The Canadian Investor - The 10 Greatest Acquisitions in Canadian and U.S. Stock Market History

Episode Date: June 29, 2026

What separates a good acquisition from a truly company-defining one? In this episode, Simon and Dan look at some of the best acquisitions in Canadian and U.S. market history — the deals that changed business models, unlocked decades of growth, created massive shareholder value, or quietly reshaped entire industries. From convenience stores and railways to software, social media, insurance, and e-commerce infrastructure, they break down why some acquisitions become legendary while others fade into the background. Tickers of Stocks Discussed:ATD.TO, SJ.TO, CNR.TO, TRI.TO, AAPL, GOOGL, META, MSFT, BRK.B, DIS, AMZN, NVDA, AMD Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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A stock is not just a ticker. At the end of the day, you have to remember that it's a business. Just my reminder to people who own cyclicals. Don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time. Welcome to the Canadian investor podcast.

I'm Simone Benjje. I'm back with Dan Kent. We have a fun episode today. So we'll be talking about the greatest acquisitions in Canadian history. Well, you'll be talking about those. And I'll be talking about the top five acquisitions in U.S. public markets. I think it'll be fun. We'll do it back and forth.

You have four. I have five on the U.S. the U.S. side and also just a few honorable mentions because there are some big acquisitions that happen in the U.S. And of course, this is subjective. Yeah. So clearly, let us know if you don't agree with these assessments, especially at least for me on the U.S. side, like especially number four and five, I had a lot to choose from. And spoiler alert, a lot of tech names. But it's, I think it's going to be a fun episode. I had took me quite a bit of time to do the research and go back to like original articles because I said I think I used a time frame of the last 50 years.

So the best one, the last 50 years for me. Yeah, it was this segment took quite a bit of time. I initially thought about it because we had talked about it a while that Tormont acquisition of AVL, that kind of generator housing and switchgear company. I kind of thought like that is a very good acquisition. Obviously it's too early to determine whether it will be as successful as a lot of the ones we'll talk about, but I kind of thought it would be a good segment to go over, you know, some of the bigger swings in Canada and then you obviously in the United States.

And the one thing, as you had mentioned, like, I'm sure we miss some. Like, it's very hard to nail this down precisely, especially in the U.S. market. The Canadian one was a bit more obvious, but it still took a lot of digging and, you know, going back to like you mentioned articles from like the 90s to kind of get prices and like the reasonings why and stuff. So yeah, if you have any opinions on, you know, ones you think are better, just let us know and maybe we'll dig into them and do a V2 version 2 episode. Yeah, exactly. And just before we get started, just some housekeeping here, you'll probably notice in the next couple of weeks that our podcast cover will change. So we're going over some rebranding here.

So we're close to having the new podcast cover finalized. So just be on the lookout. Don't be surprised. Just want to give people a heads up if they do see it. So they're like, oh, what's this show? It'll still say the Canadian investor on it. But you'll see a different podcast cover as well for the show that Dan Fos and I do, so our live recording that we've named the Canadian macro investor. So just be aware of those. There's going to be two different covers for that show and the one that Dan and I do. So just a little bit of housekeeping.

So let's get started. So Dan, you'll start since you have four and then we'll go back and forth. So you'll do one on the Canadian side. I'll do one on the U.S. side. Yeah, so the first one would be Alimentation Kustard buying Circle K. So I think this would be one that would be hard to debate as to whether or not it would be one of the greatest acquisitions from a Canadian company. So back in 2003, they took a pretty gigantic swing and bought Circle K from ConocoPhillips. Kustard is up around 6,500 percent from this point.

That wouldn't be including reinvested dividends. And this acquisition is mainly the reason why. So I'm pretty certain back then I kind of looked up market caps. They were like Custard was around a $500 million company. And that would have been in Canadian dollars. And it ended up paying just more than $1 billion for Circle K. So you're talking about more than twice the size of the company. And they are a company that has taken many big swings recently.

We have that, I can't remember that they had a French grocer they were looking to. acquire back to get a cold. Yeah. And then. Yeah. And seven and I. So this is not out of the norm for the company. This would have been the first huge acquisition they made.

And if you would think about an acquisition of this size for a company that's small at the time. If it did not work out, you'd kind of wonder out where they would be today. At the time, you kind of had a small time, Quebec, like corner store operator buying up a national U.S. chain. And now that U.S. chain is, is pretty much the main. driver of the business. I've witnessed at least like here in Alberta, they used to have a lot of Mac stores and that was kind of what they ran. They've pretty much turned all of those over to Circle

