VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 2
CONTENTS
PARTICIPATING DATA CONTRIBUTORS ............................................................................... 3
FOREWORD ...................................................................................................................................... 4
VENTURE CAPITAL CANADIAN MARKET OVERVIEW .................................................... 5 VENTURE CAPITAL HIGHLIGHTS ................................................................................................................................ 6
VENTURE CAPITAL HEAT MAP ..................................................................................................................................... 7 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY ......................................................................... 8 VC ACTIVITY BY DEAL SIZE ............................................................................................................................................. 9 TOP 10 DISCLOSED CANADIAN VC DEALS ........................................................................................................ 10 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES .................................................................... 11 VC SECTOR BREAKDOWN ............................................................................................................................................. 12 VC STAGE BREAKDOWN ................................................................................................................................................. 13 VC EXITS ....................................................................................................................................................................................... 14 TOP DISCLOSED VC EXITS .............................................................................................................................................. 15MOST ACTIVE VC FIRMS // FUNDS ........................................................................................................................ 16
PRIVATE EQUITY CANADIAN MARKET OVERVIEW ...................................................... 17 PRIVATE EQUITY HIGHLIGHTS .................................................................................................................................... 18
PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY ............................................... 19
PRIVATE EQUITY HEAT MAP // ALL PE DEALS ............................................................................................. 20 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY ....................................................................... 21 TOP 10 DISCLOSED CANADIAN PE DEALS ....................................................................................................... 22 PE ACTIVITY BY DEAL SIZE ............................................................................................................................................ 23 TOP CANADIAN CITIES // ADMINISTRATIVE CENTRES .......................................................................... 24 PE SECTOR BREAKDOWN .............................................................................................................................................. 25 PE EXITS ....................................................................................................................................................................................... 26 TOP 10 DISCLOSED CANADIAN PE EXITS .......................................................................................................... 27MOST ACTIVE PE INVESTORS .................................................................................................................................... 28
CVCA METHODOLOGY ............................................................................................................. 29 VENTURE CAPITAL .............................................................................................................................................................. 29 PRIVATE EQUITY ............................................................................................................................................................. 30, 31
AUTHORS, ABOUT CVCA AND CONTACT INFO ............................................................. 32
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 3
PARTICIPATING DATA CONTRIBUTORS
Alberta Teachers' Retirement Fund
Alberta Enterprise Corporation
BDC Capital Inc.
Bluesky Equities Ltd.
Caisse de dépôt et placement du Québec
Capital Régional et Coopératif Desjardins
Dancap Private Equity Inc.
Fondaction CSN
Fonds de solidarité FTQ
Fonds de solidarité FTQ (Regional)
HarbourVest Partners (Canada) Ltd.
Investissement Québec
Kensington Capital Partners Limited
Ontario Teachers' Pension Plan
Teralys Capital
PARTICIPATING LIMITED PARTNERS
If you would like to have your firm included in future reports, please contact either [email protected] or [email protected]
PARTICIPATING PRIVATE EQUITY & LSVCC FIRMS
32 Degrees Capital
AIP Private Capital
ARC Financial
Ardenton Capital Corporation
ATB Capital
Birch Hill Equity Partners
Brookfield Asset Management
CAI Capital Management Co.
Clairvest Group Inc.
Clearspring Capital Partners
End of Petroleum
First West Capital
Fulcrum Capital Partners
GrowthWorks Capital
Hawthorne Capital Inc.
Highland West Capital
InstarAGF Asset Management
Ironbridge Equity Partners
Kayne Capital
Killick Capital Inc.
Lex Capital Management
m2s Capital
Mink Capital
Mosaic Capital Corporation
Novacap Management Inc.
OMERS Private Equity Inc.
Parallel 49 Equity
Persistence Capital Partners
PFM Capital Inc
PRIVEQ Capital Funds
Regimen Equity Partners
Roynat Capital Inc.
Seafort Capital
Searchlight Capital Partners
Signal Hill Equity Partners
TIMIA Capital Corp
TriWest Capital Partners
Westcap Mgt. Ltd.
Western Investment Company of Canada Ltd.
XPND Capital
Accelerate Fund
Amorchem Venture Fund
Anges Québec
Anges Québec Capital
AVAC Ltd.
Avrio Ventures Management Corp
Azure Capital Partners
Bioindustrial Innovation Canada
Brightspark Ventures
CIBC Innovation Banking
CTI Life Sciences
Cycle Capital Management/Ecofuel
Emerald Technology Ventures
Epic Capital
Espresso Capital Ltd.
