CANADIAN PRIVATE EQUITY BUYOUT REVIEW
First Half 2016
REUTERS
Table of Contents
Canada’s PE Buyout Market in Q2 2016 3
$ Invested and # Companies Financed 5
Top Buyout Deals 9
Canada by Market Segment 10
Canada by Sector & Province 12
Canadian Investments Abroad 14
Buyout Funds Raised 16
Public and M&A Exits 17
Explanatory Notes & Contacts 18
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Overview of Canadian PE Buyout Market Activity in Q2 2016
Canadian buyout-PE market trends
Deal-making activity in Canada’s buyout and related private equity (PE) market showed mixed conditions in the first half of
2016 with increased deal values and declining deal volumes. A total of $10.1 billion was invested in 145 deals as of June
30th, which in dollar terms was up 30% from the same period the year prior and the most dollars invested in a first half
since 2007. Deal volumes however were down by 29% from the first six months of 2015, marking the fewest companies
funded in a first half since 2010.
Canadian private equity deal volumes were also down as compared to conventional merger & acquisition activity of
Canadian targets. As the number of M&A deals completed in the first half was only down 16% from the same period a year
ago, private equity has been seeing a greater decline in deal volumes as compared to alternative markets.
Top deals included CDP Capital’s $2.0 billion investment in Bombardier Transportation, Thomas H. Lee Partners’
investment in Give & Go Prepared Foods for $1.0 billion, and CPPIB’s $1.0 billion investment in Tiene Energy. At the end
of June, the ten largest transactions captured 78% of all disclosed disbursements made in the Canadian market.
Canadian market trends by sector
Canadian oil & gas, mining, and consumer related companies each tied for the largest share of buyout-PE dealmaking in
the first six months with 20 transactions apiece. Following a close second were manufacturing companies, with 16 deals,
while software and healthcare-related companies each came in third with ten transactions.
As measured by disclosed deal values, oil & gas companies continued to place first, unchanged from 2015, with a
combined $3.1 billion. The manufacturing sector placed second with $2.2 billion in disclosed deal values, while the
Consumer sector placed third with $1.5 billion.
Overview of Canadian PE Buyout Market Activity in Q2 2016
4
Canadian market trends by region
The majority of buyout-PE transactions (announced and completed) in the Canadian market in the first half involved
businesses that were located in Québec (45%) and Ontario (28%). However, only the province of British Columbia
demonstrated any growth over the first six months of 2015, with 15 deals this year, an 88% increase. The number of deals
done declined substantially in Québec (by 30%), Alberta (by 31%), and Ontario (by 39%).
Though the number of deals done in Ontario declined in the first quarter, the province attracted the bulk of the largest
deals, securing $3.8 billion. Alberta-based companies attracted the second largest share, with $2.8 billion, while Québec
followed with $2.6 billion. Though British Columbia saw growth in its number of deals in the first half, most had undisclosed
values, leaving the province with only $724 million of disclosed disbursements.
Canadian investor activity in global markets
Canadian buyout and related PE funds were substantially less active in international transactions in the first half relative to
the year before. As of June 30th, Canadian funds led or participated in a total of 47 deals in other countries, and these
were valued at approximately $36 billion. This compares against a total of 76 deals valued at $65 billion reported in the first
half of 2015. Topping the list was Florida-based security services provider ADT, which was acquired for $8.7 billion by PSP
Investments.
Trends in Canadian buyout-PE fund-raising
The fundraising activities of Canadian buyout funds maintained very strong levels in the first half of 2016 with a total of
$39.1 billion of new capital committed, led by the closings of Brookfield Capital Partners IV and Brookfield Infrastructure
Fund III.
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$12.0 $11.7 $10.5
$31.0
$22.2
$10.1
$0
$5
$10
$15
$20
$25
$30
$35
2011 2012 2013 2014 2015 2016
Q1 Q2 Q3 Q4
Buyout – PE Deal Values Reach $10.1 Billion Most Dollars Invested in a First Half Since 2007
De
al V
alu
e (
CA
D B
illio
ns)
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303
334 341
430 413
145
0
50
100
150
200
250
300
350
400
450
500
2011 2012 2013 2014 2015 2016
Q1 Q2 Q3 Q4
Buyout - PE Deal Volumes Down 29% From H1 2015 Fewest Deals in a First Half Since 2010
Nu
mb
er
of D
ea
ls
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to packages of additional data. Please contact us to participate.
303
334 341
430 413
145
0%
5%
10%
15%
20%
25%
30%
35%
0
50
100
150
200
250
300
350
400
450
500
2011 2012 2013 2014 2015 H1 2016
Number of PE Deals # of PE Deals as % of # of M&A deals
Slowdown in PE Dealmaking More Pronounced Than in Conventional M&A in Canada
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Nu
mb
er
of P
E D
ea
ls
303
334 341
430 413
145
0
50
100
150
200
250
300
350
400
450
500
2011 2012 2013 2014 2015 First Half2016
Foreign Lead Investor Domestic Lead Investor
Canadian Investors Lead 70% of Deals in First Half Unchanged From 2015
Nu
mb
er
of D
ea
ls
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Company Province
Value
(CAD $
Millions)
Disclosed Investors
Bombardier Transportation QC $2,089 CDP Capital
Give and Go Prepared Foods ON $1,004 Thomas H. Lee Partners
Tiene Energy AB $975 Canada Pension Plan Investment Board
GFL Environmental ON $800 Highbridge Principal Strategies, Macquarie
Group
RimRock Oil & Gas AB $685 Warburg Pincus
Pacific Exploration and
Production ON $633 Catalyst Capital Group
TELUS International BC $600 Baring Private Equity Asia
Aralez Pharmaceuticals ON $486 Deerfield Management
Top Canadian PE Buyout Deals First Half 2016
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Deal Size Range # of Deals
Done
Dollars Invested
(Disclosed)
> $1 Billion 2 $3,093 Million (31%)
$500 Million - $1 Billion 5 $3,693 Million (37%)
$100 Million - $500 Million 8 $2,074 Million (21%)
$10 Million - $100 Million 29 $1,035 Million (10%)
< $10 Million 48 $176 Million (2%)
Deal Values Undisclosed 53 $0 (0%)
Top Ten Buyout-PE Transactions Take 78% of Dollars
Total Deals With Disclosed Values: 92 (of 145)
Total Invested: $10.1 Billion
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Consumer & Natural Resources Companies Lead Deal Volumes in First Half
0 5 10 15 20 25
Distribution & Wholesale
Forestry & Agriculture
Energy & Environmental
Business Services
Finance
Transportation
Construction & Engineering
IT & Media
Healthcare & Life Sciences
Software
Manufacturing
Consumer Related
Mining
Oil & Gas
Total Deals: 145
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Oil & Gas, Manufacturing Investments Drive Deal Values in First Half
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5
Distribution & Wholesale
Transportation
Software
Construction & Engineering
Agriculture & Forestry
Finance
Mining
Business Services
IT & Media
Energy & Environmental
Healthcare & Life Sciences
Consumer Related
Manufacturing
Oil & Gas
Total Deal Values: $10.1 Billion
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0
10
20
30
40
50
60
70
80
90
100
British Columbia Alberta Ontario Quebec Rest of Canada
First Half 2015 First Half 2016
Sharp Declines in Deal Volumes Across All Regions but British Columbia
13
# o
f D
ea
ls
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to packages of additional data. Please contact us to participate.
$2.2 $1.4
$5.3
$10.3
$30.5
$34.3
$44.8
$41.2
$13.3
$22.7
0
25
50
75
100
125
150
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Total Deal Values, Including All Investors # of Deals
Am
ou
nt In
ve
ste
d (
CA
D $
Bill
ion
s)
Canadian Firms Participate in $36 Billion of Non-Canadian Deals in First Half
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# o
f D
ea
ls
Canadia
n Investo
rs, N
on
-Canadia
n C
om
panie
s
Rank Company Name Location Deal
Value (C$ Bil)
Industry Canadian Investors
(Disclosed)
1 ADT Boca Raton,
FL $8.7 Security PSP Investments
2 Petco San Diego,
CA $6.3
Consumer
Related CPPIB
3 Cleco Corporate
Holdings Pineville, LA $6.0 Electric Utilities BCIMC
4
Glencore PLC -
Agriculture
Business Unit
Switzerland $3.3 Agriculture CPPIB
5 Isagen SA ESP Columbia $2.8 Electric Utilities Brookfield Asset
Management
6
University House
Communities
Group
Dallas, TX $2.0 Real Estate
Management CPPIB
15
Canadian Funds’ Investments Abroad Top Deals: First Half 2016
Canadian PE Exits Up 21% From H1 2015 Trade Sales Comprise 77% of Exits
0
5
10
15
20
25
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
IPO Financial Sale Trade Sale
# o
f E
xit E
ve
nts
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Brookfield Funds Key to Record Canadian Fundraising
$12.2
$16.1 $14.7
$11.0
$39.1
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
2012 2013 2014 2015 First Half2016
Fu
nd
s R
ais
ed
(B
illio
ns o
f $
CA
D)
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Explanatory Notes
1. Data collected and analyzed by Thomson Reuters for this statistical report were drawn from a variety of sources. These include Thomson
Reuters M&A databases, regulatory filings, and public and proprietary sources among the members of Réseau du capital d’investissement
du Québec and other Canadian and non-resident fund managers responding to Thomson Reuters’ quarterly surveys.
2. All current and previous years data is as of Tuesday, July 26th, 2016. Data is continuously updated and is therefore subject to change.
3. All figures are in Canadian dollars unless otherwise noted.
4. Key statistical indicators (e.g., total disbursements, per quarter or per annum) are influenced by the fact that a substantial fraction of buyout
and other PE deals are not fully disclosed. For instance, “dollars invested” in a given period pertain only to those deals with values that
have been published or confidentially disclosed to Thomson Reuters.
5. The data also highlight the deal-making of Canadian funds in non-Canadian companies. “Dollars invested” pertain to the total value of
disclosed deals in which Canadian funds have participated and not the specific Canadian financial contributions to these deals.
6. Statistical data reflect all essential forms of buyout-PE deal-making, including control-stake acquisitions of businesses, minority equity
investments, restructuring and special-situations transactions, mezzanine deals over $3 million, and other quasi-equity investments.
7. For further information on Thomson Reuters venture capital and private equity offerings, please visit us at:
http://thomsonreuters.com/financial/venture-capital-and-private-equity/
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http://dmi.thomsonreuters.com/DealsIntelligence/QuarterlyReviews
9. If you would like to participate in the submission process, receive quarterly press releases, or have questions about our venture capital
criteria, please contact us at:
Gavin Penny
E-mail: [email protected]
Tel: 416-687-7577
18