K's. You don't see those anymore. I don't know. Same for Ontario. Yeah. Yeah. They kind of eliminated that brand and, you know, a lot of them are, are Circle K's now. And the company mentioned the debt that they took on to acquire Circle K would be paid off with within 18 months, which at the time was pretty huge. Again, they're buying a company twice their size. They mentioned they were going to see around 50 million in cost savings in year one of the deal, and they went well ahead of that mark 77 million in the first year. And just before the acquisition, ConocoPhillips had planned to cut its Circle K workforce by over 30%. And when Cushstart actually acquired the company, they kept pretty much all of that workforce intact. I'm pretty sure this was a company that Conical Phillips, or this was kind of

an area of the business that Conoco just wanted to get away from as fast as possible. And digging up an article from back in 2003, it looks like Custard owned around 2,500 stores at the time with only around 200 of them being in the U.S. So they added more than 1,650 stores in the U.S. with this acquisition. And one of the biggest transformations from this deal, at least, you know, what I'm taking from these multi-decade old articles, is that prior to this acquisition, Custard was mainly just a convenience store. They didn't have a lot of fuel exposure. I don't even know if they had any. It was a very small part of the story prior to 2003. And once they acquired Circle K, fuel kind of

became the main driver. So it was pretty much a complete shift in business model. And the deal was heavily accretive. Looking back at it, it looks absolutely genius. Conoco was looking to dump the assets of the time. And they gave Kustard this asset at an absolute bargain. It added 44% growth to Custard's earnings per share pretty much right out of the gate. And the other interesting element here is Circle K had been pretty much tossed around for years. So it went through a ton of acquisitions, bankruptcies, etc. Went bankrupt in 1990, got bought up, and then it got bought and sold from what I read three or four times leading up to when Custard bought it.

So nobody wanted this business except them. And it's pretty safe to say if they do not make this act. They're probably nowhere near where they are today. It kind of changed the trajectory of the business, making it one of the larger companies in the country. They would go on to use the cash flow from this to just continue to acquire more and more over the years. And they've been one of the best acquisition-based companies in Canada for multiple

decades now. Yeah, exactly. And I mean, I was just looking at the returns for Joint TCI subscribers. And it's 8,500% since then. So let's just say that I don't think the returns would have been as good. And it's hard not to love what they did with the acquisition. And again, I think now today there's a bit more questions around grog just because Animal Cautassion Custard is a much larger company.

We've seen that sometimes there might be some regulatory hurdles to go through. If they're looking for acquisition, you mentioned the 7 and I acquisition that didn't end up going through. so they really need to be making large acquisitions to make the needle move, whereas back then they were a much smaller player. So just to give some context here, it's a very different business today than it was back then, not saying that there's not positive prospect for Kuchang in the future, but there are some legitimate questions as to where growth will come for sure. Yeah, you're just working with the law large numbers here and to kind of move the needle.

They've been, they've kind of been taking much bigger swing. both of them have failed. But yeah, we'll see what they do in the future. I know they kind of make smaller tuckins all the time, but they haven't really made a big push in a while. Yeah, exactly. Now, while the first one on my list, I don't know if everyone will guess this one.

There is some pretty massive ones that were home runs in the U.S. So the first one is Apple that bought an XT in 1997 for approximately 400,000. 27 million when the transaction was closed. So the acquisition was announced in December 1996 and closed in February of 1997. Buying Next fundamentally change Apple forever. And without it, it would be a much different company today. I would even argue that I'm not even sure Apple would be a standalone company if it didn't buy Next because Next was founded by Steve Jobs after he was housed it from the Apple board

in 1985, a bit in a coup attempt, and I think he was essentially ripped of his power and then just decided to resign after that. And buying Next meant that Apple had a new base for its modern operating system. So the MacOS or the Apple OS that we know today dates all the way back to the next acquisition. But Next also marked that Steve Jobs would return to Apple. And that's the other big factor here. And at the time of the acquisition, Microsoft was dominating operating system software with Windows 95. Actually, Windows 95 was like a revolutionary software. I remember it had like Windows, I think, 3.1 before that was really archaic and Windows 95 brought in like the start button. It really, yeah, it was really phenomenal compared to what there was at the time. I was

about 10 when it came out. So I do remember. And you must have been, you were, bigger though, right? Yeah, I was only like five or six years old, but I still remember the boot up screen, like what it looked like, like the big visuals thing in the middle with the nut. Yeah. Nostalgia there. Yeah, and they had basically the vast market chair.

And Apple was a really at a critical junker at the time because it was losing market share rapidly to Microsoft and losses were accelerating. It was definitely a risky deal, considering the state of things that was at the time. And it was

seen as some saw it positively and some were pretty skeptical on the deal and I was as I was looking at that here so fortune had an article where it was very did not see the deal as a good move from Apple I think it was written February 3rd 1997 so just going back and seeing those old school articles is pretty kind of cool doing this this reachers I must admit and in late 1997 Jobs took over as interim CEO. In 1998, Apple introduced the IMAQ, which became a massive hit. It really kind of paved the way to, again, the Apple we know today. And Steve Jobs would be named permanent CEO back in 2000.

