CALGARY, A.B. – According to an article in the Financial Post, merger and acquisition activity in the energy sector is expected to rebound this year as oil prices stabilize and struggling Canadian companies continue to sell off non-core assets.
The Financial Post is reporting that Adam Waterous is leaving his job as Scotiabank’s head of global investment banking to start his own private equity company and bet on the next Alberta drilling boom. Waterous has predicted a very busy year as “legacy” companies continue to restructure and cut costs.
AltaCorp. Capital’s head of research Dirk Lever says he expects companies to increase their focus on their core assets, and take advantage of the rebound in oil prices to sell assets that aren’t as vital.
Christopher Sheehan, director of transaction research at global energy research firm IHS Markit is forecasting a recovery in both deal activity and value in in North America. According to IHS, deals worth almost $16 billion were locked up in Canada last year, an increase from only $6.6 billion in 2015.
There were 51 transactions, both sale of assets and corporate mergers, up from 43 the year before. The biggest was Suncor Energy Inc.’s acquisition of Canadian Oil Sands Ltd., worth $6.2 billion.
That’s still a far cry from the big M&A days before the oil crash, when international oil and gas companies were flocking to Canada to get a piece of its oilsands. Deal value peaked in 2012, when the Canadian oilpatch locked up 100 deals worth collectively more than $51 billion, according to IHS.