Using debt to finance your next acquisition
1Q17 Tech Exits – IPOs and M&A Remain Strong
Growth-stage technology companies are increasingly using debt to help finance strategic M&A. Ed Bryant of M&A Advisory Firm Sampford Advisors and Will Hutchins of Espresso Capital, a leading venture debt provider, discuss why.
Well-executed acquisitions can be an important complement to organic growth for growth-stage technology companies, enabling them to achieve critical scale faster and helping accelerate product development, speed market entry, and strengthen competitive position. But for companies that aren’t yet generating meaningful cash flow, finding the right acquisition financing – and enough financing – can be a challenge. Compounding that challenge is the fact that in M&A, speed matters. The ability to quickly secure financing is often a critical factor in ensuring a successful acquisition. With a variety of debt financing solutions now available, we review how the effective use of debt can complement other sources of funding and help technology companies raise needed capital within the tight time frames required by M&A processes.
Myth Busters – Do Canadian Tech companies sell too early?
The first quarter of 2017 was another good quarter for technology company exits. We saw a number of very high profile tech company Initial Public Offerings (IPOs) come to market which is extremely encouraging given the limited activity we saw in 2016.
On the merger and acquisition (M&A) side of things we saw an equally positive trend with the number of technology M&A transactions coming in at 638 for the quarter, a healthy increase over the prior two quarters.
In this article, I breakdown the first quarter technology IPO and M&A markets in North America in more detail and describe what I believe it means for the year ahead.
Why Canadian VC Investment Lags the US
We always hear from numerous people the complaint that Canadian businesses sell too early especially when compared to their US counterparts. It’s an interesting notion that is always raised when a sale of a large Canadian tech company happens – BlueCat Networks’ recent $400m sale is a good example.
Rather than just relying on hearsay, we thought that it was worthy of us analyzing the numbers to see if it is true that Canadian firms sell too early...
Record High M&A Activity to Continue in 2017
Given our recent post on LinkedIn about the breakdown of VC investment by Canadian city attracted over 4,000 views and a lot of comments, we thought it would be worthwhile to do a deeper dive on this topic...
1st Anniversary – What an amazing first twelve months!
2016 was an amazing year for mergers and acquisitions, especially in the technology sector. In tech, it was the highest M&A activity we have seen in north America in the last 15+ years. We believe many of the factors that drove this strong performance are in place to make sure 2017 is just as strong, if not better. In this blog, we will highlight some of these trends from 2016 and discuss why we think everything is in place for a very robust 2017.
M&A, VC Capital and IPOs: Key take-aways from our Tech Leadership Conference
Over the last twelve months we have really been able to prove our thesis that technology firms in Canada are in desperate need of quality M&A advisory services. We started this journey with an idea that our 25+ years of combined Wall Street experience could be a significant asset for many technology firms in Ottawa that are looking to acquire other businesses or working towards an exit and that has been proved over the last twelve months...
M&A: Why do Mergers & Acquisitions fail?
A couple of weeks ago we hosted our first ever Tech Leadership Conference. With approximately 100 attendees, it was great to see such broad participation from the leaders of many of Ottawa’s technology companies. We moderated three separate panels, focusing on M&A, the Venture Capital environment and IPOs. With a good mix of out-of-town experts and local CEOs and CFOs that had experienced these processes first hand, the panels covered these critical topics from both sides of the coin.....
M&A: Is there a value gap between the US and Canada?
Merger and acquisition activity is really picking up, especially in technology where many of the large tech companies have plenty of cash and are finding themselves losing market share to smaller more nimble competitors.
But while M&A is in the headlines a lot recently, for every two transactions that close, there's another transaction that doesn't.....
M&A: What to do when you get an inbound enquiry
We often get asked by our clients that are considering M&A, whether or not Canadian tech companies trade at a discount to their US peers. In a perfect market there shouldn’t be a difference between the two, but as we all know, markets are rarely perfect.....
The Canadian tech merger market has started the year off very strong, with $5.1bn of transactions compared to $3.1bn in all of 2015. In Ottawa we have seen a similar trend with 9 M&A transactions as of the end of June versus 10 for the whole of 2015.
But what’s driving this increased activity? A sizeable proportion of this deal activity is driven by what’s known as inbound M&A.....