And under Steve Jobs, of course, and using the next software as the backbone for their operating system, Apple release all the major products that it's known for today. Not all, but the vast majority of the, them. So think about the iPod, the early 2000s, the iPhone that came after that, the iPad. Those were all released under Steve Jobs and still are big reason that Apple's business is what it is today, especially when you start factoring in the Apple ecosystem and how sticky it is and why it's one of the most valuable companies in the world today. So again, without this acquisition, I think you can really make a case, especially the direction that Apple was going,

that Apple would either have gone bankrupt or would have been bought by another company. I think it would have been very unlikely. It would still be a standalone company and yet and even less so as valuable as it is today. Yeah. So it's kind of a software acquisition and probably a CEO acquisition. Yeah, which is kind of interesting because I do have one on the Canadian side that's very similar situation. But I didn't even know this had occurred. I didn't know that they kind of acquired.

bring them back on board way back then. Yeah, yeah. I remember, I think I had seen it from, there was a documentary on Steve Jobs, like, you know, some years ago after he passed away. And I definitely remember it. And as I was kind of looking and I was debating,

I actually had it third on the list, but then I just thought about how, you know, without Steve Jobs coming back, like Apple, I don't think really Apple is ever where it is today. So yeah, yeah, that's why I put it number one.

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So this one is, I guess I should have mentioned before we started, I did include kind of roll-ups, especially when it was like, you know, a core strategy of the business. So the next one would be Stella Jones, kind of getting into railroad ties and utility poles. So back in the early 90s, Stella Jones primarily started out as a wood treatment company. So they would pressure treat the utility poles and the railway ties so that they'd kind of survive, you know, decades out in the elements. And they did this for quite a while, but in 2001, they kind of made the realization that the industry was very heavily fragmented. And this is a

ridiculously boring industry, not flashy by any standards, probably one that investors back then at least spent, you know, not more than a few minutes looking at before moving on to something else. And I think Stella certainly took advantage of this. So they kind of identified that there was and abundance of tiny wood treatment plant facilities scattered around North America, all pretty much doing the exact same thing as Stella, but more so kind of those mom and pop shops, not in the literal sense. They were still like large facilities,

but kind of smaller owned. And the CEO at the time, who was Brian McManus, kind of identified that if you take all these smaller companies and roll them up, it would be genius for quite a few reasons. The first one would be volume. So a lot of these smaller facilities did not deal in large volumes. And with most industries, the more you buy, the more you save.

We see this with something like Costco, who can just, you know, roll up so much volume that they can turn around and offer it back to people at lower prices. The more you buy from distributors, the more you're going to save. So if Stella could acquire these companies, it would need more timber for those companies. The more timber they order, the larger discounts they would get based on volume. and then ultimately that would kind of boost margins. And secondly, these facilities needed to be local. There wasn't really any client of, there wasn't a client of choice for a lot of these major utility and railway companies.

They just kind of chose the closest one in the area because, you know, it's very, this stuff is hard to ship. It's heavy. It's huge. You know, you're not going to move this stuff across the country if you don't have to. So they identified kind of the path to substantial growth was to acquire these. shops, order the timber and volume, lock down pretty much every utility company and railway in the area because you can offer cheaper prices, larger timber orders, reduces the prices,

boost margins, and then the cash flow they use from those companies would allow them to continue to roll up more. From that point onward from 2001 up until, I think it's around now, they've made over 20 acquisitions, not necessarily any of them huge, but pretty much all of them, you know, very meaningful. So they bought Guelph pole in 2000, which was kind of the first big move into utility poles. They made their first U.S. acquisition in 2005. They bought Webster Wood Preserving. And the two kind of transformational plays for this company, they bought Tangent Rail, which is a U.S. railway tie company and McFarlane in 2010 and 2012. So Tangent, again, that railway ties. McFarland was a massive utility pole player and utility.

Polls are now actually the largest segment of the business. And then in 2015, they started getting into residential lumber, which I believe is, I didn't actually look, but the last time I checked, it was around 15 to 20% of the business. So this is kind of another Quebec-based company that kind of transformed its entire business based solely on acquisitions. The majority of its revenue now is actually from the United States. They built up a massive moat around arguably one of the most boring businesses on the planet. They pretty much strategically eliminated all competitors in particular areas by acquiring them. And now the barrier to entry is very high.

It's not easy to build these treatment plants, the logistic networks, all that type of stuff. But arguably the hardest thing would be getting the contracts from the major utility providers and class one railways. And with the scale that Stella has now, they have pretty significant pricing power. And if you look at their stock price since 2001, it's up around 13,500 percent. So this kind of shows you that, you know, it doesn't have to be the flashiest business, you know, the tech plays, all that type of stuff to drive strong returns and management huge too here because they just identified a market that they could just crush and they and they ended up doing it. Yeah, and including dividends.

