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Private companies

Mid-year Canadian M&A industry and market trends

The private company industry led the way in Canadian M&A market activity over the past 12 months, with total deal value exceeding CA$119bn (as of July 2021)1. Companies that have embraced technology during the pandemic and have been able to adapt are of particular interest to investors and strategic acquirers, who are looking for agile and visionary management teams. The glut of capital in the market and low interest rates will continue to shape the Canadian M&A landscape well into 2022.

Here are some of the key M&A trends we’re seeing in private companies:

  • Over the last six months, we’ve seen a wave of sales of privately owned companies. Some have struggled during the pandemic or were under-capitalized, becoming acquisition targets. Other high-performing companies have made it through the pandemic so far, but many aging owners have realized how fragile their business can be and are looking to monetize the value of their business so they can retire.
  • Health and wellness are gaining momentum. A number of larger organizations have become interested in acquisitions in this sector, in which private companies are numerous. Whether focused on health care, mental health, sleep disorders, nutrition or other areas, organizations in this sector are garnering attention, and the sector as a whole is showing tremendous growth potential.
  • Technology companies, more specifically IT services companies, are experiencing accelerated growth as corporate clients digitize their operations to be at the forefront of the new normal and position themselves competitively. At the same time, labour in the IT sector is scarce and in high demand. This situation is creating a lot of M&A opportunities among market players across Canada.
  • The bottom line? Even though we’re starting to emerge from the pandemic, companies should continue investing in new technologies, digitizing their operations, being innovative and finding ways to be more efficient and, most of all, do business differently. Technology is everywhere now, in all sectors. Going forward, to stay competitive, value creation strategies will be key to unlock value following strategic acquisitions. And don't forget to include in the value creation equation how this changing environment is impacting your workforce. Workforce profiles are evolving, and employees will need to develop new skills. New ways of working are taking hold and already starting to make the business environment look significantly different.

1 Source: Capital IQ data, PwC Canada analysis

Interested in learning more about M&A opportunities in private companies?

Reach out to start a conversation.

Christine Pouliot

MBA, CFA, Deals Private Leader, Partner, Montreal, PwC Canada

+1 514 205 5123

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