Canadian M&A
Industry Insights
SUMMER 2024

Learn more734 Canadian companies were sold in
1H 2024

85% of deals completed were under
CAD100 million in enterprise value

Executive Summary

Megadeals represented 81% of disclosed
deal value

2

Canadian M&A
UpdateCanadian M&A activity has decreased in both deal volume and disclosed implied enterprise value (EV) in 1H
2024. Sellers have been cautious of expected rate cuts and general economic conditions, leading to the overall
slowdown in deal activity in the first two quarters. In 1H 2024, 734 Canadian companies were sold, with thetotal disclosed EV amounting to CAD44.3 billion, indicating a 13% decrease in deal volume compared to 1H2023.

Canadian M&A Transactions
Implied EV

Number of Transactions
2,500

2,000
100,000

1,500

1,000

50,000

Number of Transactions

Implied EV (CAD millions)

150,000

500-2014

2015

2016

2017

For all data herein: All transaction values are in Canadian dollars (unless otherwise noted) andrefer to transactions with reported financial data. All transaction data refers to acquisitions ofmajority stakes (minority deals were excluded). M&A transactions in 1H 2024 include thosebetween January 1 and June 30, 2024.

2018

2019

2020

2021

2022

2023

1H 2023

1H 2024

Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available in
S&P Global Market Intelligence.

3

Canadian M&AUpdate

21 megadeals closed in 1H 2024, averaging $2.8 billion in EV, a decrease from 1H 2023, which had 28
recorded closed megadeals.* The largest Canadian transaction in 1H 2024 was the acquisition of Tricon
Residential for $12.1 billion by Blackstone Real Estate Advisors. Enbridge closed both the second- and thirdlargest Canadian megadeals in 1H 2024, which consisted of Dominion Energy Questar Corporation and FallWest Holdco for $8.9 billion and $5.8 billion, respectively.
Significant megadeals announced in 1H 2024 but not yet closed include Temasek Holdings, Brookfield
Corporation and Brookfield Renewable Corporation’s acquisition of Neoen S.A. for $13.4 billion; CanadaPension Plan Investment Board and Global Infrastructure Management’s acquisition of ALLETE for $8.6 billion;
and TPG Capital and Caisse de dépôt et placement du Québec’s acquisition of Aareon AG for $5.7 billion.

1H 2024 Large Closed Canadian Transactions
TargetTricon Residential Inc.

Buyer

Buyer Country

Enterprise ValueCAD Billions

Industry

Blackstone Real Estate Advisors L.P.

United States

12.1

Real Estate

Target Country
CanadaDominion Energy Questar Corporation

United States

Enbridge Inc. (TSX:ENB)

Canada8.9

Utilities

Fall West Holdco LLC

United States

Enbridge Inc. (TSX:ENB)

Canada5.8

EnergyEnerplus Corporation

CanadaChord Energy Corporation (NasdaqGS:CHRD)

United States

5.3

EnergyFuture Electronics Inc.

CanadaWT Microelectronics Co., Ltd. (TPE:3036)

Taiwan5.1

Information
Technology*Deals involving a Canadian company as the buyer or seller, with an implied EV of$500 million or more (minority deals excluded).

Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available inS&P Global Market Intelligence.

4

Canadian M&AUpdate

In 1H 2024 there were 734 completed transactions in the Canadian M&A market, down from 848 in 1H 2023.
The median deal value increased from $6.0 million in 1H 2023 to $7.2 million in 1H 2024, as deals under $50
million represented 78% of the deal count. Although megadeals represent only 6% of all transactions, theyrepresented 81% of the total disclosed deal value.
It should be noted that, since the values of many smaller transactions are not disclosed, the actual median deal
value is likely lower.

Number of Canadian M&A Transactions: Canadian Targets*(1H 2024) (Deal Volume)
194 deals
78%<$50 MM

$1,7044%

16 deals
6%$50 to $100 MM$1,1782%

24 deals
10%$100 to $500 MM$5,67413%

14 deals
6%*Only includes transactions with disclosed financial information.
MM denotes millions of Canadian dollars.

Value of Canadian M&A Transactions: Canadian Targets(1H 2024) (CAD millions)>$500 MM$35,723
81%Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available in
S&P Global Market Intelligence.

