Does a lower-middle-market M&A deal really close every day in Canada?
Canada's lower-middle-market — companies with $10 million to $50 million in revenue — is a vibrant hub of mergers and acquisitions activity, and industry observers note that a transaction in this segment closes daily across the country. Analysis of M&A data from 1999 to 2024 supports the claim and offers valuable insights for business owners and advisors.
The data behind the claim — from March 1999 to September 2024, Canada likely recorded 50,000 to 80,000 total M&A transactions, averaging 2,000 to 3,100 deals a year. The lower-middle-market is an estimated 20% to 30% of that activity — 13,000 to 19,500 deals, or 510 to 765 a year, equal to 1.4 to 2.1 deals per day. Reference points include a record 3,512 transactions in 2017, 815 deals in Q1 2023, and 1,715 foreign acquisitions of Canadian firms in 2018.
What drives the daily pace
- Strong valuation multiples — across 79 Canadian deals ($10M-$50M revenue, $1M-$5M EBITDA), the median MVIC/EBITDA was 8.8x and MVIC/Net Sales 1.05x, with cannabis retail (13.2x) and technology (18.3x) commanding premiums
- Diverse sector activity — cannabis retail, technology (a $27.1M IoT deal at 18.3x EBITDA), transportation and healthcare sustain deal volume
- Global interest — 1,715 inbound foreign deals in 2018, drawn by Canada's economic stability and resources
- An expert advisory ecosystem — accountants, lawyers, tax, wealth and, most critically, M&A intermediaries keep deals closing efficiently
What it means
- For owners — with about 12% median EBITDA margins and strong multiples, selling now can maximize value, while delay risks missing peak valuations
- For advisors — valuing intangibles (e.g., $23.8M goodwill in a healthcare deal) demands specialized expertise, and the 8.8x EBITDA benchmark helps guide clients
Caveats — downturns (2008-2009, 2020) likely fell below one deal per day, offset by peaks like 2017; unreported private deals add uncertainty but likely raise the true count.
Key facts: daily lower-middle-market M&A in Canada
About 50,000 to 80,000 total Canadian M&A deals since 1999; lower-middle-market averages ~1.4 to 2.1 per day
Median multiples (79 deals): 8.8x MVIC/EBITDA and 1.05x MVIC/Net Sales; ~12% median EBITDA margin
Premium sectors: cannabis retail (13.2x) and technology (up to 18.3x EBITDA)
Strong, resilient deal flow makes timing and expert M&A advice critical
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or financial advice. Consult qualified advisors regarding your specific circumstances.