So total returns close to 20,000 percent. Yeah. Yeah. Pretty good, actually. From a railway, yeah, railway tie business. Yeah. Yeah, exactly. So I don't have much to add there.

So I'll move on to number two on my list. So this one, when we started the episode, probably came to mind for a whole lot of people. So Google buys YouTube for $1.65 billion in 2006. Really interesting this one for Google acquiring YouTube. It was announced on October 9, 2006. So some younger listeners might not be aware of this acquisition, but that's fine. And the deal closed not too long after on November 13, 2006. So actually pretty quickly, it was an all-stock deal.

And at the time, there was a lot of questions around copyright content on YouTube, which ended up being resolved not too long after that with some major, I think, multi, I guess, broadcast company. I can't remember the exact names, but when I was reading that, that was one of the dimensions. And I do have some of the original articles. I went back to one from The Guardian, TechCrunch as well from 2006. So really interesting how to see how it was perceived. And there was also a lot of comps being made by, believe it or not, around that same time,

Fox buying Myspace. I think they paid like, yeah, they paid like 500 million for. For it, yeah, 580 million Robert Murdoch's news actually paid for social networking website, Myspace, the year prior. So pretty interesting just to give a little bit because there were some acquisitions in the space and companies trying to position themselves. Globally in 2006, YouTube had 63 million people stream video, whereas now, third-party estimate put around 2.5 billion monthly active users.

and of course users were not quite measured the same ways back then. So just keep that in mind, but it's still a much larger platform. I think everyone can agree on that. And in 2006, the best estimates I could find was that YouTube had about 15 million in sales. And keep in mind, YouTube was a private company bag then. So it's harder. These are just for the most part estimates. So Google probably paid in excess of 100 times sales to buy YouTube.

But last year, YouTube generated more than 40 billion. ad sales alone and that doesn't even include the YouTube subscription revenue that they get that I know a lot of people have now and since 2017 YouTube has generated more than 220 billion in ad revenue it's hard to say what the valuation of YouTube would be if it would be a standalone company but I think you know the estimates I've seen is that it would be worth north of 500 billion dollars as a standalone company, which is pretty wild. Then I think just, you know, considering that they paid $1.65 billion, of course, a big reason why it's that big.

It's because of what Google did with it over time. But still, it's just a very impressive acquisition. Yeah, if I were like to have not looked at your list because I didn't know about the Apple situation, I would imagine that this would have been number one. But yeah, yeah, just massive. And if we look to the Myspace, so they were bought for five. $580 million in 2005, which would have been a year before Google bought YouTube. And then it was sold, MySpace was sold for $35 million in 2011.

So you can tell like the massive swing, like one an absolute gem and the other one an absolute dud. But the one thing is like YouTube only started. When did they start? 2005. Yeah. So they registered the domain in 2005 and sold it for a billion dollars. very shortly after. They were kind of well ahead of the game in terms of

like video content. Like nobody really, I mean, I kind of see this trending like being involved with the content so much like nobody reads content anymore. Like YouTube is just so massive. It's all video, whether it be short form video or video based content, but written content is slowly dying and video is just launching.

There is, but it's more niche, right? So you have certain written content. And then that does well. I think like the athletic from New York time does pretty well. But those are like hardcore sports fan that are following a team that want some, some writing done on their team. And they subscribe for that. But yeah, no, it's hard to not have it there.

But the reason it's number two, it's just because I think Google could still be a very large company without YouTube. If you just think about the search engine where I think Apple just, it just transformed. Wouldn't be close. would not be close and probably not be a standalone. So that's why I chose one too. So let's go with your third one on the Canadian side here. Yeah.

So this would be CN Rail buying Illinois Central. So a lot of people might not know this, but CN Rail used to be a Crown Corporation. Obviously, I was not alive to see most of it in action, but it was apparently, from what I've read, a horribly ran company, one of the worst railways in North America. So they brought in people to kind of fix the company up and ultimately sell it. They slashed over 60% of their workforce and then they ended up taking the company public in 1995. And when CN Rail was a Crown Corporation, the operating ratio was nearly 90%. And this is egregiously bad for a railway.

Like you're talking, this is like trucking level operating ratios. Most railways you see today are in, well, I mean, you look to CN and CP. They're like low 60% range. So operating ratio is Lower is better right for it. Just the opposite of operating margins. Yeah. So you're taking what does it cost them to generate a dollar of revenue?

So a 90% operating ratio. It was costing CNRail 90 cents to generate a dollar in revenue, which is no good. Right now you're talking probably 62 cents to generate a dollar in revenue. So once the company went public and was fixed up, it got down to about 70% serviceable, but serviceable. but still pretty bad. And in 1998, they made probably the most transformational acquisition in their history. They bought Illinois Rail for $2.4 billion. And that would have been U.S. dollars.

