(Toronto, February 1, 2018)—M&A activity in Canada reached its highest point of the past five years in 2017 with 2,274 deals, despite uncertainty surrounding the impact the new US administration’s policies might have on trade and the broader North American and global economies, according to PwC Canada’s Deals report published today.
“2017 was a stellar year for M&A activity in Canada, and all indications are pointing to a similar high volume this year,” says Dave Planques, National Deals Leader, PwC Canada. “Investing in Canadian businesses may become even more attractive if the gap between US and Canadian valuations widens”
According to the report, deal volume (deals more than USD$1M) increased to 2,274 deals in 2017 from 1,956 in 2016. For deals with a disclosed value, only “mega deals,” those valued at USD$5B or more, decreased to two in 2017 from seven in 2016. The technology sector continued to be Canada’s most active industry sector in 2017, with a 34% increase in deal volume over 2016.
“Now that US tax reform has been passed, providing a further stimulus to an already strong US economy, we expect to see increased M&A activity in the US and potentially US outbound investment activity into Canada,” adds Planques.
Outbound deals to the US reached nearly 60% of all outbound deals in 2017, one of the highest levels since 2008. Of the outbound deals to the US, real estate saw nearly twice the number of deals year over year. Deals in the technology sector also increased by 45% from 2016, with the majority (90%) of those acquisitions coming from corporate buyers.
According to PwC’s 21st Annual Global CEO Survey, 44% of Canadian CEOs are planning to engage in M&A activity in the next year to drive corporate growth and profitability. The deals report sites three factors that could significantly influence Canadian M&A activity in the year ahead:
Click here to access PwC Canada’s Deals report.
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© 2018 - 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.