Despite deal volumes falling to their lowest levels since the GFC in the 2012 financial year, a new report by Freehills has still found some redeeming features in the Australian M&A market.

"While deal volume remained low, overall deal value remained fairly strong. The value of deals announced in FY2012 was A$63 billion, which was a decrease of only A$16 billion in funds committed by bidders," commented Freehills partner Simon Reed, author of the 2012 Freehills Public M&A Report.

Another feature of the 2012 M&A market was a "feast or famine" pattern of work. "Deals were announced in 'bursts', reflecting the extremely volatile nature of Australian and global markets in recent times, but also suggesting that bidders are looking to announce transitions during particular 'windows of opportunity', when market conditions offer  better prospects," said Reed. 

Other key findings of the report were as follows:

SUCCESS RATE
* Overall success rates for deals increased to 81% in FY2012
* The success rate for Chinese bidders increased to 83% in FY2012, as opposed to 57% last year

DEAL STRUCTURE
* Schemes of arrangement accounted for 46% of all transactions, the highest level since Freehills first began collecting this data five years ago;
* Cash was the form of consideration in 65% of transactions. Of these cash deals, 49% were funded wholly or partly via debt

MARKET
* The energy & resources sector accounted for 50% of all transactions;
* There was little correlation between macro-economic events (for example, interest rate movements) and the timing of deal announcements

BIDDERS
* The number of private equity deals increased in FY2012, with 82% of these deals conducted by way of scheme of arrangement
* The proportion of foreign bidders dropped marginally to 46%; North American bidder activity  dropped noticeably to 13% and Asian activity was slightly higher at 22%