The following article is a chapter from our latest report, M&A in Motion.
Access the full report here.
- New Energy
- Carbon Credits
- Mining and Resources
- Technology
- Financial Services and Digital Assets
- Agribusiness
- Healthcare
New Energy
Market Health Check: Stable
Energy storage played a critical role in unlocking value in underperforming or constrained assets, with retrofitting and co-location strategies increasingly featuring in transaction rationales. From a due diligence perspective, buyers placed heightened focus on grid connection certainty and costs and planning approval risks.
Jo Ruitenberg
The Prediction for 2026
Foreign utilities and infrastructure funds, particularly from Asia and Europe, will drive M&A activity as they seek established platforms in Australia’s renewable energy sector. Mid-tier developers facing development financing constraints will pursue strategic exits to well-capitalised foreign and domestic infrastructure funds.
With 74 committed storage projects in the pipeline (13.3 GW capacity and 35.0 GWh energy output)1, investment in standalone and hybrid Battery Energy Storage System (BESS) projects will remain robust, particularly co-located with data centres and industrial users to mitigate curtailment risk. Amazon’s A$20 billion expansion of data centres in Sydney and Melbourne highlights growing corporate demand for renewable energy supply. By 2030, data centres are forecast to consume between 8% and 20% of Australia’s electricity, up from 5% in 2024, unlocking significant opportunity for off-take agreements and hybrid energy solutions.
Investment in clean technologies such as energy efficiency solutions, carbon capture, green hydrogen applications and innovative storage or smart grid software is expected to accelerate, driven by corporate sustainability commitments, government incentives and the increasing cost-competitiveness of low-carbon solutions.
Increased M&A activity is expected in sub-5 MW solar and BESS projects, driven by faster development timelines, lower grid-connection risk and strong demand from commercial, industrial and community scale off-takers. These assets are increasingly attractive to private capital and aggregators seeking scalable portfolios and contracted revenues.
Did the Market in 2025 behave in line with our expectations?
M&A activity in Australia’s renewable energy sector in 2025 saw capital recycling, platform consolidation and storage-led repositioning. While new investment in large-scale renewable generation slowed materially, transaction activity remained resilient as sponsors rebalanced portfolios, infrastructure capital sought scaled platforms, and storage emerged as the primary investment value driver.
BESS continued to attract outsized investor interest, reflecting their growing role in managing volatility, firming intermittent generation and underpinning bankable revenue structures. In contrast, renewable generation assets, particularly wind, faced headwinds from transmission delays, planning uncertainty and constrained development finance. These conditions reshaped both what assets traded in 2025 and how deals were structured.
While the re-election of the Albanese government provided renewed policy certainty, particularly through the expansion of the CIS, structural barriers continued to shape transaction dynamics. Transmission bottlenecks, protracted permitting processes and development financing challenges remained key friction points. However, rather than suppressing M&A activity altogether, in practice, we saw increased use of:
- deferred consideration and milestone payments tied to connection, planning or CIS outcomes
- staged sell-downs and minority growth capital investments; and
- transaction structures designed to allocate grid and development risk more precisely between the buyer and seller.
These trends were consistent with the broader increase in milestone-based deferred consideration observed across M&A transactions in recent years, particularly in capital-intensive and infrastructure adjacent sectors.
Carbon Credits
Market Health Check: Robust
After another challenging year marked by sentiment headwinds and limited transaction activity, improved policy certainty coupled with sustained offshore and private equity interest should catalyse consolidation and deal flow in 2026, particularly as Integrated Farm and Land Management and other methodologies gain traction whilst decarbonisation technologies receive further industry validation.”
James Delesclefs
The Prediction for 2026
With the Integrated Farm and Land Management method (IFLM) now in draft form for consultation, increased regulatory certainty may catalyse consolidation and heightened M&A and fundraising activity amongst project developers. Offshore interest, most notably from Japan, remains strong, whilst private equity and other funds continue raising dedicated capital for environmental opportunities, infrastructure core-plus and related strategies with mandates encompassing this sector. Accordingly, capital should be abundant to match transaction opportunities once the regulatory framework stabilises.
