Private M&A: What Lies Ahead for 2020?

From fluctuations in the cannabis industry to Canadian regulators taking a more activist approach, the private M&A market in Canada is in a constant state of change. Based on the latest market research, the growth in total annual deal value that has persisted since 2009 shows no indication of tapering off. With an abundance of private capital competing for investments, we believe that private M&A in Canada will continue on its path of robust growth. The question is whether the North American economy will remain stable or if there will be any surprises.
 
Below are some M&A trends we’ll be watching closely in the months ahead as they may impact your business.

1. Tech and other high-growth companies are increasingly eschewing initial public offerings in favour of venture capital and private equity investment.
2. Canadian market terms are steadily becoming more seller-friendly, reflecting increased attention from U.S.-based and international buyers.
3. Contrary to the trend toward seller-friendly terms, representations and warranties are going farther and deeper as a result of the steady increase in the use of representation and warranty insurance.
4. Canadian regulators, like the Competition Bureau, are taking on a more activist approach and have recently challenged transactions that do not cross monetary thresholds for notification.
5. Consolidation and contraction in the cannabis industry are going to lead to a boom in related M&A.​