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Deal volume dipped in the second half of 2021 after a roaring start to the year.Shannon Stapleton/Reuters

Canada’s capital markets hit new heights in 2021, setting records for the amount of money raised in initial public offerings, and for the total value of mergers and acquisitions.

Deal activity continued to flow freely for the second year in a row, with M&A transactions totalling US$349-billion across 4,558 deals, according to data from Refinitiv. That figure tops the previous record set in 2007, when deal value totalled US$312.2-billion.

BofA Securities Inc. was the year’s top M&A adviser, and worked on 27 deals involving Canadian companies with a total value of US$99.6-billion. The U.S.-based investment bank advised on the year’s two largest deals: Canadian Pacific Railway Ltd.’s US$31-billion acquisition of Kansas City Southern, and Rogers Communications Inc.’s proposed $26-billion takeover bid for Shaw Communications Inc.

Of the top five financial advisers, BMO Capital Markets, which placed second in deal value at US$91.9-billion, was the only Canada-based adviser.

Deal volume dipped in the second half of 2021 after a roaring start to the year. There were more than 1,200 deals in each of the first two quarters of the year, but fewer than 1,100 transactions in the third and fourth quarters. Even so, those figures were still high historically.

“At the beginning of the year there was general M&A activity, but also a catch-up,” said Sarfraz Visram, who heads the Canadian and international M&A group at BMO Capital Markets. “There were deals that were put on the back burner at the outset of COVID that sort of came back to life.”

Even with fewer deals, the fourth quarter of 2021 had the year’s second-highest quarterly deal value, at US$93-billion. The biggest deal of the quarter was the Bank of Montreal’s proposed US$16.3-billion acquisition of Bank of the West from BNP Paribas. BMO Capital Markets advised its parent.

In the global IPO market, Canadian companies raised $9.1-billion across 50 issues. The former record was set in 1997, with $8.6-billion raised across 85 IPOs, according to Refinitiv data.

TOP BANKS FOR IPOs

Rank

Bank

Ranking amount ($ billions)

No. of issues

1.1

BMO Capital Mkts.

12

1.1

10

TD Securities

Scotiabank

1.0

12

1.0

RBC Capital Markets

13

.9

9

CIBC World Markets

TOP FINANCIAL ADVISERS FOR M&A

Adviser

Ranking amount ($U.S. bln.)

Rank

No. of deals

BofA Securities

99.6

27

91.9

BMO Capital Mkts.

40

Morgan Stanley

80.2

29

Goldman Sachs

72.9

33

72.2

Barclays

24

TOP YEARS FOR IPOs

Ranking value ($ billions)

Rank

Year

No. of issues

9.1

2021

50

8.6

85

1997

1999

8.0

47

7.4

2005

88

7.2

74

2004

TOP YEARS FOR MERGERS

Ranking value ($U.S. billions)

Rank

Year

No. of deals

2021

349.0

4,558

2007

312.2

3,556

2018

267.7

3,670

2000

249.6

3,018

249.4

2,594

2016

THE GLOBE AND MAIL, SOURCE: REFINITIV

TOP BANKS FOR IPOs

Rank

Bank

Ranking amount ($ billions)

No. of issues

1.1

BMO Capital Mkts.

12

1.1

10

TD Securities

Scotiabank

1.0

12

1.0

RBC Capital Markets

13

.9

9

CIBC World Markets

TOP FINANCIAL ADVISERS FOR M&A

Adviser

Ranking amount ($U.S. bln.)

Rank

No. of deals

BofA Securities

99.6

27

91.9

BMO Capital Mkts.

40

Morgan Stanley

80.2

29

Goldman Sachs

72.9

33

72.2

Barclays

24

TOP YEARS FOR IPOs

Ranking value ($ billions)

Rank

Year

No. of issues

9.1

2021

50

8.6

85

1997

1999

8.0

47

7.4

2005

88

7.2

74

2004

TOP YEARS FOR MERGERS

Ranking value ($U.S. billions)

Rank

Year

No. of deals

2021

349.0

4,558

2007

312.2

3,556

2018

267.7

3,670

2000

249.6

3,018

249.4

2,594

2016

THE GLOBE AND MAIL, SOURCE: REFINITIV

TOP BANKS FOR IPOs

Rank

Bank

Ranking amount ($ billions)

No. of issues

1.1

BMO Capital Markets

12

1.1

10

TD Securities

Scotiabank

1.0

12

1.0

RBC Capital Markets

13

.9

9

CIBC World Markets

TOP FINANCIAL ADVISERS FOR M&A

Adviser

Ranking amount ($U.S. billions)

Rank

No. of deals

BofA Securities

99.6

27

91.9

BMO Capital Markets

40

Morgan Stanley

80.2

29

Goldman Sachs

72.9

33

72.2

Barclays

24

TOP YEARS FOR IPOs

Ranking value ($ billions)

Rank

Year

No. of issues

9.1

2021

50

8.6

85

1997

1999

8.0

47

7.4

2005

88

7.2

74

2004

TOP YEARS FOR MERGERS

Ranking value ($U.S. billions)

Rank

Year

No. of deals

2021

349.0

4,558

2007

312.2

3,556

2018

267.7

3,670

2000

249.6

3,018

249.4

2,594

2016

THE GLOBE AND MAIL, SOURCE: REFINITIV

“I’ve never been so busy pitching and executing IPOs,” said Peter Miller, head of equity capital markets at BMO Capital Markets. “The momentum stocks really drove the technology sector, which allowed many companies [that] historically would have been too small to go public.”

Half of the 30 IPOs on the Toronto Stock Exchange that raised $50-million or more in 2021 were tech companies. While Mr. Miller anticipates another strong year in 2022, he does not expect to see a similar flurry of tech companies going public.

“The reason why that pipeline is lighter on technology is really because those companies that did want to go moved quickly,” Mr. Miller said. In 2022, he expects more activity from “companies that actually build something you can put in your hands.”

Mr. Visram also expects 2022 to be a busy year for M&A.

“Our pipeline right now is actually bigger than it was this time last year,” he said. He acknowledged that interest rate hikes could be a “headwind” that slows business down. The U.S. and Canadian central banks have indicated they may raise rates this year, to help counteract a spike in inflation.

“There are a few things that make us feel that the headwind isn’t going to be as strong as it used to be,” he said. “We’ve sort of learned how to do M&A by remote … This is always going to be a resource-intensive [business], but we’ve just become more efficient at executing M&A, and so I think that’s going to help.”

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 07/11/24 0:47pm EST.

SymbolName% changeLast
RCI-B-T
Rogers Communications Inc Cl B NV
-0.45%50.74
CP-T
Canadian Pacific Kansas City Ltd
-0.22%109.21
BMO-T
Bank of Montreal
-0.34%129.37

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