Avoiding the competition: Tactical sellers choosing bilateral deals over competitive auctions in private M&A

Bilateral processes dominated 2024 with sellers being tactical on bidder engagement ahead of launching full-scale competitive auctions, according to a new report from leading global law firm Herbert Smith Freehills Kramer (HSF Kramer).

The latest instalment of its Dealmakers: Australian Private M&A Report unpacks a select sample of 60 private M&A transactions led by HSF Kramer dealmakers. It offers data-driven insights into a dynamic year of strategic execution, sector shifts, and evolving deal structures.

The new report identifies that sellers are being more tactical on bidder engagement, with the data showing that 78 per cent of private M&A deals in 2024 were bilateral.

HSF Kramer M&A partner and author of the report Kam Jamshidi said, “Sellers are getting strategic and utilising windows of opportunity to test appetite with individual prospective buyers, moving quickly to bilateral deals instead of launching straight into a broad auction. 

“It has the benefit of speed and lower risk for both parties. The buy-side is also happy to participate in bilateral negotiations because it reduces the likelihood of investing energy in a lengthy process with uncertain outcomes”.

The report further details that where there was an auction, there was a significant reduction in conditionality and termination rights relative to bilateral situations.

“This trend supports the conventional wisdom that competition helps improve deal certainty for a bidder, as well as price. This was particularly the case among Financial Sponsor bidders”, Jamshidi added.

HSF Kramer’s report identified a flurry of activity in the last quarter of 2024, suggesting that optimism is returning, and an improved economic outlook is now driving momentum in private M&A markets.

The data showed that December 2024 was a stellar month for dealmaking, with 18 per cent by number and 42 per cent by value of deals being signed in this month. This included the most hotly contested sponsor auctions of the year, resulting in Carlyle’s acquisition of Waste Services Group and Pacific Equity Partners’ acquisition of FMH Group from Singapore Post. HSF Kramer acted for Carlyle and Singapore Post on these transactions.

Reflecting on this activity, Jamshidi explains, “Dealmaking conditions improved throughout 2024, as interest rate forecasts became more doveish and the election of a Trump Government in the United States gave confidence to dealmakers globally. This led to a spike in deal activity in the last quarter of calendar year 2024, December in particular, as sellers gained confidence to take their window of opportunity”.

While the Australian Federal Election tempered activity in the first half of 2025, HSF Kramer’s partners expect this to be short-lived.

Jamshidi adds, “The drivers for private M&A continue to be strong — an improved interest rate outlook, a relatively low Australian dollar, and strong buyer appetite, particularly from private equity, are expected to drive a new wave of activity.

“The pipeline of assets is exceptionally strong, boding well for near-to-medium term activity”.

The report also highlighted the dominance of private capital bidders, finding that they bid fiercely in competitive situations last year.

HSF Kramer M&A partner Adam Charles explains, “Private capital didn’t just participate in 2024 — it led with conviction, shaping the market through bold acquisitions and strategic holds.

“The major auctions of the year involved deep pools of private equity bidders hotly contesting for assets. We saw second phases of auctions being staged in order to drive competitive tension, multiple bidders being taken to the wire and submitting binding bids, and bidders dropping deal conditionality materially in auctions”.

The data also showed that private equity continued to be highly active on the buy-side, relative to the sell-side, of transactions.

“Financial sponsors were more active as buyers than sellers, with a growing appetite for carve-outs and secondary transactions between private capital managers. The fact that financial sponsors continued to actively deploy and were willing to hold their investment signals optimism for improved conditions through the remainder of 2025”, Charles added. 

Key findings in the report include:  

• Transactions below A$250m represented 77 per cent of all transactions by number. However, there were a number of notable transactions above A$1 billion, representing 6 per cent of all transactions by number, but 36 per cent by value.
• Favoured sectors for private in 2024 were Health Care (18 per cent by number and 31 per cent by value), Commercial Services & Supplies (14 per cent by number and 12 per cent by value), Education (9 per cent and 6 per cent by value), Financial Services (9 per cent by number and 8 per cent by value) and Information Technology (7 per cent by number and 2 per cent by value).
• Scrip was used in 21 per cent of deals. There were a small number of deals where listed scrip consideration was used, but the median proportion of listed scrip in these deals was 61 per cent of the consideration.
• Founder exits (39 per cent) and non-core divestment of assets (39 per cent) were the biggest drivers for sellers to pursue a transaction. Financial Sponsor exits continue to be under-represented relative to the pipeline of assets with medium-to-long hold periods, which bodes well for activity in future periods.
• The median period between signing and completion was 47 days, with 50 per cent of deals being completed between 20 to 98 days. Where Foreign Investment Review Board Approval (FIRB) was required, the median period for this approval was 90 days, with approval being secured in 50 per cent of deals between 54 to 128 days. This is in-line with expectations and previous years.

Find out more and request a copy of the full report here.