After attending a deeply insightful presentation from Pitcher Partners Queensland at our recent Members’ Lunch event in Brisbane on the forthcoming "silver tsunami," we felt compelled to collaborate with them on this month’s CEO Series so we could share these critical perceptions. Through additional supporting sources, and because Pitcher Partners provided the primary research and analysis, this article seeks to convey the magnitude of Australia's imminent and continuing disruption resulting from the transition of baby boomers out of their businesses. It is vital to understand the depth and the urgency of this demographic shift. Effective exit as well as succession planning are also important for securing the legacy then future prosperity of Australian businesses.
Australian business is now facing a meaningful shift called the "silver tsunami". It is propelled by baby boomer generation retirements. Many business owners and leaders remain unready for this demographic event that creates important succession planning issues and is Australia's biggest generational wealth shift ever. In order to navigate through this transformative period successfully, CEOs and business owners must urgently consider mergers and acquisitions, in addition to succession strategies as the “silver tsunami” gathers momentum.
The Scale of Australia's Succession Challenge
Australia's mid-market sector, consisting of businesses generating revenues between $10 million and $250 million, faces a pronounced impact from this transition. According to research from Pitcher Partners, succession planning is anticipated to become the primary driver of mergers and acquisitions (M&A) for 2025, identified by 85% of mid-market dealmakers – a substantial increase from just 37% in 2024¹. This demographic shift encompasses decades of valuable business expertise, robust client relationships, and extensive operational knowledge crucial for ongoing business continuity.
Yet, despite clear urgency, Australian businesses exhibit substantial gaps in succession preparedness. Roughly half of all deal-makers view businesses as inadequately equipped for leadership transitions, and alarmingly, one in four potential acquisition targets is considered fundamentally unprepared². This issue is notably acute in the financial advisory sector, where 40% of firms lack a nominated successor, and a further 30% acknowledge the necessity but have not commenced succession planning².
Market Dynamics and Strategic Opportunities
The “silver tsunami” occurs amidst complex economic conditions, providing both urgency and opportunity for strategic business moves. Mid-market M&A deal volumes experienced a 16% decline in early 2024; however, deal values remained robust³. This shift highlights a market increasingly focused on strategic transactions - fewer in number but significantly greater in scale and impact.
Business owners must adapt swiftly to these evolving market conditions, developing robust and comprehensive succession strategies. International interest remains buoyant, attracted by Australia's economic stability and strategic positioning within the Asia-Pacific region. Nonetheless, global investors are increasingly discerning, mandating detailed and robust succession planning as prerequisites for engagement.
Andy Hough, Partner at Pitcher Partners, said the mood among dealmakers was one of wary optimism, and Australian prospects should continue to attract significant attention, but international dealmakers would be ever more discerning.
“Australia’s strategic importance within the Asia Pacific region remains unparalleled, and dealmaking in 2025 will be about making the right move, not every move,” Hough said.
“The Australian market, with its stability and strategic opportunities, is drawing interest from those ready to think big, but founders and leaders must not mistake that interest for blind faith.
“The market signals are that investors are interested in making deals with those who are well-prepared and can demonstrate a compelling vision, which includes doing the legwork that will aid the business in changing hands.”
Strategic Succession Planning Imperatives
Effective succession planning goes beyond mere exit facilitation, fundamentally enhancing organisational resilience. Data from Macquarie highlights that businesses equipped with formal succession strategies generate average profits of $684,148 per owner, compared to only $355,446 for those lacking structured plans². This stark profitability differential emphasises strategic planning's broader advantages, including strengthened governance, improved client retention, and heightened operational efficiency.
Family-owned businesses encounter distinct succession challenges, demonstrated by the fact that just 12% survive into the third generation despite nearly 28% aiming for intra-family transitions. Such outcomes underline the necessity for customised succession strategies, factoring in unique sector-specific handover complexities and successor readiness.