Evok Innovations
Ferst Capital
Fight Against Cancer Innovation Trust
Freycinet Ventures
Golden Venture Partners
Good News Ventures
GreenSoil Investments
HIGHLINE
iGan Partners
Information Venture Partners
Innovacorp
iNovia Capital
Island Capital Partners
Luge Capital
Lumira Ventures
MaRS Catalyst Fund
MaRS IAF
McRock Capital
New Brunswick Innovation Foundation
Northumberland CFDC
OMERS Ventures
OpenText Enterprise Apps Fund
Panache Ventures
Pangaea Ventures
Pelorus Venture Capital Ltd.
Plaza Ventures
Quark Venture
Real Ventures
Relay Ventures
Renewal Funds
Roadmap Capital
Ryerson Futures
ScaleUP Ventures
StandUp Ventures
Tandem Expansion
TandemLaunch
TELUS Ventures
Top Renergy
Trellis Capital
V3-Ventures
Vancouver Founders Fund
Vanedge Capital Partners
VentureLink Funds
Versant Ventures
Version One Ventures
White Star Capital
Whitecap Venture Partners
Yaletown Partners Inc.
PARTICIPATING VENTURE CAPITAL FIRMS
CVCA thanks the following firms who participated in itsQ1 2018 survey.
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 4
FOREWORD
Third $1B Quarter In Last Twelve Months Propels Venture Capital Momentum; All Private Equity Segments Slowing With Overall Activity Eclipsed By Two Mega Deals
VENTURE CAPITALVenture capital investment in Canada continued its five-year upward trajectory in the first half of 2018 showing no signs of slowing for the remainder of the year. Almost $1B was invested over 166 deals in Q2, bringing the year-to-date (YTD) total VC investment to $1.7B—7% higher than H1 2017. Q2 2018 is the third time since January 2017 where VC investment in Canada has surmounted $1B.
“Innovation in Canada is enjoying the best venture capital investment climate in well over a decade,” says Mike Woollatt, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. “We’re consistently observing an increase in size and volume of deals at all stages; plus, a welcome resurgence in exits. We’re bracing for 2018 to be another record year.”
There were 16 exits so far in 2018 continuing the rebound from last year. These included the $141M corporate acquisition by Eli Lilly of AurKa Pharma, a TVM Life Sciences Management portfolio company and the $100M transaction in Coveo Solutions Incorporated by a U.S.-based private equity firm.
Keeping pace with the last two years, there were seven mega deals ($50M+) in the first half of 2018, totalling almost a half a billion dollars. Of the seven, Toronto-based Ritual raised $90M in a series C round led by Georgian Partners. Toronto-based ecobee Inc received $80M in series C financing which included participation from Relay Ventures. Ecobee Inc also received a $47M follow-on investment from BDC Capital and Caisse de dépôt et placement du Québec. Toronto-based TouchBistro Inc. raised $72M in a series D round from a syndicate led by OMERS Ventures and included participation from BDC IT Venture Fund and Relay Ventures.
ICT companies continue to receive the majority (64%) of total VC dollars invested in the first half of 2018 ($1.1B over 189 deals) with life sciences ($204M over 48 deals) and cleantech ($192M over 28 deals) companies receiving an equal 12% share.
PRIVATE EQUITYPrivate equity investment in Canada continued its downward trend in the first half of 2018. $7.6B was invested over 146 PE deals in Q2, bringing the year-to-date (YTD) total to $14.5B over 288 deals. So far in 2018, overall investment was bloated by two mega deals ($2.5B+) which made up 69% of total dollars invested. In comparison, mega deals made up only 51% of dollars invested in H1 2017 and 0% in H1 2016.
The two mega deals accounted for three quarters (69%) of YTD investment in 2018 and included the $5.1B recapitalization of Ontario-based GFL Environmental Incorporated by a consortium which included Ontario Teachers’ Pension Plan (OTPP) and the OMERS Private Equity sale of its position in Husky Injection Molding Systems Limited to a U.S. PE firm via a $5B secondary buyout.
“Canadian private equity appears on pace from previous years, however on the dollar side it is increasingly driven by significant deals; suggesting the levels are a bit more tenuous,” says Mike Woollatt, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. “In the absence of a few large deals, activity in the Canadian PE market is being driven substantially by smaller deals as activity shifts to categories with typically smaller deal sizes.”
