Canadian Mid-Market M&A by Quarter

  • Posted By: Ari Cuperfain

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  • Comments: 2

Canadian M&A activity is off to a slow start this year in both deal count and total volume. The Canadian economy has been poor due to crippling oil prices in light of Canada’s resource-heavy economy. As will be discussed in the 1Q 2015 analysis by industry, Energy deals were down by 55% compared to 1Q 2014.

For all Canadian mid-market transactions, only 66 deals were reported in the US$5-500 million range for 1Q 2015, down 25% from 88 deals in the same quarter of 2014. Correspondingly, total deal value was down 25%. While the public market is often a lead indicator of M&A market activity, the S&P/TSX Composite Index ended the first quarter up by 4.0% since the end of 1Q 2014.

The chart below shows the median deal size for all reported transactions in Canada, the U.S. and the rest of the world. Canadian deals have been consistently smaller relative to the other major markets. Median deal size for Canadian deals has remained virtually constant at around $10 million. Interestingly, deal size has been increasing steadily in both the U.S. and the rest of the world over the past three years. Median deal size for the U.S. market increased from $14.4 million in 2012 to $18.3 million in 2015 and from $13.7 million to $18.6 million in the rest of world. This is likely a reflection of accommodative credit markets and high demand for quality acquisitions, driving up valuations. Not surprisingly, the Canadian median deal size has fallen because of a slowdown in larger energy and mining M&A activity, which is highly correlated to the commodity cycle.

Canadian Median M&A Deal Size

Next we will look at Canadian mid-market M&A based on industry activity. If you found this post interesting, you may want to explore our 2014 Canadian Private Equity Report where we discuss trends in private equity as they pertain to the Canadian market. 

Source: Capital IQ 

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