Despite flatlining global technology mergers and acquisitions (M&A) volume year over year in 2012, Canadian volume was up 21% according to Ernst & Young‘s Global technology M&A update. The report highlights that risks such as incorrect valuation were top of mind as equities markets fluctuated and buyers believed many company values remained high. But deal volume held steady as macroeconomic pressures forced companies to clarify what’s important.
“Canada’s deal volume was very heavily weighted towards Q2 in 2012, during which time 84% of transaction volume for the year was recorded as the result of two mega-deals,” says Tony Ianni, Transaction Advisory Services partner at Ernst & Young. “But globally, companies were hesitant to engage in large, transformative deals in 2012. Both technology and non-technology sectors are continuing to learn how to harness new technology megatrends like smart mobility, cloud computing, social networking and big data analytics. “Technology companies are rapidly adapting to the needs of specific industries, while other industries are looking to take advantage of the evolving possibilities that technology enables. That will continue to drive smaller, more strategic deals.”
Despite continued macroeconomic uncertainty, the results of the report indicate there continues to be a broad-based need for transactions that help companies accelerate their adaptation to transformative technology.
“These technology megatrends are shaping and driving business in virtually every sector,” says Martin Lundie, partner and Canadian Media and Entertainment leader at Ernst & Young. “All businesses should really be taking a good look at where and how these trends are already affecting their business, and examine how they can make the most of these trends to grow.”
Ernst & Young is a platinum sponsor of Dx3, a conference taking place in Toronto this week that brings together technology providers and digital buyers for networking and business opportunities.
“It’s an exciting time for Canadian businesses that are both creating and using new technologies,” adds Lundie. “You never know what kind of innovation or deals are sparked when you bring people and businesses together to share ideas at conferences like Dx3.”