Articles - December 2018

  • Canadian M&A Diverges from the Global Trend

    Posted By: Karen Fisman and Clear Li

    Are you wondering where M&A is heading this quarter?  We took a dive into April deal activity, and while our findings might not be predictive of the full quarter, they looked interesting enough to share.  What caught our interest? We noticed that Canadian deal activity diverged from the global trend.

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  • What do Sellers Want?

    Posted By: Karen Fisman

    Valitas Insights:  What do Sellers Want?

    It’s a competitive market out there for buyers.  We’ve talked often about the high levels of capital available for a shrinking pool of quality targets. And of course, there are those sky-high valuations.  In this challenging market, it becomes more important than ever to understand seller preferences and experiences.  A recent Mergermarkets survey provides insight into sell-side strategies and views, and we thought it worthwhile to share some of their findings.

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  • Know Your Buyers: Part 3

    Posted By: Karen Fisman

    Know your Buyers is a three-part series by Valitas Capital Partners for business owners. It is designed to help owners consider the types of buyers that are in the market, how those buyers perceive value, and the advantages and disadvantages associated with each.

    In previous instalments of the series, we discussed financial and strategic buyers. This month, we present different business scenarios and how the type of buyer impacts the outcome in each case.

    Know your Buyers: Part 3

    Christine Spence and Murray Brown own thriving commercial bakeries. 

    Both spent decades building their businesses from corner shops to the factories that house their current operations today. 

    Both generate healthy revenue and cashflow, at a level that might make their competitors envious. 

    Both are still working long, tough hours…maybe longer and tougher than they’d like (particularly in Murray’s case).

    And while both have adult kids, the kids have gone in different directions, and have no interest in the commercial bakery business.

    Those are their similarities, and here are some critical differences…

    Murray is 72 years old.  He’s tired of the long hours, and wants freedom to spend winters in the Florida sunshine, take up golf, and enjoy time with his grandkids. He’s ready to realize the value from what he’s built over the past decades and have someone else take over the business.

    Christine just turned 60.  This milestone birthday has triggered some thinking about how she wants to spend the next decade.  Further thinking has been provoked by her long-time business partner, who recently announced that she wants to sell her 30% stake in Christine’s bakery.

    What will generate the most successful outcomes for Murray and Christine?

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  • The subject of trade agreements has been grabbing plenty of media space in recent months, with NAFTA (and its related uncertainty) occupying the lion’s share.  BUT…

    This week, our focus is on the Canadian - European Union Comprehensive Economic and Trade Agreement (CETA).  CETA received Royal Assent on May 16, 2017, and opens a gateway to increased cross-border trade and investment, including, of course, M&A activity.  On implementation, the agreement will immediately eliminate 98% of EU tariffs, as well as many non-tariff barriers, yielding significant cost savings and competitive advantage for Canadian exporters of goods and services.

    recent article by Mario Nigro and Eric Bremermann, of leading law firm, Stikeman Elliott, describes CETA as a catalyst for cross-border M&A.  We were fortunate to speak directly with Mr. Nigro, who is a partner in Stikeman’s M&A and Private Equity & Venture Capital Groups. 

    Please click "open in browser" to read our full interview with Mario Nigro.

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  • Canadian Venture Capital and Private Equity Activity Continue to Diverge

    Posted By: Miranda Li, Karen Fisman, Yingxi Liao

    In our recent review of Canadian Venture Capital (VC) and Private Equity (PE) activity for the first nine months of 2016, we reported a significant difference in trends.  While VC investment exceeded the four-year quarterly average, PE investment and deal volume lagged relative to the same period of the previous year.

    According to the latest first quarter 2017 VC and PE update by the Canadian Venture Capital and Private Equity Association, this divergence in activity continues. 

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  • Private Equity and Portfolio Company Management

    Posted By: Clear Li, Paris Aden, Miranda Li

    Private equity has remained one of the most reliable asset classes amid recent challenges in the market. However, PE investors still need to be vigilant in order to retain their competitive position going forward. The management team of the portfolio company is crucial to a successful partnership. A recent Mergermarket report surveying 25 middle market PE firms and 25 company executives across North America revealed several key insights on this issue, and we thought it is worthwhile to share some of their findings.

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