The second quarter of 2019 was a very busy period for deal activity and developments in Canada’s Transportation and Logistics sector. The activity spanned several industry segments, with major transactions involving airlines, promising investments in the railway sector and significant developments in shipping.
Overall, Q2 2019 saw 32 transactions at a total value of CA$6.2 billion. The activity represented a 45% jump in volume and a massive 1,460% increase in disclosed deal value, when compared to Q1 2019*. On a year-over-year basis, deal volume was up 113% and disclosed deal value rose 1,297%.
With a transaction value of CA$4.8 billion, Onex Corp.’s friendly acquisition of WestJet was one of the biggest deals in the Transportation and Logistics sector in recent memory. Onex’s involvement will provide Westjet access to significant cash resources, which should help the airline to expand globally and further develop its Swoop and Encore platforms.
The other major development in the airline sector in Q2 2019 was Air Canada’s move to buy Transat A.T. Inc. for about CA$494 million. This acquisition, if approved, will give Air Canada access to a substantial market for transatlantic and Caribbean flights.
Deal activity in Q2 2019 includes the Canadian National Railway Co.’s acquisition of Alberta-based H&R Transport Ltd’s intermodal division. The move builds upon CN’s recent acquisition of TransX Group and reiterates the importance of intermodal shipping within Canadian and global supply chains.
Developments in Q2 2019 include:
Amid economic and geopolitical uncertainties, the strength in the Transportation and Logistics sector is further evidence of the impact of Canada’s continued push to pursue trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. With strong demand for exports of Canadian products like wheat, a healthy job market and a relatively stable interest rate policy by the Bank of Canada, the current environment bodes well for the sector overall.
*In comparing the figures for Q1 2019, it’s important to note that that quarter included a high number of transactions that didn’t disclose a deal value.
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