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October 16, 2019 | M&A Reports 

Crosbie & Company Canadian Mergers & Acquisitions Report for Q3 2019

Canadian M&A Activity Softens in Q3 Following Record Quarterly Results 

Canadian M&A market activity experienced a slight decline in Q3 after a record setting second quarter, but remained robust with 776 announced transactions valued at $45B.  M&A activity has been extremely strong for several years and transaction activity has persisted in Q3 – the number of deals has exceeded the 700 transaction threshold during each quarter since Q1 2017. 

“Canadian M&A activity softened somewhat in Q3 following an extended period of strong deal activity in recent quarters,” said Sam Sivarajan, Managing Director at Crosbie & Company.  In the third quarter, Canadian companies made 575 acquisitions worth $19.3B, including 378 domestic acquisitions involving both a Canadian target and acquirer.  While Canadian buyers made fewer domestic acquisitions than in recent quarters, foreign buyers continued to acquire Canadian companies at an increasing rate. In the third quarter, foreign buyers spent $16.1B on 139 Canadian targeted acquisitions, a 7% increase in activity from the prior quarter and the highest quarterly volume since Q2 2017.

“Even though we may be in the late innings of the longest bull market in history, there is reason to believe in the continued strength of the M&A market.  Strong balance sheets, relatively easy access to capital, aging business owners looking to monetize at current high valuations and buyers seeking to boost weak organic growth all suggest that the strong M&A activity trend will continue into Q4,” said Sivarajan.  

There were 9 mega-deals announced this quarter with a combined aggregate value of $25.0B.  In the third quarter there were 5 Canadian targeted mega-deals including the purchase of Dream Real Estate Investment Trust by The Blackstone Group valued at $6.2B.  Brookfield’s acquisition of Genworth Financial, the largest private sector residential mortgage insurers, for $2.4B was a notable mega-deal – and underscores Brookfield’s general confidence in the Canadian mortgage market.

Financial sponsors were active in the third quarter of 2019 with 22 transactions (in excess of $100M) valued in aggregate at $22.6B.  Seven of the 9 mega-deals in the quarter involved financial sponsors including private equity groups, investment managers and pension funds that were interested in making acquisitions in Canada and abroad.

The mid-market, which has traditionally been a core component of the Canadian M&A landscape, began to show signs of softness in the third quarter.  The mid-market, which is defined as transactions with enterprise values below $250M, had 287 transactions with an aggregate value of $8.7B.  Despite the slight decline in activity, the mid-market represented 91% of deal activity and 19% of aggregate deal value in Q3.

The Real Estate sector was the most active this quarter with 112 announced deals comprising 42% of deal volume with $19.0B of transaction value.  The sector experiencing the greatest increase in activity was the Information Technology sector with 102 transactions, a 32% increase relative to the same quarter in 2018.  The Industrial sector also remained robust this quarter with 102 transactions valued at $2.2B.


  • Deal activity declined slightly in Q3 with 776 announced transactions during the quarter
  • For transactions with values of less than $1B, the aggregate transaction value of $20.0B is in line with the $21.4B average value during the previous 8 quarters
    • Average transaction value was $26.1M, excluding mega-deals
  • Total deal value in Q3 was $45.0B, a slight decline following 5 incredibly strong quarters
  • Cross-border activity remained steady in Q3, with 336 transactions
    • Canada/US cross-border transactions comprised 66% of all cross-border deals, with Canadian acquirers making 124 acquisitions south of the border, outpacing the 99 inbound transactions


  • There were 9 mega-deals announced this quarter with an average value of $2.8B, including 5 Canadian targeted deals
  • The largest announced transaction was the $6.2B asset purchase of Dream Real Estate Investment Trust by The Blackstone Group
  • Brookfield was involved with two mega-deals this quarter including the acquisition of Canadian based Genworth MI Canada for $2.4B and the sale of Colombia-based Empresa de Energía de Boyacá E.S.P. for $1.0B

Industry Sector Activity

  • Real Estate was the most active sector this quarter with 112 announced deals valued at $19.0B, exceeding the 100 transaction threshold for the 5th consecutive quarter
  • The Industrials sector remained robust with 102 transactions valued at $2.2B
  • The Information Technology sector experienced the greatest increase in activity with 102 transactions, increasing 32% relative to the same quarter in 2018

Breakdown by Transaction Size

  • 91% of transaction activity in the quarter was from mid-market transactions below $250M (for transactions with disclosed values)
  • Mid-market transactions were valued at $8.7B or approximately 19% of total M&A value 
  • Mega-deal size declined this quarter with an average transaction value of $2.8B

Domestic Versus Foreign M&A

  • Domestic M&A activity exceeded 500 transactions for the 8th consecutive quarter with 517 deals announced in Q3 
  • Foreign buyers’ demand for Canadian companies remained strong this quarter with 139 transactions announced valued at $16.1B
  • Contrary to historical trends, Canadian buyers spent more money making acquisitions domestically than abroad, spending 75 cents outside of Canada for every dollar spent at home  

Cross-Border Deals

  • Inbound cross-border activity remained strong in the 3rd quarter while outbound activity declined slightly 
  • Cross-border deals represented 43% of total activity and 54% of total deal value
  • US buyers comprised 71% of all Canadian targeted cross-border activity and 95% of the aggregate transaction value

Target by Province

  • Ontario remains the most active province this quarter with 188 deals valued at $17.0B
  • British Columbia was also active in the second quarter with 131 deals valued at $3.3B
  • The $329M  private equity buyout of BioVectra by H.I.G. Capital is Prince Edward Island’s largest transaction to date

Crosbie & Company Inc.
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