Will Canadian M&A Activity Peak in 2020/21?

Market Insights - Q3 2019

M&A is thriving in North America. It’s a seller’s market, but how long will that last?

While 2019 got off to a slower start than the record-breaking 2018, we anticipate an active M&A environment through the coming year, based on the factors in this introduction, as well as  buyer and seller behaviours in our recent transactions, and the traction we are experiencing on our live mandates.

There is an abundance of cash to be deployed by strategic buyers and private equity firms alike; the U.S. economy still has legs; and interest rates remain low and may go lower.

Competition for high-quality targets is intense, which means sellers are commanding high prices. It is a seller’s market.

Global economic uncertainty is prevailing, however, and we seek to close deals quickly while conditions remain favorable. We are closely monitoring bellwethers, including the yield curve, corporate earnings, wage pressure, trade disputes and slowdowns outside of North America.

From a seller’s perspective, the window to exit is closing. Those that choose to delay should be ready to wait a few years, through a possible slow down or outright recession, while hoping that company performance holds up during that period. Considering a typical mid-market sale process takes 9-12 months to close, prudent sellers will prioritize M&A initiatives in 2020.

For a more detailed analysis, read our white paper, available in pdf below.

Case Studies

GrowthGenius is an AI-assisted sales prospecting service provider for B2B businesses, based in Toronto. The company needed financing to fund its rapid expansion. Raising equity was unappealing because of the high cost of dilution, so the founders sought out a debt solution. After meeting with multiple lenders, they selected FirePower, whose efforts to get to know the founders, understand the business, and tailor a loan structure that worked for the company and its owners proved to be the difference.

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