For Canadian M&A, CIBC World Markets Takes Top Spot

Date: Tuesday, January 6, 2009
Author: Seeking Alpha.com

With 44 deals worth more than $45-billion, CIBC World Markets took the top spot among financial advisors to Canadian M&A in 2008.

RBC Capital Markets fell from first to second with $43.7-billion in 25 deals, while Merrill Lynch (MER) rose from 11th place in 2007 to round out the top three in terms of value, according to year-end data from mergermarket. JP Morgan (JPM) fell to 12th from second.

Ranked by volume, Scotia Capital took third spot with 24 deals worth approximately US$34-billion.

Deal volumes for North America fell by roughly 25% from 2007, with deal values declining 44%.

JP Morgan was the top financial advisors to global M&A by value in 2008 at $726-billion, followed by Goldman Sachs. Meanwhile, UBS had the highest deal count at 271, followed by KPMG.

“The dying days of 2008 have seen a wave of transactions fall apart as shifting valuations and sclerotic debt markets undermine companies’ ability to close deals,” mergermarket said. With a total of $513-billion worth of lapsed deals in 2008, the fourth quarter proved to be the hardest of all for dealmakers with 62% of the total lapsed value occurring in this quarter at $320-billion.

“The usually hectic final stretch that is the fourth quarter was symptomatic of the current economic climate, as dealmakers were left with little to do,” the firm said, noting that this was more evident in North America.

Mergermarket added that the value of global LBOs virtually crawled to a halt in 2008 for the private equity industry. There were no mega deals above $5-billion, compared to 2006 and 2007 that saw 14 and 20, respectively. Private equity firms were forced to walk away from 23 deals in North America with a total value of $101-billion. The most high profile of which was the failed $48-billion buyout of Canadian telecom giant BCE Inc.

Mergermarket said:

The Leverage in ‘Leverage Buy Out’ [LBO] has emphatically vanished. Although PE firms are still sitting on piles of money ready to invest, the returns promised to eager investors are simply not realistic targets in the current environment – it is a case of sit tight and weather the storm, or surrender high returns by sacrificing more equity to make deals happen.