Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m F e b r u A r y 2 0 1 5 43 L e g A L r e p o rt \ M & A Pete Ryan M&A outlook 2015 There's lots going on outside of the somewhat shaky oil and gas business. By Michael McKiernan strong 2014 has merger and acquisition lawyers feeling bull- ish about prospects for the next 12 months, despite uncertain- ty in the critical resources sector. "When you think about the factors that are likely to lead to M&A, all the fundamentals are there," says David Woollcombe, a part- ner in the Toronto office of McCarthy Tétrault LLP. "Interest rates continue to sit at historic lows, and the U.S. economy that Canada is so linked to, is rebounding and growing at a stronger pace than ours. There is lots of money available to do M&A: on the debt side, banks are lending; but on the equity side, whether it's private equity money looking to be put to work or strong balance sheets for strategics, people have money. And to the extent that they don't, they can borrow it." The last year offered a chance for Canada's M&A market to display its bench strength, thanks to a disappointing return from the traditionally reliable stars in the natural resources field. Experts say M&A activity in mining, normally a bellwether for the broader Canadian market, was sedate. Meanwhile, landmark low prices in the oil and gas sector in January, which saw oil traded below $50 a barrel for the first time this decade and natural gas hit a two-year low of less than $3 per million British thermal units, ground M&A activity in the field to a halt, casting a pall over an otherwise solid 2014. Despite those difficulties, according to data from PwC Canada, overall Canadian deal volume in the first three quarters of 2014 increased by 20 per cent compared with the same period in 2013, while the total value of that M&A activity also surged by just over 17 per cent. According to Woollcombe, the boost in the former has been particularly good news for law firms. "Investment banks might focus on the dollar value of the deals because they are getting a percentage of that, but for law firms, it's the number of deals that is far more relevant to their levels of activity," he says. Emmanuel Pressman, who chairs the mergers and acquisitions practice group at Osler Hoskin & Harcourt LLP, says he was encouraged to see blockbuster deals sprinkled across a range of sectors in 2014. "There were big ones in pharma- ceuticals, retail, financial services, min- ing, consumer products, and technology . . . and there was also a very robust mid- market. It's always good to see diversity, as opposed to one particular sector driving the market," says Pressman. In Calgary, Canada's energy capital, Grant Zawalsky, the managing partner at Burnet Duckworth & Palmer LLP, says everyone is feeling the pressure created by the oil-price plunge: "We're on a bit of a rollercoaster right now. It was a really strong year, because there was such easy availability of capital, with a lot of acquisi- tions that were property and cash driven. Obviously, that all changed very dramati- cally with the sudden downdraft," he says. However, Zawalsky is keen to stress low prices don't have to mean a death sen- tence for oil and gas M&A. "With change, A

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