The FY27 Succession and Exit Outlook

What the year ahead means for Australian private and mid-market business owners considering succession, ownership transition or an eventual exit.

FY27 presents a rare combination of opportunity and change. Buyer demand for quality Australian businesses remains strong, private capital is plentiful and a significant wave of business-owner retirements is beginning to reshape the market. At the same time, proposed tax changes, shifting economic conditions and increasing buyer scrutiny are changing what successful succession and exit planning looks like.

The decisions you make today can have significant impact on the value of your business, the number of options available to you and the after-tax outcome you ultimately achieve.

This report is designed for owners of private and mid-market businesses who want to understand their succession and exit options, prepare for a future transaction and maximise business value.

Key findings

~15% decrease

in value if the business can’t run without you

3-5 years

to build value that maximises sale price

age 55+

increasing # of owners nearing retirement

6-12 months

needed to become sale-ready

30 June 2027

CGT valuation deadline

65%

of deal count under $50m

Why business owners need to act in FY27

The tax clock is running
If a sale is on your horizon, now is the time to understand how the upcoming Capital Gains Tax (CGT) changes could affect your planning. From 1 July 2027, the 50% CGT discount ends. To be taxed under current rules, a sale must be completed by 30 June 2027. Preparing a business to withstand buyer scrutiny commonly takes six to 12 months, followed by a sale process which can run well beyond a year from engagement to completion.

If your business is sale-ready, your window is open but narrow, and it’s worth taking advice now. If it is not, the value lost from rushing an unprepared business to market may exceed any tax benefit achieved by completing a sale before the CGT deadline.

Supply is building
More Australian business owners are approaching retirement than ever before, making succession one of the strongest drivers of deal activity in the mid-market. For owners planning an exit, this creates both opportunity and urgency. Businesses that are well prepared can take advantage of strong buyer demand today, while those that delay may find themselves competing with a growing number of succession-driven transactions in the years ahead.

Capital is abundant, but concentrated
Capital remains available across private equity, family offices and strategic buyers. The difference in FY27 is that buyers are becoming increasingly selective. Businesses with strong earnings, disciplined operations and clear growth opportunities continue to attract strong interest. Businesses that are unprepared or difficult to assess are increasingly being discounted.

Australia’s M&A market

Australian mergers and acquisitions (M&A) has moderated from its FY22 peak, but the headline numbers understate what is happening underneath. Deal counts and aggregate values have softened, which points to a market doing fewer, larger and more considered transactions. The mid-market continues to account for the majority of activity by volume, with about 65% of deals up to $50m in value, and over 90% under $500m.

Conditions tightened through FY26. The Reserve Bank raised the cash rate three times during 2026 and buyers responded with fewer speculative deals, deeper due diligence and a decisive shift toward defensible, cash-generative businesses.

Graph 1: Number and aggregate value of transactions in Australia (FY17 – FY26)

FY22 spike in aggregate value due to two very large transactions: BHP Petroleum International Pty Ltd acquired for $27.2b and Sydney Airport Limited for $32.1b

Source S&P Capital IQ and WB Analysis

Activity peaked at 1,039 deals in FY22 before moderating to 585 deals in FY26. Disclosed values have swung year to year, with FY26 at $42b, but excluding the FY22 outliers, aggregate value has tracked broadly around its decade average of $60b, without the sustained decline the deal count shows.

Graph 2: Breakdown of M&A activity per transaction size by count in Australia (FY17 – FY26)

Transactions under $500m consistently represent over 90% of all deals

Source S&P Capital IQ and WB Analysis

Over the last three financial years, the majority of deals (about 65%) were up to $50m in value, with one third of all deal volume within the range of $10-$50 million. In contrast, deals above $500m drive the bulk of aggregate value.

Graph 3: Number and aggregate value of transactions under $200m in Australia by sector (Y26)

Mid-market activity clustered heavily in Industrials and Materials, which together drove about half of deal volume and disclosed value.

Source S&P Capital IQ and WB Analysis

Mid-market transactions under $200m were led by Industrials and Materials on both deal count and aggregate value. Materials activity was heavily concentrated, with metals and mining accounting for around 99% of value across disclosed FY26 deals. Industrials was the opposite, with no single subsector dominating. Value was spread across construction and engineering (29%), trading and distribution (23%) and a long tail of transport, logistics and business services. That breadth shows buyer demand is broad-based rather than confined to a few pockets, so the takeaway for an owner is less about which sector holds the most opportunity and more about how well positioned your business is within it.

Beyond a trade sale, private equity, venture capital and public listings remain options for raising capital or realising value, though each has grown more selective. These options reward profitability and strong fundamentals over growth at all costs, which means well-governed operations are increasingly what attracts capital and supports an exit.

Economic outlook: Walking the inflation tightrope

For business owners, investors and acquirers, the key message is that capital remains available, but the era of ultra-low interest rates is firmly behind us. Businesses with strong earnings, pricing power and clear growth opportunities are likely to remain best placed to attract both funding and buyer interest.