In parallel, investments through roll-up strategies and new platform investments in the broader carbon consulting ecosystem are anticipated to remain robust. On the technology front, federal
funding (including the National Reconstruction Fund Corporation), environmental approvals and industry endorsements such as Jet Zero’s SAF and Calix Limited’s ZESTY technologies should serve as precursors to broader market validation of emerging decarbonisation technologies.
Whilst the staggered application of Mandatory Climate Reporting to smaller entities is expected to generate increased interest in carbon projects and decarbonisation technologies, the market does not anticipate a material demand uplift in the short to medium term given the current macropolitical environment.
Did the Market in 2025 behave in line with our expectations?
Continuing geopolitical headwinds and regulatory uncertainty surrounding carbon credits and related financing, both globally and domestically, resulted in another subdued 12 months for investment and M&A activity in the carbon sequestration sector.
On the world stage, COP 30 focused predominantly on adaptation finance, with participants failing to reach consensus on carbon emission mitigation measures that could have provided much-needed impetus to the global carbon market. Domestically, high land prices, volatile crop yields and continued uncertainty around the future of the human-induced regeneration method resulted in suppressed valuations for carbon developers and a corresponding lack of fundraising and M&A activity. Notably, however, investors and project developers, did in the meantime, expand the scope of methodologies adopted, with (albeit higher cost) environmental plantings and forestry investments (such as Adamantem Capital’s investment in PF Olsen and Forest 360).
Mandatory Climate Reporting legislation came into force for the largest emitters in 2025 but has yet to drive any publicly stated shift in board attitudes amongst less well-resourced entities regarding investment in carbon offset projects of scale or decarbonisation technology projects. As for decarbonisation technologies, financial institutions remained reticent to lead funding rounds
without clear industry endorsement, with capital predominantly allocated to service providers in the broader decarbonisation ecosystem, such as Pemba Capital’s investment in consulting firm Ektimo.
Mining and Resources
Market Health Check: Stable
Whilst macro events may drive short term price spikes in various commodities, market volatility and increased regulatory intervention will mean that opportunistic M&A will continue to face challenges in 2026. The deals that will thrive in 2026 will be made by bidders looking to strategically consolidate tonnes or grade into projects with existing infrastructure or very near-term development potential.”
Shaun Hardcastle
The Prediction for 2026
M&A activity in Australia’s energy and resources sector is expected to remain steady through 2026, underpinned by continued strength in gold, silver and copper prices and renewed strategic interest in battery metals, critical minerals and energy transition assets. The hunt for projects with scale and grade is also driving interest in Australian targets with projects in Africa and Latin America.
While overall deal volumes are unlikely to accelerate, transaction quality is expected to remain high, with buyers prioritising advanced-stage assets with nearterm production opportunities. Capital availability will remain selective. Junior and mid‑tier resource companies may continue to face challenges raising pure project finance, particularly for greenfield or capital‑intensive projects, as lenders remain disciplined amid commodity price volatility and regulatory friction. This dynamic is expected to drive a continued consolidation of gold assets by bidders with existing access to capital and infrastructure.
Critical minerals remain a structural growth theme, in line with a broader thematic where the changing geopolitical landscape is continuing to be a driving force in M&A activity. Government policy support, including funding initiatives and offtake backing, continues to support deal activity across lithium, rare earths, copper and battery materials. However, heightened geopolitical instability, FIRB scrutiny and foreign investment considerations will increasingly influence deal structuring, diligence focus and execution timelines.