Best Practices for CEO Transition
CEO transitions, specifically, demand meticulous, proactive management. Given that 40% of new CEOs fail within their initial 18 months, careful planning is essential. Effective CEO transition frameworks typically include:
- Proactive Timeline Development: Commencing planning three to five years ahead facilitates thorough identification and grooming of potential successors. It supports detailed assessments of internal candidates, aligning their skills with future strategic needs, and enables gradual, thorough knowledge transfer that maintains institutional memory and culture.
- Governance and Oversight: Establishing clear governance structures involving the outgoing CEO, incoming leader, and a dedicated board committee prevents power struggles and clarifies transitional decision-making roles. Regular skills audits and independent oversight enhance governance effectiveness, reassuring stakeholders through transparent and stable leadership transitions.
- Communication and Cultural Integration: Timely, structured communication strategies maintain stakeholder confidence by addressing specific concerns through targeted engagement with employees, investors, and clients. Cultural immersion programmes and joint leadership engagements bridge outgoing and incoming leadership styles, ensuring cultural coherence and continuity.
- Operational and Financial Preparedness: Digitised documentation of critical processes - including crisis management protocols and operational playbooks - supports resilience during transitions. Additionally, robust financial and legal contingency plans safeguard valuations and ensure stability amid leadership changes.
Internal Versus External Succession Pathways
Businesses must carefully evaluate internal succession versus external sales:
- Internal Succession: Favoured by organisations with strong cultural capital, internal transitions leverage existing institutional knowledge and employee loyalty. Structured leadership rotations and mentorship programmes significantly enhance internal candidates' readiness, reducing post-transition revenue dips by up to 34%.
- External Sales: Ideal for those seeking swift exits or retirement. Businesses with thorough transition documentation and demonstrable profitability typically command more favourable valuation premiums. Detailed transition preparations significantly improve market attractiveness and facilitate smoother transaction processes.
- Emerging Hybrid Models: Employee Ownership Trusts (EOTs) are increasingly popular in Australia, offering a gradual ownership transition that maintains employee loyalty and operational continuity. Early adopters report up to 22% productivity improvements post-transition, demonstrating substantial benefits in preserving company culture and ensuring long-term value creation.
Economic and Geopolitical Factors
Recent economic conditions, since interest rate cuts happened, increased how viable debt-funded buyouts are, so these buyouts are 38% of mid-market transactions. Geopolitical uncertainties exist, particularly around potential trade disruptions. Strong scenario planning is therefore a necessity.
Following the recent election in Australia, policy still remains stable so we can tactically implement more structured succession initiatives. Government provides incentives for growing SMEs to further position the 2025–2026 period as ideal to initiate revolutionary succession and ownership transition models.
The Path Forward
For Australian CEOs and business owners, the “silver tsunami” represents a significant challenge and a unique strategic opportunity. Successful navigation demands proactive and early-stage succession planning, robust governance structures, clear succession protocols, and realistic assessments of market conditions. Organisations embracing these principles will capitalise on strong buyer interest and favourable valuations, whereas reactive, crisis-driven strategies risk considerable value erosion.
The wave is inevitable. Riding it requires starting the journey today, not when the water reaches your neck. Comprehensive, strategic succession planning thus becomes essential, not merely advisable, to ensure sustained business viability and economic prosperity amid Australia's evolving market landscape.
Appendix: Citations and Sources
- Pitcher Partners (2025). Quality not Quantity: Silver Tsunami Driving Deals for 2025. Retrieved from https://www.pitcher.com.au/insights/media-release/quality-not-quantity-silver-tsunami-driving-deals-for-2025/.
- Money Management (2024). Never too Early, Often too Late: Thinking about Succession Planning. Retrieved from https://www.moneymanagement.com.au/features/never-too-early-often-too-late-thinking-about-succession-planning.
- Investor Daily (2025). Current M&A Landscape Could be Conducive to Strategic Deals: Pitcher Partners. Retrieved from https://www.investordaily.com.au/markets/55569-current-m-a-landscape-could-be-conducive-to-strategic-deals-pitcher-partners.
- Money Management (2024). Silver Tsunami: Business Retirees Propel M&A Surge. Retrieved from https://www.moneymanagement.com.au/news/financial-planning/silver-tsunami-business-retirees-propel-ma-surge.
