B.C.’s top corporate finance deal value tumbles during pandemic

After 2018 spike, M&A deal values return to normal

The value of B.C. corporate transactions tumbled with the onset of the pandemic, according to data collected on Business in Vancouver’s list of the biggest corporate finance deals of 2020 (see biv.com/lists).

The average size of the top 80 stock and debt deals nosedived 48.2% to $193.7 million in 2020 from $375.7 million in 2019.

However, the decline could be less of crater and more of a return to normal. The average deal size on the stock and debt list had explosive growth in 2018, more than doubling over the year. The average deal value in 2020 was 8% greater than the average deal value in 2017, and returned the industry to the slow growth it was experiencing before 2018.

The 2018 surge in average deal value and the subsequent growth in 2019 could not simply be traced to a few outliers. There were twice as many billion-dollar deals in 2019 than in 2020, and the top deal value was similar to that of 2020.

The average non-mining merger and acquisition deal value has followed a similar pattern, posting rapid growth in 2018 only to come crashing down afterwards.

However, in the case of the province’s largest M&A deal value, 2018 was an anomaly. Deal value grew 77.1% in 2018 and lost much of that growth the next year, falling 37.8% in 2019.

Despite the pandemic, the average non-mining M&A deal value grew 12.8%, to $678.6 million in 2020 from $601.6 million in 2020.

However, the median non-mining M&A deal value did not enjoy similar growth. It sank 31% over the year. This suggests that larger M&A deals higher on the list grew while smaller deals occupying lower ranks on the list fell.

– Albert Van Santvoort