Volatility brings opportunity

Doing deals now: volatility brings opportunity

Rob Silverwood
Deals Business Leader

As we settle into this new financial year, I’ve been reflecting on what an exemplary year FY21-22 was – not just for our clients but for our people too.

Our rolling staff turnover is currently at its lowest level in years. Meanwhile, our people engagement scores have significantly increased from this time last year. We’ve been out in the market, actively sharing our perspectives, and we’re continuing to kick goals by way of our transformation efforts. 

Our team is growing, too. We’ve seen 17 new partners join the Deals business in the past financial year, while our broader team has increased by almost 100 colleagues. We now have 500+ dedicated Deals experts working together, as one team, to support our clients with their value creation objectives across the M&A lifecycle. 

How have we done this? It all comes back to diversity. 

Diversity and inclusion are critically important to us, and we’re continuing to work hard on diversity representation in our Deals practice. Like many employers, we still have a way to go, but we are making great headway, and our new hires in August saw us achieve gender parity. Moreover, we're on track to meet PwC's gender and diverse cultural background (non-Euro) targets by 2025. From a skillset perspective we’re diverse, too. From engineers, to strategy experts, to HR and people specialists, our talent is varied. In fact, in a recent town hall, 60% of our Deals people identified as a non-accountant. 

All of which is to say, I’m really proud of the Deals team – we truly are a business that’s powered by many-and-varied talents of our diverse people. I’m also excited for the rest of this new financial year. 

So, what’s coming up next?

Volatility bring opportunity

The year ahead: volatility means opportunity

Despite the economic headwinds right now (especially rising interest rates, inflation, and the potential for a US, or even global, recession), the market fundamentals remain encouraging. There’s a wall of private capital out there, corporate balance sheets are still strong, deal pipelines look positive, and the Australian market feels robust.

My view is that with volatility comes opportunity.

Our team’s diverse set of competencies, and our expanded portfolio, is positioning us to help our clients navigate the challenges and opportunities ahead. For example, our Deals Strategy & Operations (DS&O) practice works right across the deals lifecycle, from strategy to validation and execution, supporting clients in key areas including technology, analytics, and people. Similarly, our dedicated Deals ESG experts support private equity funds and corporates on their responsible investment strategies, including ESG due diligence and monitoring.

Certain segments may blow hot in the coming months, and it will pay to be proactive. As anyone in our Business Restructuring Services team will tell you, navigating the remainder of 2022 and into 2023 will be challenging, but there are steps organisations can take to reduce the risk despite the headwinds ahead.

Top tips for FY23

In the year ahead, prudent areas for clients to focus on include:

  • To close deals, buyers and sellers should prepare to flex and try new ideas given the challenges and complexities in the market. Creativity and innovation in deals is a must right now. 

  • So too is a valuation reset, as the gap between the expectations of buyers and sellers widens. Now’s the time for a mindset change, and a long-term view of value is needed.

  • Origination, advanced planning, heightened due diligence, and scanning the market for opportunities is more important than ever. Ensure the use of internal and third party data to help gain business insights and help focus investment.  

  • For acquirers, be prepared and always ready. This is crucial in the current market, where attractive assets are available for attractive prices. 

  • As inflation threatens company earnings and erodes shareholder returns in real terms, dealmakers need to think afresh about value creation starting with re-baselining value creation plans.  

  • Moreover, ESG will be core to value creation and should be embedded into value creation planning

  • Think about capabilities early. To ensure a capabilities fit, determine the capabilities you currently have, as well as the ones you need. Ask yourself: Given the value you want to create for customers, what capabilities do you need? Where are the gaps? Which gaps should be filled organically/inorganically?

  • Also, think about culture early. 82% of transactions have had significant value destroyed in their latest acquisition where they’ve lost more than 10% of staff. Therefore it’s imperative for dealmakers to proactively prepare for key person risk by locking in critical leaders with a clear mandate to drive the right culture and retain equally critical talent. 

  • More broadly, invest in integration. Ensure you have a comprehensive integration plan - including topics of technology, synergies, and people - with sufficient investment to cater for risks and potential accelerants.

Your career in Deals: The perfect place to pivot

Even if you haven’t previously considered a career in Deals, now’s the ideal time to do so. Our team is on the lookout for a range of skills in addition to our core skillset, including engineers, tech specialists, HR professionals, data and analytics experts, and more. 

For all roles, we’re seeking team players because relationships are core to everything we do. Our team is powered by people – we’re very social – and we generate energy when we come together as a team. We have a huge sense of loyalty to one another and our clients, and we care about the wellbeing and success of our team members.

We’re also all about being action-oriented and focused on delivering quality and excellence, even when the pressure is on. We need people who can think ahead; people who bring a growth mindset to doing deals and who have a natural curiosity. Moreover, we’re seeking diversity of thought. We value differences in ways of thinking, being, and doing – that’s the art of thinking independently together.

More information 

Find out more about PwC’s Deals offering or about a career in deals.

Shaping the future of deals

In a series of eight articles, our Deals leaders reflect on the year that has been and the market outlook ahead, speaking to the value they bring to a deal and what makes their team tick.

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Rob Silverwood
Deals Business Leader

I’m really proud of our Deals practice - we truly are a business that’s powered by our people. Our people are fiercely loyal, determined, passionate and driven to go the extra mile for our clients and each other. This is what truly differentiates us from the rest.

Sasha Lawrence
Deals People Leader

What energises me is the 'can-do' attitude of my colleagues and the variety of what we do. Each client's people and culture situation is unique, so we're always puzzling out new solutions and generating fresh ideas.

Clara Cutajar
Deals Markets Leader

Our team is all about collaborating with colleagues and clients to find solutions. I enjoy the intellectual challenge that presents, as well as the camaraderie that develops when the pressure is on. It's a special feeling when we help clients achieve their commercial and personal milestones.

Brian Mullock
Deals Chief Operating Officer

"Our Deals business is a dynamic and exciting place to work where no two days are alike. I love our Deals business and the work we do serving world class clients on iconic transactions every day.