‘Silver tsunami’ of business retirees to propel M&A surge
An overwhelming 97 per cent of Australian dealmakers are actively looking for M&A opportunities, according to Pitcher Partners.
The company canvassed 60 M&A dealmakers who have completed at least one deal in Australia over the past 12 months to gauge their plans for the year ahead.
Pitcher Partners’ report uncovered that generational leadership transitions will be one of the key drivers of inorganic growth activity in 2025.
This is particularly evident in Australia’s mid-market businesses, which often have longstanding family or founder-led leadership structures where the leader is approaching retirement. As a result, the urgency to develop and execute succession plans has only intensified.
“Over the past year, succession planning has emerged as a critical driver of mid-market M&A in Australia, with 85 per cent of dealmakers saying this is the top deal driver in 2025,” the paper wrote.
This was up from 37 per cent in 2024, underscoring the need for well-orchestrated transitions in ownership within mid-market practices, Pitcher Partners explained.
“The so-called silver tsunami should spell a bumper year for the 97 per cent of dealmakers who say they are actively looking to source Australian M&A deals this year – as well as for owners looking to sell.”
The findings reflect what is occurring in the Australian financial advice industry, with business owners in the sector often leaving succession planning too late.
Adviser Ratings previously discovered that 40 per cent of advice firms have not nominated a successor and said they don’t need one, while 30 per cent said they need a successor but haven’t begun the search.
Despite the strong appetite for M&A, only half of dealmakers believe Australian mid-markets are well-prepared for a change in leadership, and one in four said mid-market targets lack preparation.
“This lack of readiness is likely to pose a significant challenge to successful transitions, triggering delays, creating valuation misalignment and prompting deals to fall over.
“This supports broader concerns that many would-be sellers are leaving it too late to start preparing for their exit, and find themselves trying to compress what should be a three- to five-year process into a year or even a few months.”
Speaking to Money Management last year, Stephen Prendeville, founder and director of Forte Asset Solutions, said advisers “very rarely” plan their exit from the practice in advance which presents problems later on down the line.
The four common “trigger events” that prompt an adviser to think about their succession and may necessitate a sudden action are death, disability, retirement and resignation.
Similarly, John Birt, chief executive of Radar Results, said advisers commonly delay succession conversations due to the immediate day-to-day pressures of operating a business.
“Advisers often keep putting it off and are a bit tardy in getting it organised. That’s just human nature; it’s the ‘we’ll take care of it when the time comes’ type of attitude,” he described.
Both commentators encouraged advice leaders to begin having succession or M&A discussions sooner rather than later, which means either finding an internal successor or searching for the right merger partner.
AUTHOR
Jasmine Siljic
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