Will We See More Distressed M&A In Canada?

The term "distressed M&A" refers to mergers or acquisitions that are completed when the target company is facing insolvency or is already insolvent. In this article, Peter A. Saad and Gordon Chan of Loopstra Nixon LLP discuss the likelihood of an increase in distressed M&A deals for Canada over the next 12 months, and the various factors that may come into play.

Uptick in interest rates and tightening labour market conditions

As has happened in other parts of the world, there has been an uptick in interest rates in Canada. While there are currently a lot of businesses in Canada on low fixed rate interest loans in the 2–3% range, these loans are coming to maturity in the near future. With the looming maturity dates and inflation hitting the labour market in a significant way, these challenges will certainly put pressures on business operations.