Our 2018 Mining M&A forecast predicted that there would be an increase in Canadian mining M&A activity in 2018. It appears that our prediction may be correct: industry reports suggest an 86% increase in the value of the transactions in the first quarter of 2018 (Q1 2018), as compared to the first quarter of 2017 (Q1 2017). The increased value in deals was not accompanied by an increase in volume, however. The deal volume decreased by 16% in Q1 2018 compared to Q1 2017. While this does not perfectly follow the “small is beautiful” gold mining acquisition trend, … Continue Reading
Although the agricultural sector has largely been segmented in the past, there appears to be a continued trend of consolidation in the industry. As the global population has grown, so too has the demand for food and associated goods. But the appetite for food is changing rapidly and has fueled the rise of M&A activity. A recent report by KPMG discusses the trends driving M&A activity in agribusiness.
A notable trend involves the rise of health products, which stem from consumer desires to seek more health conscious and sustainability-focused options. The increased focus on health and sustainability has begun to … Continue Reading
It is a generally accepted fact that a significant number of M&A deals fail to deliver value post-closing. In a recent survey (the Survey) discussed in the Deloitte 2018 M&A trends report (the Report), 55% of respondents agreed that up to 25% of their M&A deals fall short of meeting or beating expectations. We’ve discussed the factors that can contribute to this failure on a previous blog post and in a recent article, including: cultural and business integration issues, poor due diligence, negotiation errors, lack of involvement by owners, and an overall lack of clarity. Moreover, a … Continue Reading
On May 31, 2018 the United States (U.S.) government announced that it would be imposing tariffs on a number of Canadian products, including steel and aluminum at a rate of 25% and 10% respectively. In response, the Canadian government imposed its own surtaxes of approximately C$16.6 billion on imports of steel, aluminum, and other products from the U.S. These countermeasures came into effect on July 1, 2018 and will remain in force until the U.S. repeals its tariffs on Canadian steel and aluminum.
At a market level, this escalating “trade war” between Canada and the U.S. has the potential … Continue Reading
Historically a highly fragmented industry, the waste management and recycling sector has undergone a process of consolidation and increased M&A activity over the past several years. Analysts have offered various explanations for this trend, ranging from a desire for larger companies to expand their geographic coverage to a rise in clean-tech and recycling businesses.
Although typically not an industry that attracts the limelight, investors now view waste management and recycling companies as attractive targets due to the high barriers to entry and the presumed lower risk that comes with businesses providing essential services. As a result of these and … Continue Reading
Following our update during the last quarter of 2016, M&A activity in Canada’s upstream oil and gas sector continued to decline in 2017 and has remained slow during the first quarter of 2018. Globally, there was a strong start to 2017 followed by a significant decline, in terms of both deal count and overall deal value, during the balance of 2017, with a notable increase in deal activity during the first quarter of 2018.
According to Deloitte’s Oil & Gas Mergers and Acquisitions Report–Yearend 2017, after the increase in deal spend in Q4 2016 and Q1 2017, the rest … Continue Reading
In the first quarter of 2018, M&A activity across the world hit a 17 year record high according to Mergermarket’s Q1 2018 Global M&A Report. This is an 18 percent increase in value compared to the first quarter of 2017. This increase was affected by the surge in deal-making seen at the end of 2017 which carried over into 2018 as the US experienced mega US healthcare deals. In fact, US M&A activity during Q1 2018 was reported to represent 44.2% of the total global share. According to data from Bloomberg, the healthcare sector has already reported $156 billion … Continue Reading
The year of 2017 witnessed a worldwide slowdown in the number of megadeals. According to a recent Mergermarket Report (the Report), the global total for the number of deals worth US$4 billion or more decreased from a peak of 158 in 2015 and 133 in 2016 to 129 in 2017. In Canada, the number of deals valued CAD$500 million or more decreased from 74 in 2016 to 55 in 2017, as reported by Duff & Phelps. However, there have been recent hints suggesting that the spring for megadeals is just around the corner.
After polling the … Continue Reading
A relentless parade of new technologies is unfolding on many fronts – one of which includes the M&A scene. While not every emerging technology will alter a business’ landscape, certain technologies have the potential to disrupt the status quo, alter the way companies operate and rearrange value pools. These “disruptive technologies” can quickly displace established systems and set new industry standards.
As an example, earlier this year, Toronto-Dominion Bank made headlines for its acquisition of “Layer 6 AI”, a start-up company which uses artificial intelligence to analyze various forms of data and anticipate an individual customer’s needs. This announcement came … Continue Reading
For the first time, the American Bar Association’s Private Target Mergers and Acquisitions Deal Points Study (the Study) includes data points on the use of representation and warranties insurance in transactions. The Study analyses publicly available purchase agreements for transactions for which purchase agreements were executed and/or completed in 2016 and the first half of 2017 that involved private targets being acquired by public companies in the US (the Agreements).
Representations and warranties insurance (RWI) is a tool increasingly used by buyers and sellers in the context of mergers and acquisitions. As previously discussed on this … Continue Reading
According to a recent article published by Pitchbook, this year has already shown a positive momentum for deal-making in the U.S. banking industry – a trend worth monitoring as it is expected to surge further as the year progresses and U.S. banks (especially those that already have a Canadian presence) may be looking to acquire financial assets and operations north of the border.
Most recently, Citizens Business Bank announced that it would acquire Community Bank, pursuant to which Citizens’ total assets will increase from U.S. $878 million to U.S. $12 billion. This acquisition represents one of 19 M&A transactions that … Continue Reading
Is this the end of European conglomerates?
The end may be in sight for European conglomerates. Activist investor Christer Gardell of Cevian Capital predicts a growing trend of “demergers” in the next five to seven years, due in large part to an increasing number of European conglomerates engaging in in spin-off transactions, or “spin-offs.”
Generally, a spin-off refers to a transaction in which a parent company sells or distributes new shares of one of its business units, after which the business unit then becomes a new legally distinct and independent company. The use of spin-offs by conglomerates to “demerge” may … Continue Reading
Looking ahead to 2016, Intralinks recently published its Deal Flow Predictor report (the Report) for Q1 2016, which tracks global, early-stage M&A activity in order to predict M&A deal volume in the coming quarter.
Based on early-stage deal activity moving into 2016, the Report forecasts modest, positive momentum for M&A activity in Q1 2016, but such activity is unlikely to match the record increases in dealmaking seen in 2015. With respect to worldwide M&A activity, the Report predicts that the total number of announced deals in Q1 2016 will be between 6% to 8% higher than in Q1 2015. … Continue Reading
In recent report entitled The conflict of interest? Rising rates effects on M&A, MergerMarket was commissioned by Toppan Vite to examine the effect of potential rising interest rates on the effect of M&A activity in the coming year.
U.S. M&A activity was at peak performance in 2014 as deal activity increased to over 5,051 deals worth $1.5tn U.S., up from 3,995 transactions worth $937bn U.S. in 2013. However, with a potential rise in interest rates coming in 2015 from the Federal Reserve, many are concerned about its effect on deal activity in the coming year. MergerMarket interviewed seven leaders … Continue Reading
Crosbie & Company recently released its Canadian M&A Activity – Fourth Quarter 2013 Report. The report explains that while M&A activity in Q4 didn’t deviate much from the year’s previous quarters, suggesting a relatively stable year from a numbers perspective, a closer look at 2013 deal activity as a whole tells a slightly different story.
As reported in the Financial Post:
… Continue Reading
“The mix of deals in the Canadian M&A market has really shifted in recent years,” said Colin Walker, [Crosbie’s] managing director, noting that some of the sectors that historically were key contributors (such as mining) have become