Nearly Half of Respondents Anticipate Canadian M&A Will Rise in Next 12 Months
TORONTO, March 3, 2015 /CNW/ - Despite the current climate of rapid oil prices declines, valuation gaps between buyers and sellers and regulatory impediments to cross-border transactions, Canadian M&A is expected to increase in the next 12 months, according to 46% of respondents in a new study, Charting the course: The future of Canadian M&A in volatile markets. An additional 22% of respondents believe the volume of dealmaking will remain the same and only 32% expect it to somewhat decrease.
Citi commissioned Mergermarket to survey 50 senior M&A practitioners in December 2014 in order to hear their predictions surrounding dealmaking in Canada in 2015. Despite the unavoidable repercussions of the downward trajectory in oil prices, the market remains optimistic that Canadian M&A levels will increase.
"The backdrop of oil price volatility and geopolitical uncertainty does not seem to have profoundly impacted the level of Canadian M&A that people are expecting in 2015," says Grant Kernaghan, Managing Director of Canadian Investment Banking at Citi. "Looking ahead, cross-border activity should remain healthy, particularly for inbound transactions."
In addition, the continued availability of low-cost financing for cross-border and domestic M&A is expected to support activity levels as companies pursue growth. Increasingly, respondents predict that Canadian firms will look to international markets in order to meet their targets.
Key findings from the report include:
- Almost half of respondents (46%) anticipate Canadian M&A will rise in the next 12 months with the top driver of activity being companies seeking inorganic growth. Only 32% of respondents expect dealmaking to somewhat decrease
- Fifty-six percent of respondents cite inorganic growth as the main driver behind Canadian M&A for the coming year, followed by sales of private businesses (38%) and strong valuations of companies (36%)
- Majority of respondents expect private equity activity to increase in cross-border and domestic deals, with 44% of respondents projecting these firms will conduct the most acquisitions in 2015
Click here to view the results and download the full PDF.
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Mergermarket, part of The Mergermarket Group, is an unparalleled, independent M&A intelligence tool used by the world's foremost financial institutions to originate deals. It provides proprietary intelligence on potential deal flow, potential mandates and valuations via the world's largest group of M&A journalists and analysts who have direct access to the most senior decision-makers and corporates. The Mergermarket Group has over 450 employees worldwide and regional head offices in New York, London and Hong Kong. Visit us at www.mergermarket.com
SOURCE CITIBANK CANADA
For further information: Jennifer Bombardier, Citi Canada Public Affairs, 416.947.5599, [email protected]