M&A Market Update – Q4 2020
• M&A activity in the North American agriculture industry increased from Q3 2020 to Q4 2020, both in i) disclosedtransaction value of $3.5 billion to $4.3 billion, and ii) number of transactions of 89 to 97.
• However, disclosed transaction value in Q4 2020 decreased significantly from Q4 2019, $4.3 billion compared to $7.3 billion, respectively.
• While the increase over Q3 2020 indicates continued cautious recovery from COVID-19, total transaction value in 2020 of $13 billion was still down significantly from $17.8 billion in 2019.
• M&A activity in Q4 2020 was predominantly driven by industry operators (i.e. strategic buyers) who accounted for the vast majority of total deal volume during the period, however, private equity buyers still remain active and are closing deals with ample capital to deploy.
• The majority of transactions in the agriculture landscape Q4 2020 were in the food products sub-sector, whichcomprised 88.7% of the disclosed transactions. There was also notable deal volume in the agricultural servicessub-sector. M&A activity in these sub-sectors is reflective of operators making strategic acquisitions to diversify product offerings, increase scalability and expand business models into new channels.
• The largest disclosed transaction in Q4 2020 was McCormick & Company Inc.’s acquisition of The Cholula FoodCompany Inc. for $800 million. Another notable transaction in Q4 2020 was the joint acquisition of Clearwater Seafoods Inc. by Premium Brands Holding Corporation and a coalition of Mi’kmaq First Nations for $746 million.
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