The Canadian mergers and acquisitions market continues to boom, according to PwC Canada’s M&A mid-year review and outlook.
The report released on Tuesday said total transactions hit US$73 billion with the average deal being worth US$184 million in the first six months of this year.
“The most significant move was a US$10-billion acquisition of Goldcorp Inc. by Newmont Mining Corp. Overall, corporate transactions accounted for 71 per cent of all transactions, including eight mega deals over US$1 billion, while the remaining 29 per cent were completed by private equity firms and pension plans,” said the report.
Compared to the second half of 2018, the number of deals went down by five per cent due in part to dealmakers adjusting their approaches to further validate the deal thesis and identify and address any potential issues. In other words, dealmakers have been placing a greater emphasis on performing due diligence. One notable reason why is cybersecurity and the risks associated with protecting information, it said.
Dave Planques
National deals leader at PwC Canada
“Strong cyber due diligence can be a game changer in the M&A process,” said Dave Planques, national deals leader at PwC Canada, in a news release.
“It can help potential buyers figure out the shortcomings of their target’s cybersecurity practices and the resulting cyber risk while also ensuring that the costs and time required to effectively address these issues are properly priced into the deal.”
With the ongoing geopolitical, economic trade tensions, together with the continuous development of technology and innovation, the need for robust due diligence and assessing risk remains important, but that doesn’t mean that potential buyers will be more frequently scared off, added the report.
“Rather, this extended process will ensure the completion of the best deal possible for both sides. In the M&A market, there remains an abundance of capital and buyers have plenty of interesting targets to pursue,” said Planques.
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