Materials segment falls flat; Changing demographics present marketplace
TORONTO, Jan. 2, 2014 /CNW/ - The Canadian M&A sector remained flat for a
second straight year in 2013, reflecting similar numbers from 2012, according
to KPMG. The Materials segment also continued to flounder while other market
segments showed some growth and promise as debt market liquidity gained
momentum during the calendar year.
Total M&A deals involving Canadian companies are expected to amount to US $139
billion in 2013, representing a seven percent increase over 2012. Almost
1,800 deals, virtually the same number as 2012, are expected to be completed
by December 31, 2013 based on data supplied by Thomson Financial.
The Materials segment, which includes Mining and Metals, remained in the
doldrums. Despite a modest increase in deal value over last year, Materials
continued to see a decline in the number of transactions, resulting in a 23
percent decrease over 2012.
The cost of debt capital hovered around historic lows in 2013. This allowed
debt market liquidity to gain momentum throughout the year and reduce the
costs of acquisitions, enticing intergenerational sellers to begin monetizing
their assets. Private Canadian companies from coast to coast have come to
the market in order to take advantage of strong selling conditions. KPMG
foresees strong selling conditions continuing in Consumer and Industrial
markets due in part to strength in automotive sales in North America coupled
with increased consumer spending.
Some of the landmark transactions involving Canadian companies in 2013 include:
-- The US $19.1 billion acquisition of Nexen by CNOOC Limited, a
Chinese investment holding company
-- The US $6 billion acquisition of the American retailer Neiman
Marcus by a private equity consortium that included CPP
-- Sobeys' acquisition of Safeway Canada, a food retailer in
Western Canada, for US $5.7 billion
-- The acquisition of Ally Credit Canada by RBC for US $4.1
-- Hudson's Bay Company's acquisition of Saks Incorporated for US
"It was another tough year for the Canadian Materials segment in 2013 but
others showed signs of growth and strength which we expect to spill over into
2014. Debt capital markets have been a catalyst for strong valuations and we
anticipate that continuing in the year ahead."
-- Peter Hatges,
President, KPMG Corporate Finance, Inc.
"Whether the buyers are private equity firms or strategic investors, there
appears to be an abundance of investment capital that is available, creating
the opportunities for increased synergies and penetration into new markets by
way of merger or acquisition."
-- Martin-Pierre Roussel,
Managing Director, Quebec Corporate Finance, KPMG Corporate
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SOURCE KPMG LLP
Briana D'Archi National Senior Manager, Communications KPMG in Canada
email@example.com 416 777 8169
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-0- Jan/02/2014 14:49 GMT
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