19
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019
PRIVATE EQUITY CANADIAN MARKET OVERVIEW
// 2019
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 2
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CONTENTS
PARTICIPATING DATA CONTRIBUTORS .......................................................................3 FOREWORD ......................................................................................................................4 PRIVATE EQUITY HIGHLIGHTS ......................................................................................5 DATA VISUALIZATIONS ...................................................................................................6 PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY ............................................... 6 PRIVATE EQUITY HEAT MAP // PE GROWTH DEALS ONLY ............................................................. 7 PRIVATE EQUITY HEAT MAP // ALL PE DEALS .................................................................................... 8 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY .................................................................. 9 TOP 10 DISCLOSED CANADIAN PE DEALS ........................................................................................ 10 PE ACTIVITY BY DEAL SIZE ...................................................................................................................... 11 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES .............................................................. 12 PE SECTOR BREAKDOWN ....................................................................................................................... 13 PE EXITS ........................................................................................................................................................ 14 TOP DISCLOSED CANADIAN PE EXITS ............................................................................................... 15MOST ACTIVE PE INVESTORS ................................................................................................................ 16
PRIVATE EQUITY METHODOLOGY ............................................................................. 17 AUTHORS, ABOUT CVCA AND CONTACT INFO ..................................................... 19
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 3
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PARTICIPATING DATA CONTRIBUTORS
If you would like to have your firm included in future reports, please contact [email protected]
7 Gate Ventures
Accelerate Fund
AmorChem Fund
Anges Quebec
Anges Quebec Capital
AVAC Ltd.
BCF Ventures
Brightspark Ventures
Build Ventures
CIBC Innovation Banking
CIC Capital Ventures
Conexus Venture Capital
CTI Life Sciences
Cycle Capital Management/EcoFuel
Dash40 Ventures
Espresso Capital Ltd.
Evok Innovations
Fight Against Cancer Innovation Trust
First Ascent Ventures
Fonds Innovexport
Framework Ventures
Freycinet Ventures
Good News Ventures
GreenSoil Investments
iGan Partners
Information Venture Partners
Innovacorp
inovia Capital
Ironbridge Equity Partners
Island Capital Partners
Luge Capital
Lumira Ventures
MaRS Catalyst Fund
MaRS IAF
McRock Capital
New Brunswick Innovation Foundation
OMERS Ventures
Ontario Capital Growth Corporation
Panache Ventures
Pangaea Ventures
Portag3 Ventures
Quantius
Quark Venture
Radical Ventures
Real Ventures
Relay Ventures
Rhino Ventures
Ripple Ventures
Roadmap Capital
Round 13 Capital
Ryerson Futures
Sectoral Asset Management Inc.
StandUp Ventures
Tandem Expansion
TandemLaunch
TELUS Ventures
Top Renergy
V3-Ventures
Vanedge Capital Partners
Venbridge Ltd.
VentureLink Funds
Versant Ventures
White Star Capital
Yaletown Partners
Venture Capital Firms32 Degrees Capital
AIP Private Capital
ARC Financial
Ardenton Capital Corporation
BDC Growth Equity
BMO Capital Partners
Canadian Business Growth Fund
Capital Financière Agricole
Clairvest Group Inc.
Clearspring Capital Partners
First West Capital
InstarAGF Asset Management
Kayne Capital
Killick Capital Inc.
Mink Capital
Mosaic Capital Corporation
Novacap Management Inc.
OMERS Private Equity Inc.
PenderFund Capital Management
Persistence Capital Partners
PFM Capital Inc
PRIVEQ Capital Funds
Seafort Capital
TorQuest Partners
TriWest Capital Partners
Vistara Capital Partners
Westcap Mgt. Ltd
Western Investment Company of Canada Limited
Private Equity & LSVCC FirmsAlberta Enterprise Corporation
Alberta Teachers’ Retirement Fund (ATRF)
BDC Capital
Bluesky Equities
Caisse de depot et placement du Quebec
Dancap Private Equity Inc
Desjardins Capital
Fondaction
Fonds de solidarite FTQ
Fonds de solidarité FTQ (Regional)
Kensington Capital Partners Ltd.