So at the time, I think CN Rail was around a $5 billion U.S. dollar company. So pretty much a huge chunk of change to pay. And the logic was pretty simple here. At that time, CN Rail just ran straight east to west across Canada. Illinois Rail ran kind of north to south. throughout the United States, by the railways, hook the tracks up and you have a railway that is effectively a Y shape so it can hit, you know, head down through the south to the Gulf of Mexico.

And at the time, Illinois Central was the best operated railway in North America. So operating ratios were in the low 60s, which was apparently unheard of back then. Like that's operating ratios you'll see today. And this was, what would it be now 30 some years ago? Yeah. And it was it was operated so well. because it had, you could argue, the smartest mind in railway history, which would be Hunter Harrison. He ran that company.

And apparently when they bought Illinois Central, Harrison told CN management that he only knows one way to railroad. One way to railroad is apparently what he said. And if they were willing to play by his rules, he would stick around with CN. So this one is a very interesting acquisition because when you look back at it, the best acquired asset was him and not the actual company itself because Harrison initially started out as the C.O. And then he became the CEO in 2003 and turned CN Rail into the best Class 1 railway in North America. It held that title for a very long time up until recent slipups. And I would argue that a lot of those recent slip ups are actually management related for CN Rail. Yeah. And apparently the main. I would argue that.

Yeah. So you can tell like how important, you know, a management team. team is to accompany overall. The main focus here for him was something called precision scheduled railroading. So previously rail cars, they'd sit in the yard until they were full and they wouldn't leave until they were full. So he viewed this as extremely inefficient. So instead the trains ran on a schedule. It didn't matter if they were half full, quarter full, completely full.

So this allowed CN Rail to actually cut back the rail cars that used by more than 31%, which is absolutely wild because these things are not expected. They're not cheap, very expensive to own to operate. So he slashed that. And from the time that CN was a Crown Corp to the time when Harrison was actually able to implement the strategy, operating ratios went from 90% to 60%. And at the time when they hit 60%, again, most of the railways were operating in the mid-70s to 80s.

So you're talking like a money printing machine relative to competitors. He kind of bounced around. Harrison bounced around over the course of his career, I believe, from struggling railway to struggling railway. He left CN and went to CP in 2012 and effectively did the exact same thing. And eventually the industry kind of caught on that to this precision railroading and pretty much every company adopts it now. So the edge is kind of gone. But I do kind of find this one fascinating me because by the looks of it, the acquisition was for a person, not Illinois rail. I don't really know if that's the reason why CNRail went out and got it.

They probably bought it for the assets, but they had to have known that this guy was a very strong operator. And again, should kind of show listeners how important a strong management team is. Like a brilliant mine can take a terribly operated company and turn it kind of into an outstanding one and vice versa for sure as well. Since he came on the board CNRail is up around 4,800%. That's not including dividends. I don't know what it would probably 6,000 some percent with dividends because it is pretty consistent dividend grower and dividend payer. So it's not as flashy as, you know, the Stella Jones or any of these big tech companies.

But it's still pretty material and probably an acquisition that turned this, probably one of the bigger turnaround acquisitions from, you know, a very poorly run company to one of the best in business for decades. Okay, yeah, not too much ad there. So I will go on. I'll actually do my next two back to back because I feel like we should have started with the U.S. companies because I had one more.

But that's okay. We're recording earlier than expected and coffee is still making its way to my brain. So that's all right. So the third one on my list. So Facebook buys Instagram. So there's a lot of tech plays like I mentioned here. So announced on April 9, 2012.

Facebook said that it would buy Instagram for $1 billion in cash and stuff. stock deal. The deal was faced with some regulatory hurdles and was reviewed by the Federal Trade Commission, the U.S., so the FTC. It eventually led the deal proceed. The deal closed on September 6, 2012. And at the time, Instagram was a really small operation. I think it had like a handful of employees. I can't remember how many, but as I was reading, I think it was like less than 10 or 12, something like that. And had around 30 million users. It had little to no revenue. today, obviously it's a much larger business. The only issue is that meta doesn't really disclose the Instagram numbers separately, so it

aggregates them and they're what they call the family of apps. So you have to make some estimates, but based on some statements that Zuckerberg made last year, it now has 3 billion monthly active users. And it's estimated to have around 65 to 75 billion in revenues per year. So again, similar to YouTube, I think it would be relatively easy to make a case that as a standalone and probably be worth in excess of half a trillion at least, I mean, three or $400 billion as a standalone company today. So amazing acquisition. I mean, you know, is Instagram bigger than Facebook itself as the app? I think a lot of people go on Instagram more and it has a younger demographic.

too. So Facebook would be a very different business without it. That's for sure. I think that is kind of the element is Instagram is more younger demographic, whereas Facebook is older. I don't know. I see they almost seem like the exact same platform. Like I don't have Instagram. I've never used Instagram, but it kind of seems to me like people go on Facebook and Instagram for the exact same thing. I don't know. Yeah, they're very similar. Like they've kind of merge quite a bit over time. Obviously you have like Facebook. marketplace and other stuff now that's available. I think marketplace generates a whole lot of revenues for them too.

