M&A Summary: Q4 2019 - Manufacturing

February 25, 2020

During the fourth quarter of 2019, M&A volume in the Canadian manufacturing industry increased to a total of 23 deals, one more than was announced or closed during the prior quarter. In aggregate, the trailing four quarters through Q4-2019 saw 73 transactions closed or announced, representing a slight increase over 2018. Despite a year of political uncertainty, ongoing trade tensions and an imminent economic slowdown, Canada has remained a resilient and attractive market for investment and potential growth within the manufacturing sector.

As we move into the first quarter of 2020, there are several signs that suggest the M&A market for manufacturing companies in Canada will remain active. The ratification of the United States, Mexico, and Canada Agreement (USMCA) and a trade agreement between US and China are generally positive indicators for Canadian manufacturing businesses. These factors bolster the outlook for the sector and help to reduce the risk profile for manufacturing business acquisitions. Greater stability, together with the available capital and appetite for growth through M&A that exists in today’s market, is expected to drive strong transaction activity into 2020.

Select Manufacturing Transactions - Q4 2019
Target Buyer Date Transaction Description
Kongsberg Maritime Contros GmbH AML Oceanographic Ltd. 2019-10-26 AML Oceanographic Ltd. entered into agreement to acquire Kongsberg Maritime Contros GmbH from Kongsberg Maritime ASKongsberg Maritime Contros GmbH develops, produces, and markets underwater sensor systems to detect dissolved gasses, such as hydrocarbons, CO2, and oxygen, as well as pH and total alkalinity (TA).
Marco Ltd. ATS Automation Tooling Systems Inc. (TSX: ATA) 2019-12-16 ATS Automation Tooling Systems Inc. acquired Marco Limited for £25 million, with up to an additional £7.3 million payable subject to an earn-out structure over the next two full fiscal years. Marco Ltd. manufactures yield control and recipe formulation systems for manufacturing and packaging operations.
Hibar Systems Inc. Tesla, Inc. (Nasdaq: TSLA) 2019-10-04 Tesla, Inc. acquired Richmond Hill, ON based Hibar Systems, an automated battery manufacturer for electrified vehicles. Terms of the acquisitions were not announced to the public.
Service Inter Industrie Magellan Aerospace Corporation (TSE:MAL) 2019-11-07 Magellan Aerospace Corp. acquired 100% of the outstanding shares of Service Inter Industrie (“SII”), an aerospace component supplier based in France. SII specializes in precision machining of civil and military helicopters.