Tag archives: PwC

Ready to rock! 2019 may see increased M&A activity among Canadian mining companies

2018 was a difficult year for Canadian mining companies. The aggregate valuation of TSX-listed miners declined by 12.7%, while equity capital raised by these companies declined by 36% from the previous year’s total. In this environment, new financings and deals have been scarce, but there is reason to believe that this trend might change in 2019, according to a recent publication by PwC.

A number of factors support the general prediction of increased M&A activity among TSX-listed mining companies. These factors include:

  • Increasing commodities prices. Spot prices for based and precious metals decreased across the board in 2018. However,
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Asset and wealth management M&A activities in 2018 and beyond

Merger and acquisition activities in 2018 in the asset and wealth management sector logged a total of 140 deals, up 5% from last year. According to an overview published by PwC, the total announced value of the M&A deals was US$14.9 billion, which represented a year-over-year increase up 72% – the highest percentage increase since 2009. Interestingly, almost 40% of deals in this sector were made during the last quarter of 2018, totalling US$9.9 billion in deal value. Specifically, there were three mega-deals that exceeded US$1 billion during the fourth quarter. With respect to deal volume, the fourth quarter … Continue Reading

M&A or joint venture: key considerations for choosing your path to growth

Choosing to grow your business through an M&A transaction or through a strategic partnership or joint venture can be a difficult decision to make. M&A transactions and partnerships can both drive growth and bring access to new markets or product and service offerings, but they also come with unique challenges. While an acquisition allows the acquirer to gain control over the target, M&A transactions can be costly and the acquirer not only obtains the target’s business but also its liabilities, which can be significant.

Strategic partnerships, on the other hand, do not provide the same degree of control but may … Continue Reading

The tech takeover: disruptive technology as a driver of M&A

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

Global automotive M&A ends 2017 in high gear with no signs of slowing down

As seen in this recent PwC article, global automotive M&A activity was strong in 2017.  Automotive deal value increased 29.9% to $53.2b from 2016 to 2017 primarily as a result of two mega deals in the Auto-Tech sector, which PwC defines as “investments in connectivity, autonomous, electrification, ride-sharing and the software, sensors, intellectual property and other components that support these trends.”  For 2018, it is expected that investments in the Auto-Tech sector will continue to drive global automotive M&A activity.

Auto-tech deals spark M&A activity

Auto-tech deal value increased from $5.3b in 2016 to $26.7b in 2017. Further, deal volume … Continue Reading

Canadian M&A: a look back 2017 and a glimpse into 2018

A retrospective look at 2017

In Canada, 2017 had the highest number of mergers and acquisitions (M&A) deals in the past five years. There were a total number of 2,274 deals carried out in 2017, compared to 1,956 in 2016. The number of “mega deals”, however, did not see an increase in 2017. “Mega deals” are categorized as deals that have a value of US $5 billion or more. The number of these types of transactions went down from seven in 2016, to two in 2017.

For 2017, PwC noted the following three common M&A trends:

1) Increased

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What private equity investors look for in acquisition targets

According to a report by PWC, 43% of tech M&A deals were funded by private equity (PE) investors. For the deals with disclosed values, more than 52% are in the $50 million to $1 billion range.

Private equity investors may look for different factors in a target company than the traditional corporate buyer. For this reason, the dynamic of attracting offers and deal-making changes with the involvement of a private equity firm.

Focus on management

PE investors look for a company that has a clear path to deliver success. This is, among other reasons, why PE investors … Continue Reading

Why some tech M&As fail to deliver value

In a recent blog post, we explored the reasons why a sizable number of M&A deals fail to complete every year. As discussed in that post, the closing of an M&A deal does not necessarily announce the success of a transaction. In fact, as high as 60% of M&A deals fail to deliver value even after a victorious closing, as an A.T. Kearney study shows. The Harvard Business Review reports that the failure rate of an M&A deal falls in the range of 70 – 90%.

Extensive research has been conducted to locate the elements that are fatal to … Continue Reading

Emerging trends in Canadian real estate: mobility, mobility, mobility

We have all heard the expression: “Location, location, location” when it comes to buying real estate. Though that may be true for the immovable property itself, the 2018 Emerging Trends in Real Estate report (the Report) published by PwC Canada and the Urban Land Institute (ULI) suggests that the new and emerging trend in real estate is a demand for mobility.

