Although 67% of all of Canada’s merger and acquisition (M&A) activity in 2012’s first quarter was in Western Canada, B.C. is experiencing more moderate activity, according to a PwC report released Thursday.
“When we refer to the West that obviously includes the Prairie provinces and [B.C.],” said Vancouver-based PwC partner Jim McGuigan, managing director of PwC Corporate Finance. “There’s a little bit of a difference.”
According to PwC, B.C.’s deal values involving B.C. targets are up 11% this quarter over the same quarter last year, but volumes are down 17%.
McGuigan noted that B.C. is seeing a slowdown in M&A activity in the metals and mining sector since last year.
According to PwC figures, B.C. saw 35 deals in the sector at a value of $1.9 billion in the first quarter of 2012, compared with 51 deals worth a total of $2.55 billion for the same quarter of 2011.
“That sector can be pretty active and then it can fall off pretty quickly, and we’re comparing it to 2011 when the market was very active,” McGuigan said. “So there’s been a decline in activity, but it’s relative to a pretty strong recent past.”
McGuigan said that B.C. and Canada as a whole are seeing less private equity activity than historically right now, despite capital being available and acquisition prices being “very good.”
“There’s a lot of capital, but the sell side doesn’t seem to be accessing it right now,” he said. “So it’s probably an opportunity that’s not being taken advantage of.”
What’s ahead for B.C. on the M&A front?
“In mining on some bigger projects, we’ll probably see some international companies participate in the market – particularly companies from China, Korea and Japan,” McGuigan said.
He added that B.C. may see some M&A activity in the food sector, and that the real estate sector will likely remain strong.
