Trade and Innovation: Cross-Border M&A June 2018 Dr. Howard E. Johnson DBA, FCPA, FCA, FCMA, FCBV, CPA, CFA, ASA, CF, C.DIR Managing Director, Duff & Phelps Canada Limited

Disclaimer This material is for educational purposes only. It deals with technical matters which have broad application and may not be applicable to a particular set of circumstances and facts. As well, the course material and references contained therein reflect laws and practices which are subject to change. For these reasons, the course material should not be relied upon as a substitute for specialized advice in connection with any particular matter. Although the course material has been carefully prepared, neither Duff & Phelps nor the author accepts any legal responsibility for its contents or for any consequences arising from its use. © Howard E. Johnson, 2018 Howard.Johnson@duffandphelps.com 416-597-4500

North American M&A Activity Source: Capital IQ

Canadian M&A Activity Source: Capital IQ

Canadian M&A Activity Source: Capital IQ

Cross-Border M&A in Canada Source: Capital IQ

Cross-Border M&A in Canada Canadian Cross-Border Transactions by Region (Number of Transactions – 2017) Canadian Buyers Canadian Sellers United States Europe Asia/Pacific Other Source: Capital IQ

Cross-Border M&A in Canada Canadian Cross-Border Transactions by Industry (Number of Transactions – 2017) Canadian Buyers Canadian Sellers Materials Real Estate Information Technology Industrials Consumer Discretionary Consumer Staples Energy Healthcare Utilities Financials Telecommunication Services Not Specified Source: Capital IQ

Cross-Border IT M&A Source: Capital IQ

Summary Observations Still an active M&A market, driven by significant cash reserves among PE firms and corporate buyers Canadian firms are net buyers of foreign companies – regardless of the FX rate Acquisitions can be a substitute of in-house innovation, but Canadian firms are net sellers of IT

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