Vancouver mergers and acquisitions activity has come up off of a slow end to 2024, but the reason for increased activity may not particularly positive.
Despite relatively low interest rates, economic uncertainty caused by U.S. trade and tariff action could be pushing some business owners to sell their companies.
Industry experts also say it might be causing owners to hold off on selling their companies.
“Banks are apprehensive,” said Pino Bacinello, president of Vancouver-based Pacific Mergers and Acquisitions Inc. “One of the first questions they ask is how much of your product [is] coming from or going to the States.”
Businesses and sectors that rely on the use of U.S. products or that export products to the U.S. remain sensitive to change and vulnerable.
But that sensitivity is less related to tariffs themselves and more so the result of ongoing uncertainty, he said. And despite that, Vancouver’s overall M&A market performed well in Q1, potentially correcting a downward trend.
Data shows M&A deal volumes across Canada rose slightly to 649 in Q3 2024 compared to 595 in Q3 2023, according to a 2025 Canadian M&A outlook by PricewaterhouseCoopers LLP, which did not include data for Q4 2024. Deal values in that same time period rose dramatically by around $121.7 billion, surging from $50 billion to $171.7 billion.
This followed a substantial increase in values from Q2 to Q3 last year.
With the Canadian federal election now over, Bacinello said there is optimism around Q2 2025, despite the current economic climate.
“How do you make decisions in an uncertain environment? Makes it very difficult for these businesses to plan ahead and move forward,” he said.
As a result, risk profiles were higher in March and April of this year, said Justin Isaacs, partner at Sequoia Mergers and Acquisitions Corp., a Vancouver-based boutique M&A firm that closes about four to five deals per year.
Deal flows and the quality of deals were lower last year compared with 2023, he said, adding that some clients are holding off on selling their companies.
“We’ve got five deals under LOI (letter of intent), so deals are still getting done,” he said, highlighting their deals typically take around nine months to close. “There’s always going to be a market for good companies.”
In the first half of 2025, PwC expects the Canadian M&A market to continue on a slightly upward trajectory, with activity increasing as the year goes on. Uncertainty around tariffs could lead to transaction delays, and Canadian companies setting up offices in the U.S. to mitigate risk.
