AUSTRALIA Trends and Developments Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
be attributed to the onerous demands of new regulatory and compliance frameworks imposed by the comprehensive cybersecurity legislation enacted by the Federal Government in Novem - ber 2024. Illustrative of this trend is the AUD236 million acquisition of cloud storage provider Ansarada by Datasite and the unsolicited on- market takeover proposal from 5G Networks for AuCyber. Continuing this movement, Dropsuite, a company specialising in cloud-based backup and archiving solutions, announced an acquisi - tion agreement with the US-based IT manage - ment software provider NinjaOne in January of this year. Artificial intelligence, particularly generative AI, is rapidly being adopted by companies to improve efficiency and productivity. Companies effective - ly utilising artificial intelligence in their business operations have been the subject of increased takeover activity, including the reported AUD1.6 billion acquisition by Blackstone and Vista Ener - gy Partners of Adelaide-based Energy Exemplar, which uses AI to support the energy price sim - ulation software that it sells to grid operators, power utilities and renewable energy genera - tors. Another significant transaction during the year from an AI perspective was the reported AUD120 million acquisition by Australian soft - ware design giant Canva of generative AI plat - form Leonardo, which, prior to the acquisition, was viewed as a potential competitor to Canva in the visual design space with over 19 million users globally. This transaction is a great exam - ple of the common practice of leading technol - ogy companies using M&A to gain access to valuable software, systems and developers to support and enhance their existing business offerings and drive future growth while quash - ing the threat of a potential competitor.
Acquirers and their professional advisers in the Australian market are also more routinely incor - porating AI and generative AI solutions in their transactions, including automating certain due diligence processes, enabling the rapid review and analysis of vast quantities of documents to identify risks and liabilities more efficiently. AI algorithms are also being used to predict deal outcomes, assess contract terms against industry standards, flag potential regulatory compliance issues, streamline negotiations, and improve the accuracy and speed of legal work in M&A deals. This is having, and will continue to have, a profound impact on the evolution of the way transactions are investigated and consum - mated, with those that fail to efficiently incor - porate artificial intelligence solutions expected to face a significant competitive disadvantage when bidding for targets/assets due to higher transaction costs and longer acquisition time - lines. Outlook The outlook for M&A activity in Australia is buoy - ant, with the structural trends that fuelled deal - making in 2024 expected to continue. Anticipat - ed rate cuts in major global markets, including the US, United Kingdom, Japan, and Australia, will enhance borrowing conditions and attract more foreign bidders and private capital. Despite this, the persistence of geopolitical ten - sions and the risk of a potential global tariff war coupled with the increasing cost of living and housing affordability pressures remain head - winds for M&A activity. These same headwinds are likely to also impact businesses in the IT, consumer discretionary and materials sectors and companies within these sectors could be susceptible to opportunistically timed and priced offers. Also, there have been a string of promi - nent ASX-listed companies whose share prices
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