Whilst often overlooked, regulatory, native title and permitting risk are becoming an increasing concern for mining operators. Buyers who skimp on this diligence may find themselves paying a premium for assets that are less exploitable than budgeted for. Aside from diligence, the use of deferred consideration, milestone payments and conditionality tied to permitting, development and regulatory outcomes could be employed to mitigate exposure to these risks. Whilst our market prediction for 2026 is “Stable”, the increased volatility in global markets driven by extraordinary macro events cannot be ignored. Market volatility significantly increases deal risk, and while deals using creative blends of scrip and cash can seek to hedge against these market gyrations, it is likely that any sustained periods of market volatility could significantly hamper deal volumes during 2026.
Did the market in 2025 behave in line with our expectations?
Broadly, yes. Deal activity in 2025 aligned with expectations, particularly in relation to consolidation and capital raising activity across gold and critical minerals projects. Gold sector strength translated into transaction momentum. Elevated gold prices supported increased equity raisings, strategic investments and asset-level transactions, enabling companies to progress development pipelines and execute portfolio optimisation strategies. We observed strong appetite for advanced gold projects with defined resources, established infrastructure or near-term production potential.
Capital discipline shaped deal structures. While investor appetite remained strong for quality assets, funding was increasingly structured to manage risk. Transactions commonly featured staged investments, deferred consideration or milestone-linked payments, reflecting ongoing uncertainty around development timelines, permitting and commodity price sustainability. Foreign and strategic interest remained resilient.
Despite heightened FIRB sensitivity in certain sub‑sectors, offshore investors continued to target Australian resources assets, attracted by stable legal frameworks, high-quality geology and long-term demand fundamentals tied to electrification, decarbonisation and energy security. Execution risk became more pronounced. Extended regulatory processes, competition law reforms and
increased scrutiny of foreign investment approvals contributed to longer transaction timelines and greater emphasis on contractual protections, including more prescriptive conditions precedent and walk‑away rights.
Negotiation Tools from HL Deal Data
- Mix and match consideration, allowing shareholders to choose their own balance of cash and scrip consideration
- Two in one structures, where demergers are undertaken concurrently with a takeover to maximise the value of assets that would otherwise be overlooked in the asset mix
Technology
Market Health Check: Robust
Tech continues to outpace the broader market, with AI and AI infrastructure deal appetites driving deal flow and filling the SaaS gap. Across all sectors, investors are as focused on the analysis of AI capabilities and vulnerabilities as the quality of a Company’s earnings.”
Gaynor Tracey
The Prediction for 2026
Technology will continue to be a key sector for dealmakers. Strong deal activity will continue with tech-focused mid-market transactions with the main focus unsurprisingly on AI. The big change
from 2025 is the sharp decline in public stocks and corresponding valuations of private enterprise software companies, as the market reacts to the capabilities of generative AI. However, the jury is out on whether the ‘SaaSpocalypse’ will actually come to pass or whether the need for trusted and tested software and infrastructure remains. Whatever the result, the current market perception will undoubtably create M&A opportunities as sellers seek to exit or merge.
On the AI front, as companies seek to remain relevant, investment in AI, workflow efficiency, and content will be king. AI will continue to redefine software, hardware and also media. The increasing prevalence of generative AI will continue the trend of information decentralisation and consumption away from established media sources. This, in turn, will see advertisers explore new platforms and drive acquisitions and consolidation activity as investors seek to capture new market share. While the Australian market is unlikely to see a surge in pure AI plays, with capital continuing to centre on overseas technology hubs we still expect AI to have an indirect influence on the majority of transactions across all sectors, with vendors increasingly needing to demonstrate how targets plan to utilise AI to drive productivity and competition.
Finally, global investment in defence and military technology will continue to trend high and therefore, technologies that can demonstrate military applications will continue to enjoy heightened demand.
Did the Market in 2025 behave in line with our expectations?
Overall, the Australian tech M&A market has largely performed in line with our expectations. Company valuations as a multiple remain elevated in comparison to other sectors and deal volumes have been high, particularly at the mid-market. The success of SaaS and AI driven businesses have helped the broader sector outperform other industries. Interestingly, however, data centre deal activity across the region has not yet mirrored the rapid acceleration seen internationally across global markets to service AI and is yet to replicate the heights of Blackstone’s acquisition of Airtrunk in 2024.