5

Public vs.
PrivatePrivate company M&A deals continued to represent the majority of North American transactions in 1H 2024,
representing 94% (also 94% in 1H 2023) of total Canadian deals and 98% (also 98% in 1H 2023) of all U.S.
deal flow. In 1H 2024, 29 fewer public companies were sold in North America than in the previous year.
Compared to 1H 2023, the total number of public companies sold in Canada decreased by 13 (41 sold in 1H
2024 vs. 54 sold in 1H 2023), while the U.S. experienced a decrease of 16 public companies sold (119 sold in
1H 2024 vs. 135 sold in 1H 2023).
The median 30-day takeover premium of Canadian public companies in 1H 2024 was 32% (a 17% increase
from the prior year); for U.S. public companies, the median was 33% (a 17% increase from the prior year). In 1H2024, the 30-day Canadian takeover premium trended below its 10-year average (34%), and the U.S. takeoverpremium was above its 10-year average (31%).

Public Companies Sold in North America
U.S. Public Companies Sold

Canadian Public Companies Sold

U.S. Median Premium

Canadian Median Premium

500

70%

450

60%

Number of Deals

50%

350
300

40%

250

30%

200
150

20%

100

Median Premium overTrading Price

400

10%

50
00%
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

1H 2023

1H 2024

Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available inS&P Global Market Intelligence.

6Valuation
Multiples

North American transactions experienced an increase in overall valuation multiples (where disclosed) in 1H
2024 compared to the previous full year. In particular, the average earnings before interest, taxes, depreciation
and amortization (EBITDA) multiple was 10.0x, an increase of 0.3x from 2023.
In 1H 2024, EBITDA multiples increased in most industry segments including, the consumer discretionary,consumer staples, energy, health care, communication services and real estate sectors. The information
technology industry experienced the largest decrease in industry multiples.

EV to EBITDA Multiples by Industry for Transactions in North America*
Consumer Discretionary
Consumer Staples
EnergyFinancials
Health Care
Industrials
Information Technology
Materials
Communication Services
Utilities
Real Estate
Unspecified**

2014
10.7x
12.0x
8.5x
12.3x
11.7x
9.7x
12.7x
8.3x
9.9x
9.7x
17.6x
4.1x

2015
9.9x
9.4x
8.8x
9.0x
12.7x
9.9x
13.1x
10.5x
14.9x
10.3x
19.2x
8.5x

2016
10.6x
12.1x
8.6x
12.1x
12.6x
9.1x
12.4x
7.8x
8.9x
11.1x
16.5x
10.5x

2017
10.0x
12.0x
13.1x
12.6x
13.7x
10.4x
13.6x
10.5x
9.7x
13.9x
17.7x
7.3x

2018
11.1x
11.5x
9.8x
10.4x
12.3x
10.3x
12.1x
10.7x
9.6x
11.8x
16.2x
8.3x

2019
11.3x
10.7x
9.7x
N/A
12.1x
10.9x
11.8x
9.8x
9.6x
10.1x
14.1x
7.0x

2020
11.6x
12.8x
4.1x
6.0x
14.1x
9.5x
10.1x
9.3x
11.0x
15.1x
19.5x
12.3x

2021
9.6x
10.3x
8.0x
8.9x
11.9x
10.9x
11.6x
8.6x
11.2x
10.5x
17.8x
5.7x

2022
10.9x
10.8x
7.9x
9.0x
11.3x
9.7x
12.5x
10.3x
14.3x
13.9x
20.6x
10.0x

2023
7.1x
15.6x
5.1x
N/A
8.8x
10.0x
14.4x
8.5x
10.3x
14.4x
16.8x
6.8x

1H 2024
7.6x
15.8x
5.6x
N/A
16.4x
9.8x
8.0x
7.1x
18.7x
9.3x
17.7x
6.1x

All Industries

10.7x

11.0x

10.9x

11.7x

11.0x

10.9x

10.7x

10.6x

10.8x

9.7x

10.0x

*Excludes multiples over 25.0x; figures are rounded, but the “All Industries” category uses
unrounded figures in its calculation.
**The Unspecified category includes transactions within a target company industry that S&P
Global Market Intelligence has not categorized.

Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available in
S&P Global Market Intelligence.

7

Industry
Sectors

Deals in the industrials and materials sectors were the most active in 1H 2024, with 142 and 128 transactions,respectively. In terms of EV, the largest deal in the two sectors was MMG Limited acquisition of Cuprous Capital,valued at $2.6 billion. Although similar in deal volume, the total deal value in terms of EV for the industrials andmaterials sectors totaled to $5.8 billion (average value of $41 million) and $4.1 billion (average value of $32million), respectively. The third most active sector was information technology, with a total of 78 transactions
amounting to $6.5 billion. The sector with the highest aggregate EV in 1H 2024 was real estate, at $13.3 billion– mostly attributed to Blackstone Real Estate’s acquisition of Tricon Residential.

