Health Policy

SMEs shouldn’t ignore M&A deals, private equity

There seems to be storm clouds for SMEs

Whether it’s troubles in Europe, a potential slowdown in China, uncertainty about the Australian economy and rising business costs, there seems to be plenty of storm clouds for Australia’s small- and medium-sized enterprises.
But to paraphrase legendary investor Warren Buffett, there are always opportunities when people are stressing out.
Graeme Browning, Ernst & Young’s Oceania Transaction Advisory Services Leader, says it’s important that SMEs remember that winners – as well as losers – will emerge in 2012, and there are still interested buyers and investors out there.

“2012 will have its challenges and investors are going to be cautious. But I think the message is there will be winners and losers out of that environment,” Browning says.
“It’s times like these that do allow companies to break away from their competition.”
“For companies with a clear picture of where they want to go, 2012 could be an ideal opportunity for them to prudently make some of the challenges for the upturn.”

Browning says capital-stretched SMEs with a good growth story shouldn’t write off private equity, particularly as the initial public offering market is depressed and conservatism reigns among large listed companies.
“Private equity is one channel, and it’s absolutely worth thinking about,” he says.
“It won’t be for everyone, but private equity is cashed-up, banks are prepared to support private equity deals, and these guys are professional investors so they invest through all cycles.”

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