At first glance, Q1 2022 was a challenging quarter for Canadian M&A. Between January 1 and March 31, 406 transactions were announced, representing a 34% decrease compared to Q1 2021 and the lowest Q1 deal volume since 2018.* Understandably, some business owners who were contemplating potential M&A strategies are wondering if they have missed their window of opportunity.

Fortunately, the context behind this data is more encouraging. The slowdown in Q1 2022 versus Q1 2021 was largely expected, due to last year’s record deal volume. Much of the Q1 2021 activity resulted from a backlog of transactions that were delayed due to the COVID-19 pandemic. Furthermore, the middle market continues to make up a vast share of overall deal activity, with most transactions with disclosed values during Q1 2022 between $5 – $100 million.**

For business owners, the key takeaway is that the M&A market is both healthy and active enough to support well-executed strategic initiatives. Strategic and financial buyers remain aggressive in their search for quality acquisitions, buoyed by record levels of capital to deploy, while many entrepreneurs are more receptive to selling after two years of economic disruptions. Rather than focusing on headline figures, companies contemplating an M&A transaction should focus on developing strategies that enable them to stand out in today’s competitive market.

We can help! Raintree Corporate Finance is the investment banking arm of Raintree Capital. Our team has extensive experience assisting entrepreneurs with a sale or acquisition of a business. Through proper planning and preparation, our team can guide a business owner through the entire process of a transaction.

If you are contemplating a transaction and are looking for advice, please do not hesitate to reach out and contact us.

*Source: FP Advisor, accessed June 29, 2022.
**Source: Ibid.