Canadian M&A Insights – Summer 2021 M&A Advisory

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In 1H 2021, Canadian M&A Canadian M&A Transactions (CAD in millions) activity recovered to pre-pandemic levels in both transaction count and total implied enterprise value (EV) as vaccine roll-out programs continue, and there is increasing visibility on a return to normalcy. There were 1,008 Canadian companies sold over the course of 1H 2021, representing total disclosed EVs of $61.9 billion. Of the transactions completed, 73% were domestic acquisitions, which is in line with historical averages.

Canadian M&A Insights – Summer 2021

There is still an abundance of capital in the market, sitting with both strategic buyers and financial sponsors. Many strategic players have held on to cash reserves in precaution for COVID-19 and are now looking to deploy that capital to fund growth initiatives. Private equity firms still have a healthy overhang of dry powder after supporting portfolio companies through the pandemic, and many sponsors have raised new funds in recent months to chase resurging deal flow.

Finally, while central bankers and governments remain watchful of inflationary pressures, the key near-term focus will be on lifting the economy out of the pandemic–particularly as unemployment remains high in key geographies and many small businesses and sectors are just now recovering from the barrage of lockdowns. Central banks maintaining low interest rates will continue to incentivize buyers to utilize leverage to fund acquisitions and bolster deal activity into 2H 2021.

 

Sources:
S&P Global Market Intelligence as of July 11, 2021; Duff & Phelps analysis. All publicly disclosed transaction information available in S&P Global Market Intelligence.

For all data herein: All transaction values are in Canadian dollars (unless otherwise noted) and refer to transactions with reported financial data. All transaction data refers to acquisitions of majority stakes (minority deals were excluded). M&A transactions in 1H 2021 include those between January 1 and June 30, 2021.

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