U.S. Companies Pursue Growth through M&A While Canada Consolidates
The graph displays total transaction consideration for U.S. and Canadian M&A transactions since 2019.
In the first half of 2019 the U.S and Canada were closely matched with approximately $2.1 billion of total consideration.
From the 2nd half of 2019 through 2020, Canadian M&A ground to a near standstill while U.S. activity remained robust.
The U.S. dominance was supported by large transactions like Curaleaf’s $949 million Select deal in Q1:20 and $830 million Grass Roots deal in Q3:20.
In Q1:21, activity in both countries spiked upward. U.S. activity benefitted from an increase in acquisitions of public companies including Liberty Health, Helix TCS, and Bluma Wellness. Canadian activity included a $353 million Canopy Growth divestiture of its ownership in Canopy Rivers.
Activity has accelerated in the second quarter with the recently completed $4.5B Tilray/Aphria megamerger in Canada and the $2.1B Trulieve/Harvest deal announced in the U.S.
Although consolidation among Canadian LPs in pursuit of positive cash flow is likely to continue, we expect the superior growth potential of the U.S. market to keep U.S. targets at the forefront of M&A activity.