Dealmakers see ‘green shoots’ for New Zealand’s M&A market despite economic challenges

New Zealand’s M&A market had a somewhat mixed 2024. Activity was subdued as the market continued its post-Covid recovery, while many deal timelines were impacted by protracted negotiations.

And while a strong end to the year saw increased positivity for a rebound in 2025, there is continued uncertainty due to global tariffs and trade wars.

To find out more about the M&A market in New Zealand and the prospects this year, we spoke to two dealmakers from Armillary – Executive Director Martin Gray and Investment Banking Manager Anahita Haridasani.

Q. Martin, can you please tell me about the company and what you do?

I’m an Executive Director at Armillary and we’ve been operating as a private investment bank for more than 20 years. We provide the whole range of investment banking services: transactional advice on M&A, sales, capital raising, debt raising and the like.

Quite a large part of the firm’s work is advisory services, anything from valuations to due diligence to strategy to governance support. We run some marketplaces in New Zealand, including managing the second largest stock exchange the USX, and we manage some bespoke funds plus an equity crowdfunding and peer-to-peer lending licensed platform.

Armillary operates right across the country and we’re also a member of a global network called M&A Worldwide which has representation in about 38 countries. We collaborate with them on any global deals we’re doing and around thought leadership, sharing resources and personnel, and that kind of thing.

Q. And Anahita, what’s your role? 

I’ve been with Armillary for about a year. My role is pretty much managing deals the firm is working on. So that could be an M&A deal or a capital raise deal, and I also work on strategy documents for different clients.

My role goes end-to-end, right from preparing the financial model, the pitch deck, and the data room, reaching out to counterparties, and then executing the deal, helping with the due diligence queries, going ahead with SPA preparation, and closing out the deal.

Q. Martin, how is the M&A market in New Zealand at the moment? And what do you think will happen for the rest of the year?

We think there are some real green shoots in the New Zealand M&A and investment banking market. From our perspective: we’ve got a good pipeline of deals that we’re working on and we closed several in 2023-24. 

But it is fair to say that activity has been subdued over the last year or two. Interest rates were very high post-Covid and stayed that way. But the Reserve Bank has cut rates quite dramatically over the last six to nine months so we expect to see the economy improve as the year progresses.

M&A activity is improving ahead of the economic recovery. We’re seeing a pretty good deal flow and a whole range of acquirers, including offshore parties, are showing heightened interest in the New Zealand market.

Q. Are cross-border deals a big part of the work that you do? And if so, which regions are showing the most interest?

They are a very important part of our work. The New Zealand economy has always sourced capital from offshore and buyers of businesses are part of that. We have broad interests from all around the globe. 

For two deals we’re doing at the moment, one has interest from North Asia and the other from Europe. Direct investment into New Zealand and it’s pretty well spread around the Americas, Asia, and Europe.

Q. Which sectors offer the most opportunities for investors or for M&A?

I don’t think there are any that stand out particularly. Armillary is pretty agnostic around industries. The one that I mentioned with Asian interest is tourism-related and the other was an engineering-type business, so there are no particular themes as to which sector attracts interest.

There is always an interest in technology. New Zealand is quite innovative around tech generally and that spans various sectors from agritech to industrial tech to medtech. We spawn a lot of interesting, innovative companies, maybe because we’re a bit geographically isolated.  

There’s a saying called the “Number 8 Wire”, which was invented in New Zealand, and our businesses do have a can-do attitude. They don’t see barriers that businesses in other countries might. So, technology generally has always been a real driver for our industries.

Q. Our research has shown that M&A deals have been taking longer over the last few years.  Would you say that was the case for New Zealand too?

Well, I’ve been around for a few cycles, and it’s always been a complex process. I think it’s fair to say that the time taken to close deals has stretched out in the last two or three years. The debt side of the market drives a lot of deals and activity there has been much more cautious and a whole lot more expensive. So that certainly has impacted deal times.

But the biggest delays relate to regulatory issues. If a deal requires approval from the Overseas Investment Office or the Commerce Commission that can lead to very long deal times.

Q. Somebody mentioned that ESG regulations are becoming more arduous and taking up more time. Is that your experience?

Yes. Corporates are far more conscious of ESG. The IFRS and other regulatory reporting requirements make more work and environmental issues can certainly create specific issues around due diligence. There can be more demanding reporting requirements with Triple Bottom Line reporting, and sometimes there are more compliance issues. 

But I don’t think that’s a big change: there always were deals where you had to do specific technical due diligence around contamination or whatever environmental issues were flavor of the month.

Q. Has cybersecurity become more important for due diligence?

Yes. Operational or technical due diligence have always been part of considerations, but these days you need to apply more rigor. Cybersecurity, health and safety and privacy are all now seen as key issues by the board, particularly for acquisitions. But then any due diligence should look at all the potential risks.

Whether it really slows down deals, I’m not sure. I think the biggest delays are always down to regulatory issues.

Q. Are there any particular sectors where you expect a deal to take longer or be more complex?

No, not particularly. We use some of the functionality of tools like Ideals to help us run a competitive process. If we’re keeping two active bidders live right through to near completion, that will take longer and be more time-consuming. 

But the complexity is more about the process: how many other parties are there, and what type they are. There’s obviously a big difference between a trade counterparty and a financial buyer in terms of confidentiality and how and when you disseminate information. And these are the factors that really determine the timeframe.

Q. What about the use of technology to speed up due diligence? Using AI tools to sort contract information for instance.

We are undoubtedly seeing more focus on AI. There’s been a continuous development in how we use technology, and the digitization of data is obviously a key aspect. 

But AI is a buzzword that can mean many things. How we deal with big data, for example from a privacy aspect, is becoming more important and now there are tools that enable us to filter and interrogate it.

Q. Anahita, as the person setting up data rooms, is there any part of your job where you think AI tools could simplify things?

I think AI could help by summarizing big documents or pulling out key information from contracts. It saves time compared with going through documents line by line. 

Q. Martin, what’s the approach to these new tools? Is it something you’re embracing, or do you have to be quite risk-averse in terms of adopting them?

We have an AI policy within the firm. Everyone will be using it more but it’s already very much an active tool for us in all aspects of our work, not just our due diligence.