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Canadian M&A Trends in Q2-2013: The Numbers

Canadian M&A activity improved slightly in the second quarter of 2013 but still remained below traditionally “normal” levels, according to a report recently published by Crosbie & Company. Nonetheless, a number of large transactions brought up the total value of Q2 M&A deals to the third highest sum in 8 quarters.

According to Crosbie, 234 deals were announced in Q2, with a total aggregate value of $44.7B. This represents modest growth of 9.4% in activity over Q1, but a significant 52%  increase in the aggregate value of all deals. Looking back, when these figures are compared to the second … Continue Reading

Q2 2013 M&A Trends

Canadian M&A Q2 2013 results have not provided the desired relief from lacklustre Q1 results. However, while not much of the lost ground was gained, the sharp decline in M&A activity experienced in the first three months of 2013 appears to have subsided.

According to Bloomberg’s recently published M&A Rankings, these results are in line with global M&A trends. Although global M&A volume decreased by 10% from the same period last year, it increased by 3% to $489 billion from Q2 2013. Deal making activity was highest in the Americas, where Canada was second only to US in rankings … Continue Reading

Q1 2013 M&A Trends

Canadian M&A continued its decline in Q1 2013, reaching lows not seen since Q1 2009.   According to Crosbie & Company Inc.’s Q1 2013 M&A Report, which compared M&A activity results from Q4 2012 to Q1 2013, the market has declined significantly both in transaction value (51%) and volume (35%).  Specifically, while Q4 2012 saw 301 transactions valued at $52.8 billion, Q1 2013 saw 196 transactions valued at $25.9 billion.

PricewaterhouseCoopers (PwC) noted similar trends in their recently released report, Capital Markets Flash: Q1 2013 Canadian M&A Deals Quarterly, including that:

  • the decline in Canadian M&A activity was largely
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Increasing focus on M&A alternatives

With increasing cash reserves and a stagnant economy, firms are looking for alternatives to M&A for excess cash, including returning capital to shareholders by way of repurchase, dividend and debt reduction.

Canadian currency

According to the Thomson Reuters fourth annual Outlook for Investment Banking Services Survey, as valuations continue rising in the Americas, firms are becoming less interested in using cash for M&A transactions, with 36% of respondents believing firms will continue building cash reserves, up from 25% last year. Of those surveyed, 33% cited repurchasing shares as a top priority for 2013 (versus 27% for 2012) and 32% cited distributing cash … Continue Reading

Use of M&A insurance on the rise

Forecasts of increased M&A activity, combined with a global economic climate where risk aversion is the name of the game, present an opportune moment for examining M&A insurance as a viable means of reducing risks in business transactions.

The most common type of transaction insurance is Representation and Warranties (R&W) insurance, which targets the net liabilities facing parties in M&A deals.

Intended to help smooth negotiations and closings, R&W insurance seeks a balance between buyers’ concerns for losses resulting from breaches of representations and warranties, and sellers’ interests in liability protection. As an alternative to traditional mechanisms of risk management … Continue Reading

M&A trends look positive in 2012

Grant Thornton recently released its 20th annual International Business Report on M&A in which it suggests the market for M&A looks strong both globally and in Canada, as businesses look to invest cash resources built up over a period of slow M&A activity.  Based on our experience, we have certainly noticed an increase in M&A activity since late 2011 and early 2012.

The report surveyed 12,000 businesses in 40 economies and shows that businesses worldwide are more interested in M&A today (34%) than they were in 2010 (26%). The report found 42% of Canadian businesses are planning a merger … Continue Reading