Investissement Quebec
Northleaf Capital Partners
Ontario Teachers’ Pension Plan (OTPP)
Teralys Capital
Limited Partners
CVCA thanks the following firms who participated in its 2019 survey.
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 4
source:
FOREWORD
2019 PE Investment Elevated by Q4 Surge
The closing of Garda World Security and Westjet Airlines in the last quarter raised PE investment in 2019 to a total disclosed value of CAD $19B over 526 deals, 16% less than the CAD $22.7B in 2018, and 38% higher than the previous low of CAD $13.8B in 2016.
For the second year in a row, the sum of mega-deals exceeded the sum of all other deals combined: CAD $11.6B out of CAD $19B in 2019 and CAD $14.4B out of CAD $22.7B in 2018. There were three $1B+ mega-deals this year which included:$5.2B recap of Montreal-based Garda World Security Corp. by a
European investor$5B buyout of Calgary-based WestJet Airlines Ltd. by ONEX$1.4B buyout of London-based Autodata Solutions Inc. by a US PE firm
“Private Equity continues to pick up momentum as an attractive source of value-add financing for growing companies in the Canadian market,” said Kim Furlong, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. “Canadian PE offers attractive returns and the
opportunity to truly make a positive impact across the country as investors and investees grow Canadian companies together.”
There were 111 PE growth deals in 2019 which accounted for a fifth of all deal flow totalling $1.5B (8% share of total dollars). These included the following disclosed deals:$102M investment by BDC Capital Inc., Fondaction CSN and Fonds de
solidarité FTQ in Laval-based JLD-Laguë Group, with 400 employees in Montreal, Estrie, Laval, Laurentides, Saguenay and Ontario
$95M by a US investor in Vancouver-based PDFTron Systems Inc., a female-founded tech company employing 47 employees
$91M investment by InstarAGF Asset Management and PFM Capital Inc. in Calgary-based Steel Reef Infrastructure Corp. which employs 110 people
24% of all PE investment in 2019 went into companies in the industrial and manufacturing sector, 2% higher than its share in 2018 and 4% higher than its 2017 share. The ICT sector maintained its deal flow in 2019 with a 17% share of PE Investment.
2019 PE performance driven by deals with Autodata Solutions, Garda World Security and WestJet Airlines
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 5
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PRIVATE EQUITY HIGHLIGHTS // 2019
Key Findings
The closing of two mega-deals made it the best fourth quarter for PE since 2014. This last quarter surge elevated PE activity in 2019 to a total disclosed value of $19B over 526 deals, 16% shy of the $22.7B mark in 2018, and 38% higher than the previous low of $13.8B in 2016.
For the second year in a row, the sum of all mega-deals exceeded the sum of all other deals combined: $11.6B out of $19B in 2019 and $14.4B out of $22.7B in 2018. The three $1B+ mega-deals this year included:
$5.2B recap of Montreal-based Garda World Security Corp. by a European investor
$5B buyout of Calgary-based WestJet Airlines Ltd. by ONEX
$1.4B buyout of London-based Autodata Solutions Inc. by a US PE firm
The average deal size ($36.1M) was marginally higher by 1% than compared to the previous 3-year period between 2016-2018 ($35.7M)
Excluding the three $1B+ mega deals, the PE average deal size was $14.2M which was relatively unchanged from $14.1M in 2018. Two-thirds of all PE deals were below $25M
Two-thirds all PE deals (332) were in the province of Quebec totaling $9.7B; Ontario captured a fifth of deal flow (98) totaling $3.2B
There were 98 deals in Montreal-based companies (19% share) totaling $7.6B, followed by Toronto-based companies which captured a 11% share with 56 deals worth $1.5B
Buyout and add-on deals made up a quarter 2019 deal flow totalling $8.4B
111 PE growth deals accounted for a fifth of all deal flow totalling $1.5B (8% share of total dollars). These included the following disclosed deals:
$102M investment by BDC Capital Inc., Fondaction CSN and Fonds de solidarité FTQ in Laval-based JLD-Laguë Group, with 400 employees in Montreal, Estrie, Laval, Laurentides, Saguenay and Ontario
$95M by a US investor in Vancouver-based PDFTron Systems Inc., a female-founded tech company employing 47 employees
$91M investment by InstarAGF Asset Management and PFM Capital Inc. in Calgary-based Steel Reef Infrastructure Corp. which employs 110 people and whose founder and executive chairman was honoured with the Saskatchewan Oilman of the Year award
A record share of deal flow (24%) went into companies in the Industrial & Manufacturing sector, 2 percentage points higher than its share in 2018 and 4 percentage points higher than its 2017 share; the ICT sector maintained a 17% share
The Oil & Gas, Power sector only received a 3% share of total deal flow, down significantly from its 25% in 2014
The dollar share of mid-market deals between $100M and $500M, a sweet spot for Canadian PE deal flow, increased to 19% ($3.6B) compared to 18% ($4.1B) in 2018. The largest of these disclosed deals included:
$445M privatization of TMX-listed Gluskin Sheff + Associates Inc. by ONEX
$414M buyout by a European investor of Cobalt 27 Capital, listed on TMX, and subsequent re-listing on TSX Venture under Conic Metals Capital Corp.
