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Players in the Canadian merger and acquisition (M&A) market are expecting deal activity to ramp up in the year ahead, according a report published Thursday from Citibank Canada and Mergermarket.

Citi commissioned Mergermarket to interview 50 senior Canadian M&A practitioners in the second half of 2018 to gain insight on their predictions for Canadian dealmaking in 2019.

The survey finds a high level of confidence in the M&A deal pipeline, with 86% saying that they expect deal activity to rise in their sector.

“A stable domestic economy, relatively low interest rates and a stronger Canadian dollar have Canada’s dealmakers optimistic about the M&A outlook for 2019,” the firms say in a news release.

“Even the uncertainty of a federal election in 2019 has failed to dent dealmaker optimism, with many hoping that a victory for the Conservatives would herald the introduction of a more business-friendly policy agenda,” the report says, as it notes that both main parties are expected to push through energy pipeline plans, thereby supporting economic growth.

Survey respondents are less sanguine about the U.S. political landscape, as dealmakers remain concerned about U.S. protectionism and its possible impact on Canada’s economy.

Nevertheless, dealmakers expect to see a surge in Canadian acquisitions of foreign firms. “Outbound M&A deal activity has climbed in 2018 and more of the same is anticipated in 2019 as dealmakers diversify away from a competitive domestic deal market and leverage attractive debt markets to win deals overseas,” the report says.

Regarding Canadian firms, 40% of survey respondents anticipate an increase in the volume of domestic deals.

Respondents expect deals in the energy sector will lead deal activity, with the mining sector starting to gain momentum, too.

Technology will also drive deals. Technology and intellectual property “have emerged as the most important factors to Canadian acquirers when making M&A decisions,” says the report.

In terms of deal participants, dealmakers see private equity having a bigger role in Canadian M&A in the years ahead, as investors look to deploy their dry powder in Canadian assets. Indeed, 36% of respondents say that PE buyouts will make up more than 50% of deal volume over the next five years.

Click here to view the full report.