Chartered Business Valuators Predict Increase in M&A Activity: CBV Institute 2024 M&A Outlook Survey
Chartered Business Valuators Institute ("CBV Institute" or "the Institute"), a not-for-profit valuation professional organization that provides training and accreditation in business valuation and leads the Chartered Business Valuator (CBV) profession, announced today the results of its 2024 M&A Outlook Survey.
On the heels of tepid M&A activity in 2023 as dealmakers wrestled with interest rate hikes, inflation, geopolitical pressures and economic uncertainty, the Institute's 2024 M&A Outlook Survey shows expectations of increased activity. The survey, which was fielded among CBV Institute members who were involved in M&A transactions in 2023, finds that nearly six in 10 (58 per cent) respondents expect M&A transaction activity to increase in Canada over the next 12 to 24 months, as compared to 2023. When asked about sector-specific changes, the following were identified by CBVs as the most likely to experience higher levels of M&A activity over the coming 12-24 months, as compared to 2023:
- Industrial products and services
- Health care
- Technology
"As experts in assessing the value of businesses, CBVs bring unparalleled expertise and discipline that is critical to understanding the true financial health of a business prior to an M&A transaction as well as providing trusted perspective throughout transaction execution," said Dr. Christine Sawchuk, MEd, EdD, CPA, CA, CBV, President & CEO, CBV Institute.
Cross-Border M&A Activity Expected to Rise
Starting in 2022, the surge in interest rates in both Canada and the U.S. prompted a contraction in the deal market, as purchasers adopted a more cautious approach to their investments due to considerably elevated borrowing costs.
While deal flow remained relatively flat in 2023, abating economic pressures, high cash availability in the U.S. and a strong supply of Canadian companies may give reasons for optimism in 2024. According to the 2024 M&A Outlook Survey, half (50 per cent) of CBVs anticipate that cross-border M&A transaction activity involving Canadian companies will increase this year and 37 per cent expect it to continue at the same pace as 2023.
Deal Size
- While most (58 per cent) CBV respondents anticipate higher M&A activity, only one-third (34 per cent) anticipate increased average deal sizes in the next 12 to 24 months. Approximately half of respondents (48 per cent) expect average deal sizes to remain similar.
Buyers and Sellers
- The most likely sellers? Fifty-seven per cent of respondents identify private companies as the most likely to experience higher transaction volumes, followed by private equity portfolio companies (36 per cent).
- The most likely buyers? CBV respondents rank private equity firms as most likely to experience a growth in transaction activity (55 per cent). Expectations for private company buyers are divided ? 42 per cent expect approximately the same activity, while 40 per cent expect higher buying activity from private companies.
This survey was developed in close collaboration with Dr. Howard Johnson, DBA, FCPA, FCA, FCMA, CPA, CFA, ASA, CF, C.Dir., FCBV, Canadian Market Leader and Managing Director in Kroll's M&A Advisory Practice.
Survey Methodology
The 2024 M&A Outlook Survey was conducted by CBV Institute between January 10, 2024, and January 17, 2024. The online survey was completed by CBV Institute's members who were involved in M&A activity in 2023.
About CBV Institute
CBV Institute is a not-for-profit accreditation body and professional oversight organization leading the Chartered Business Valuator profession, Canada's only designation dedicated to business valuation since 1971.
CBV Institute takes pride in its rigorous training and accreditation standards. With 4,000 members and registered students across Canada and around the world, the Institute is dedicated to advancing the profession in the public interest and upholding the highest standards of business valuation practice through education, accreditation and governance.
For more information on CBV Institute, visit: www.cbvinstitute.com
About the CBV Designation
The Chartered Business Valuator (CBV) designation is a globally recognized business valuation accreditation and the benchmark of excellence in the profession. Holders of the prestigious CBV designation have the skills and expertise to meet the challenging and ever-evolving dynamics and complexities of business valuation. The integrity of the CBV designation is grounded in CBV Institute's world-class Program of Studies and Membership Qualification Examination. Stringent Institute standards are upheld through annual professional requirements, including adherence to a Code of Ethics, participation in a practice inspection program, and continuing professional development requirements.
CBVs are internationally recognized by Courts, tribunals, and securities regulators as experts in business valuation and related financial matters.
For more on the CBV accreditation, visit: www.cbvinstitute.com/become-a-cbv/
Find a CBV through the CBV Institute Membership Directory: https://cbvinstitute.com/find/
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