Bureau van Dijk (BvD), a private business intelligence advisory company, recently released its Zephyr North American monthly M&A reports for the months of January 2015 and February 2015. The January and February monthly reports detail the value and number of M&A deals targeting Canadian and U.S. companies.
These numbers should be of particular interest to M&A analysts and practitioners, since many were apprehensive as to what the new year would hold for M&A, given volatility in global commodity prices, the collapse of oil and general macroeconomic uncertainty. BvD’s data provides a first look at how 2015 is shaping up and offers some insight into what the remainder of 2015 might hold.
In general, M&A deals were off to a sluggish start during the first month of 2015, with the notable exception of Canadian private equity deals. After a relaxed January, however, Canadian M&A proved itself robust in February, recovering to levels comparable to February 2014.
The numbers from February are encouraging signs that despite economic headwinds and heightened economic uncertainty, there might still be a promising year ahead for deal makers.
January 2015: easing into the New Year
In January 2015, Canadian deal volume fell almost 36% month-on-month, from 365 deals in December 2014 to 235 deals in January 2015, and almost 23% when compared to January 2014, which counted 304 deals.
Canadian deal value fell almost 77% month-on-month, coming off a particularly buoyant December; compared to January 2014, deal value was down just over 40%. Similarly, U.S. deal flow and value were down both on a month-to-month and year-on-year basis.
Canadian private equity continues to be a bright spot
One bright spot this January was Canadian private equity deals, which increased both month-on-month and in comparison to January 2014, closing January 2015 with a total deal value of US$1.1 billion, compared to US$852 million in the preceding month and US$508 million January 2014. This is a 29% increase month-on-month and a doubling year-on-year. In fact, Canadian private equity deal value in January 2015 was higher than private equity deal value for any month in 2014.
Canadian gains in private equity were in marked contrast to U.S. private equity performance, which, on a month-to-month basis, fell over 30% in terms of number of deals and over 80% in terms of deal value. Compared to January 2014, the number of deals in January 2015 fell 21% and total deal value fell by half.
February 2015: encouraging signs for the balance of 2015
After a languid first month, the Canadian M&A space proved itself more robust in February 2015, more than doubling month-on-month from US$5.17 billion to US$13.89 billion, while the number of deals declined about 14%, from 294 to 252. These numbers are just slightly off from February 2014 and may signal improved prospects for Canadian M&A activity during the months ahead.
On a percentage basis, Canadian M&A deal growth significantly outpaced U.S. numbers. In the U.S, M&A deal flow and value for February continued to slide from January. On a month-to-month basis, U.S. deal flow fell by almost 28%, while deal value moved slightly higher, gaining about 4%.