North American Power Deals: Mergers & acquisitions report

 

 

Quarterly report: Q3 2017

Canadian investors were extremely active in the third quarter of 2017 as six of the top 10 North American power and utilities deals involved companies from Canada or Canadian assets.

The Canadian-related deals of Q3 were headlined by Hydro One Limited’s acquisition of American energy company Avista Corp. in July for US$5.3 billion. The mega deal helps the Canadian utility company expand its North American reach and benefit from geographic diversification—the merged entity is expected to serve more than two million retail and industrial customers in Canada and the US.

The third quarter of 2017 showed a decline in total deal volume from Q2 2017 and Q3 2016, but deal activity in the industry saw the highest quarterly deal value since Q3 2016. The deal value spike was highlighted by large utility transactions and the second largest deal of the quarter—Energy Capital Partners and a consortium of investors including Canada Pension Plan Investment Board agreed to buy American independent power producer Calpine Corporation for US$17.3 billion.

There were 10 deals greater than $50 million recorded, a decrease from 18 deals in Q2 2017.

 

 

“Hydro One’s acquisition of Avista was the third largest deal of Q3 and expands the Canadian electricity giant’s reach outside of Ontario and into the Pacific Northwest market. This also gives them the opportunity to improve their asset balance and get exposure to other parts of the energy value chain.”

- Ken Goodwin, National Deals Leader, Power & Utilities

 

 

Key trends this quarter

Deal volume in Q3 2017 decreased compared to Q2 2017 and Q3 2016. However, total deal value was strong in the quarter at $44.9 billion, up from $6.5 billion in Q2 2017, but down from $78.1 billion in Q3 2016.

Four mega deals occurred in Q3 2017 totaling $43.0 billion in deal value, compared to one mega deal in Q2 2017 and six mega deals in Q3 2016.

In Q3 2017, Strategic buyers and Financial buyers had an equal share of deal volume. However, Strategic buyers drove deal value with $25.5 billion or 57 percent of total deal value.

While Corporate deals and Asset deals had an equal share of deal volume, Corporate deals significantly drove deal value with $41.8 billion or 93 percent of total deal value.

There were two outbound deals from Canadian investors into the US totaling US$5.4 billion in deal value. This compares to seven in Q2 2017 and three in Q3 2016.

Renewable deal activity was limited in the quarter with $0.2 billion or 1 percent of total deal value.

Key trend 6

  • There were seven inbound deals in Q2 2017, representing a significant number of inbound deals compared to two in Q1 2017 and three in Q2 2016.

Key trend 6

  • There were seven inbound deals in Q2 2017, representing a significant number of inbound deals compared to two in Q1 2017 and three in Q2 2016.

 

 

 

View previous quarter reports

Contact us

Ken Goodwin
Partner, National Valuations, Modelling and Disputes Leader
Tel: +1 416 814 5760
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John Matheson
Partner, Deals - Transaction Services
Tel: +1 416 687 8171
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Jeffrey Stewart
Partner, Valuations, Forensics & Disputes
Tel: +1 416 941 8361
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Brian Poth
Partner, National Industry Leader, Power and Utilities
Tel: +1 416 687 8522
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