In our 2012 M&A market outlook we predicted a positive recovery for M&A, based largely on 2H 2011 deal flow. Much of this activity is currently being generated in Canada, while the rest of the market seems to be slowing.
According to a report in the Globe & Mail, Bay Street is besting Wall Street in everything from stock sales to loans to bond underwriting. The volume of new stock sold by U.S. companies in 2012 is down 48%. The decline in Canada is only 10%, according to the report. In a recent poll conducted by PricewaterhouseCoopers, a quarter of Canadian CEOs said they were planning a merger or acquisition, more than double the global average of 12%. Much of the current activity comes from the resources industry, with oil, gas and mining making up the lion’s share of Canadian deals.
Firmex counts Royal Nickel, SEMAFO, Quadra FNX, First Coal and IC Potash Corp as customers in the mining space. Quadra FNX used Firmex Virtual Data Rooms to facilitate their acquisition by Poland’s state-controlled copper miner, KGHM Polska Miedz for $CDN3.5 billion, while First Coal used Firmex to facilitate their sale to Xstrada for $CDN147 million.
In the U.S., the financial crisis continues to impact recovery. According to Thomson Reuters, investment-banking fees are down 30 percent, across all industries, from where they were last year.