Mobility in capital

According to the Report, real estate business prospects in 2018 are higher than in 2017, signaling an increased optimism from owners, developers, and investors in the Canadian real estate sector. The survey also … Continue Reading

Canadian M&A activity stays hot, more in store

Deal Law Wire - Norton Rose FulbrightAccording to a recently published PwC report (the Report), Canadian mergers and acquisitions (M&A) activity is booming.

We recently reported that Canadian-backed equity financing activity in emerging venture capital companies is thriving. Moreover, both funding and deal volume among Canadian artificial intelligence companies have attained record heights in 2017. However, Canadian companies more broadly appear to be enjoying a particularly prosperous year as well. This momentum in the markets translates to good news for M&A activity in Canada, which is expected to pick up further steam in 2018.

Canadian M&A: by the numbers

The first three quarters … Continue Reading

A look at the venture capital landscape in Canada

PwC has recently released the 2017 MoneyTree Canada report  for Q3 2017 (the Report), which provides insight into the landscape for equity financings in emerging venture capital (VC) backed companies headquartered in Canada.  While it may come as no surprise that financing activity has increased in Q3 2017, the magnitude of the increase, especially for Artificial Intelligence (AI) based companies, stands out as the focal point of the Report.

Key findings

  • Financing activity continues to increase: Annual investment is on track for another USD $2B year invested across more than 300 deals – record
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M&A: the automotive industry’s new fuel?

Automotive technologies are evolving rapidly and impacting not only drivers’ automotive experiences but also, the automotive industry more broadly. From assistive technologies like bicycle sensors and back-up cameras to self-driving technologies, it appears that technological innovation will be critical in order for automotive companies to maintain their relevance and competitive edge in the marketplace. However, such innovation is complicated and largely outside of the auto industry’s wheelhouse. As a result, merger and acquisition (M&A) activity may be just the tool that these companies need for harnessing this innovation and competing effectively.

The automotive industry transformation

As alluded to … Continue Reading

Power & renewables M&A deals 2017: gaining momentum

PwC’s survey on global power and renewables (P&R) M&A trends for 2017 predicts an investment thrust for the progressive sector.

In 2016, the P&R sector’s total global deal value was the highest that it had been in the current decade, fueled, in particular, by mega deals for North American network infrastructure targets. Both corporate and institutional buyers are vying for the market’s international offerings.

Regionally, the acquisition of regulated assets defines US market growth, with deal momentum slowing and interest rates climbing. Across the water, economic growth in Europe plays out alongside waning acquisitions. However, post-Brexit, restructuring and … Continue Reading

Blockchain technology: an imminent driver of investment and M&A

Blockchain technology has been making headlines since it emerged in 2009 in connection with the cryptocurrency Bitcoin. We’ve covered the potential use of Bitcoin in M&A transactions in previous articles in 2016 and 2014. As discussed in these articles, the volatility and lack of central authority has so far meant that the cryptocurrency plays a niche role in the capital markets.

However, blockchains – the technology behind Bitcoin – has been gaining ground for its exciting enterprise potential. We are already beginning to see companies racing to adopt this emerging technology, as more and more companies acquire the technology … Continue Reading

Merging of digital and physical worlds: impact on M&A in non-digital industries

Strategy& of PwC published Mergercast “Digital Deals – A New Frontier” (Episode 56) in July 2016, which discusses the growing rationale for digital deal-making and post-deal challenges. Particularly, this podcast identifies that digital deals accounted for nearly 32% of all transactions in 2015, up by 20% since 2011, indicating the growing appetite for digital M&A. Many companies operating in traditional industries are looking to enter into or enhance their digital capabilities by identifying digital targets, particularly hardware, software, IT service and Internet companies. Digital deal growth is most notable in non-digital industries, such as automotive, retail and wholesale, aerospace, defense, … Continue Reading

M&A update in the global metals industry

In the past, we reported on PwC’s ongoing analysis on M&A activity in the global metals industry. PwC released its most recent report in the series, entitled “Forging Ahead: First-quarter 2016 global metals industry mergers and acquisitions analysis” which breaks down the latest trends in the global metals industry, and provides insights into what the industry may expect going forward.