The momentum in exits also shifted downward in H1 with only 41 exits ($10.5B) compared to 152 exits ($11.5B) in 2017. There were two IPO exits which included Quebec-based IPL Incorporated (TSE: IPLP) with a market cap of $709M, backed by Caisse de dépôt et placement du Québec (CDPQ), Fonds de solidarité (FTQ) and Investissement Québec and ONCAP-backed BC-based Pinnacle Renewable Energy Incorporated (TSE: PL).
Five-year upward trend for VC shows no signs of slowing for the remainder of 2018; PE mega deals in H1 doubles its share compared to the three previous years
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 5
VENTURE CAPITALCANADIAN MARKET
OVERVIEW // H1 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 6
VENTURE CAPITAL HIGHLIGHTS // H1 2018
Almost $1B was invested over 166 deals in the second quarter this year, bringing the YTD total VC investment to $1.7B which is 7% higher than the first half of last year. This is the third quarter since the beginning of 2017 where VC investment has surmounted $1B. The five-year upward trend shows no signs of slowing for the remainder of 2018.
The average deal size was $6M, a 28% increase from the previous quarter and 13% higher than the average deal size in the five-year period between 2013-2017 ($5.3M).
The top 10 disclosed deals in H1 amounted to $624M, capturing a 38% share of total dollars invested—the largest share since 2013 where they accounted for 34% of total dollars invested.
The flotilla of $50M+ mega deals continued the same pace as the previous two years: seven deals totalling almost $0.5B and included:
Toronto-based Ritual secured a $90M series C round led by Georgian Partners Inc.
Toronto-based ecobee Inc. closed its series C financing: an $80M round from an investor syndicate that included Relay Ventures and a follow on $47M investment from BDC Capital and Caisse de dépôt et placement du Québec (CDPQ).
Toronto-based TouchBistro Inc. raised a $72M series D round from a syndicate led by OMERS Ventures Management Inc. which included BDC IT Venture Fund and Relay Ventures.
Deals between $1M-$5M captured 14% of total dollars invested, representing a 4% point gain from its share last year.
Ontario-based companies received 55% of investment ($907M), up from their 39% share last year; Quebec-based companies received 19% ($319M) followed closely by BC-based companies with a 17% ($276M) share.
Toronto-based companies received almost half ($793M over 89 deals) of total dollars disbursed, with Vancouver-based companies receiving a 16% ($264M over 38 deals) and Montreal-based companies a 15% share ($254M over 64 deals).
ICT companies grabbed the lion’s share (64%) of total dollars invested in H1 2018 ($1.1B over 189 deals) with life sciences and cleantech companies receiving an equal 12% share ($204M over 48 deals and $192M over 28 deals respectively).
There was a marked increase toward later-stage companies which received 54% ($901M) of total dollars compared to its 41% from last year; early stage companies received 37% ($612M) of investment, down from its 52% share in 2017.
The market for exits continued the rebound from last year with 16 exits which included:
the $141M corporate acquisition of TVM Life Science Management portfolio company AurKa Pharma by Eli Lilly
the $100M transaction in Coveo Solutions Inc. from a US private equity firm
Key Findings:
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 7
194
4217 7
116$319m
$907MOntario
$276MBC
$70MAlberta
Québec
Nova Scotia$55M
New Brunswick
Newfoundland& Labrador
$21M
$4M
$3MSaskatchewan
$7MManitoba
1213Prince Edward
Island
$1M3
3
$1.7btotal308 dealstotal #
VENTURE CAPITAL HEAT MAP // H1 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 8
0
