M&A Summary: Q4 2019 - Retail & Consumer Goods

February 25, 2020

After the decrease in Canadian retail and consumer goods M&A activity seen in Q3-2019 (57 deals, down from 68 in Q2-2019), deal activity remained consistent in Q4 with 59 deals involving a Canadian buyer or seller closed or announced.

Q4-2019 M&A activity in the retail and consumer goods space was primarily driven by two subsectors that, while largely fragmented are experiencing consolidation in full force. These are auto retail and retail pharmacies/healthcare. The investment thesis around industry consolidation is simple: improve investment returns/operational metrics by cutting redundant costs, improving buying power where possible, and increasing market reach primarily from a geographical perspective.

While these industries are expected to experience continued consolidation throughout 2020, the traditional school of thought around the M&A lifecycle would suggest an expected tipping point that will result in activity headwinds. At that point, the industry will comprise a smaller number of relevant groups controlling a majority of market share. Further, the remaining relevant parties will begin shifting their focus towards their core capabilities and improving profitability, or seek to exit the industry by other means.

With a forward look, Q1-2020 will remain highly active in these industries, as large groups around the country continue to fight for a larger piece of overall market share.

Select Retail & Consumer Goods Transactions - Q4 2019
Target Buyer Date Transaction Description
North Star General Motors The Jack Carter Auto Group 2019-12-19 "The Jack Carter Auto Group has acquired North Star General Motors. North Star operates two GM, Chevrolet and Buick dealerships, located in Cranbrook, BC and Creston, BC. BDO Transaction Advisory Services advised the owners North Star GM on the sale."
Edward Beiner New Look Vision Group Inc. 2019-12-02 Canada's largest optical company, New Look Vision Group, acquired substantially all of the assets of Coco Lunette Holding LLC, which carries on business principally under the Edward Beiner banner, a company known for its unique and original designer eyewear.
Grand Medicine Pharmacy Rubicon Pharmacies Canada Inc. (Owned by TorQuest Partners) 2019-11-25 Rubicon Pharmacies Canada Inc., a portfolio company of Toronto's Torquest Partners has acquired Grand Medicine Pharmacy, located in Hodgson, Manitoba.
Pacific Mazda Carson Group 2019-11-20 The Carson Automotive Group acquired Pacific Mazda, an independent dealership located in Victoria, British Columbia. The Carson Group operates 11 dealerships in Victoria and Vancouver, selling chiefly Ford brands as well as Jaguar, Land Rover and Mitsubishi.

Quarterly RBC deals involving Canadian businesses
Buyer & target geography (Canadian targets, buyers or both)
M&A activity (including deals announced)

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