Despite global economic instability, Canadian companies are prepared to
TORONTO, Feb. 13, 2013 /CNW/ - Confidence to undertake M&A is predicted
among Canadian companies, according to KPMG's latest Global M&A Predictor. Not only do companies appear to have their appetite back, they also
have the capacity to transact. Over the last two years, the capacity
for deals has been steadily rising as companies have focused on
reducing debt and building cash reserves.
"We are seeing significant transaction appetite, with Private Equity
having capital to deploy and corporate balance sheets having
significant capacity to transact," said Neil Blair, Partner, KPMG Corporate Finance. "The outlook for 2013 is more positive than it has been for over two
years - the winning combination of confidence, capital and capacity
bodes well for the health of the Canadian M&A market."
KPMG's International January 2013 M&A Predictor found:
Global forward P/E ratios (an appetite measurement) have risen 15
percent over the past 6 months and 12 percent year-on-year
The forecast net debt to EBITDA ratio shows an expected improvement in
capacity to transact of 15 percent over the next year
In the U.S., appetite rose by 10 percent and capacity by 21 percent
since June 2012
From healthcare to industrials to technology, confidence and capacity
are up across all sectors
In the previous edition of KPMG's M&A Predictor, analyst predictions showed that appetite levels for M&A were falling
across the board - confidence was dropping everywhere. By the end of
2012, however, confidence was rising in almost every country covered by
"In Canada, we are finding that in an environment where GDP growth is
modest, corporations are looking at acquisition-led growth both
domestically and internationally," said Blair. "As the overall
macroeconomic picture becomes more stable, Canadian corporations are
prepared to pay for new growth opportunities."
About the Global M&A Predictor
KPMG's Global M&A Predictor, established in 2007, is a forward-looking
tool that helps member firm clients to forecast worldwide trends in
mergers and acquisitions. The Predictor looks at the appetite and capacity for M&A deals by tracking and
projecting important indicators 12 months forward. The rise or fall of
forward P/E (price/earnings) ratios offers a good guide to the overall
market confidence, while net debt to EBITDA (earnings before income
tax, depreciation and amortization) ratios help gauge the capacity of
companies to fund future acquisitions.
The Predictor covers the world by sector and region. It is produced bi-annually,
using data comprised from 1,000 of the largest companies in the world
by market capitalization. The financial services and property sectors
are excluded from our analysis, as net debt/EBITDA ratios are not
considered relevant in these industries. All the raw data within the Predictor is sourced from S&P Capital IQ. Where possible, earnings and EBITDA
data is on a pre-exceptionals basis with the exception of Japan, for
which GAAP has been used.
About KPMG Corporate Finance
As one of the world's leading transaction advisers, KPMG provides a
coordinated portfolio of Corporate Finance services, including mergers,
acquisitions, divestitures, debt and equity financing, and fairness
opinions. Acting independently of financing sources, we provide clients
with pure, objective advice, focusing on strategies that can help meet
In 2011, KPMG Corporate Finance Inc. ranked first on Thomson Financial
Securities Data's ranking of the world's leading M&A advisers, based on
the number of deals successfully completed. For over 10 consecutive
years, we have ranked as one of the top two M&A advisers in the world.
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the
laws of Ontario, is the Canadian member firm of KPMG International
Cooperative ("KPMG International"). KPMG member firms around the world
have 152,000 professionals, in 156 countries.
The independent member firms of the KPMG network are affiliated with
KPMG International, a Swiss entity. Each KPMG firm is a legally
distinct and separate entity, and describes itself as such.
Follow @KPMG_Canada on Twitter and linkedin.com/company/kpmg-canada on LinkedIn for more on the M&A Predictor.
SOURCE: KPMG LLP
For further information:
National Coordinator, Media Relations
KPMG in Canada