New Zealand

MinterEllisonRuddWatts’ market-leading Corporate M&A team has today released its M&A Forecast for 2024. The forecast charts the industry’s deal-making journey in 2023 and offers insights into the evolving landscape and emerging themes. The team predicts strengthening deal activity in 2024 as buyers come to terms with the ‘new normal’ and sellers begin to re-set their expectations. The team notes that deal-making was full of turbulence throughout 2023 with several key factors contributing to the bumpy ride: Macroeconomic factors: 2023 was a busy year around the world. Deal-makers were operating in a landscape impacted by the lingering effects of a global pandemic, geopolitical tensions, economic uncertainties, and the dynamics of a changing government landscape. Stubbornly high interest and inflation rates further complicated matters. Cautious buyers: This new, uncertain landscape caused buyers to become much more cautious. Many chose not to participate at all. For those that did, due diligence processes became more prolonged and boards and investment committees, wary of downside risks, demanded more robust protection. Disconnect in expectations: Significant gaps emerged between buyer and seller expectations. This led to more, often tense, negotiations, which in turn blew out deal timelines. The shift from a seller-friendly to a buyer-friendly environment was rapid and profound. Buyers and sellers spent much of 2023 coming to terms with the new normal. While there was undoubtedly a decrease in overall M&A activity in 2023 (following historic highs), the firm’s forecast notes a cautious, but optimistic outlook for the year ahead. Head of Auckland Corporate and Partner, Neil Millar said “We anticipate a strengthening of deal activity throughout 2024 as both buyers and sellers adapt to the new landscape which evolved so rapidly in 2023. “Private equity (PE) is expected to be particularly active, and we have ongoing engagements on numerous transactions for our PE clients. Additionally, international buyers continue to show interest in New Zealand's fantastic privately owned businesses, particularly in the technology, healthcare and financial services sectors. "While many speculated that New Zealand’s General Election caused deal-makers to pause in 2023, we do not believe that the election’s impact was particularly significant." Millar explained. "Instead, our experience saw domestic buyers remaining focused on macroeconomic factors, while international buyers we deal with continued to see New Zealand as a stable and safe place to do business, regardless of which party leads the Government.” Head of Corporate Wellington and Partner John Conlan, believes that despite the uptick in deal activity, deal terms will continue to favour buyers this year, with a focus on downside protection. “Buyers will seek comprehensive warranty and indemnities to support their offers, alongside mechanisms such as Material Adverse Change (MAC) clauses to address unforeseen circumstances. We expect that earn-out arrangements will remain popular, serving to bridge pricing expectations between parties.” Conlan also expects a rise in distressed M&A activity as the ever-patient banks face increasing pressure to act. Sectors such as construction, retail, food and beverage, and hospitality are likely to experience consolidation as larger players seize opportunities to acquire smaller competitors struggling to navigate challenging market conditions.      

New Zealand’s stock exchange is set to list its first AI business, Being AI – a newly launched artificial intelligence services, development, and investment business. Being AI has reached a conditional agreement to be acquired by NZX-listed company, Ascension Capital. Top-tier law firm, MinterEllisonRuddWatts, is advising Being AI co-founder, David McDonald, on the acquisition. If Ascension Capital shareholders approve the deal in March 2024, it will be significant for the New Zealand market as the first AI company to list on NZX. Being AI, one of the three branches of artificial intelligence consulting company, Being Consultants, provides companies with an understanding of what is happening in the AI space, assists companies around digital transformations, while also investing in new AI technologies. Corporate Special Counsel Igor Drinkovic who advised David on the deal said: “It has been great working with David on this significant sale to Ascension. The deal means changing times as NZX receives its first AI business.” The conditional agreement values the Being AI portfolio at NZD45 million on the completion date.  

