Canadian M&A market seeing flurry of available assets
By OGJ editors
HOUSTON, June 6 -- An estimated $2.8 billion (Can.) of assets and companies were put up for sale during the first quarter across Canada, marking the largest quarterly value in 3 years.
Sayer Securities Ltd. principle Frank J.D. Sayer of Calgary said his statistics include those assets and companies that were publicly announced as being for sale and excluded assets and companies in the process of a silent auction.
Of the assets and companies on the public sales block, the first quarter volume was more than four times higher than the previous quarter and a big jump over the average 2001 and 2002 quarterly values of $1.1 billion.
"Many of the companies putting assets up for sale were avid buyers over the last 2-3 years, and they are now rationalizing their portfolios. The high selling prices for assets and companies over the winter of 2002-03 also contributed to the increase in the number of vendors attempting to tap into the market," Sayer said.
In addition, some US companies were precluded from selling anything in Canada until lately because of US securities and accounting rules.
The $2.8 billion in value represented production of 102,715 boe/d. Properties accounted for $2.1 billion of this total. The rest was for companies that announced they were either available for sale, or were "seeking ways to enhance shareholder value."
The asset packages had production ranging from 32 boe/d to 27,000 boe/d, and an average value of $137.6 million, while corporate packages had a narrower range, from 285 boe/d to 8,088 boe/d, with an average value of $66.7 million.
US-based companies that were buyers in recent years, such as Marathon Canada Ltd. and Vintage Petroleum Canada, had some of the biggest asset packages up for sale. These packages accounted for 41% of the total production for sale in the first quarter.
Many small public Canadian companies having production of up to 3,000 boe/d also put themselves up for sale, Sayer said.