Acquisitions by foreign firms dominate top M&As

Deal to buy Clearwater Seafoods is an outlier among biggest 2021 transactions on BIV list

Most of the top five deals on BIV’s Biggest Non-Mining Mergers and Acquisitions of 2021 list (https:biv.com/lists) highlight continuing interest in B.C companies by large companies outside of the country, with four of the five transactions representing foreign acquisitions of domestic enterprises.

Value: $3.3 billion

Industry: Casino gambling

Deal: Apollo (NYSE:APO) acquisition of Great Canadian Gaming (TSX:PL)

The New York–based firm acquired the Canadian gambling company, which operates 26 casinos across Canada, including River Rock Casino Resort in Richmond among others. In a transaction that was completed nearly a year after its announcement, Apollo boosted its initial bid from $39 per share to $45 per share, a value large institutional holdout investors would support. The acquisition came after a difficult two years for Great Canadian Gaming as pandemic restrictions limited revenue, resulting in a nearly $70 million loss over the two quarters preceding the acquisition’s completion.

Value: $1.25 billion (US$1 billion)

Industry: Technology,
application software

Deal: Diligent Corp. acquisition of ACL Services Ltd.

Creating one of B.C.’s most recent tech unicorns, New York-based Diligent Corp. acquired Galvanize, formerly known as ACL Services Ltd., to create the world’s largest software-as-a-service company focusing on governance risk and compliance. Originally founded in 1987, ACL underwent a renewal, bringing on new executives to help reinvent the organization. After raising US$70 million in private equity deals, it pursued more investment capital and attracted the interest of potential buyers. 

Value: $831 million

Industry: Forest products

Deal: Drax Group PLC (LON:DRX) acquisition of Pinnacle Renewable Energy Inc. (TSX:PL)

U.K.-based Drax Group PLC bought Pinnacle in one of its latest steps towards its goal of producing eight million tonnes of wood pellets by 2030. The deal has been criticized by some groups concerned that it gives Drax a monopoly in B.C.’s wood pellet sector. Post-acquisition, Drax has full or partial control over half of B.C.’s wood pellet mills.

Value: $537 million

Industry: Fishing

Deal: FNC Holdings LP, representing a coalition of Mi’kmaq First Nations and Premium Brands Holdings (TSX:PBH) acquisition of Clearwater Seafoods

FNC Holdings LP and Premium Brands Holdings acquired all of the outstanding shares of Clearwater Seafoods for approximately $537 million. FNC Holdings will become 50 per cent owners of Clearwater and will hold Clearwater’s Canadian fishing licences within a fully Mi’kmaq-owned partnership. The First Nations Finance Authority will provide funding to the coalition of Mi’kmaq First Nations in connection with the transaction. The strategic investment puts the First Nations coalition into a leading global position in the seafood industry, with the largest holdings of shellfish licences and quotas in Canadian fisheries.

Value: $419,922,500 (US$419,922,500)

Industry: Technology; Semiconductors

Deal: Canon Inc. (TYO:7751) acquisition of  Redlen Technologies Inc.

Japanese camera producer Canon acquired B.C. microchip producer Redlen, expanding its stake by 15 per cent in the company, which it first acquired in 2018. Redlen specializes in semiconductors used in medical imaging. The acquisition comes as Canon continues to raise its profile within the medical device industry with the intention of increasing revenue 40 per cent in the sector by 2040.