A recent pair of KPMG surveys revealed that nine out of 10 Canadian CEOs are considering acquisitions within the next three years to drive growth, with 41 percent planning major deals.
The findings come from KPMG International’s CEO Outlook, which surveyed global CEOs, and KPMG in Canada’s Private Enterprise survey of small and medium-sized businesses (SMBs).
Canadian CEOs ranked mergers and acquisitions (M&A) as their second-most important growth strategy, behind organic growth. Globally, CEOs placed M&A as their top priority. Among Canadian CEOs, 49 percent are considering deals with moderate impact, and only 9 percent do not anticipate making any acquisitions. Meanwhile, SMBs are less reliant on M&A but still active, with 34 percent planning significant acquisitions and 43 percent expecting moderately impactful deals.
John Cho, KPMG in Canada’s National Leader of Deal Advisory, noted that recent interest rate cuts and easing inflation are reviving the M&A market. “As the cost of capital eases, investors and corporates are becoming more confident about making acquisitions,” Cho said, predicting 2025 could be one of the busiest years for M&A.
For SMBs, private capital is a key strategy for growth. The survey revealed that 77 percent of SMBs are seeking long-term investors and prefer private capital over public markets due to the complexities of compliance and governance. Neil Blair, President of KPMG in Canada Corporate Finance Inc., emphasized that private capital has become more attractive due to the increasing burden of public market requirements.
SMBs are also focusing on creating value ahead of potential sales, with 79 percent looking for ways to boost company value and 81 percent believing that integrating generative AI into their operations could make them more appealing to buyers. Blair highlighted that businesses that embrace innovation, such as generative AI, are better positioned to succeed in the complex M&A landscape.
The survey results underline a growing appetite for M&A in Canada, with businesses of all sizes exploring strategies to leverage acquisitions for future growth.