$385M PE recapitalization by Caisse de dépôt et placement du Québec (CDPQ) of Montreal-based Quebec Iron Ore, a subsidiary of TSX-listed Champion Iron Limited, with operations in northern Quebec
The anemic exit market for Canadian PE-backed companies continued with only 37 acquisitions in 2019, down significantly from the 84 acquisitions and 4 IPOs in 2018. These included:
$753M acquisition of HarbourVest-backed, Toronto-based Intelex Technologies Inc. by Industrial Scientific
$425M acquisition by Hostess Brands of Swander Pace Capital’s Burlington-based Voortman Cookies Limited
$337M acquisition of Dartmouth-based Nova Cold Logistics from Brookfield Asset Management
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 6
source:
2616
$5bAlberta $177m
Saskatchewan naManitoba
naNew Brunswick
$2.6bOntario
$286mQuébec
$273MBC
263 4
652
$8.4Btotal 133 deals
PRIVATE EQUITY HEAT MAP BUYOUT & ADD-ON DEALS ONLY // 2019
total #
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 7
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2568
96
2
$6MSaskatchewan
$154MAlberta
$252MBC
$368MOntario
$705mQuébec
$16mPrince Edward
Island
1
$1.5btotal 111 deals
PRIVATE EQUITY HEAT MAP PE GROWTH DEALS ONLY // 2019
total #
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 8
source:
5
6
332
98$610MBC $5.2b
Alberta $186MSaskatchewan $3M
Manitoba
$3.2bOntario
$9.7bQuébec
naNew Brunswick
$16mPrince Edward
Island
19
2847
$19btotal
526 dealstotal #
PRIVATE EQUITY HEAT MAP ALL PE DEALS // 2019
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 9
source:
QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY
TOTAL:425 DEALS
$22.9B
TOTAL:542 DEALS
$13.8B
TOTAL:607 DEALS
$26.3B
TOTAL:590 DEALS
$22.7B
TOTAL:526 DEALS
$19B
20162015 2017 2018
$0
$3,000
$4,500
$1,500
$6,000
$9,000
$13,500
$7,500
$12,000
$10,500
$15,000
0
20
40
60
80
100
120
140
160
180
200
Q4Q3Q2Q1 Q2Q1 Q3 Q4 Q2Q1 Q3 Q4 Q1 Q2 Q3 Q4
$7,0
53
$1,8
69
$11,3
75
$2,5
52
$3,2
21
$3,3
70
91
104117
113
124
146
133
139
$3,0
38
$4,17
9
$5,3
29
114
178163
152 156
162
124 130
158
128
110
148
$8,7
80
$7,4
91
$4,6
72
$6,7
48
$8,0
57
$1,9
77
$5,8
70
Q1
$1,9
65
Q2
$2,9
58
Q3
$1,6
86
Q4
$12,
391
$ Millions Invested # Deals
2019
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 10
source:
TOP 10 DISCLOSED CANADIAN PE DEALS // 2019
company name province firms involved in transaction sector $ mil
GARDA WORLD SECURITY CORP. QUÉBEC BC PARTNERS OTHER $5,200
WESTJET AIRLINES LTD. ALBERTA ONEX CORPORATION, WESTJET AIRLINES LTD. OTHER $5,000
AUTODATA SOLUTIONS, INC ONTARIO THOMA BRAVO, LLC ICT $1,350
MCINNIS CEMENT INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) INDUSTRIAL & MANUFACTURING $653
GLUSKIN SHEFF + ASSOCIATES INC. ONTARIO ONEX CORPORATION FINANCIAL $445
CONIC METALS CAPITAL CORP. ONTARIO PALA INVESTMENTS AG MINING & RESOURCES $414
MINERAI DE FER QUEBEC / QUEBEC IRON ORE QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) MINING & RESOURCES $385
LA COOP FÉDÉRÉE QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), DESJARDINS CAPITAL, FONDACTION CSN, FONDS DE SOLIDARITÉ FTQ AGRI-FORESTRY $300
VERSAPAY CORPORATION ONTARIO GREAT HILL PARTNERS ICT $126
