Private equity “targets”.

Hi Carl,

Private equity (PE) bids have been popping up with increasing regularity in recent years, supported by an estimated US$1.2–1.7tn of PE dry powder, rising to US$2.5–2.6tn across broader private markets creating pressure to deploy capital. This substantial firepower should remain a tailwind for M&A and take-private activity through 2026–27.

• To put the numbers into perspective PE has a war chest equivalent to ~60% of the entire ASX 200.

The classic PE playbook is relatively simple: buy a business using a mix of debt and equity, improve its earnings and strategic position, and sell it several years later at a higher valuation. Returns are amplified by paying down debt with the company’s cash flow, making bolt-on acquisitions or divestments, cutting costs and, ideally, selling at higher earnings multiple through a trade sale, another PE fund or an IPO.

Therein lieth the issue, PE generally steers clear of mining because the sector is a poor fit for the traditional leveraged buyout model.

• Mining earnings are volatile, capex is high and ongoing, assets deplete over time, and commodity, geological and regulatory risks are largely outside management’s control — making debt-funded returns far less predictable.

PE generally prefers mining services and infrastructure, where revenues are more contracted and recurring, rather than taking direct commodity and resource risk. It’s hard to buy and flip a mining company quickly!

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M&A Bids Targeting ASX 200 companies – source: Bloomberg

LAST UPDATED 27/08/2026 11:45

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M&A Bids Targeting ASX 200 companies – source: Bloomberg

LAST UPDATED 27/08/2026 11:45