Read our full economic report (as of 24 July 2026):

Economic uncertainty is the new norm globally and Australia is no exception. A lasting peace deal in the Middle East has proven elusive and the price of Brent crude has surged back above US$100 a barrel on 24 July, creating fresh upside risks to the inflation outlook in Australia.

The Reserve Bank of Australia (RBA) began a tightening cycle earlier this year, lifting the cash rate three times in February, March and May in response to rising inflationary pressures. Underlying inflation rose to 3.7% in the year to May and we expect it to climb further, peaking near 4% around mid year. The RBA will be watching closely for any second-round effects from higher energy and input costs that could entrench inflationary pressures.

Policymakers will also be focused on the labour market. The unemployment rate held steady at 4.4% in June and averaged 4.4% over the June quarter, above the RBA’s forecast of 4.2%. However, the unemployment rate masks ongoing resilience in labour demand. Employment rose by 120,300 over the two months to June, the strongest back-to-back increase in 14 months. And the participation rose to 67.0%, just shy of a record high. Forward-looking indicators point to a gradual easing in the jobs market.

Economic growth has remained more resilient than many anticipated heading into this year, supported by a surge in data-centre investment. Meanwhile, households are feeling the pressure from higher prices and interest rates, but spending has held up better than expected.

We expect economic growth to moderate through the remainder of the year as higher interest rates weigh on activity and housing market conditions soften. Our forecast for 2026 is 1.1% and 1.7% for 2027, down from 2.6% last year. Housing turnover and prices have already weakened and recent tax changes by the government have added another layer of uncertainty. However, housing conditions remain uneven with the mid-tier capitals continuing to outperform Sydney and Melbourne.

There remains a risk of one additional rate increase from the RBA in the current third quarter, which would take the cash rate to a peak in this cycle of 4.60%. It remains a finely balanced decision. Financial markets continue to assign a high probability to one further increase with November 2026 currently the most favoured timing. Resilient labour-market data and rising energy prices have contributed to a modest flattening of the Australian yield curve. This flattening has been spurred by a stronger increase in shorter-dated yields, reflecting expectations that the RBA may hike again or keep the cash rate higher for longer. Both shorter and longer-dated bond yields are trading around two-month highs.

Credit conditions domestically remain supportive with debt capital available for quality borrowers and credit spreads relatively contained, despite a higher interest-rate environment. Lenders and investors continue to be willing to fund businesses with strong earnings, resilient cash flows and credible growth prospects.

Although we see a risk that the cash rate will rise further in the near term, we continue to view 2027 as the year in which the RBA will begin lowering interest rates. We expect three rate cuts in 2027, starting in the middle of the year.

The share market has remained resilient. The ASX 200 has delivered a total return of almost 5% over the past 12 months and is currently trading just 1.1% below its September 2025 peak. This resilience has persisted, despite a softer economic growth outlook and heightened geopolitical risks. The Australian market has nevertheless underperformed many global peers, reflecting its relatively lower exposure to companies benefiting directly from the artificial-intelligence-investment cycle.

Besa Deda – Chief Economist 24 July, 2026

Back to top

Economic implications for business owners

Inflation remains elevated.
Interest rates are likely to remain higher for longer.
Capital remains available for quality businesses.
Buyers are increasingly focused on earnings resilience and cash flow.
Businesses with strong pricing power, recurring revenue and defensible market positions remain attractive.
We expect conditions to improve during 2027 as interest rates begin to ease.

Australia is approaching a succession cliff

We’re seeing a record number of private business owners in Australia now over 55, and most lack a documented succession plan.

Traditional succession has become harder, with the next generation increasingly building careers of their own rather than taking over the family business, and management teams rarely having the capital to fund a buyout at market value without external backing. The result will be an unprecedented transfer of Australian business ownership in the coming decade.

For owners who plan early, the opportunity is a deeper and better funded pool of buyers for well-run private businesses. But as more succession-driven businesses come to market, those unprepared will compete on price alone, and exits forced by health, fatigue or partnership disputes consistently transact at meaningful discounts to planned ones.

Every owner transitions out of their business eventually – either by plan or by circumstance. Two questions you should consider before the decision arrives are:

1. Which path do you want – whether that is family, management or an external sale?
2. If you could not run the business from tomorrow, what would happen to its value?

Back to top

The buyer landscape in FY27

Buyer demand enters FY27 well-funded. Private equity is deploying again after a strong recovery through 2025, global funds continue to hold historically high levels of uninvested capital, and foreign buyers, particularly from the US and Japan, remain active in quality mid-market businesses.

More capital chasing fewer prepared assets is the most favourable dynamic a seller can have. Knowing which buyer is most likely to want your business shapes how you prepare, who you approach and what you can negotiate.

The lines blur in practice – a private equity platform acquiring a bolt-on is a strategic buyer with a financial owner. What decides the premium is not the label, but whether a buyer needs your business or simply wants a return from it. All-or-nothing exits are also no longer the default. Partial sales, earn-outs and staged transactions are now commonplace, letting owners release value while retaining involvement and upside.