JLD LAGUE GROUP QUÉBEC BDC CAPITAL INC., BMO CAPITAL PARTNERS, FONDACTION CSN, FONDS DE SOLIDARITÉ FTQ
INDUSTRIAL & MANUFACTURING $103
There were 7 undisclosed deals totalling $1.5B that were not included in this table
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 11
source:
PE ACTIVITY BY DEAL SIZE // 2019
0
40
80
120
160
200
240
280
320
400
360
$0
$16,000
$10
,200
$1,600
$3,200
$4,800
$6,400
$8,000
$9,600
$11,200
$12,800
$14,400
20162015 20162015 20162015 2015
$91
0
$1,2
90
$6,
321
$3,
212
$6,
292
$3,
106 $
4,79
7
2016
$7,
630
$50
9
$65
3
20162015 20162015
$4,
782
$4,
034
$3,
250
$1,6
27
$1,3
50
$3,
300
$4,
800
201720172017201720172017
183
362
56 49 4531
14 7 11419
3 3 2 1 0 21 1 3
$2,
739
$2,
167
$2,
824
$1,4
76
2018 2019 2019 2019 2019 2019 2019
363
388
332
6031 15
33
2018
$1,9
36
2018
$4,
093
2018 2018 2018
$12
,749
$1,7
38
$1,4
00
$1,7
85 $3,
612
1 11
< $25M $100M - $500M $1B - $2.5B$25M - $100M $500M - $1B $2.5B+
$ Millions Invested # Deals
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 12
source:
TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // 2019
Total Deals $ Millions
1. Montreal
2. Toronto
3. Québec
4. Montérégie
5. Saguenay-Lac-St-Jean/Côte-Nord
6. Calgary
7. Vancouver
8. Bas-Saint-Laurent
9. Nord-du-Québec / Abitibi-Témis
10. Chaudière-Appalaches
98
56
36
30
27
23
23
20
19
18
$7,604
$1,499
$120
$842
$67
$5,230
$232
$262
$59
$99
#1 montreal $7.6b 98 DEALS
2
67
19
4
108 53
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 13
source:
PE SECTOR BREAKDOWN // 2019
126
91
58
52
47
29
29
23
22
17
14
9
9
# Deals $ Millions
Industrial & Manufacturing
ICT
Agri-Forestry
Consumer & Retail
Business Products & Services
Automotive & Transportation
Life Sciences
Mining & Resources
Financial
CleanTech
Oil & Gas, Power
Others
Real Estate
$1,329
$3,006
$606
$837
$253
$5,619
$295
$939
$448
$73
$178
$5,367
$48
most active sectorindustrial & manufacturing
126 deals
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 14
source:
PE EXITS // 2015–2019
0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
20162015 20162015 20162015
$1,7
11
201720172017
$3,7
10
2018 2019 2019
$12,
812
$7,0
02
$2,8
49
71 4
5
50
59
36
138
7 4 8
00
2018 2018 2019
84
$8,5
71
$2,2
41
$3,4
08
$1,6
87
$4,8
00
1
$2,6
18
$1,8
92
IPO/RTO** M&A* SECONDARY BUYOUT*
* includes transactions with undisclosed values ** IPO valuation Exit Value ($ Millions) # Exits
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 15
source:
TOP DISCLOSED CANADIAN PE EXITS // 2019
Intelex Technologies Inc.bought by
Industrial Scientific $753m#1seller company name buyer $ mil
HARBOURVEST PARTNERS, LLC, JMI EQUITY INTELEX TECHNOLOGIES INC. INDUSTRIAL SCIENTIFIC $753
SWANDER PACE CAPITAL VOORTMAN COOKIES LIMITED HOSTESS BRANDS $425
BROOKFIELD BUSINESS PARTNERS NOVA COLD CONSOLIDATED LIMITED AMERICOLD $337
KELSO & COMPANY 4REFUEL CANADA LP FINNING INTERNATIONAL INC. $260
There were 33 additional exits with a disclosed value of $117M
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 16
source:
MOST ACTIVE PE INVESTORS // 2019
145
104
44
32
19
18
15
7
5
# Deals $ Millions*
Desjardins Capital
Fonds de solidarité FTQ
BDC Capital Inc.
