Despite 2% quarterly drop in the value of Q2 Canadian M&A, Canadian
purchases in foreign markets up 191%, value of middle market M&A up 35%
TORONTO, July 19, 2012 /CNW/ - Despite continued macro-uncertainty,
Canadian companies were very active in Europe during Q2 2012,
announcing $15.1 billion worth of deals on the continent—a post-crisis
quarterly high. Overall, the quarter saw Canadians active in a number
of foreign markets. $21.8 billion of acquisitions were announced in 40
countries outside of Canada, including 27 growth markets, one of the
highest outbound deal values on record.
"Canadian firms are combating slow domestic growth by making
acquisitions abroad," says Nicolas Marcoux, Canadian Deals leader at
PwC. "Quite often, M&A can be utilized as a tool to achieve growth as
well as a means to innovate."
The middle market segment of the Canadian M&A market also picked up
steam during Q2 with 51 transactions worth $12.2 billion announced, up
21% and 35% respectively over the prior quarter. According to Marcoux,
"These results are not surprising to us. Many corporates and private
equity firms have been publicly stating their desire for bolt on
acquisitions for some time."
Other observations in the PwC Q2 2012 deals report (available at www.pwc.com/ca/quarterlydeals) included:
The second quarter saw 721 M&A announcements worth $47.7 billion. Deal
volumes and values declined 7% and 2%, respectively, over the prior
quarter. On a year-ago basis, they were down 14% and 4%, respectively.
Overall, the tally was roughly in line with the average post-crisis
The overall drop off in announced M&A during the second quarter was led
by a decline in "mega deals." The aggregate value of M&A transactions
worth more than $1 billion dropped by $4.8 billion, or 16%, compared to
Q1. Ontario overtook Alberta as the most popular province to make an
investment. By value, 41% of announced deals were in Ontario compared
to 36% in Alberta. A key reason for the change was because of fewer
large deals in Alberta's oil sands.
By sector, real estate and energy continued to see a flurry of M&A
activity while diversified financials made a comeback as a result of
deals in the insurance and banking industries. Activity in the metals
and mining sector dropped to represent just 5% of Canadian M&A activity
by value, largely due to a decline in commodity prices and a slowdown
in demand for resources, especially from China.
Cancelled deal activity dropped to a record low in the quarter despite
shaky markets. There were only 12 deal cancellations in Q2. "This shows
Canadian buyers have a high degree of confidence in their ability to
complete transactions," says Marcoux. He went on to add, "Buyers are
investing more time 'up front' ensuring targets are the right strategic
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About PwC's Deals Team
PwC's Deals Team (www.pwc.com/ca/deals) helps clients to achieve deal success—from concept to close and
beyond. As part of the world's largest Transaction Advisory practice,
the PwC Canada Deals Team is your gateway to an exciting new world of
emerging M&A opportunities.
About PwC Canada
PwC Canada helps organizations and individuals create the value they're
looking for. More than 5,700 partners and staff in offices across the
country are committed to delivering quality in assurance, tax,
consulting and deals services. PwC Canada is a member of the PwC
network of firms with close to 169,000 people in 158 countries. Find
out more by visiting us at www.pwc.com/ca.
© 2012 PricewaterhouseCoopers LLP, an Ontario limited liability
partnership. All rights reserved.
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SOURCE PwC (PricewaterhouseCoopers)
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