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Tech, media, telecommunications and consumer markets

Mid-year Canadian M&A industry and market trends

Canadian M&A activity during the first half of 2021 echoes what we’re seeing globally, with strong market interest in tech, media and telecommunications (TMT) and consumer markets (CM). Companies are continuing to invest in their core, augment their current offerings and divest their non-core assets.

“We said this was going to be a deals-led recovery, and it has been. The deals activity in the first half of 2021 was even stronger than in the first half of 2019 pre-COVID-19,” says Shoshana Baizer, deals tech, media, telecommunications and consumer markets leader at PwC Canada.

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

  • There’s currently a strong appetite for M&A within TMT&CM as a whole. Interest rates are low, the credit market is strong and companies that have successfully weathered the pandemic so far have strong balance sheets. We expect to see a large volume of transactions in the near future—and potentially larger transactions than usual for the Canadian market. But the level of restructuring many thought might happen still hasn’t materialized. That’s in part because there haven’t been as many distressed deals as expected, since the government has subsidized subsectors hit harder by the pandemic, such as hospitality and apparel.
  • There’s continued interest from private equity in consumer markets subsectors that have remained strong throughout the pandemic, such as food and pets. More surprising has been the proliferation in the United States of special purpose acquisition companies (SPACs), which are driving multiples up and affecting the market. Canadian pension funds, private equity and large corporate buyers are also focused on environmental, social and governance (ESG) and what that will mean for future reporting requirements and how companies are perceived.
  • We’re seeing a lot of buy-side activity in the Canadian tech sector, and deal flow in managed services is also high as companies use service offerings to deepen customer relationships and retention. From a tech perspective, it’s never been busier. With so much volatility in the public equities market, capital has been directed towards alternative investments in private capital and tech startups.
  • In telecom, we’re seeing continued activity on consolidation and with non-tech acquisitions. Some companies are diversifying into tech to provide customers with more value and drive additional revenue channels. They’re also looking at ways to build scale and release funds over time through initial public offerings (IPOs) of certain subsidiaries.

Interested in learning more about M&A opportunities in tech, media, telecommunications and consumer markets?

Reach out to start a conversation.

Shoshana Baizer

Deals Technology, Media, Telecommunications and Consumer Markets (TMT&CM) Leader, Partner, Toronto, PwC Canada

+1 416 815 5204

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