Canadian companies ripe for M&A, says report

Market conditions mean 2015 is full of opportunities for Canadian companies to be bought or merged, says Mergermarket in its latest trend report.

Read: SEC busts Toronto-based reverse merger schemes

With a sharp decline in the price of oil over the second half of 2014, a lull in the mining and utilities sectors, low commodity prices, and weakening of the Canadian dollar, Canadian companies can expect plenty of opportunistic buyers throughout 2015.

2014 was a busy year for outbound investments, with an all-time high of 257 foreign acquisitions. The US$70.9-billion worth of deals represented the largest total value since 2007’s US$75.7 billion, as well as an 11.3% increase over 2013 (US$ 63.7 billion).

Read: Tim Hortons lays off staff at HQ

In line with the U.S., Canadian firms bought in Europe during 2014. Investment in that continent was the highest on record, with 73 deals worth US$28.6 billion. That’s 11 more deals than 2013’s peak of 62 transactions, with a 45.9% increase in total value (from US$19.6 billion).

In Canada, the Energy, Mining & Utilities sector rebounded in 2014 on the back of a record 203 announcements and US$52.5 billion-worth of deals; a 131.3% increase compared to 2013. In total, Canada saw a record 656 deals, valued at US$102.6 billion, in 2014.

Read: Big year for private equity

Since 2012, when Canadian deals made up 11.6% of all North American mergers and acquisitions by value, the country’s share of deals declined to 7.4% and 6.8% in 2013 and 2014, respectively. That signals that M&A may not be recovering as quickly in Canada as it is in America.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.