a broad set of potential review areas such as: 

  • the company definition and offer; 

  • the size and growth of the market in which it competes;

  • the differentiation of the target’s offer and business model versus its peers; 

  • the purchasing behaviours of customers and their perception of the target; 

  • target recent performance against key value drivers;

  • the impact of government policy on the target and its market; 

  • the role and strength of suppliers and other complementary businesses, and; 

  • the potential impact of any technology or other disruption to the target’s market.

Due diligence in these areas will assess both the downside risks to the business in each area, but also the future growth potential that may be available. Advisors look to analyse the business in terms of its value drivers to provide prospective buyers with a robust assessment of how the target business can create future value. This allows buyers and sellers to talk clearly about what is most important to the success of the target business.

Why carry out commercial due diligence?

Commercial due diligence supports the overall transaction by building a robust assessment that is complementary to financial, legal, tax, ESG, and other areas of diligence. It is important for both buyers and sellers, as well as any equity or debt partners that may participate in the transaction.

For buyers, commercial due diligence is a way to test the assumptions that have been developed about a target business - particularly validating those positions that impact valuation. The process confirms the position that management has about its company in terms of its current market positioning and/or growth projections. 

Commercial due diligence typically involves customer, or client, research to confirm their opinions of the target business and whether the existing business model is fit for purpose.

By undertaking commercial due diligence independent of the deal team, the outcomes can provide confidence to the broader deal stakeholders (equity or debt partners, W&I insurance providers, etc) on the value of the deal and the rationale for acquisition.

For sellers, vendor-led commercial due diligence ensures that the full potential of the business has been robustly described for all buyers. A vendor due diligence (VDD) process also helps the seller to understand early in the deal timeline where a buyer is likely to focus its commercial review and prepare responses to any weaknesses or issues that may be identified later.

Commercial due diligence can also make a transaction more competitive by attracting new bidders that gain a more in-depth understanding of the business and can now identify a future value-adding narrative for the target.

What are the other benefits?

Ultimately, commercial due diligence can reduce the risk for both buyers and sellers by ensuring that any commercial exposures are  fully understood and analysed. 

Undertaking commercial due diligence provides greater confidence in the potential success of the transaction, which benefits both buyers and sellers. It unlocks value potential for both sides of the transaction, ensuring that sellers have a narrative for the full business value, and buyers can better understand the enhancements that it can bring post-acquisition and to “do the right deal” - the one which ensures that complementary skills are brought together in the transaction.

Successful commercial due diligence processes bring together a dedicated team with experience in both the commercial diligence approach but also the sector/target business. It will work hand in hand with dealmakers to ensure that value is sought, understood, and created through the transaction.


Phil Wheeler

Partner, Deals Strategy, Auckland, PwC New Zealand

+64 21 779 166


Commercial due diligence supports the overall transaction by building a robust assessment that is complementary to financial, legal, tax, ESG, and other areas of diligence.

Phil Wheeler, Partner - Deals Strategy

M&A in the consumer sector: how’s 2022 shaping up?

In the last year, there has been unprecedented M&A activity across many sectors and retail and consumer is no exception. In this article, we look at what’s driving interest in the sector and the outlook for 2022.

Watch Wayne Munn, Partner, talk about trends in the consumer sector.

Playback of this video is not currently available


Wayne Munn M&A Update

Click on the tabs below to learn more.

What's driving interest?

Much of the recent M&A activity in the consumer sector has been driven by macro lifestyle trends as consumers spend their money in areas influenced by new ways of living and working. These changing consumer demands are driving mergers and acquisitions as corporates and private equity (PE) firms adjust their portfolios accordingly.

An example of this is the increase in people working from home leading to greater interest in health and lifestyle assets such as home and garden products and athleisure. Similarly, there has been considerable growth in enthusiasm for pet health and care assets.

We have also seen an upswing in interest for businesses producing environmentally-friendly products as consumers shift their focus towards greater sustainability. 

COVID-related restrictions have impacted demand in areas such as hospitality and leisure although other sub-sectors have thrived with New Zealand consumers having more money to spend at home.

What about private equity?

Private equity is playing an ever-increasing role in the market. The latest PwC Global M&A Industry Trends outlook revealed that the consumer sector saw increased M&A from PE funds, which accounted for approximately 35% of deal volume and 47% of deal value in 2021, a notable increase compared with the average over the previous five years of 24% and 35%, respectively.

