Corporate Finance in Atlantic Canada

Commentary on corporate finance issues for small- & mid-market private companies in Atlantic Canada

Posts Tagged ‘Atlantic M&A

Acadian Maple sold

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https://www.thechronicleherald.ca/business/local-business/authentic-seacoast-acquires-acadian-maple-345788/

The Chronicle Herald is reporting that Authentic Seacoast has acquired Acadian Maple Products from the Allaway family.

Acadian Maple is a Halifax-based supplier of maple products, including its popular-with-bus-tours Tantallon retail location.

Authentic Seacoast is a Guysborough-based collection of businesses owned by Glynn Williams.  Williams is well reported as the Toronto businessman who fell in love with Guysborough and has been active in building food & beverage businesses in the town. http://authenticseacoast.com/meet-glynn/

Written by Dan Jennings

August 28, 2019 at 12:05 pm

Central Building Supplies sold to Kent

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http://www.cbc.ca/news/canada/nova-scotia/sale-building-supplies-business-change-1.3874402

Antigonish, NS-based Central Building Supplies is being sold to Kent Building Supplies.  Owner Steve Smith is selling his 7 locations to Irving-owned Kent, effective Jan 1.

Another example of strategic buyer consolidation in an industry.

Written by Dan Jennings

December 3, 2016 at 2:49 pm

NewNet sold

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https://news.samsung.com/global/samsung-acquires-rich-communications-services-business-from-skyview-capitals-newnet-communication-technologies

Bedford, NS’s NewNet Communication Technologies has been sold to technology giant Samsung.  NewNet is a provider of “rich communications services” to mobile data networks.

Originally named NewPace, NewNet was acquired by Skyview Capital in 2014, who have now sold it to Samsung.

Written by Dan Jennings

November 16, 2016 at 8:17 am

Source Security sold

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http://www.newswire.ca/news-releases/allied-universal-purchases-canadas-source-security–investigations-600382701.html

Halifax’s Source Security & Investigations (owned by Ron Lovett) has been sold to Allied Universal.  Allied Universal in turn is the result of a mega-merger earlier this year (Aug/16) of AlliedBarton and Universal Services.   Allied Universal claims to be North America’s largest security force.

Another example of industry consolidation and a vendor selling to a strategic buyer in his industry.

Written by Dan Jennings

November 8, 2016 at 2:00 pm

Posted in Announced Transactions

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Continuing high M&A levels in the SME space

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bdo-ma

The attached slides from one of our recent M&A presentations highlights the reasons for the continuing high levels of M&A activity in the small & medium-size business space:

  1. there is no shortage of capital available;
  2. historically low cost of capital (both debt & equity);
  3. lack of organic growth in the economy;
  4. baby boomer demographics (and the lessening of internal family business succession).

In our view, these key indicators point to elevated levels of M&A activity in the near- to mid-term.

Written by Dan Jennings

October 2, 2016 at 4:14 pm

CarteNav sold to EIC

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http://www.stockhouse.com/news/press-releases/2016/08/08/exchange-income-corporation-completes-acquisition-of-cartenav-solutions

Halifax’s CarteNav Solutions has been acquired by Winnipeg-based Exchange Income Corporation (“EIC”).

According to the news release, the purchase price was up to $17 mil including an earnout.  CarteNav’s intelligence, surveillance & reconnaissance software should be a good fit with Provincial Aerospace, the St. John’s-based maritime surveillance firm that EIC acquired last year.

Written by Dan Jennings

August 8, 2016 at 11:45 am

Posted in Announced Transactions

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J&H Industries sold to Irving-owned Kent

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http://www.theadvance.ca/news/local/2016/7/7/irving-confirms-lay-offs-at-j-and-h-industries-.html

The Queens County Advance is reporting that Irving-owned Kent Building Supplies has acquired J&H Industries in Liverpool, NS.   The business operates a hardware store and roof truss manufacturer.

Congratulations to the Sloan family.

Written by Dan Jennings

July 8, 2016 at 9:30 am

Posted in Announced Transactions

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Congrats to Clark Toyota in Fredericton

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http://www.foxrocks.ca/local-news/2016/06/17/owners-of-clark-toyota-sell-the-fredericton-dealership

Congratulations to the Clark family in Fredericton, NB on closing the sale of their Toyota dealership.  The purchaser was the Girvan family, owners of Acadia Toyota in Moncton.

For readers of this blog, you know that this is yet another example of the rapid consolidation of the Canadian new car dealership sector, which is happening all across Atlantic Canada.

Written by Dan Jennings

June 19, 2016 at 11:29 am

Congrats to Bulletproof Solutions

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http://www.bulletproofsi.com/gli-acquisition-of-bulletproof/

Fredericton’s Bulletproof Solutions has been acquired by New Jersey-based Gaming Laboratories International.  GLI intends to expand Bulletproof’s IT services business to the gaming, lotteries and voting machine sectors.

Written by Dan Jennings

June 1, 2016 at 11:03 am

Posted in Announced Transactions

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Business valuation is much more than financial statements

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When we’re starting a business valuation assignment, we are often asked why we want a relatively long list of information (i.e. much more than just five years of year end financial statements).

The reason we ask for a collection of financial and non-financial information is that a business valuation is attempting to predict how the market will value the business, and the buyers in the market don’t just consider the financial statements.

The value of a business is driven by 3 primary factors:

  1. Annual cash flow.  Every buyer asks for the last 5 years’ financial statements, but history is only a guide to the future.  In addition, historical cash flows have to be normalized for non-recurring or discretionary items.
  2. Multiple or rate of return.  How the market perceives risk in that cash flow stream impacts the multiple to apply to that cash flow.  While there is no such thing as a risk-free business, the market perceives different levels of risk in different industries (and even within the same industry), and that qualitative risk assessment has an impact on value.
  3. Capital.  How much capital will be required to buy and operate a business is critical to the price a buyer can afford to pay for a business.  For example, high inventory levels that may not be all financeable by an operating line will mean a buyer will need more equity to finance inventory, and that will impact price/value.

If your accountant is valuing your business by only considering the financial statements, then perhaps you should have a discussion with a valuation/M&A advisor.

Written by Dan Jennings

July 23, 2015 at 5:24 pm