But again, Meadow would be a much different company if it didn't have Instagram today. I don't doubt it would still be around, but I don't think it would be as large because, yeah, it's really, it's really their, I would say, like, again, this is just based on, you know, some incomplete information, but I would argue it is probably their most popular app, along which Facebook right now. So yeah. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations.

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I feel like I probably would put this one five on the list. But you tell me what do you think at the end of my number five. So Microsoft on June 13, 2016. So this is a so relatively recent acquisition when you think about it only 10 years ago. They announced it would be acquiring LinkedIn. That was a publicly traded. company back then for just over $26 billion in an all-cash deal. The deal closed in December of 2016. At the time of the acquisition, LinkedIn had a bit more than 400 million users. Now it's over

1.2 billion users. It was generating $3 billion per year in revenue, but was not gap profitable. So that means Microsoft paid some rough mat, probably around 8x a bit more than that, eight times revenues for LinkedIn. And so clearly, the price tag wasn't cheap because it was definitely on the larger side for the acquisitions, at least compared to some of the ones we've talked about already. In 2025, LinkedIn generated just shy of $18 billion in revenue from Microsoft. So they do have, they do disclose that information. So it's a bit easier to understand how substantial of a business that it is now.

They don't share profitability on LinkedIn, but it's safe to say that it generates several billions in profit per year. Given the user base revenues, how sticky it is a platform for professional, it's really a no-brainer that LinkedIn would be worth a lot more than $26 billion if Microsoft had it as a standalone company today. Plus, it's a sticky platform for professionals, sure. There could be some AI disruptions here, but the risk I think are relatively low. Some parts of the business could be disrupted, but again, I think it still would be worth pretty penny. So how much would it be worth at a standalone company today? It's hard to say, but let's just say they generate about $6 billion of profits on that $18 billion revenue,

which would be 33% profit margin, probably not that out like that crazy of an assumption to make. And in today's market, what would a company like this be valued at in terms of earnings, $20, $25, $30 times? Maybe $20 is a reasonable assumption because of maybe some. of the market participants would be putting some AI disruption risk on LinkedIn a little bit. So maybe it's on the lower end here. But even 20 times earning at $6 billion profit, it's probably easy to see LinkedIn being a standalone business worth in excess of $120, $125 billion. I think you can probably argue that it could be worth as much as $200 billion, depending on the kind of valuation premium you apply to the business here. Yeah, I don't know.

Like, LinkedIn is kind of weird to me. I don't know how, like, they generate money. Like, do people pay for probably premium subscriptions and stuff? I mean, yeah, so they get, you know, they'll get ad revenues. They'll get employers pay for recruiting jobs and stuff like that. They also have some business intelligence where you can like have, I think it's called a sales something module where like it'll help you get data and reach out to like different supplier. or potential customers. Like, there's different kinds of ways that they monetize it, but there's definitely

advertising. Yeah. All I get on LinkedIn is spam messages. Yeah. That's pretty much it for me. I don't get anything else from it. Well, they make money out of that. Yeah, make a lot of money.

Yeah. So that's number four on the list. So we'll have to keep people hanging for number five. So stay till the end. Now that I'm rethinking, I think I would swap four and five, but you go for you guys. Five is pretty big, yeah. So the final. Canadian one is Thompson buying Rooters. So Thompson Rooters is owned by the richest family in Canada.

They own it through like a subsidiary, I think, or a trust account or whatever. So they became rich largely based on Thompson Reuters performance. They own, I think it's 60 or 70% of the company. So Thompson family owns that amount in a subsidy or I think. And they had started a largely as a media company. So newspapers, radio, whatever it may be. but they started to exit that space in the late 1990s. And if I were to speculate, it would have been maybe due to the internet coming around. I don't even think it's largely speculation. I think they figured out that the internet was going to absolutely crush these media assets.

So they kind of sold them all off. The only media asset they kept was the Globe and Mail. And I'm pretty sure they still do own the Globe and Mail. In the mid-1990s, they acquired West Publishing, which includes, which included Westlaw, which is kind of the legal research database, which forms one of the backbones, the big three of the business today. And the company kind of transformed from a media-based company to kind of an information-based company.

So from a low-margin media business to a sticky recurring revenue, high-margin subscription business. So they had the legal data, they had the tax data, and they kind of needed one more thing, which is the financial data. So in 2008, they bought Reuters for... 17.5 billion and then the company was was obviously rebranded into Thompson Reuters. And the fascinating thing about this acquisition is it was kind of a flop. Their main objective when they bought it was to kind of take down Bloomberg or maybe compete with Bloomberg at the time. When they bought Reuters,

it was a number one player for financial data. But over the years, they kind of got crushed by Bloomberg, like the Bloomberg Terminal, whatever it may be. They didn't do. They didn't do. very well. And as I had mentioned previously, Thompson Reuters has made, or that family has made a lot of its money on knowing not necessarily what to buy, but when to exit, just certain businesses that they don't feel are, you know, doing very well or not going to do very well in the future. They bought Reuters for $17.5 billion, which included the financial data and terminal business, but also the news side of the business. So I think they own some press release wire. and obviously you have Reuters the website.

