TORONTO, Dec. 20, 2012 /CNW/ - Based on results to date, the Canadian M&A
market defied gravity in 2012 surviving a 10 percent decline in the total
number of M&A deals completed with a modest rise in total M&A deal values to
approximately US $139 billion. The M&A deal value results are surprising given
Canada experienced a 50 percent decline in deal values in Canada's biggest
sector, Materials & Mining, representing a decline of over US $18 billion over
last year. The total number of M&A deals across all sectors involving
Canadians is expected to amount to approximately 1,820 based on data provided
by Thomson Financial.
The drop in actual deal volume may seem disconcerting as the Canadian
environment for M&A is strong given the robust banking market, an abundance of
equity capital and a relatively strong economic climate.
"Despite the weakness in mining and commodity prices, many other sectors
showed signs of strength, taking up the slack in mining M&A deal value," said
Peter Hatges, President, KPMG Corporate Finance, Inc.
Deal values in Consumer Products, Media and Entertainment, Healthcare and
Consumer Staples were all up sharply over last year. Highlights include:
-- The acquisition of Maple Leaf Sports and Entertainment for US
-- The US $6.6 billion acquisition of Cequel Communication in the
United States by a private equity consortium that included CPP
-- Cogeco's US $1.36 billion acquisition of the Atlantic Broadband
Group in the United States
-- Bank of Nova Scotia's US $3.2 billion acquisition of ING
-- Valeant's acquisition of Medicis Pharmaceutical Corp in the US
for US $3.1 billion
In 2012, Canadians acquired the vast majority of the largest Canadian M&A
deals with many foreign targets being in the United States.
"Canadian companies have a lot of capital at their disposal," said
Martin-Pierre Roussel, Managing Director, KPMG Corporate Finance, Montreal.
"Canadian banks are lending, private equity is flush with cash and the
Canadian dollar is well valued - it's a significant strategic advantage in the
context of M&A deals and expanding the geographic footprint of Canadian
Changing demographics in Canada are another factor in the expected volume of
M&A transactions going forward.
"As Canadian business owners reach retirement age, a large number of
businesses and assets will come to the market in volumes not seen in prior
years and this is expected to continue to stimulate the M&A activity in the
non-mining sectors," said Hatges.
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited
liability partnership established under the laws of Ontario, is the Canadian
member firm of KPMG International Cooperative ("KPMG International"). KPMG
member firms around the world have 152,000 professionals, in 156 countries.
The independent member firms of the KPMG network are affiliated with KPMG
International, a Swiss entity. Each KPMG firm is a legally distinct and
separate entity, and describes itself as such.
Michael Bodsworth National Manager, Media Relations KPMG in Canada (416)
SOURCE: KPMG LLP
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-0- Dec/20/2012 16:05 GMT
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