The outlook for the deals market remains strong with 71% of its activity coming from corporate transactions
TORONTO, July 30, 2019 /CNW/ - The Canadian M&A market continues to boom according to PwC Canada's M&A mid-year review and outlook. Through the first six months of 2019, total transactions hit US$73 billion with the average deal being worth US$184 million.
The most significant move was a US$10-billion acquisition of Goldcorp Inc. by Newmont Mining Corp. Overall, corporate transactions accounted for 71% of all transactions, including eight mega deals over US$1 billion, while the remaining 29% were completed by private equity firms and pension plans.
Compared to the second half of 2018, the number of deals went down by 5% due in part to dealmakers adjusting their approaches to further validate the deal thesis and identify and address any potential issues. In other words, dealmakers have been placing a greater emphasis on performing due diligence. One notable reason why is cybersecurity and the risks associated with protecting information.
For acquirers, they want to make sure that a target has properly protected its assets, including customer, supplier and employee data, to sustain deal value. They also need to think about whether there might have been prior, but still undisclosed, cyber breaches at the target that could leave them facing costly future litigation and issues with customers, suppliers and employees.
"Strong cyber due diligence can be a game changer in the M&A process," says Dave Planques, National Deals Leader, PwC Canada. "It can help potential buyers figure out the shortcomings of their target's cybersecurity practices and the resulting cyber risk while also ensuring that the costs and time required to effectively address these issues are properly priced into the deal."
With the ongoing geopolitical, economic trade tensions, together with the continuous development of technology and innovation, the need for robust due diligence and assessing risk remains important, but that doesn't mean that potential buyers will be more frequently scared off. "Rather, this extended process will ensure the completion of the best deal possible for both sides. In the M&A market, there remains an abundance of capital and buyers have plenty of interesting targets to pursue," adds Planques.
To access the full report, click here.
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