M&A Summary Q2 2019 - Manufacturing

August 07, 2019

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Deals involving Canadian manufacturing businesses continued to decline during the last four quarters through Q2-19, with 61 deals announced or closed during the period (15 of which came during Q2-10). This represents a decrease from the 68 transactions announced or closed in 2018, and a continued slowdown in transaction volume relative to the prior few years. Macroeconomic factors including geopolitical uncertainty, pending tariffs and volatile equity markets has led investors to be selective in deploying capital and engaging with Canadian manufacturing businesses. The manufacturing industry in Canada has experienced slowed export demand and weak global trade volumes, directly relating to the U.S.-China trade dispute.

Progressing through the second half of 2019, macro-factors will continue to play an important role on the M&A landscape in Canada. Investors will carefully monitor and continue to be selective in transacting with Canadian manufacturing businesses, however, renewed optimism surrounding the resolution of geopolitical issues, the large number of business owners seeking ownership succession and the significant supply of investable capital should act as a catalyst for more deals in the industry in the near future.

Select Manufacturing Transactions - Q2 2019

Target

Buyer

Date

Transaction Description

Telwater PTY LTD.

Bombardier Recreational Products (TSX:DOO)

5/1/2019

Bombardier Recreational Products (TSX:DOO) entered into a definitive agreement to acquire 80% of Telwater Pty Ltd, a manufacturer of aluminum boats.

Hydrogenics Corporation (NasdaqGM: HYGS)

Cummins Inc.(NYSE:CMI)

6/28/2019

Cummins Inc. (NYSE:CMI) entered into an arrangement to acquire an 81.4% stake in Hydrogenics Corporation (NasdaqGM:HYGS), a manufacturer of hydrogen generation products, for approximately US$230M.

Carmanah Technologies Corporation (TSX:CMH)

Trimin Capital & TMH Capital Corp.

5/7/2019

Trimin Capital & TMH Capital Corp acquired the remaining shares of Carmanah Technologies, a manufacturer of energy optimized LED Lights, for CA$96.7M.

McCloskey International Limited

Metso Corporation (HLSE:METSO)

6/10/2019

Metso Corporation, a Finnish mining equipment manufacturer, acquired McCloskey International, a soil equipment manufacturer for CA$460M.

Buyer Target Geography

Deals announced

Deals involving Cadnadian Business

Please contact our Corporate Finance team to learn more about these transactions.