Canada: Whither Tech M&A 2016?

According to a recent MergerMarket Group report, the first 11 months of 2015 saw global deal value reach USD $3.88tn, surpassing global deal value for the entirety of 2014. At a glance, it seems the last month of 2015 actually saw an increase in the growth of deal value with the closing of four deals, each valued at over USD $50bn. A major pharmaceutical takeover deal worth a reported USD $183bn served to cap of a year touted by the Wall Street Journal as "the Biggest M&A Year Ever."

By November's end, Technology, Media, & Telecoms (TMT) led all sectors in global deal value with USD $537.4bn in reported deals worldwide. Astoundingly, this grand total doesn't account for deals closed after November, including a significant merger in Canada's telecommunications sector, or the acquisition of a European CRM business by a major consulting firm.

The resurgence of the TMT M&A market, and the start of the new year, have led many experts to put on their forecasting caps and predict whether the recent rise of TMT M&A suggests that, as Barbra Streisand sang, "happy days are here again," or whether, as the Sinatra classic goes, we've "heard this song before."

MergerMarket Group: 2016 outlook

The 2016 Outlook Report published by MergerMarket in concert with R.R. Donnelley VENUE® states that 2015 saw global M&A activity "set a breakneck pace", and highlighted the month of November as the "biggest-ever in deal history." Rather than offering prognostications of their own, the authors of MergerMarket report relied on interviews with, and survey responses from, Banking, VC, and Private Equity Executives and other professionals based on the U.S., Europe, and Asia-Pacific.

The majority of respondents, some 64%, predicted continued high M&A volume in the technology sector in 2016, 60% of all respondents thought Asia Pacific would receive more attention in 2016. The report suggests that as consumers become accustomed to higher standards of technology goods and services, "firms will seek to meet those needs through targeted investments."

Among those respondents who predicted slow growth or stagnation in technology related M&A activity, Europe was often mentioned as an at-risk region. Respondents cited continued debt pressures, unstable political and regulatory systems, rising interest rates, and the crises over Russia and Syria as factors supporting their predictions that Europe would be outpaced by other regions, namely North America and Asia-Pacific.

Deloitte: the Deloitte M&A Index 2016

Deloitte's 2016 M&A Index provides several factors the company predicts will influence global M&A performance in 2016. Chief among these is divergence in monetary policies. According to Deloitte, "in the US, the market is widely expected to have already priced in the gradual increases to the Federal Reserve interest rate." Although Deloitte does not expect "major shocks in the debt market," the company suggests that the increased cost of credit "could lead to a slowdown in the issuance of acquisition related bonds which globally stands at USD $282bn, a 15-year high."

With specific regard to TMT M&A activity, Deloitte suggests that the threat of disruptive innovation will continue to impact "the traditional products and markets of many companies", and that as a result, those companies "are launching venture funds to seek and invest in new sources of innovation, which could lead to smaller, but more strategic deals," as well as, "participation in cross-industry strategic alliances and venture investments."

Although the report does not provide any grand predictions, Deloitte expects that in 2016 financial service companies will continue to launch venture funds to tap into the Fintech sector, alternative lending and crowdfunding platforms will begin to acquire competitors in order to expand into new markets, and Asia-Pacific will continue to be a major player after recording over double (USD $224.3bn) the total TMT M&A deals completed in 2013 (USD $103.3bn).

Fortune: what the 2015 merger boom means for the 2016 stock market

In an article published January 4, 2016, Joshua M. Brown, CEO of Ritholtz Wealth Management, former broker, and columnist for Fortune Magazine's Market Intelligence section asks whether 2015's triumphal M&A year should serve as a "sell" signal to market participants.

Brown points out that by mid-December, "the total value of M&A deals involving U.S. acquirers in 2015 topped $2 trillion for the first time ever," and cites deals such as the proposed Dow Chemical and DuPont's merger as examples. When combined with foreign M&A activity such as Anheuser-Busch InBev's acquisition of SABMiller, Brown states that "global total [M&A activity in 2015] neared $4.7 trillion." However, despite the overwhelming heights reached in 2015, and the fact that "past M&A peaks have tended to occur at the top of stock market cycles, not long before steep downward slides," Brown concludes that "it's premature to declare a market top."

As support for his prediction, Brown offers analysis of the two most recent major corrections in the Tech M&A market. The original .com bubble, Brown states, was epitomized by the AOL-Time Warner merger of 2000, which Brown describes as an "an empire building exercise" in which old-media titans allowed new-media upstarts to take over using little more than elevated stock prices as currency. The inflated value of that deal, Brown concludes, "turned out to be representative of a broader tech bubble, which burst soon thereafter."

The more recent M&A boom of 2006-2007, according to Brown, "was fueled almost entirely by debt." As a result, Brown states, "every company, no matter its size, was both a potential target and a likely acquirer." That trend, too, says Brown, was a symptom of a bubble.

With regard to the current state of the M&A market, Brown's position is that TMT M&A activity is "driven by reluctant pragmatism rather than irrational exuberance," a claim he suggests is evidenced by the fact that "CEOs are entering into marriages of convenience with competitors out of desperation to preserve margins or rationalize costs." Concluding, Brown suggests that although increased M&A activity is likely to occur near the end of a bull market, currently "we're seeing companies pairing off from a position of weakness, not strength, at prices that don't seem euphoric."

Forbes M&A: hot and frothy; 2015/2016 M&A outlook recap

In its comprehensively titled write-up, Forbes M&A describes the current state of the broader M&A market as ""frothy," and predicts that high levels of activity will continue "at least through 2016." With respect to TMT M&A, Forbes' emerging tech specialist, Steve Andriole, plainly states that "record-setting technology M&A – at extremely high valuations" seen during 2015 "reminds [him] of the other valuation bubble".

Andriole predicts that although the current TMT M&A boom will continue through 2016, "valuations will crash by late 2016 – early 2017." Hedging his statement slightly, Andriole suggests that high value M&A activity in specific segments of the TMT sector (particularly digital security and cloud integration services) will likely continue "well into 2017 and 2018."

Andriole utilizes a business technology trends-driven model to derive his predictions. Although he acknowledges that his approach is biased toward and "overvalues subject-matter expertise" above financial metrics. Andriole concludes that "the key to predictability is technology and its market."

The author would like to thank Bert Riviere, articling student, for his assistance in preparing this legal update.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions