INDUSTRIES SERVED

Energy, Environment & Natural Resources

Industry Overview

With Canada being a resource based economy, this industry is characterized by vibrant M&A activities, strict government regulations, and technological innovations that drive changes in production methods. This industry can be divided into two segments: wholesale, trade and manufacturing – which includes Petroleum Refining, Coal Mining, Sand & Gravel Mining, Metals Mining, Oil & Gas Field Services and Extraction – and utilities, which includes Electric Power Transmission, Natural Gas Distribution, Renewable Power, and Thermal Power.

The energy, environment & natural resources industry is also characterized by its high barrier to entry, due to the fact that companies often require high capitals and assets for operation. This effectively reduces the threat from competition; nevertheless, for existing companies in the field, there is often very little product differentiation.

Lastly, companies in this industry often act as suppliers to other companies by providing natural resources and fuel that are essential for their business operations. For this reason, the industry plays a critical role in the economy. It is also noted that this industry is highly susceptible to macroeconomic factors such as political tensions and inflation.

Industry Drivers

Renewable energy

There is an increasing interest in renewables due to their decreasing costs and sustainability. As the volatility in natural gas continues, and as renewable energy and technologies become more cost-effective, renewables have become more competitive in the industry.

Government regulations

Companies in this industry are subject to various governmental regulations in methods of extraction, environmental considerations, safety provisions, etc.

Technology and Equipment Investing

Companies are redesigning their material processing techniques to improve efficiency and reduce environmental impacts. This allows them to gain a competitive advantage in an industry that sees very little diversification. However, this will also translate to higher R&D costs.

Selling an Energy, Environment & Natural Resources Company

Companies in the Energy, Environment and Natural Resources sector are unique because of a few characteristics, and as such, M&A opportunities in this field call for special considerations.. As Canada’s leading private market M&A Advisory firm, Beacon understands that selling a business is an important decision. A dedicated business owner not only seeks to extract maximum value from the sale of a business but also seeks to sell the business to a competent buyer who can continue the company’s legacy. Beacon has worked on valuation and M&A advisory mandates in the energy, environment and natural resources industry, bringing extensive experience in deal negotiation to the table. Our experienced advisory team will assist your business in navigating the entire sell-side M&A process.

As a business owner who is exploring a potential sale, it is important to understand some key factors specific to the energy industry that might impact the likelihood of a potential sale. These are factors that determine business attractiveness for potential buyers and investors.

Capital Intensity – This industry is generally capital intensive for a number of possible reasons, including resource extraction, production, transportation, storage, etc.

High Barrier to Entry and Low/Moderate Competition – Multiple entry barriers, including capital requirements, economies of scale, access to natural resource reserves, government regulations and licensing, and mature status of the industry, have effectively reduced the size of competition that companies in this industry face.

Government Regulations – All companies in the chemical industry are subject to government regulations for environmental and safety concerns.

With 40 years of combined experience serving businesses within Toronto, Ontario, and abroad, the Beacon transaction team has extensive knowledge and experience successfully working for several automotive companies from a variety of industries. Whether it be a valuation or sale, our team can provide expertise and resources found only at larger corporations, paired with the personalized touch of our M&A Advisory team. Contact us today to get in touch with one of our advisors.