And once they kind of realize they never keep up to Bloomberg, they sold 55% of that financial business to Blackstone in 2018. And the end result of this deal was Thompson Reuters pulling in $17 billion, pretty much the cost they paid for the entire business for selling 55% of the financial area of the company, which wasn't doing very well. So it's pretty wild in that regard. They sold it. The business was then sold again in 2019 to the London Stock Exchange.

So the company got a stake in the London Stock Exchange as a result, I believe. And they slowly sold that off over the years. I think they finally sold off their last chunk in 2024. And that ended up netting them around $10 billion, I believe. So they paid $17, $17.15 billion for the entire. company in 2008 and by the end of 2024, they collected $25 billion from just selling off the financial data arm of it. So they kept the news-based business. And that doesn't even include the profits collected from the business over those years, the dividends paid, whatever it may be.

And yeah, again, the wild part is they profited from this from a business they bought that generally just kind of failed to do what they wanted it to do when they bought it. And I think actually the most interesting part here moving forward is, you know, when you think about it's coming from a family, a business that has shown it knows exactly when to exit a business and pretty much extract every last dollar it can from it is the AI theme. So for a lot of time, the company's bread and butter was the subscription-based services for access to proprietary data in, you know, the legal area, the corporate area, the tax area. And this is under some massive fire from AI. and the company has kind of gotten crushed in price as a result. Like I'm pretty sure they're down 50 some percent over the last while here. And it's it's not a gradual drawdown.

It's if you look at a stock chart, it's pretty much a cliff. So we've seen them dump businesses. They don't believe have any potential. They've done it numerous times. But on this front, they kind of seem to be aggressively pivoting towards AI. So, you know, for a company who kind of saw the end of newspapers do the internet in the 90s, they dump the business as a result. If AI level disruption truly is a threat for the

company, why are they, you know, kind of doubling down on it and not looking to exit that space in that regard? So, you know, I find it interesting that they're kind of pushing more aggressively on this front. Like, do they believe the mode is still intact? Or do they potentially feel that there's maybe not a potentially strong suitor if they were to exit that space? It'll be interesting to see. be able to, might be difficult to get value, good value out of it. Yeah, that's what I mean. And it, it does make up a massive chunk of their business as well where it would be pretty hard to pivot. But it's just an interesting one because, yeah, they, they extracted so much money out of a business that never did well.

And now they're looking at facing, you know, high levels of potential disruption in the future. And by the looks of it, it does not look like they're going to be exiting that space. They're actually, you know, kind of pivoting aggressively into growing it. So yeah, it's an interesting one. Yeah, yeah, not too much add there. So let's move on here to the last in my top five. So that should probably be number four, Berkshire buys Geico Insurance. So this one, again, was interesting just going back and reading, I think it was a 1995 annual letter that kind of detailed the acquisition here.

So this was an acquisition that took two decades to be completed. So Berkshire first acquired shares of GEICO back in 1976. By the end of 1980, they had acquired about a third of the outstanding GEICO shares for approximately $46 million. And that state grew close to close to 50% by 1995, only because GEICO was aggressively buying back its shares. So they grew from 33 to 50%. And then by the end of 1995, Berkshire agreed to pay $2.3 billion for the rest of the GEICO business. And when Berkshire bought the remaining shares, GEICO was the seven largest auto insurer in the U.S. And today would be number three in terms of the largest auto insurers.

And it's a bit harder to assess what GEICO would be worse since insurance businesses are very cyclical. You can have a really, you can have really good years. and then because there's less claims and then you can have some years that are not as good because for various reasons there's just more claims. And in 2025, Geico generated just shy of $7 billion in pre-tax underwriting earnings, although it was an unusually strong year. So comparing that with all state that trades at nine times

for earnings and progressive at 13 times. So let's just say it would trade around 10x just as a conservative estimate here. So it's likely that I think, think it would probably be worth as a standalone insurer, probably 60 to 80 billion range. But that's not bad, but that would be overlooking what GEICO allows Berkshire to do. And estimating that is even harder. But the acquisition is definitely more than that.

