U.S. investment banks blew away major Canadian players in two important deal-making categories in the first half of the year.
Goldman Sachs Group Inc. overtook BMO Nesbitt Burns Inc. as the top bank for equity financing in the first six months of the year, underwriting $2.3-billion for clients, according to figures from Thomson Reuters.
Just one mega-financing in the second quarter was enough to tip the scales for Goldman. That call to raise funds came from drug company Valeant Pharmaceuticals International to help pay for its $8.7-billion deal to buy eye-care business Bausch & Lomb Inc.
BMO managed 19 issues worth $2.3-billion in the six months to June 30, and RBC Dominion Securities followed with $2.1-billion. The table excluded self-funded, or self-led, deals, since banks typically lead their own deals.
On the mergers-and-acquisitions front, New York-based Morgan Stanley bested Canadian competitors, advising on eight deals worth $13.7-billion (U.S.) in the quarter.
The bank worked with acquirer Sobeys Inc. on the $5.8-billion (Canadian) deal for food business Safeway Inc.'s Canadian business. Sobeys, owned by Empire Co. Ltd., will become the country's second-largest grocery store chain through the purchase.
The Sobeys and Valeant deals helped shift the conversation away from the real estate industry, which dominated M&A in the first quarter of the year.
Initial public offerings in Canada have picked up this year, with a total of $2-billion (Canadian) raised in the first two quarters — more than double the $787-million that investment bankers had posted this time last year. RBC raised the most, at $561-million.
The investment-banking arm of Canada's largest lender also dominated two other categories. The bank raised $17.9-billion in the bond category and had a book-runner volume of $16.5-billion in syndicated lending.
(Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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