Big deals dominate as transaction value continues to rise: PwC

Deals down slightly in volume from Q2, but up by 10% in value

TORONTO, Oct. 22, 2014 /CNW/ - Canadian M&A deal value continued to rise in the third quarter of 2014, according to PwC's Capital Markets Flash. With a total of 713 deals, volume was slightly lower than the 748 transactions seen in Q2, but deal value rose 10% from $45.8 billion to $50.6 billion this quarter.

Additional Q3 highlights include:

• Big deals continue to dominate the market with large transactions coming from all sectors including consumer, energy, industrials and software.
  
  
• Canadian companies seeking partners for growth are doing more business in their own backyard. Domestic deal volume increased by 17% year over year, and value is up 56% from Q2.
  
  
• By sector, consumer services took the lead in deal value, largely because of Burger King's US$13.4 billion acquisition of Tim Hortons. In terms of deal volume, mining came out on top with 17% of all deals, followed closely by real estate at 16%.

Also in this quarter's Capital Markets Flash:

• M&A in Quebec: Quebec Inc. at the gate: Quebec has always been distinctive, including within Canada's wider business community. A key characteristic of Quebec's economy is the significant diversification of industries, which have seen visionary entrepreneurs innovate and grow internally or by acquisition to become global champions.
  
  
• Driving for change – future outlook for the Canadian auto dealership industry: The Canadian auto dealership industry is experiencing more optimism compared to years past, while continuing to face significant challenges including regulation, capitalization and succession planning. These issues, as well as the opportunities for growth and M&A, are poised to shape the industry over the next few years.
  
  
• Content and connectivity: Spotlight on entertainment & media: With the growth of mobile access and online streaming, it's not surprising that some investors are curious about the potential impact that over-the-top (OTT) providers of content might have on the entertainment and media market in Canada. However, fragmentation makes the sector a prime target for M&A as production companies look to grow their content libraries and expand their reach beyond production

Quotes: Nicolas Marcoux, National Deals Leader, PwC
"The fact that big deals are coming from a variety of industries paints a positive picture this quarter. Typically in a commodities-driven environment, cross-sector uptick in deal activity bodes well for Canadian businesses seeking partners for growth."

"The increase in domestic deals is encouraging for the Canadian economy and for other Canadian businesses looking to engage in M&A activities. We expect that this trend will continue in the short term."

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Please visit PwC Canada's Capital Markets Flash blog at: www.pwc.com/ca/cmfblog

About PwC Canada
PwC Canada helps organizations and individuals create the value they're looking for. More than 5,700 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 184,000 people in 157 countries. Find out more by visiting us at www.pwc.com/ca.

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PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

SOURCE: PwC (PricewaterhouseCoopers)

Emily Abrahams, T: 416 814 5734, Email: [email protected]; Abby Yung, T: [phone], Email: [email protected]