NEW ZEALAND Law and Practice Contributed by: Ben Paterson, Cath Shirley-Brown and David Hoare, Russell McVeagh
Russell McVeagh Level 30, Vero Centre 48 Shortland Street
PO Box 8 Auckland 1140 New Zealand
Tel: +64 9 367 8024 Fax: +64 4 499 9556 Email: Ben.paterson@russellmcveagh.com Web: www.russellmcveagh.com
1. Transaction Activity 1.1 Private Equity Transactions and M&A Deals in General This chapter provides an overview of the key trends and features of a private equity transaction in New Zealand – that is, an acquisition (or disposal) of a tar - get business where the buyer or the seller is a special- purpose vehicle that is ultimately owned by a fund or funds that are managed and/or advised by a private equity fund manager. The New Zealand Private Capital Monitor 2025 report - ed that transaction activity was strong in 2024, with total private equity and venture capital activity reach - ing NZD3,765.2 million – a significant increase from NZD1,988 million in 2023. Overall M&A activity was robust in 2024, with a nota - ble increase in buy-out activity and strong mid-market investment. Various economic conditions, including the recent (technical) economic recession in New Zealand, high interest rates and geopolitical developments (fur - ther expanded on in 1.2 Market Activity and Impact of Macro-Economic Factors ), contributed to the decrease in pace of M&A activity in the second half of 2024, which has continued into early 2025. Bid-ask valuation gaps continue to impact transaction volumes, with funds focusing on volume growth via
operational improvement and funding investor returns through alternative strategies such as partial sales and sales to secondary funds. However, there are promis - ing signs of M&A activity in New Zealand picking up in the latter half of 2025. In the current market, the authors have observed an increase in deals implemented by way of private treaty/a bilateral process. Additionally, the authors are seeing an increase in contracts featuring earn- out provisions to bridge valuation gaps, as well as buyer-friendly protections such as material adverse change (MAC) clauses, enhanced security packages and more extensive conditions precedent. While slower than in previous years, the current pri - vate equity market remains relatively strong due to: • the availability of quality domestic assets; • a perception of New Zealand as a relatively safe and stable governmental/regulatory environment; and • an abundance of “dry powder” (ie, available com - mitted capital) on the part of domestic, regional and international private equity funds. 1.2 Market Activity and Impact of Macro- Economic Factors In terms of types of transactions, as noted in 1.1 Pri- vate Equity Transactions and M&A Deals in General , as noted in the foregoing, there has been a reduction in formal sale processes.
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