Leading New Zealand law firm with a reputation for innovation and early adoption of legal technology, MinterEllisonRuddWatts, has launched its first in-house gen-AI based chatbot, named AIME.  In an era where technology continues to reshape the legal landscape, the firm prides itself as being at the forefront of embracing technology solutions to streamline its operations and better serve its clients. Leveraging the power of Azure, AIME has been configured by the firm’s in-house technology team and is currently being trialled by partners and staff, for use, initially for administrative tasks. The robust testing is allowing people to feel comfortable and develop trust in gen-AI, while also identifying the opportunities it presents and understanding and mitigating any risks. Contained within the Microsoft Teams environment, AIME has the layers of security applied to this platform, ensuring that internal data entered into AIME remains protected and secure, and adheres to privacy laws. Technology Partner, NZTech Board Member and Chair of the AI Forum’s working group on gen-AI strategy, Tom Maasland, has been deeply involved in the roll out of AIME. “Gen-AI has the potential to disrupt many industries – and the legal industry is firmly, and some would say high up, on that list. MinterEllisonRuddWatts has a strong culture of innovation, and we are constantly seeking ways to better serve our clients – and gen-AI will form a key part of that service. The launch of AIME, is just one of the many ways we are working to make providing legal advice more efficient.” Chief Information Officer, Nigel Stevenson, has a keen focus on the future of gen-AI, and in finding ways to keep the firm at the forefront of opportunities. "AIME represents another major milestone in our firm’s technology innovation journey. Our team has worked to ensure that this AI-powered chatbot integrates seamlessly with our firm’s operations and systems, providing a more efficient experience for partners and staff, while maintaining our high levels of security and confidentiality,” says Nigel Stevenson. “We are looking forward to analysing the results of our trial and sharing the lessons with clients.” MinterEllisonRuddWatts has a proven track record as a market-leader in the legal technology space, developing commercial offerings such as its own fully customisable and Obligations Management system, Document Automation system, as well as being the New Zealand reseller of an award-winning online compliance training solution in New Zealand and Australia, Safetrac. In 2019, the firm was New Zealand’s first law firm to establish a joint venture to create an AI / legaltech company, McCarthyFinch – the country’s pioneering AI-innovator, developing legally-focused artificial intelligence solutions for the global market. McCarthyFinch’s first product, authorDOCS™, was released to the market in late 2019 and designed as an AI-backed add-in for Microsoft Word to enhance the review and drafting of contracts. The firm exited its start-up McCarthyFinch in late 2020 to Onit, a leading provider of enterprise workflow solutions including enterprise legal management, contract lifecycle management and workflow automation.  

MinterEllisonRuddWatts’ leadership of greater gender diversity and gender initiatives in the legal profession was again recognised at the Asia-Pacific Women in Business Law Awards 2023, with the firm taking out the award for ‘National Firm of the Year for Gender Diversity’. MinterEllisonRuddWatts’ Chief Executive, Andrew Poole said: “We believe that gender diversity is essential to our success, and we are committed to creating a workplace and profession where everyone feels welcome and valued.  “This award is a testament to the hard work and dedication of our partners and staff, who are all committed to creating a more equitable and inclusive workplace, fuelled by diversity of thought, gender, culture and experience.” Partner Sarah Salmond was also named ‘International Trade Lawyer of the Year’ at the awards held in Singapore overnight. Sarah is widely regarded as New Zealand’s leading lawyer advising corporates on domestic and international trade and financial sanctions matters. She assists her clients to address the challenges associated with trading goods and services across national borders. On hearing of her award win, Sarah said: “I’m deeply honoured to receive the International Trade Lawyer of the Year award. It's a nod to all the significant trade deals, compliance questions and disputes our clients have progressed in the past year. I would like to thank my clients for the wonderful opportunities and my amazing firm and team, without which this would not have happened”. The Women in Business Law Awards celebrate the advancement of women in the legal industry in the Asia-Pacific region, with firms from New Zealand, Australia and greater Asia competing to take top honours. The awards recognise the best initiatives for gender diversity, innovation, mentoring, work-life balance, pro bono work and talent management. MinterEllisonRuddWatts has a longstanding commitment to progress gender equality and has several programmes that mentor and support women in law.