The major news coming out of the report is that deal volume declined to 14 deals valued at $50 million or more in the first quarter of 2016; however, deal value increased to $8.7 billion. The report concludes … Continue Reading

Aerospace and defense M&A reaches new heights in 2016

jetWe told you in March of last year that aerospace and defense M&A activity had rebounded after a pullback in 2013. In July, we reported that M&A activity in the aviation and aerospace sectors was strong. Now, PwC’s Mission Control report for Q4 2015 has confirmed that 2015 was a record year for aerospace and defense M&A.

Total deal value in this sector in 2015 reached $61.7 billion, more than 50% higher than the previous highest year in 2007. The most recent report by PwC for Q1 2016 indicates that deal volume is down slightly as compared to Q4 2015, … Continue Reading

A buzz of M&A activity in the power industry

The power and utilities industry has seen a surge of M&A activity in the first quarter of 2016, according to a recent PWC report. The following highlights reflect an overall positive start to the year for the power and utilities sector:

  • Increase in total deal value. Total deal value for Q1 2016 hit $41.4 billion. This is up 260% from the previous quarter, where total deal value was $11.5 billion. Additionally, total deal value is up 508% compared to this time last year.
  • Increase in average deal value. The average value per deal reached $1.9 billion in Q1 2016,
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Mixed start to the year for the forest, paper and packaging industry

M&A activity in the global Forest, Paper and Packaging (FPP) industry took a dip in the first quarter of 2016 according to a recently released report (the Report) by Pricewaterhouse Cooper (PwC). PwC put the decrease of deal activity into perspective however with a press release last Wednesday, illustrating that while Q1 2016 was not as active as Q4 2015, 2015 was generally positive for the sector and PwC expects that the encouraging trends will continue this year.

The FPP industry saw an uptick of M&A activity in 2015 from 2014, with 143 deals announced … Continue Reading

M&A in the food industry

As the market changes, so must the food industry, and this has become evident in the M&A trends of the food and beverage sector. A PWC report entitled “An Appetite for M&A” outlines the challenges facing the food industry and how they impact M&A activity.

Five challenges are identified as forcing change in the food industry:

  1. Low growth in mature markets. The food industry has not recovered from the recession, which encouraged consumers to seek lower-priced goods, and forced manufacturers and retailers to maintain or lower prices.
  2. Pressure on margins. Despite the pressure to keep prices
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Performance incentives for portfolio companies

Private equity investors (PEIs) when investing in new portfolio companies, seek to align management’s interests with that of the PEI to grow the value of the portfolio company and achieve a profitable return in the investment upon exit.

Typically, PEIs incentivize management to adopt such interests through compensation arrangements in  the form of performance incentives. Generally, PEIs will grant management an interest in the growth in value of the company via an interest in the equity of the company (e.g., stock options or performance shares) or in the profit/proceeds of the company, the latter of which is … Continue Reading

What’s mine is yours

You may be familiar with a parent’s teaching to “share” with others – “sharing is caring”. This teaching has been a part of our economic system throughout history; bartering and sharing of goods is not a new concept. However, in recent years, “sharing” has entered the marketplace in new and innovative ways, primarily by facilitating elaborate peer-to-peer networks. Many businesses rely on the concept of collaborative consumption to create value for shareholders, and have been highly successful in doing so. Some of the sharing economy pioneers include Airbnb, Uber and Spotify.

The sharing economy is a socio-economic ecosystem that is … Continue Reading

Aerospace and defense M&A returns to cruising altitude

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CaptureFollowing a pullback in fiscal year 2013, deal activity in the global aerospace and defense (A&D) sector has returned to its former levels.

According to PwC’s Mission Control report for Q4 2014, the past year witnessed the total A&D deal value rebound from $14.3 billion in 2013 to $22.3 billion in 2014, which is on par with the 10-year rolling average.

Canada is a major player in the A&D sector: historically it is fifth, behind the United States, France, the United Kingdom and Germany in total revenue generated by A&D but second, behind the United States, in … Continue Reading

Metals sector: a year in review and forecast for 2015

With Q4 2014 results in for the mining sector, industry focus can shift to what lies ahead in 2015. PwC recently released a report, “Metals Deals: Forging Ahead 2015 outlook and 2014 review” (the PwC Report) which includes a look back at the metals deal statistics in 2014 and provides some insight into what we can expect to see in 2015 in the global metals sector.

Unsurprisingly, the 2014 metals deal analysis was discouraging, with global deal value dropping 52%, from US$34.8bn in 2013 to US$16.8bn in 2014. To put this figure further into perspective, the PwC Report states … Continue Reading

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