It's also the fact that it became the most important part of their insurance business. Berkshire did have an insurance business prior to that, but GEICO really became the largest part. And it's one of the big reasons Berkshire is structured the way it is today because, of course, they generate, they have a float. Berkshire managed a float from Geico that they generate from premiums. And it really has enabled Berkshire to make countless deals in the three decades after that. So it's been about 30 years since they completed that. So it's really easy to argue that Geico probably generated like billions in additional profits by allowing Berkshire to invent. invest, defloat in other businesses. So that's one of the big reason why they have that massive

cash pile right now. So I think just the fact that it really has allowed Berkshire to make those kind of investment. And again, it's hard to gauge to what extent Geico had an impact, but I think it's safe to say it has been a huge impact. That's why I think it probably would have to be in the top four over the LinkedIn, over LinkedIn being acquiring. Yeah, I think just looking at the profits of Geico overall for the company doesn't really kind of put justice on it. Like the amount of money that Geico has probably been made for Berkshire over the years, being able to utilize that insurance float, which is the exact same thing as a company like,

let's just say Fairfax does here in Canada. Insurance float, you kind of buy up assets with that and, you know, those ultimately compound and make more money. I would say it would be substantially higher than the 7 billion in pre-tax earnings that they earn now. Oh, yeah. Yeah, no doubt. Exponentially higher. It's one of the biggest reasons they have been able to do what they've been able to do over the last while.

And I think that's probably why they look to acquire it back then. Yeah, and also when you factor in that the GFC happened like a bit more than a decade after that and how they were able to capitalize on that, probably a big part because of their, guyco business their insurance business yeah it's really hard to estimate but i think it's safe to say that berkshire would not be as large as it is today if it weren't for the guyco insurance being part of the business so i i just wanted to put some numbers because i kind of did the same thing for the other ones i took that approach but i also thought it was important how much it transformed the business and honestly in my honorable mentions i think i would even swap out the next one here without

going into too much detail over LinkedIn. So maybe LinkedIn should have been my honorable mention. So I guess number six, as I do the honorable mentions, Google buys Android. So they bought it for approximately $50 million in 2005 before smartphones explode in popularity. Now it has $3 billion plus active users using Android's in the world. It's hard to say how much Google makes from it since they don't disclose the revenue, but it's not hard to argue that it's in the tens of billions of dollars if you factor in the ads, Google Play, Android, and all that.

So I think that one would probably should have made the top five. Again, it was kind of hard to pick. Yeah. So please forgive me on that, but let us know if you disagree or agree with that. Next one, I think Disney buying both Pixel and Marvel, those were separate deals. But a lot of the Disney content that we know today comes from those two acquisitions. Had they overuse, especially the Marvel franchises the content, I would argue that it's probably a bit tired at this point. But I mean, they've had that for, I don't have the dates here, but I think probably 20 plus years at this point.

So around that time. The other one is Berkshire buying BNSF Railway. Won't go into much detail, but just wanted to mention. And the last one here that I'm sure not a lot of people know, it's Amazon buying Kiva system. So I'd bought for $775,000, 2020. And Kiva did not create Amazon's e-commerce business. It obviously was there before that, but it definitely helped turn Amazon's fulfillment network

into really the logistics machine that made Amazon kind of modern and the Amazon that we know today. So definitely an underestimated impact on the business here. So those were the four honorable mentions, whether again you think Google buying Android should be in the top five. I'll let people decide, but I think if I had to redo it, I think I would put it in the top five and put Microsoft on the outside looking in. Yeah, probably a fair.

I think Google buying Android should be in there. I know a lot of people are probably going to question why I didn't include Constellation in this, which that would probably be my kind of honorable mention there. Yeah. Constellation's success over the last like 20 plus years is probably more impressive than the Thompson buying. buying Reuters, but. Yeah, but it's not just one acquisition. Yeah. It's a problem.

I kind of wanted to, I mean, I did the Stella roll up, but the Stella roll up was also, you know, just 20 companies or so, 20, 25 companies where Constellation is in in the hundreds. So I didn't include it, but it would definitely be, you know, in this list, if I didn't want to focus on just more like individual smaller type transformational acquisitions, that kind of changed the company's trajectory. Like Constellation's kind of done this and done it well for for a long time. So it probably would have been a pretty boring one to talk about. So I kind of focused on some other ones. But it would be in there for sure. Yeah, no, exactly. So I think it was fun.

I'm sure we missed some, but I think it was still fun to go over. Maybe some. I can't remember, but I'm just going on memory. I could be completely wrong here. But was it Nvidia that bought Voodoo, the card? Yes, I'm pretty sure. designer back in the day. I feel like that probably has had some big impacts on Nvidia. December 2000. Yeah. 110 million they paid. Yeah. And then AMD buying radion could

have been one on the chip designing side, graphic design GPU side. So maybe some that I'm just going on memory here that I should have double checked, but that may have helped transform those businesses too. But I think let's wrap it up here. Anything else you want to add before we sign off? No. No. Well, I hope you enjoyed it, so I think it was a fun one to do. I hope you like that to let us know if you agree or not on the list.

And we will be back for another episode this upcoming Thursday. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial. professional before making any financial or investment decisions.