Canadian M&A Transactions by Industry (1H 2024)

150
10050-Note: The unspecified category includes transactions within a target company industry thatS&P Global Market Intelligence has not categorized.

Aggregate EV

Number of Transactions

15,00012,0009,000
6,000

Aggregate EV(CAD Millions)

Number of Transactions

200

3,000
-Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available inS&P Global Market Intelligence.

8Cross-Border
Transactions

Acquisitions of Canadian companies continued to be predominantly domestic, with 473 of the 734 transactions(64%) in 1H 2024 completed by a Canadian buyer. Foreign and undisclosed buyers accounted for the remaining
261 transactions.
Canada experienced a net negative M&A environment, with Canadian companies acquiring fewer foreign-basedcompanies (258 transactions) than Canadian companies being acquired by foreign companies (261transactions) in 1H 2024. For the first time in the past decade, Canadian companies were net sellers from aglobal M&A perspective.

Canadian Cross-Border M&A Activity (1H 2024)
1,200
Number of Transactions

1,000
800
600
400
200(200)(400)
(600)
(800)
2014

2015

2016

2017

2018

Canadian Buyer of Foreign Target

2019

2020

2021

Foreign Buyer of Canadian Target

2022

2023

1H 2023

1H 2024

Net Transactions
Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available in
S&P Global Market Intelligence.

9Cross-Border
Transactions

U.S. and Canadian transactions remain the most active cross-border activity involving Canadian buyers andsellers. Despite a 16% decrease in Canadian buy-side transaction activity, there were several notable deals.
The largest deal was the $8.9 billion sale of Dominion Energy Questar Corporation to Enbridge.
European transactions were the second most active, with a total of 46 Canadian companies acquired in 1H2024, similar to 1H 2023. Acquisitions of European companies by Canadian companies decreased from 65in 1H 2023 to 62 in 1H 2024.
The number of Canadian buyers of Latin American companies decreased, with a total of 18 completed
transactions in 1H 2024 (compared to 25 in 1H 2023).
Representing 8% of the total transactions in 1H 2023, Canadian buyers of Asia Pacific-based companies
slightly increased to 9% in 1H 2024. Asia Pacific-based buyers of Canadian companies decreased to 7%,
from 9% in 1H 2023.

Canadian Cross-Border Transactions by Region (1H 2024) (Number of Deals)

Foreign Buyer of Canadian Target

Canadian Buyer of Foreign Target

13752%

4618%

187%

10%

5923%

261

100%

United States
EuropeAsia-Pacific
LATAM
Other/Unspecified

57%

146

24%

629%

247%

183%

8100%

258
Sources: S&P Global Market Intelligence as of July 8, 2024; Krollanalysis. All publicly disclosed transaction information available inS&P Global Market Intelligence.

10Looking Ahead
S&P 500 Cash Balances
Canadian deal volume and value in 1H 2024 declined compared to1H 2023. Expected rate cuts are incentivizing sellers to delay theirtransaction timelines—many awaiting for higher valuations as rates
decrease.
(USD trillions)

$2.5
$2.0
$1.5

$1.5

$1.4

2014

2015

$1.6

$1.7

2016

2017

$2.0

$2.0

2018

2019

$2.6

$1.0
$0.5
$0.0
2020

2021

2022

2023

Private Equity Overhang$700
Capital Raised (USD billions)

Despite the decrease in transactions from the previous half year,
Canadian M&A has shown to be resilient. With further rate cuts
expected in the balance of year and an abundance of capital in themarket, we believe the Canadian M&A space will be active for theremainder of 2024. However, the higher tax rate on capital gains,which took effect on June 25th, 2024, may cause hesitation amongsome sellers.

$2.9

$3.0

$3.3

$3.0

~$1,546

$600

$400

$414

$430

$1,500

$614

$580

$500

$100

$1,200

$536
$464

$900

$358

$367

$300
$200

$276

2015

$1,800

$600
$300

2016

2017

2018

2019

Dry Powder

2020

2021

2022

2023

$0

Cumulative Overhang (USD billions)

Corporations and private equity funds remain ambitious tocomplete deals that are accretive with high operational leverage.
Financial sponsors continue to explore creative transaction
structures to meet their risk-adjusted return. Both corporate cash
balances and financial sponsor dry powder are at a 10-year high,indicating that there is ample capital to propel deal activity.
Investors continue to seek profitable businesses where they candrive value — both strategically and operationally. Financial
sponsors are becoming less inclined to make excessively levered
investments and turning toward alternate sources of capital—
including the use of asset-based loans, preferred equity and coinvestments among private equity firms to reduce risk.

