Among 180 Canadian companies interviewed by Greenwich Associates as part of its 2006 Canadian Investment Banking Study, 43 percent say they expect to engage the services of an M&A advisor in the coming year for a domestic transaction.
That proportion substantially tops the 33 percent of companies that actually engaged in domestic M&A activity between 2005 and 2006. The same trend exists in cross-border M&A, where the proportion of Canadian companies expecting to be active in the coming year increased to 32 percent from the 22 percent actually transacting in the 12 months leading to the 2006 study.
“In terms of expected M&A activity, our research forecasts the biggest demand among the largest companies in Canada,” says Jay Bennett, a consultant at Greenwich Associates. “Forty one percent of the TSE 300 companies interviewed for the study say they expect to use an advisor for a domestic transaction in the next 12 months and nearly two-thirds with a market capitalisation of over USD10 billion expect to do so.”
The research reveals a number of sectors that expect to be most active domestically: non-bank financials, metals and mining, paper and forest products, real estate, telecommunications, and utilities.