Q2, 2016 a quiet quarter for Canadian P&U players

09/09/2016

North American Power & Utilities: Deals Q2 2016

Quarterly, PwC releases a North American Power & Utilities deals report outlining M&A activity for the sector across the continent. 

Q2 2016 deal making showcased a growing theme of activity across investment classes, with active targets in electric and gas infrastructure and renewable and traditional generation. Covering the spectrum of renewable to traditional technologies, the top ten deals ranged from headline grabbing deals like Tesla Motors' US$6.6b acquisition of SolarCity to Dynegy's US$375m acquisition of a 35% stake in a fossil fueled electric generation facility.

However, Q2-2016 was a quiet quarter for Canadian companies. In contrast to Q1 2016, where Canadian companies like TransCanada, Fortis and Liberty Utilities (Algonquin Power) were involved in six of the ten largest deals, Q2 2016 saw only one major deal with Canadian involvement — Fortis' on-sell of a 19.9% interest in ITC Holdings.

Key trends this quarter

  • A drop in overall deal volume and number of mega deals resulted in total deal value reduction from $41.4 billion in the previous quarter to $28.3 billion this quarter (a 32 percent decline in deal value).
  • Four mega deals occurred in Q2 2016, as compared to seven mega deals in the previous quarter.
  • 12 of the 17 transactions in Q2 2016 were from strategic buyers, accounting for 76 percent of total deal value, down from the previous quarter (92 percent of total deal value).
  • Corporate deals increased its share to 92 percent of total deal value in Q2 2016, as compared to 85 percent of total deal value in the previous quarter.
  • Renewable deals were up in Q2 2016 to 28 percent of total deal value, as compared to 3 percent in the prior quarter.
     

You can have a look at this quarter’s report here

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Ken Goodwin
Partner, National Valuations Leader, PwC Canada
Tel: +1 416 814 5760
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