skip to main content
August 23, 2018 | M&A Reports 

Crosbie & Company Canadian Mergers & Acquisitions Report for Q2 2018

M&A Hot Streak Continues - Led by Resurgence in Mega-Deal Activity

The Canadian M&A market continued its hot streak in the second quarter with 826 transactions, just below the high recorded in the first quarter.  Total deal value rebounded to $74B (from $47B in Q1), largely due to 18 mega-deals (transactions with aggregate value in excess of $1B), the highest quarterly number announced in over five years.  

“A ‘Made in Canada’ phenomenon has been a driver of activity in first half of 2018, with more than half of all transactions involving both a Canadian target and buyer,” said Richard Betsalel, Managing Director at Crosbie & Company.  “Cross-border transactions have historically comprised the majority of total M&A activity in Canada, as Canadian companies sought growth opportunities outside our relatively small economy.  We are interested to see if this new trend of inward-focused M&A continues through the balance of the year or reverts to historical norms.”  

In Q2, there were 440 transactions involving Canadian targets with domestic buyers, in line with the previous quarter’s 434 transactions, but a 33% increase relative to the same period last year. Activity involving Canadian buyers of foreign targets increased a more modest 10% to 231 transactions (compared to 210 in Q2 2017).

There were 18 mega-deals announced in the quarter with a total value of $51B, up from 8 mega-deals valued at $29B in the first quarter and 12 mega-deals valued at $39B during Q2 of 2017.  The largest announced transaction was the $7B acquisition of Techem GmbH, a German energy services company, by the Caisse de Dépot and the Ontario Teachers’ Pension Plan.  “The deal that dominated the headlines was the Government of Canada’s controversial $4.5B purchase of the Trans Mountain Pipeline from Kinder Morgan,” said Mr. Betsalel. “Of course this is only part one of a multi-stage transaction involving Trans Mountain, as the federal government has indicated that it will eventually seek to return ownership of the asset to the private markets.”

Financial sponsors remained active in the second quarter of 2018 with 15 transactions (in excess of $100M) valued in aggregate at $30B.  Eight of the 18 mega-deals in the quarter involved a financial sponsor, including several Canadian pension funds which continue to pursue large transactions, both domestically and abroad.

The Metals and Mining sector was the most active sector for the fifth time in the last six quarters with 107 transactions valued at $2.3B (compared to 100 transactions valued at $2.3B in Q2 2017).  The Energy sector experienced the most dollar volume, with $15.8B in announced deals, up from $14B during the same quarter last year.  This was primarily due to a few pipeline mega-deals, including the Trans Mountain Pipeline transaction, and the $4.1B purchase of Enbridge Income Fund Holdings (remaining 80.1% stake) by its parent Enbridge Inc., in an effort to simplify its corporate structure. 

Real Estate was the 2nd most active sector in terms of deal activity, with 97 transactions valued at $8.1B.  Information Technology also exhibited robust activity, with 94 transactions valued at $10.4B, including two significant going-private transactions: VeriFone Systems by BC Investment Management for $4.4B and Mitel Networks by Searchlight Capital Partners for $2.7B.


  • Hot streak continues in Q2
    Second consecutive quarter with 800+ announced transactions
  • Q2 number of deals announced increased 14% year over year
  • Total deal value was $74B, up 57% from the first quarter this year and 16% from Q2 2017
  • We expect M&A activity to remain buoyant for the balance of the year due to the following factors:
    • Low interest rates
    • Significant availability of capital - both debt and equity
    • High valuations
    • Strong corporate earnings
    • Active financial sponsors


  • 18 mega-deals is the highest quarterly number in over 5 years
  • Represented $51B of total value, the highest level since Q1 2017
  • Largest announced transaction was the $7B purchase of Techem GmbH by the Caisse and Teachers
  • Aurora Cannabis’ $3.1B acquisition of MedReleaf was the first mega-deal in the burgeoning cannabis sector
  • 8 of 18 mega-deals involved financial sponsors who remain eager to deploy capital

Industry Sector Activity

  • Metals & Mining was the most active sector for the 5th time in the last 6 quarters with 107 transactions valued at $2.3B
  • Energy sector experienced the most dollar volume in the quarter with $15.8B in total transaction value
  • Robust activity in Information Technology with 94 deals valued at $10.4B

Breakdown by Transaction Size

  • 88% of transaction volume in the quarter was from mid-market transactions below $250M (for transactions with disclosed values)
  • Mid-market transactions were valued at $8.2B or approximately 12% of the total M&A value

Domestic Versus Foreign M&A

  • Strong ‘Made in Canada’ activity (Canadian buyer and Canadian target) with 440 transactions, up 33% from Q2 2017
  • Canadians remained active acquirers abroad announcing 231 transactions valued at $32.6B

Cross-Border Deals

  • Outbound M&A outpaces inbound M&A by 2:1, in-line with historical trends
  • Cross-border deals represented 42% of total activity and 57% of total deal value
  • The United States remains our most active M&A partner representing 67% of cross-border activity

Target by Province

  • Ontario remains the most active province for the quarter with 205 deals valued at $13.8B
  • BC experienced the largest increase in activity with 132 transactions, up 42% from the same quarter last year
  • Alberta saw total transaction volume increase to $13B due to several large energy deals

Crosbie & Company Inc.
150 King Street West, 15th Floor, P.O. Box 95, Toronto, Ontario M5H 1J9
Tel: 416.362.7726 | Toll Free: 1-866-873-7002 | Fax: 416.362.3447


All content © Copyright Crosbie & Company Inc. 2021
All rights reserved.
Legal Disclaimer and Terms of Use | Privacy Policy