At Australian Edge, our goal is to grow our subscribers’ wealth over the long term by identifying high-quality companies that offer sizable and growing dividends. While we love to collect a fat payout, we also enjoy healthy capital appreciation.

And this week, while monitoring our holdings, our eyes nearly popped out of our heads when we noticed that shares of Toll Holdings Ltd (ASX: TOL, OTC: THKUF, ADR: THKUY) had suddenly surged 47.5% in local currency terms.

We had only just added the transportation and logistics company to our Aggressive Holdings on Jan. 20, so it was shocking, to say the least, that the market had already rewarded us in such a dramatic manner.

Our first thought was that the price action must be driven by a takeover bid. Sure enough, we soon learned that Japan Post Holdings, a Japanese conglomerate that offers both postal and financial services, had offered AUD9.04 per share to acquire the firm in an all-cash deal worth USD5.1 billion.

Based on Toll’s price at initial recommendation, that represents a gain of 52.7% in local currency terms. Not bad for having held the stock for just a few weeks. And we’ll also get to collect an AUD0.13 per share fully franked interim dividend before the deal’s expected close in early June.

Of course, we can’t count on offers with such premiums for all of our holdings–nor would we want that to happen. After all, our primary mandate is to find securities that can generate a steady stream of income over the long term.

Although we’re happy when another company wants to pay us a premium for our shares, it also means that we’re losing a steady dividend payer and must now endeavor to find another.

But while no one can predict which of their holdings will be subject to a takeover offer, our emphasis on selecting high-quality companies means that some of our other recommendations could eventually be acquired at similar premiums.

In fact, the volume of mergers and acquisitions in Australia is poised to pick up as a result of the lower exchange rate.

During the resource boom, the Australian dollar traded as high as USD1.10, thanks to the perception that the country’s currency is backed by hard assets. But with the crash in commodities prices and the country’s central bank back in easing mode, the aussie is currently trading near USD0.78.

As investors based in the U.S., the decline in the exchange rate has been painful, eroding what would otherwise be solid gains in many of our recommendations, while paring the value of their payouts. Though the S&P/ASX 200 is currently trading near a post-Global Financial Crisis high, it certainly doesn’t feel that way in U.S. dollar terms.

But for new subscribers or those with new money to invest, the fall in commodities prices coupled with the lower exchange rate offers an opportunity to buy solid companies with double coupons.

That’s because the share prices of many resource companies have fallen sharply, with their value further enhanced by a lower exchange rate. That’s a rare double discount—precisely the sort of value that investors lament having missed once the cycle turns.

And retail investors aren’t the only ones who can take advantage of this opportunity. While diversification away from Japan’s slowing domestic market was a key driver of Japan Post’s bid for Toll, the lower exchange rate was also a factor.

In fact, analysts believe that there could be a rise in Australian deals pursued by foreign acquirers.

Like Japan Post, a number of other Japanese companies are looking for opportunities to diversify at the right price.

“Japan Inc.’s appetite for Australian companies has been growing, particularly in the service sector,” said Koichi Haji, an executive research fellow at NLI Research Institute in Tokyo, in an interview with Bloomberg. “In Australia, they’ve got natural resources and political stability, as well as proximity to the Southeast Asian region.”

According to Bloomberg, Australia returned to sixth place on Ernst & Young’s global survey of preferred M&A destinations in October last year. In the prior year, by contrast, it had dropping out of the top 10 because the Australian dollar remained stubbornly high even though commodities prices had already started falling.

As Toll Chairman Ray Horsburgh said in the company’s conference call on Wednesday, the deal suggests that companies are starting to value Australian skills and knowledge, and not just the country’s abundance of resources.

The Toll deal is the largest-ever acquisition of an Australian company by a Japanese firm. We expect more to come.