Financial Services and Digital Assets
Market Health Check: Stable
Rising compliance costs and the importance of scale are expected to drive consolidation, while due diligence is increasingly focused on the robustness of compliance monitoring and regulatory readiness as key valuation drivers.”
Jo Ruitenberg
The Prediction for 2026
Consolidation to accelerate
As digital asset and payment service provider licensing regimes move closer to implementation, regulatory clarity will likely accelerate selective M&A activity, particularly amongst the many unregulated digital asset and payment service providers unwilling or unable to meet the upcoming licensing obligations. More specifically, the fintech sector is primed for an active year, with a robust pipeline of mature, revenue generating businesses positioned for transaction activity. Strategic consolidation is becoming the dominant theme, with fintechs increasingly acquiring other fintechs to capture market share and broaden product offerings. As regulatory reform beds down, rising compliance costs and the importance of scale are expected to drive both acquisition-led growth by well-capitalised fintechs and incumbents, and exit activity among sub-scale operators across payments, Buy Now Pay Later and digital assets.
Phased acquisitions manage regulatory implementation risk
We expect that earnout and phased acquisition structures will become increasingly prevalent in transactions where regulatory outcomes materially affect valuation, as buyers and sellers navigate
regulatory implementation uncertainty. Earnouts tied to regulatory milestones (such as licence approvals and compliance certifications), customer retention post-regulatory change, and revenue performance post-compliance cost absorption will bridge valuation gaps. Phased acquisitions where buyers purchase an initial majority stake with staged acquisition of the remainder at the buyer’s option allow buyers to defer full valuation exposure until regulatory settings and compliance costs are clearer, while providing management retention through staged exit opportunities.
Did the Market in 2025 behave in line with our expectations?
As expected, payments and digital asset reform drove transaction opportunities as increased regulatory burden and compliance costs materialised in 2025. While compliance costs did drive consolidation as anticipated, an additional dynamic emerged: Australia’s clearer licensing trajectory increased inbound interest from offshore buyers by reducing regulatory uncertainty. This trend is further illustrated by London Stock Exchange-listed IG Group Holdings plc acquiring Independent Reserve, one of Australia’s leading cryptocurrency exchanges, with Hamilton Locke advising on the deal.
Our expectation of increased W&I insurance for larger financial services transactions to mitigate regulatory enforcement risks proved accurate. In our experience, we saw the structure evolve beyond traditional seller-warranted policies to buyer-procured insurance policies with warranties given by the target company rather than sellers. This structure proves particularly suited
to financial services deals where passive financial investors (private equity, institutional sellers) lack detailed operational knowledge to provide comprehensive regulatory warranty packages, while buyers prefer recourse against the operating entity for regulatory risks.
Negotiation Tools from HL 2025 Deal Data
Financial services M&A deals in 2025 showed increased focus on regulatory compliance issues, which shaped how key deal terms were negotiated. In our experience, pre-completion regulatory uplift requirements were a key feature of negotiations, with transactions requiring steps be taken to support future AFS licensing, significantly uplift sector-specific compliance obligations, remediate existing banking and payment arrangements and develop post-completion custody control and governance uplift frameworks. We also saw material adverse change definitions increasingly address sector-specific regulatory risks.
Agribusiness
Market Health Check: Stable
Agribusiness is navigating mixed fundamentals: geopolitical issues affecting export markets and input costs, softening prices in some commodities and climate variability impacting specific sectors and areas. Regulatory risk around water access and land use also continues to evolve. Consolidation will favour platforms that can manage input volatility and trade policy risk while investing in efficiency and sustainability to defend margins.”
Peter Williams
The Prediction for 2026
The outlook for Australian agriculture in 2026 is mixed, with a projected fall in the gross value of production to A$72 billion due to lower crop and livestock volumes, although it will still be the third highest on record. Key factors include potential for better seasonal conditions in some regions, which could improve profits, alongside risks from uncertain global trade policies and elevated input cost.