What’s the outlook for 2022?

The M&A outlook for consumer markets in 2022 remains strong as companies continue to innovate and digitalise their businesses in response to changing customer preferences and new emerging business models. 

A particular focus is likely to be around e-commerce and online skills as companies look to use M&A to gain more capability in these areas and greater market share. Businesses with strong online capabilities will be key acquisition targets.

Assets related to the work-from-home trend are also likely to remain targets including:

Home and garden products
Demand for home and garden businesses grew during the pandemic as companies flourished due to growing consumer interest. This will continue as hybrid working trends remain and more people look to create home offices or remodel their homes. Recent deal examples include the sale of local flooring and furnishing provider The Interiors Group to Pencarrow in October 2021 and spa distributor Vortex Leisure Pty Limited sale to United States based Jacuzzi Brands LLC in November 2021.

Pets and vets
As pet ownership grows, pet and veterinary products are highly attractive sectors for dealmakers. An example is the sale of the New Zealand-based premium natural dog and cat food producer Ziwi Limited to FountainVest Partners in September last year.

Casual wear and athleisure
Casual and sports-inspired clothing are a popular segment of the fashion sector as greater hybrid working endures. This will attract further interest from corporate and PE investors.

Health and beauty
This sub-sector continues to be attractive for M&A as companies look to enter new markets or expand business models. Deals include the sale of Australasian Medical & Scientific Ltd (AMSL) and New Zealand Medical & Scientific Ltd (NZMS) to DexCom Inc. in July 2021. AMSL and NZMS are specialist distributors of medical devices.

Interest from investors persists. Transactions in the sector include the acquisition of Dads Pies Limited by George Weston Foods Limited in November 2021 and meat alternatives manufacturer Chalmers Organics Limited by Life Health Foods NZ Limited in December 2021. In addition, Pioneer Capital has recently invested in Raglan Food Co.

Although the outlook for M&A activity in the consumer sector is generally good and there is a strong deals pipeline for the next six to 12 months, there are also growing headwinds.

We are seeing greater volatility in the financial markets, in addition to ongoing supply chain disruption. At the same time, there is increasing inflationary pressure and rising interest rates.

All of these factors are likely to impact M&A activity as dealmakers navigate the challenges. It’s likely that there will be an increase in deals involving distressed assets or those looking to consolidate. 

For consumers, it may mean there will be less purchasing power which will have an impact on businesses within the sector.


Wayne Munn

Partner, Canterbury, PwC New Zealand

+64 21 918 289


Gavin Brown

Director, PwC New Zealand

+64 27 463 5552


The M&A outlook for consumer markets in 2022 remains strong as companies continue to innovate and digitalise their businesses in response to changing customer preferences and new emerging business models.

Wayne Munn, Partner

How PwC can help

PwC NZ’s Corporate Finance and M&A team is the largest in the country, with a proven track record across a diverse range of sectors. We offer a full range of M&A advisory services including divestments, acquisitions, private equity, capital raisings and strategic relationships. 

Our links to the global network of PwC firms provides relationships with key global market participants, and our close relationship with our Australian colleagues ensures a comprehensive understanding of the Australasian marketplace.

Our M&A team has been ranked the number 1 firm for the amount of M&A deals by Thompson Reuters for the last 16 years.

Karl Dwight

Partner, Auckland, PwC New Zealand

+64 21 396 361


Murray Schnuriger

National Managing Partner - Markets & Growth, Auckland, PwC New Zealand

+64 21 884 616


Amy Ellis

ESG Deals Leader, Auckland, PwC New Zealand

+64 21 223 4554


Rod Harris

Partner, Auckland, PwC New Zealand

+64 22 657 6699


Regan Hoult

Partner, Corporate Finance Leader, Auckland, PwC New Zealand

+64 21 243 2378


Richard Longman

Managing Partner, Wellington, Wellington, PwC New Zealand

+64 21 777 780


Wayne Munn

Partner, Canterbury, PwC New Zealand

+64 21 918 289


Craig Armitage

Canterbury Managing Partner and China Business Group Lead, Canterbury, PwC New Zealand

+64 21 616 232


Phil Wheeler

Partner, Deals Strategy, Auckland, PwC New Zealand

+64 21 779 166


Follow us