M&A Summary: Q2 2019 - Manufacturing
August 07, 2019
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. |
Please contact our Corporate Finance team to learn more about these transactions.