Ask Grant

When it comes to the merger and acquisition (M&A) activity of small businesses in Alberta, particularly in relation to real estate, understanding any seasonal trends is crucial for business owners, investors, and advisors. While specific reports from the Alberta Real Estate Board may not directly address small business M&A, there are general insights and trends that can be observed.

General Seasonal Trends

Spring and Early Summer

• Increased Activity: Spring and early summer tend to be busier periods for M&A activity. This is often because businesses want to capitalize on the momentum of a new year and execute plans they have strategized during the winter months.

• Real Estate Market Correlation: In real estate, this period is traditionally active as well, with many property transactions occurring. This can indirectly influence business sales, especially if the business involves real estate holdings or relies heavily on location-based advantages.

Late Summer and Fall

• Steady Transactions: Late summer and fall can also be active periods for M&A. As businesses aim to close deals before the end of the fiscal year, there is often a push to finalize transactions. This is especially true if businesses want to reflect these changes in their annual reports.

Winter

• Slowdown in Activity: Winter typically sees a slowdown in M&A activity. This is due to several factors, including holiday seasons, weather conditions affecting logistics, and businesses focusing on year-end financials rather than new acquisitions.

Factors Influencing M&A Seasonality

• Economic Conditions: Economic stability or volatility can greatly impact M&A activity, sometimes overriding seasonal trends. For instance, a booming economy might see consistent activity throughout the year.

• Industry-Specific Trends: Different industries may experience their own cycles. For instance, technology firms might not adhere to the same seasonal trends as retail businesses.

• Regulatory Changes: Changes in regulations or tax laws can prompt businesses to accelerate or delay M&A activity, impacting seasonal patterns.

Insights from the Alberta Real Estate Board

While the Alberta Real Estate Board may not specifically track small business M&A, their data on property transactions can provide indirect insights:

• Market Health Indicators: Real estate trends often reflect broader economic conditions. A healthy real estate market can indicate a conducive environment for business transactions.

• Location-Based Decisions: For businesses where location is key, real estate trends directly influence M&A decisions. For example, if property values are rising, businesses might expedite acquisitions to secure favorable terms.

In conclusion, while there are general seasonal trends in small business M&A in Alberta, influenced by real estate and economic factors, the specifics can vary widely depending on the industry and current economic conditions. Business owners and investors should remain informed about both local and broader economic trends to make strategic decisions.