Canadian startups have a bit of an infamous reputation for building a great company, then exiting early, most often to a non-Canadian buyer. Our nation generally doesn’t benefit from this type of transaction.
Look no further than this week, when Techvibes broke the news that Salesforce was laying off up to one-third of Radian6 staff. The New Brunswick-born Radian6 was a Canadian success story that sold to Salesforce for more than $300 million last year.
All seemed well at first: the company maintained offices in three cities in the province and this year pledged to add hundreds of full-time jobs to the region. Then Salesforce acquired Buddy Media and starting removing jobs due to redundancies.
Fortunately, Canadian companies are looking to reverse this trend. According to a new survey from Ernst & Young, 44% of Canadian companies expect to acquire in the next 12 months—miles ahead of the 25% cited by their global counterparts.
More specifically, 35% of Canadian companies are poised to take advantage of Europe’s economic uncertainty. This compares to just 14% for global respondents.
“Canadian firms are looking to acquisitions to gain share in existing markets and, to a lesser extent, to gain share in new markets,” says Tony Ianni, Transaction Advisory Services Partner at Ernst & Young. “Canadian companies are also more inclined to look at mergers and acquisitions as a means of taking advantage of the Eurozone crisis, far more so than survey respondents from other countries.”