Crosbie & Company Canadian Mergers & Acquisitions Report for Q4 2024

Stronger 2024 Culminates in Fourth Consecutive Quarter of M&A Growth 

As we sit today, 2024 may seem like a different time.  Following a weak 2023 Canadian M&A environment, the market turned and strengthened throughout 2024 with four consecutive quarters of growth in announced transactions.  This was despite tariff-threat road-bumps that emerged late in the year.   

Announced deals in Q4 totaled 685, a 5% increase from the previous quarter. Total announced deal value rose to $74B, a 12% increase from the previous quarter, bolstered by two deals over $10B. Market conditions underpinning these results included the expectation of easing interest rates, stabilizing inflation, active capital markets, firming valuations, as well as moderate growth supported by a strong US economy.

“2024 benefited from improved investment psychology that brought a lot of buyers and sellers back to the market.  This resulted in four consecutive quarters of growth, the first such stretch we’ve seen in over 5 years,” said Colin Walker, Managing Director for Crosbie & Company Inc.  “Despite the positive tone, we did have some pull-back late in the year due to post-election tariff concerns, particularly for companies exporting into the U.S.  Looking forward, tariff related uncertainty is now on people’s minds.  This will be a headwind until the Trump tariff policies and their impact get sorted out,” he added.

There were 13 mega-deal transactions (deals valued above $1B) announced in the fourth quarter totalling $58B in value. Two of these deals exceeded $10B in value, including the $20B take-private acquisition of Nord Anglia Education by a consortium comprising Neuberger Berman Private Markets, EQT, and the Canada Pension Plan Investment Board, a deal that underscores private equity's growing interest in the private education sector. In another $10B deal, Partners Group, together with co-investors Caisse de dépôt et placement du Québec and Ontario Teachers' Pension Plan, sold their majority stake in Techem GmbH. Other notable mega deals this quarter include Mubadala Capital’s $4.8B acquisition of CI Financial, Coeur Mining’s $2.3B takeover of SilverCrest Metals, and Vermilion Energy’s $1.1B purchase of Westbrick Energy.

Consistent with other quarters, mid-market transactions (valued below $250M) continued to dominate deal volume, accounting for 89% of all announced transactions and 9% of aggregate deal value. Quarter-over-quarter, both the number of announced mid-market deals and their total value declined by 5%, though they remained well within historical norms.

From an industry perspective, deal counts remained stable across most sectors that we track. Notable changes include Real Estate (-25) experiencing the largest drop as well Communication Services (-10). Conversely, increases were seen in Metals and Mining (+14), Information Technology (+13), Industrials (+11), Consumer Discretionary (+8), and Energy (+8). In terms of aggregate deal values, the Consumer Discretionary and Industrials sectors led with $20.7B and $12.7B, respectively, primarily due to two significant transactions exceeding $10B each.

Cross-border transactions remain a key driver of overall M&A activity, representing 44% of transactions and 63% of deal value. Despite looming tariff concerns, Canada-U.S. M&A continued to play a dominant role in cross-border activity, accounting for 65% of transactions and 33% of deal value.

Overview

• Deal activity continued its climb in Q4 with 685 transactions, a 5% increase compared to Q3 2024
• Activity is up 18% from the cycle low in Q4 2023
• Aggregate deal value ($74B) was up 12% driven by 13 mega-deals
• Cross-border M&A activity increased by 9% to 304 transactions representing $46B in value (63% of aggregate deal value)

Mega-Deals 

• There were 13 mega-deals (those over $1B) announced in Q4 2024 representing $58B in value 
• The largest deal this quarter was the $20.7B take-private acquisition of Nord Anglia Education by Neuberger Berman Private Markets, EQT, and the Canada Pension Plan Investment Board
• Precious Metals was an active mega-deal space with Dhilmar's $1.1B acquisition of the Éléonore Operation in Northern Quebec and Orla Mining's $1.1B acquisition of the Musselwhite Mine

Industry Sector Activity

• Deal count increases were seen across most industries, with Metals and Mining (+14), Information Technology (+13), Industrials (+11), Consumer Discretionary (+8), Energy (+8), and Health Care (+7) leading the pack
• Sectors experiencing the largest declines from the previous quarter include Real Estate (-25), Communication Services (-10), and Consumer Staples (-3)
• Services accounted for 44% of aggregate deal value, significantly above typical levels

Breakdown by Transaction Size

• Mid-market transactions (deal value below $250M) with disclosed values accounted for 89% of deals and 9% of deal value
• Mid-market deal value fell 5% quarter-over-quarter, while the broader market climbed 12%

Canadian Domiciled versus Foreign M&A Targets

• Acquisitions involving Canadian targets (i.e. what we refer to as Canadian domiciled deals) remained relatively flat, totaling 444 in Q4 2024, up from 398 in the fourth quarter of last year.  The mix of domestic vs. foreign buyers in these deals was ~72% which is unchanged from the prior quarter, while the cumulative value declined to $23B (from $38B in Q3 2024)
• In Q4 2024, Canadian firms made 502 acquisitions, including 321 (64%) that were domestic, totaling $11B. The remaining acquisitions involved foreign targets, amounting to $34B in cumulative deal value

Cross-Border Deals

• Cross-border deals represented 44% of overall deal activity and contributed 63% of total deal value in Q4 2024
• The outbound-to-inbound ratio for both deal count and value saw a significant increase from the previous quarter
• The U.S. remained the dominant cross-border M&A partner, accounting for 65% of total cross-border transactions, though its share of deal value dropped to a multi-year low of 33%

Deals by Provincial Domicile

• Ontario, was the most active province by deal count (156), representing 62% of all transaction value for Canadian domiciled targets in Q4 2022, up from 149 deals and 54% of value in the previous quarter
• Alberta experienced the largest drop in deals (16), while the rest of the provinces remained relatively consistent with the previous quarter
• Total deal value for Canadian domiciled transactions saw a significant drop from the previous quarter (and a return to more typical levels) due to lower valuations for Canadian domiciled mega-deals