Fondaction CSN
Investissement Québec
Espresso Capital Ltd.
Caisse de dépôt et placement du Québec (CDPQ)
First West Capital
PFM Capital Inc.
$1,035
$2,214
$311
$817
$305
$16
$1,754
$36
$106
* Total deal values – includes all participating investors
most active pe firmdesjardins Capital
145 deals
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 17
source:
CVCA METHODOLOGY // PRIVATE EQUITY
PRIVATE EQUITY DATA:Dataset includes only completed private equity deals (announced but yet to be completed deals are not included)
BUYOUT INVESTMENT FOR THE CONTROL OF A PORTFOLIO COMPANY, INCLUDING PLATFORM CREATION, SECONDARY BUYOUT
GROWTH SIGNIFICANT MINORITY INVESTMENT INTO A PORTFOLIO COMPANY, THROUGH NEW CAPITAL INFUSION AND RECAPITALIZATION
ADD-ON CORPORATE ACQUISITIONS BY MAJORITY CONTROLLED PE BACKED PORTFOLIO COMPANIES
DEBT DEBT INVESTMENT INTO PORTFOLIO COMPANIES
INFRASTRUCTURE INVESTMENTS INTO DEVELOPMENT AND MANAGEMENT OF INFRASTRUCTURE ASSETS BUT PE DOES NOT OWN THE UNDERLYING ASSETS
AGRI-FORESTRY AGRICULTURE, FOODS AND FORESTRY
AUTOMOTIVE & TRANSPORTATION TRANSPORTATION, LOGISTICS AND RELATED SERVICES
BUSINESS PRODUCTS & SERVICES BUSINESS PRODUCTS AND SERVICES
CLEANTECH ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES
pe deal type
pe sectors
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2019 | 18
source:
CVCA METHODOLOGY // PRIVATE EQUITY
continued
CONSUMER & RETAIL CONSUMER PRODUCTS AND SERVICES, BRICK AND MORTAR RETAIL
FINANCIAL FINANCIAL SERVICES
ICT COMPUTER HARDWARE/SOFTWARE & SERVICES, INTERNET SOFTWARE & SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE & TELECOM AND SERVICES
INDUSTRIAL & MANUFACTURING EQUIPMENT AND MATERIAL MANUFACTURING
LIFE SCIENCES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES
MINING & RESOURCES NON OIL AND GAS NATURAL RESOURCES
OIL & GAS, POWER OIL & GAS, POWER AND UTILITIES
REAL ESTATE PROPERTY DEVELOPMENT AND MANAGEMENT
pe sectors
ABOUT AND CONTACT
About CVCAOUR VISIONA thriving Canadian economy driven by private capital
OUR MISSION CVCA’s mission is to help our members fuel the economy of the future by growing the busi-nesses of today. We do this by supporting and connecting a vibrant private capital industry with advocacy, research, and education.
CVCA is also the nation’s ultimate resource for data on Canadian private capital investments.
Please visit cvca.ca
@CVCACanada CVCA
CVCA - Canadian Venture Capital and Private Equity Association
372 Bay St., Suite 1201 Toronto, ON M5H 2W9
To obtain estimates for additional custom CVCA Intelligence data reports please contact [email protected]
Authorsdarrell pinto vp, research & industry [email protected] | 416-487-0519 ext. 208
david kornacki associate, research & [email protected] | 416-487-0519 ext. 202
jon jackson head of [email protected] | 416-487-0519 ext. 201
