Small caps likely to be a focus of increased M&A activity ...we believe M&A will increasingly play a role in the Australian equity market over the next year or two (particularly small caps) given: constrained top-line growth; cheap debt funding; and asset recycling well under way in most private equity houses. Whilst picking the next takeover is rightly regarded as a fool's errand, it seems to us that regional media and some industrial cyclicals could be fertile ground. The recent proposed merger of Amcom (owned) and Vocus to create a challenger corporate telco provider, is an example of a complementary industry combination. (VIEW LINK)


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