Activities in merger and acquisition (M&A) continue to boom in Australia, and there’s a recent trend toward US-based asset managers buying into Australian assets.

This morning, a consortium comprising US-headquartered TPG Capital and Australia-based Potentia Capital has made an acquisition play for ASX-listed SmartGroup (ASX:SIQ).

The non-binding offer values SmartGroup at $1.32 billion in cash or $10.35 a share, which is a 31.7% premium to SIQ’s closing price yesterday.

SIQ’s share price jumped 17% to $9.17 on the news.

SmartGroup provides salary packaging and fleet management services to corporates, and has performed strongly in the last half.

The company’s half yearly revenue was down 2% to $109.4m, but it reported a 53% increase in net profit to $26.5m.

SIQ has agreed to grant the consortium access to its books to commence due diligence, saying that it’s in the best interest of shareholders.

Based on the current available information, the Board said it intends to unanimously recommend the proposal to shareholders.


SmartGroup share price today:



M&A boom in Aussie infrastructure assets

SmartGroup’s business offers asset managers like TPG a solid asset with recurring revenues, as it has consistently paid dividends over the last few years.

This deal is just one of a recent flurry of M&A activities in Australia and globally, as record-low interest rates encourage investors to chase higher valuations.

Nearly US$3 trillion in M&A deals have been completed worldwide in the first 6 months of the year, and infrastructure assets have been among the more popular.

Energy network operator AusNet (ASX:AST) is one ASX company that’s found itself in the middle of an ongoing bidding war.

AST announced that it planned to arrange for potential suitor Brookfield Asset Management (BAM) to carry out further due diligence, after BAM upped its bid for the company to $2.52 per share.

That gave BAM the upper hand against fellow infrastructure play APA Group (ASX:APA), but APA returned to the fray with a revised bid of $2.60 per share.

This morning, AusNet announced that it has given APA access to its books to commence due diligence.

This acquisition is expected to create Australia’s largest energy transmission and distribution infrastructure utility, with a combined enterprise value of $35 billion and total assets of $29 billion.

Other stocks that have been making news in the M&A space recently include Sydney Airport (ASX:SYD), which has granted due diligence to a US-based consortium that has put an offer of $8.75 in cash.

Transurban Group (ASX:TCL) completed an equity raising to acquire the 49% stake in WestConnex the NSW government owns for $11.1 billion, taking 100% control of the tollroads company.

Spark Infrastructure (ASX:SKI) is about to end its listing on the ASX, after the company agreed to a 100% takeover by a consortium led by US-based global private equity giant, KKR.

The offer was for $2.95 a share before franking credits, and valued Spark at around $5.2 billion.