Key Takeaways
- • Private equity take-privates of ASX-listed companies have surged over the past 12 to 24 months as financial sponsors turn to public markets for deal flow, according to the PE Pulse commentary.
- • Bidders in Steadfast and Reliance Worldwide revised their prices up to three times before exclusivity was granted, and Ingenia's board engaged only after shareholder pressure.
- • The process deed has returned as a central feature of larger take-privates, giving bidders exclusivity and confirmatory due diligence access; Cleanaway, Steadfast, Reliance Worldwide, OFX Group and Ingenia all used them.
- • Brookfield's Reliance Worldwide process deed included a 30-day go-shop and a US$5 million reimbursement fee payable in certain circumstances.
- • Traditional banks are returning to leveraged lending with leverage of up to 6.5x and super senior term tranches, while private credit distress, including the collapse of Bathla Group, and tighter ASIC scrutiny weigh on the sector.
Summary
Private equity take-privates of ASX-listed companies have surged over the last 12 to 24 months, as financial sponsors turn to the public markets for deal flow, according to the PE Pulse analysis. These public-to-private (P2P) transactions are now a prominent feature of Australian M&A, with large-cap approaches across industrials, financial services and infrastructure-style businesses.
A common thread is that bidders have had to return with improved terms before boards will engage. In Steadfast and Reliance Worldwide, bidders revised their price up to three times before exclusivity was granted, and Ingenia's board engaged only after shareholder pressure. Once an approach becomes public, it can draw in rival bidders, as oOh!media and FleetPartners showed. Institutional shareholders, particularly some Australian super funds, have also grown more vocal in challenging whether headline control premiums adequately reflect long-term value, a trend shaping board engagement and bidder pricing.
A notable feature of this cycle is the return of the process deed, signed ahead of a binding implementation agreement, which gives the bidder exclusivity and access for confirmatory due diligence. Process deeds have featured in recent take-privates including Cleanaway, Steadfast, Reliance Worldwide, OFX Group and Ingenia. These deeds typically include no-shop, no-talk and no due diligence restrictions, notification of rival approaches and, often, a matching right of up to five business days. Any period of hard exclusivity is limited to no more than four weeks, in line with Takeovers Panel guidance. In the Reliance Worldwide deed, Brookfield agreed that the implementation agreement would include a 30-day go-shop allowing Reliance Worldwide to solicit competing proposals, a feature that appears to have been part of the commercial bargain for granting pre-bid exclusivity, alongside a US$5 million reimbursement fee payable in certain circumstances. The authors expect process deeds to become increasingly common in larger take-privates.
On the credit side, traditional banks are returning to the leveraged lending market, a space previously dominated by private credit funds. Banks are now considering transactions with leverage of up to 6.5x and, in a recent development, providing super senior term tranches alongside the credit fund unitranche, in addition to traditional super senior revolving facilities. This renewed bank appetite is enabling sponsors to finance take-privates on more competitive terms. At the other end of the credit spectrum, distress is rising across private credit exposures, highlighted by the collapse of Bathla Group. This is weighing on fundraising and on liquidity available to support existing positions, with funds increasingly turning to back-leverage to bridge funding gaps. ASIC's intensified scrutiny of private credit is also growing the regulatory burden, prompting funds with the capacity to do so to invest in internal compliance infrastructure.
Looking ahead, the authors expect take-private activity to remain strong into 2027, citing undervalued targets and abundant dry powder. They anticipate strong demand from global sponsors, often in consortiums, US buyers continuing to drive cross-border M&A, process deeds becoming standard for larger take-privates, and continued demand for core and core-plus infrastructure businesses.
A common thread is that bidders have had to return with improved terms before boards will engage. In Steadfast and Reliance Worldwide, bidders revised their price up to three times before exclusivity was granted, and Ingenia's board engaged only after shareholder pressure. Once an approach becomes public, it can draw in rival bidders, as oOh!media and FleetPartners showed. Institutional shareholders, particularly some Australian super funds, have also grown more vocal in challenging whether headline control premiums adequately reflect long-term value, a trend shaping board engagement and bidder pricing.
A notable feature of this cycle is the return of the process deed, signed ahead of a binding implementation agreement, which gives the bidder exclusivity and access for confirmatory due diligence. Process deeds have featured in recent take-privates including Cleanaway, Steadfast, Reliance Worldwide, OFX Group and Ingenia. These deeds typically include no-shop, no-talk and no due diligence restrictions, notification of rival approaches and, often, a matching right of up to five business days. Any period of hard exclusivity is limited to no more than four weeks, in line with Takeovers Panel guidance. In the Reliance Worldwide deed, Brookfield agreed that the implementation agreement would include a 30-day go-shop allowing Reliance Worldwide to solicit competing proposals, a feature that appears to have been part of the commercial bargain for granting pre-bid exclusivity, alongside a US$5 million reimbursement fee payable in certain circumstances. The authors expect process deeds to become increasingly common in larger take-privates.
On the credit side, traditional banks are returning to the leveraged lending market, a space previously dominated by private credit funds. Banks are now considering transactions with leverage of up to 6.5x and, in a recent development, providing super senior term tranches alongside the credit fund unitranche, in addition to traditional super senior revolving facilities. This renewed bank appetite is enabling sponsors to finance take-privates on more competitive terms. At the other end of the credit spectrum, distress is rising across private credit exposures, highlighted by the collapse of Bathla Group. This is weighing on fundraising and on liquidity available to support existing positions, with funds increasingly turning to back-leverage to bridge funding gaps. ASIC's intensified scrutiny of private credit is also growing the regulatory burden, prompting funds with the capacity to do so to invest in internal compliance infrastructure.
Looking ahead, the authors expect take-private activity to remain strong into 2027, citing undervalued targets and abundant dry powder. They anticipate strong demand from global sponsors, often in consortiums, US buyers continuing to drive cross-border M&A, process deeds becoming standard for larger take-privates, and continued demand for core and core-plus infrastructure businesses.
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