Slowing global growth is expected to affect demand for discretionary items like dairy and meat more so than demand for staples, which are less sensitive to lower global incomes. Indeed, price falls are forecast for beef, wool, butter, cheese and skim milk powder in 2026. Global demand for sugar is steady, but world prices are forecast to fall 9% as low oil prices reduce conversion of sugar to ethanol fuel. On the upside, export prices for grains are forecast to rise 1.8% and remain above historical averages, while rising fruit and nut prices are supported by strong demand in China and Southeast Asia where shifting preferences for quality favour Australian produce.
Did the Market in 2025 behave in line with our expectations?
2025 was a strong year in Australian agriculture with growth in production and exports from 2024 levels. High livestock prices were a major driver of the sector’s strong performance. Strong rainfall also boosted the outlook for winter crops. Some of these positive factors were offset by inflation impacting input costs and macroeconomic issues. Geopolitical risks and broader economic uncertainties influenced market volatility, particularly tariff impositions. As a result, deal timelines were longer than usual as parties navigated a more cautious market environment.
Healthcare
Market Health Check: Robust
Strong demographics and recurring revenue keep healthcare firmly on the buy list, but execution now turns on regulatory readiness. With ACCC scrutiny rising and FIRB risk front of mind, bidders are tightening risk allocation and diligence, while PE continues to drive buy and build across imaging, home care and allied health.”
Gordon McCann
The Prediction for 2026
M&A activity in the healthcare sector reflects increased regulatory scrutiny, active private capital participation, and strong demographic drivers. The sector remains resilient but faces rising compliance obligations and valuation pressure.
Private equity (PE) will continue to drive consolidation:
PE firms already account for about a quarter of healthcare acquirers and remain focused on diagnostic imaging, aged care and allied health. High valuations such as the reported 17.0 x EBITDA
achieved in the Lumus Imaging deal and the scale of the proposed I-MED exit indicate that sponsors will keep pushing larger platforms to market while using buy and build strategies for mid-market operators.
The sectors continued appeal is underpinned by strong macro drivers including a growing and ageing population, greater focus on health and efficiencies increasingly being driven by technology, including AI. Major PE-backed consolidators are actively pursuing smaller independent healthcare and radiology practices to expand their geographic footprint and service capabilities.
Regulatory intervention is slowing deal velocity
The new ACCC mandatory notification regime that commenced this year has extended approval timelines, with aged care designated as a high-risk sector subject to heightened scrutiny that is particularly constraining PE bolt-on acquisition strategies.
Elevated competition for quality assets will influence deal dynamics
Diagnostic imaging, home care and allied health attract significant attention due to recurring revenue and demographic demand. Buyers and sellers will navigate rising costs, labour shortages and tighter regulatory compliance, which will increase diligence requirements and reduce reliance on qualitative material adverse change clauses that have proved unreliable exit tools.
Did the Market in 2025 behave in line with our expectations?
In 2025 the mid-market remained active, with multiple transactions in the A$10 million to A$250 million range such as Regis Healthcare’s expansion and Estia Health’s acquisitions. Diagnostic imaging and home care will record strong activity as consolidators complete regional bolt-ons and position for scale ahead of regulatory reforms. In 2025 international interest remained strong.
Transactions such as Affinity’s acquisition of Lumus Imaging and Fuso Pharmaceutical’s licensing deal with Dimerix demonstrate that foreign investors will continue to value stable regulatory settings and predictable revenue in Australia’s healthcare system.
Negotiation Tools from HL 2025 Deal Data
We saw the following specific indemnities included in healthcare transactions we advised on:
- Schedule 4 Medicines handling violations;
- Australian Health Practitioner Regulation Agency logo usage issues;
- regulatory advertising violations; and
- health fund overpayments and recorded incidents.
