SEPTEMBER 2021 |
53
Mergers Acquisitions
Strong activity continues in mergers, acquisitions, and divestitures by Jon Edgett
A
s Canada moved into the second half of 2021, merger and acquisition (M&A) transactions remained active, indicating positive investor sentiment against the continued pressures of the global pandemic.
amounts of uninvested capital • Strong investor sentiment, despite uncertainties due to the risks surrounding Covid 19 variants and concerns regarding the outlook for inflation
The total value of M&A transactions in Canada during the second quarter of 2021 remained high at $5.7 billion, across 85 transactions. This was slightly down from $5.8 billion for the previous three months - the highest quarterly mid-market deal volume in Canada since the fourth quarter of 2017.
The chart to the right summarizes transaction volume by sector (sectors as defined by the S&P/TSX Composite Index). The mix of transactions shows particularly high volumes in health care – specifically cannabis-related materials, and energy.
• Strong public equity markets, which support acquisitions by publicly listed companies • Low interest rates, which increase the ability of buyers to raise debt to finance acquisitions • Private equity funds with significant
finance & investment
What is driving the high levels of M&A activity? The current analytic manifests interest in transactions supported by several factors, including:
• Health care accounted for 21 percent of total deal volume with 18 completed deals. Canopy Growth Corporation closed the largest mid-market health care deal in the quarter, acquiring The Supreme Cannabis Company Inc. for $421 million. • Materials accounted for 21 percent of total deal volume in the quarter, nine of which related to gold mining. • Energy accounted for 16 percent of total deal volume, up from 11 percent in the previous quarter, with activity supported by higher oil prices.
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