“This environment favours the prepared, ready to play offence and defence and using M&A to their advantage. It has the potential to unlock value and transform a business.” says Mr. David Savard, National Bank’s Global Head of M&A and Chair of Private Capital Coverage at National Bank of Canada.
Opportunities remain for buyers and sellers
While the last few months have been marked by a highly unpredictable macro and business environment, Mr. Savard notes that anticipation for sustained M&A activity remains high among market participants. Business owners and boards of directors remain constructive in terms of risk appetite and access to credit remains open. Furthermore, global private equity has about $2-trillion in ‘dry powder’ (the amount of capital committed but not yet deployed) to shop for companies around the world, including in Canada, a report by McKinsey notes. In this context, opportunities continue to exist for astute buyers and sellers in Canada—and despite the volatility, deals are still being done.
Goals vary, from increasing a customer or supplier footprint in new markets, to divesting non-core business lines or selling companies outright. Whatever the objective, M&A deals don’t happen overnight. Nor would a buyer or a seller want to rush the process.
In-depth preparation is essential for sellers to get the best value and for buyers to optimize transaction benefits without overpaying.
“You don’t want to be scrambling once a deal is almost ready to close due to insufficient due diligence and a lack of integration planning,” Mr. Savard says. “A lack of preparation, and inadequate legal and financial advisory support, can negate the financial and operational benefits that well executed M&A transactions can provide.”
A disciplined strategy is key
The challenge for many companies is a lack of in-house M&A expertise. Working with experienced partners can be beneficial for both buyers and sellers.
External advisors can assist sellers in determining their objectives and identifying the levers that will drive the best outcomes in a deal -from optimal process design and negotiation strategy through to transaction structuring and closing. For buyers, the goal is to integrate tailored M&A planning into broader growth objectives, with guidance on target selection, approach strategy and deal execution. Across both journeys, business owners are supported end‑to‑end by experienced advisors who bring the right expertise at the right time.
Over the years, National Bank has helped Canadian companies expand domestically and overseas as well as supporting international investors looking to acquire companies in Canada. To be relevant in today’s market, Mr. Savard says M&A advisors must foster global connections.
“We cover close to 1,000 funds worldwide, including private equity funds, family offices, direct-investing pension funds and all major sovereign wealth funds. And there’s a lot of interest in Canada, even in the current uncertain business environment."
Proper planning and disciplined execution, supported by experienced third-party legal and financial advisors, helps to minimize transaction risks. It also assists in cutting through today's uncertainty to identify and capitalize on buy- and sell-side opportunities.
“Those with well-designed M&A strategies can take advantage of volatility and complete beneficial deals while their competition remains idle,” Mr. Savard says.
He expects to see an increased pipeline of companies – across sectors – that are looking to buy, sell or find partners to grow.
Despite current volatility, there are always ways to seize opportunity. “The main message is that M&A remains a relevant and highly effective corporate development tool no matter the market. Businesses should ensure that they have the right team around them to support their growth ambitions.”