By James Langton

(January 9 – 15:00 ET) – Canadian investment dealers are having a hard time with many of their wholesale businesses, but the demand for M&A advice is soaring.

According to research from Toronto-based investment bank Crosbie & Co., 2000 was a record year for mergers and acquisitions.

The volume of M&A deals rose 5% to 1,297 in 2000, but deal value boomed to $23 4 billion, jumping 32% year over year.

Big deals helped drive up the totals, with 39 deals worth more than $1 billion hitting the Street, accounting for $154 billion of the total. This compares with 1999, which saw 22 deals worth more than $1 billion, for a $12 billion total.

By far, the biggest deal of the year was Vivendi SA’s $49.5 billion buyout of media and drinks giant Seagram Co., followed by Nortel Networks’ $11.5 billion purchase of Alteon WebSystems Inc., and Alcatel SA’s $10.8 billion deal for Newbridge Networks. All the others came in less than $10 billion.

The tech sector led the way, with 465 deals worth about $71 billion, up 28% from 1999, in the industrial products group. Nortel deals alone accounted for 30% of the tech sector, which in turn were responsible for two-thirds of the deals in the industrial group.

Energy was also hot, with total deal value more than tripling to $7.4 billion from 1999. The consumer sector was strong, thanks to the Seagram deal.

The financial group saw 136 deals up from 123 in 1999, although the value was down sharply to $14.5 billion from $27 billion in 1999. Only three sectors saw the number of deals decline year over year, gold, transports and merchandisers.

Cross-border activity also intensified in 2000, with two-thirds of the megadeals classed as cross-border transactions. Canadian firms bought $56.5 billion worth of foreign assets in 2000, up 141%. Foreign buyers spent $102 billion on Canadian assets, up 147% from 1999.

“The Canadian M&A market was exceptionally strong in 2000. Our deal flow continues to be very strong into 2001 but there is some question as to whether the market can sustain the pace experienced last year,” says Ian Macdonell, partner at Crosbie.

“While the major trends of globalization and industry consolidation are expected to continue, there is certainly cause for concern regarding the outlook for the North American economy and the availability of capital to finance acquisitions.”