M&A Summary: Q1 2019 - Manufacturing

May 14, 2019

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.

Select Manufacturing Transactions - Q1 2019
Target Buyer Date Transaction Description
Prepac Manufacturing Ltd. TorQuest Partners Inc. 03/14/2019 TorQuest Partners, Inc., a Canadian private equity firm announced that they will acquire Prepac Manufacturing Ltd. a Canadian manufacturer of home furniture.
Groupe Laperriere & Verrault Inc. Valmet Oyj 02/26/2019 Valmet Oyj, a Finnish manufacturer of pulp & paper products, acquired Groupe Laperriere & Verrault Inc.,
a Quebec-based manufacturer of water treatment and pulp & paper products, for $169M CAD
Dynex Power Inc. (TSXV:DNK) Zhuzhiu CRRC Times Electric (SHEK:3898) 01/18/2019 Zhuzhou CRRC Times Electric Co. (SHEK:3898), a
Chinese manufacturer of locomotive electrical components, acquired Dynex Power Inc., (TSXV: DNK) a Semiconductor manufacturer for $17.34M CAD.
Solacom Technologies Comtech (NasdaqGS:CMTL) 01/08/2019 Comtech (NasdaqgS:CMTL), a US provider of commercial communication systems, acquired Solacom Technologies, a Quebec-based safety communications manufacturer for $43.9M
Aeryon Labs FlIR Systems (NasdaqGS:FLIR) 01/02/2019 FLIR Systems (NasdaqGS:FLIR) a manufacturer of digital & thermal imaging systems acquired Aeryon Labs Inc., a manufacturer of aerial imaging systems for $265M CAD.

Buyer Target Geography

Deals announced

Deals involving Canadian-Business

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.

Horizon Issue

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