M&A Summary: Q1 2019 - Manufacturing

M&A transaction volume involving Canadian manufacturing businesses experienced a moderate decline during the last four quarters through Q1-19 (L4Q19), with 65 deals announced or closed during the period. This represents a slight downtick from the 68 transactions announced or closed during 2018, but continues a multi-year decrease in Canadian Manufacturing M&A volume.

Recent declines in Canadian manufacturing transactions was likely impacted by factors and end-market drivers that increase the risk profile of manufacturing companies. Examples include rising debt levels in Canada, volatile equity markets, geopolitical uncertainty, changing cross-border trade dynamics and slowing economic growth.

Progressing through 2019, macro factors will continue to have an impact on the manufacturing M&A landscape, raising the threshold for due diligence and the strategic vision required to consummate a transaction. However, the growing number of business owners seeking succession transactions, and substantial debt and equity capital that must be deployed, are expected to support continued transaction opportunities. Business owners with reasonable value expectations should continue to see opportunities to transact with buyers despite an uncertain economic environment.

For a global perspective, read our latest quarterly global mid-market M&A review where we offer a view of how the M&A market is evolving – and where it appears to be heading.