M&A Summary: Q3 2019 - Manufacturing
November 14, 2019
During the third quarter of 2019, M&A volume in the Canadian manufacturing industry increased to a total of 22 deals - seven more than were announced or closed during the prior quarter. On an aggregate, the trailing four quarters through Q3-19 (L4Q19) saw 68 transactions closed or announced, which is consistent with 2018. Despite political uncertainty in Canada and globally, ongoing trade tensions, and an imminent economic slowdown, investors still appear to view Canada as an attractive market for investment and potential growth in the manufacturing sector.
As we move into the final quarter of 2019 and prepare to enter into 2020, there are positive signs suggesting the M&A market for manufacturing companies in Canada will remain active. The ratification of the United States, Mexico, and Canada Agreement (USMCA) and easing of trade tensions between the U.S. and China, for example, should prove to be beneficial for Canadian manufacturing businesses. These factors, among others, help to improve the outlook for companies in a wide range of sectors and simply make it easier to close M&A deals. Transaction volume in 2018 and 2019YTD has been lower than in the prior few years, but the persistent combination of investment capital requiring deployment as well as business owners that need to exit should result in a continued churn of M&A activity in the manufacturing sector.
M&A Summary: Q3 2019 - Manufacturing
| Date |
Target |
Buyer |
Deal Description |
Commentary |
| 09/10/2019 |
BioVectra Inc. |
H.I.G. Capital, LLC |
Mallinckrodt plc (NYSE: MNK), a global biopharmaceutical company, today announced it has entered into a definitive agreement to sell its wholly owned subsidiary BioVectra Inc. to an affiliate of H.I.G. Capital, a leading global private equity investment firm, for approximately $250M CAD. |
This transaction allowed Mallinckrodt to divest a non-core business, while providing HIG Capital LLC with an opportunity to support BioVectra with its experience and expertise with other biomedical companies in their portfolio. BioVectra is expected to generate robust organic growth as they are completing major capital expenditure programs to significantly expand capacity and the company is positioned to capitalize on growing demand for their services. |
| 08/01/2019 |
Prevtec Microbia Inc. |
Elanco Canada Limited |
Elanco Canada Limited, a manufacturer of medications for animal health, acquired Prevtec Microbia Inc., a biotechnology company, for $100M CAD. |
By acquiring Prevtec and bringing the Coliprotec line into Elanco's swine portfolio, Elanco will look to expand registration to other key geographies. The transaction also brings Prevtec's research and development programs to Elanco's pipeline.BNP PARIBAS acted as financial advisor to Prevtec Microbia Inc. |
| 07/23/2019 |
Therapix Biosciences Ltd. (NasdaqCM:TRPX) |
Destiny Bioscience Global Corp |
Destiny Bioscience Global Corp, a manufacturer of cannabis-derived pharmaceutical-grade products, signed a letter of intent to acquire Therapix Biosciences Ltd. (NasdaqCM:TRPX), a specialty clinical-stage pharmaceutical company, for approximately $64M CAD. |
The transaction will create a combined company that focuses on Therapix's proprietary IP and related technology and assets pertaining to all clinical stage pharmaceutical applications and Destiny's genomics-based breeding techniques and development capabilities. |
| 08/12/2019 |
TSO3 Inc. (TSX:TOS) |
9402-4874 Québec Inc. |
9402-4874 Québec Inc., a subsidiary of Stryker Corporation (a medical technology company), entered into a definitive arrangement agreement to acquire TSO3 Inc. (TSX:TOS), a manufacturer of sterilization technology for medical devices in healthcare settings, for $40.6M CAD. |
This transaction provides liquidity opportunity for shareholders. In addition, it will provide TS03 Inc. with the expertise and the financial resources to best help it to achieve its full potential. |