$3.5

Capital Raised11Select Kroll Corporate Finance M&A Experience
SELL-SIDE ADVISOR

Gum Products International

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired byhas been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired bya portfolio company of

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

a portfolio company ofhas been acquired byhas been acquired byhas been acquired byhas been acquired byhas been acquired byhas been acquired by
has acquired

BUY-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has acquired

has been acquired byhas been acquired byhas been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired byhas been acquired bya portfolio company ofNote: All trademarks, trade names or logos referenced herein are the property of their respective owners.

SELL-SIDE ADVISOR

a portfolio company of12

Canadian M&A Contacts
Howard Johnson
Head of Canadian M&A
Toronto+1 416 597 4500
howard.johnson@kroll.com

Devin Kennealy
Director, M&A Advisory
Toronto+1 416 361 6749
devin.kennealy@kroll.com

Stephanie Lau
Director, M&A Advisory
Toronto+1 416 361 6761
stephanie.lau@kroll.com

Jake Newman
Vice President, M&A Advisory
Toronto+1 416 813 4472
jake.newman@kroll.com

Calvin D'souzaBusiness Intelligence Services
Toronto+1 416 813 4406
cdsouza@kroll.com

Joel Bowers
Cyber Risk
Toronto+1 416 361 6742
joel.bowers@kroll.com

Matthew Holden
Compliance Risk and Diligence
Toronto+1 416 361 2592
mholden@kroll.com

Joshua Benn
Head of America M&A Advisory
New York+1 212 450 2840
joshua.benn@kroll.com

Stephen Burt
Global Head of M&A Advisory
Chicago+1 312 697 4620
steve.burt@kroll.com

Eric Coburn
Managing Director, Healthcare M&A
New York+1 212 450 2839
eric.coburn@kroll.com

Nicholas Collins
Managing Director, Technology M&A
Los Angeles+1 650 354 4020
nicholas.collins@kroll.com

Dafydd EvansManaging Director, M&A Advisory
London+44 207 089 4850
dafydd.evans@kroll.com

Alexandre Pierantoni
Managing Director, M&A Advisory
Brazil+55 11 3192 8103
alexandre.pierantoni@kroll.com

David LuManaging Director, M&A Advisory
China+86 21 6032 0608
david.lu@kroll.com

Andreas Stoecklin
Head of Europe M&A Advisory
Frankfurt+49 697 191 8466
andreas.stoecklin@kroll.com

Other Canadian Service Areas
Scott Davidson
Disputes and Investigations
Toronto+1 416 364 9719
scott.davidson@kroll.com

Global M&A Advisory Contacts

About Kroll
Kroll provides proprietary data, technology and insights to help our clients stay ahead of complex demands related to risk, governance and growth. Our solutions deliver a powerful competitive advantage, enabling faster, smarterand more sustainable decisions. With 5,000 experts around the world, we create value and impact for our clients and communities. To learn more, visit www.kroll.com.
M&A advisory, capital raising and secondary market advisory services in the United States are provided by Kroll Securities, LLC (member FINRA/SIPC). M&A advisory, capital raising and secondary market advisory services in theUnited Kingdom are provided by Kroll Securities Ltd., which is authorized and regulated by the Financial Conduct Authority (FCA). Valuation advisory services in India are provided by Kroll Advisory Private Limited (formerly, Duff &Phelps India Private Limited), under a category 1 merchant banker license issued by the Securities and Exchange Board of India.
© 2024 Kroll, LLC. All rights reserved.
The material in this report is for information purposes only and is not intended to be relied upon as financial, accounting, tax, legal or other professional advice. This report does not constitute, and should not be construed as
soliciting or offering any investment or other transaction, identifying securities for you to purchase or offer to purchase, or recommending the acquisition or disposition of any investment. Kroll does not guarantee the accuracy orreliability of any data provided from third-party resources. Although we endeavor to provide accurate information from third-party sources, there can be no guarantee that such information is accurate as of the date it is received orthat it will continue to be accurate in the future.