Graph 4: Local against foreign number of transactions in Australia (FY17-FY26)

Source S&P Capital IQ and WB Analysis

Foreign acquirers accounted for 28% of Australian transactions over the past decade, and their share climbed to a high of 35% in FY26, even as overall deal volumes fell. Offshore interest broadens the pool of buyers for a prepared business, though it comes with higher expectations of reporting and governance, which makes early preparation the price of admission.

Key elements of how a buyer will value your business

Price is set after risk, no matter which buyer sits across the table. Buyers discount what they cannot verify and often walk away from risk rather than negotiate. Identifying and resolving risks before a process begins is crucial value creation available to a business.

What drives the value of your business?
The value of a business is generally measured by its financial performance, but buyers rarely pay for profits alone. They pay for the likelihood those profits can grow, be sustained and continue without the owner. This is why two businesses with similar earnings can attract very different valuations, and the difference comes down to the multiple. Across private equity, family offices and corporates, premiums attach to the same seven drivers.

The gap between average and median multiples is wide in most sectors, and listed transactions typically attract higher multiples than private businesses of similar size. Where a business lands within its sector’s range is decided by the drivers below and the gap is potential value that preparation either captures or leaves behind.

William Buck’s value multiplier framework

Our Value Multiplier Framework helps owners understand the factors buyers value most, benchmarks your business against comparable transactions, and identifies where improvement can have the greatest impact on valuation.

Earns a premiumTriggers a discount

Leadership depth & the founder dependence discount

Many owners believe they are the greatest asset in the business.
Buyers often view founder dependence as the greatest risk.
The more customers, staff and operational decisions depend on one individual, the greater the perceived risk and the lower the valuation multiple.

Getting an accurate valuation of your business
Public transaction data provides useful context, but it only tells part of the story. Many private mid-market deals up to $50m do not disclose sale prices or valuation multiples.

William Buck is involved in approximately 200 valuations and transactions each year, mostly within a valuation range up to $100m. We maintain a confidential proprietary database of Australian mid-market transactions, allowing us to benchmark businesses against comparable transactions and provide valuation insights that reflect the realities of the private market.

Graph 5: Australian EV / EBITDA transaction multiples per sector

Median multiples sit between 6-11x across most sectors

Source S&P Capital IQ and WB Analysis

Back to top

Preparing for an exit: The three to five-year runway

The difference between a good exit and a great one is rarely timing the market. More often, it comes down to preparation. The seven value drivers take years to build and prove. That is why the most effective planning starts three to five years before a sale, not when the decision is made.

Back to top

Tax changes every business owner should understand

The post-tax result of a sale is determined by a range of factors, including the sale structure, timing and tax concession eligibility. Recently there has been some major tax changes, making FY27 the year to review your options.

The 50% CGT discount ends on 1 July 2027 for most asset classes and will be replaced with CPI indexation. Sales completed by 30 June 2027 are taxed wholly under the current rules. For assets held beyond that date, what your business is worth at 30 June 2027 determines how much of your gain keeps the old treatment, making an accurate valuation at that date essential.

The small business CGT concessions remain, and are set to reach more mid-market businesses, with the turnover threshold for the 50% active asset reduction lifting from $2m to $10m on 1 July 2027. Eligibility depends on how your business is structured, which is often done years in advance.

Discretionary trusts face a proposed 30% minimum tax on trust income from 1 July 2028. Where income flows to corporate beneficiaries, the practical combined rate can reach 60% or higher. Rollover relief is proposed to be available for three years from 1 July 2027 for businesses to restructure out of trusts.

Superannuation balances above $3m attract an additional 15% tax on earnings. From 1 July 2026, this applies to realised earnings on the portion above $3m only. This impacts where your sale proceeds may be contributed to.

Each of these outcomes depends on decisions you make well before a transaction. Reviewing your structure and eligibility early preserves options that narrow considerably once a sale process is underway.

Back to top

Planning with intent

Most owners will sell or transition a business only once.

The difference between a successful transition and a disappointing one is rarely the state of the market at the time. More often, it comes down to preparation, timing and advice.

FY27 presents a rare combination of strong buyer demand, structural succession activity and meaningful tax change. That creates both opportunity and risk.

The owners who achieve the strongest outcomes are likely to be those who start planning before they need to.

Now is the time to understand what your business is worth, what drives that value and what steps can strengthen your options in the future.

Back to top

Four questions every business owner should ask before planning succession

Could my business operate for three months without me?
Could I explain my growth story to a buyer with numbers to back it?
Who would buy my business today, and what would they pay?
How much of my revenue depends on my three largest customers?

If any of these questions are uncomfortable to answer, we encourage you to speak with our specialist advisers about how this outlook applies to your business, your sector and your long-term goals.

William Buck’s recent transactions

Behind every transaction is an owner navigating a once-in-a-lifetime decision. The deals below reflect our Corporate Finance team’s work advising businesses like yours across Australia this year.

The FY27 Succession and Exit Outlook