20
40
60
80
100
120
140
160
180
200
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1000
220
240
$1,100
$1,200
Q2 Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
$35
8
$41
4
$6
91
$6
13
$43
2
$6
65
$6
21
$58
5
$9
60
$71
3
110
93
113 122
134
140 142
130
127
147
Q3
$6
82
Q4
$8
41
Q1
$6
48
$9
08
Q3
$1,
159
Q4
$1,
09
9
Q1
$6
66
Q2
$9
96
125134
136
153 155 158
142
166
TOTAL:438 DEALS
$2.1B
TOTAL:546 DEALS
$2.3B
TOTAL:533 DEALS
$3.2B
TOTAL:602 DEALS
$3.8B
TOTAL:308 DEALS
$1.7B
$ Millions Invested
# Deals
2014 20162015 2017 2018
QUARTER-OVER-QUARTERVC INVESTMENT ACTIVITY
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 9
Total Deals $ Millions
< $100K
$100 - $500K
$500K - $1M
$1M - $5M
$5M - $20M
$20M - $50M
$50M +
12
68
44
101
52
10
7
$1
$16
$30
$232
$600
$290
$493
VC ACTIVITY BY DEAL SIZE // H1 2018
$1m-$5mwere between
one-third of all deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 10
TOP 10 DISCLOSED CANADIAN VC DEALS // H1 2018
COMPANY NAME PROVINCE DISCLOSED VC FIRM(S) SECTOR STAGE $ MIL
RITUAL ONTARIO GEORGIAN PARTNERS INC., GREYLOCK PARTNERS, INSIGHT VENTURE PARTNERS, MISTRAL VENTURE PARTNERS INC. ICT LATER STAGE VC $90
ECOBEE, INC. ONTARIO AMAZON.COM NV INVESTMENT HOLDING LLC, ENERGY IMPACT PARTNERS, RELAY VENTURES, THOMVEST VENTURES, INC. CLEANTECH LATER STAGE VC $80
TOUCHBISTRO INC. ONTARIO BDC IT VENTURE FUND, J.P. MORGAN PARTNERS, NAPIER PARK FINANCIAL PARTNERS, OMERS VENTURES MANAGEMENT INC., RELAY VENTURES ICT LATER STAGE VC $72
WEALTHSIMPLE FINANCIAL INC. ONTARIO POWER FINANCIAL CORPORATION ICT LATER STAGE VC $65
LEAGUE INC. ONTARIOBDC IT VENTURE FUND, OMERS VENTURES MANAGEMENT INC., QUANTUM VALLEY INVESTMENTS, RBC VENTURE PARTNERS, REAL VENTURES, TELUS VENTURES, WITTINGTON INVESTMENTS, LTD.
OTHERS EARLY STAGE VC $62
BREATHER PRODUCTS INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), MENLO VENTURES, TEMASEK HOLDINGS (PRIVATE) LIMITED ICT LATER STAGE VC $59
ECOBEE, INC. ONTARIO BUSINESS DEVELOPMENT BANK OF CANADA (BDC), CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) CLEANTECH LATER STAGE VC $47
ELASTIC PATH SOFTWARE INC. BC BDC IT VENTURE FUND, SAGEVIEW CAPITAL LP, YALETOWN PARTNERS INC. ICT LATER STAGE VC $43
UBERFLIP ONTARIO UPDATA PARTNERS ICT LATER STAGE VC $41
* THERE WAS 1 UNDISCLOSED DEAL NOT INCLUDED IN THIS LIST
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 11
TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES // H1 2018 #1 toronto
$793M 89 DEALS $793
$254
$264
$32
$81
$27
$50
$18
$4
$38
Total Deals $ Millions
1. Toronto
2. Montréal
3. Vancouver
4. Calgary
5. Kitchener, Waterloo, Cambridge
6. Ottawa
7. Halifax
8. Laval
9. St. John’s (NF)
10. Edmonton
89
64
38
11
10
10
9
7
7
6
15
2
10
4
6
39
78
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 12
0
40
80
120
160
200
240
280
320
400
360
440
520
480
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
$2,600
2016 2017 2017 2017 201720152014 201620152014 201620152014 20152014
$1,
948
$20
8
$18
5
2016 H12018
H12018
H12018
H12018
276
329
331
381
113
104
78
$48
8 $72
1
$73
3
$70
5
$1,
342
$1,
347
106
4847 44 35 28 14
2027 25 15
$17
7
$13
8
47
$27
$42
$2,
464
$19
2
$79
$40
9
$9
8
$1,
06
5
189
$20
4
VC SECTOR BREAKDOWN // 2014-H1 2018
ICT CleanTechLife Sciences AgriBusiness
$ Millions Invested
# Deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 13
VC STAGE BREAKDOWN // 2014-H1 2018
0
30
60
90
120
150
180
210
240
300
270
330
360
$0
$175
$350
$525
$700
$875
$1,050
$1,225
$1,400
$1,575
$1,750
$1,925
$2,100
201620152014 201620152014 201620152014
$13
6
$15
9
$21
4
$8
60
$1,
06
8
$1,
210
$9
05
$1,
570
$1,
99
3
$1,
403
201720172017
139
180 178
179
220
260
235
97
117135
93
154
106
$1,
572
204
$23
6
H12018
$14
2
H12018
$6
12
H12018
$9
01
97
Seed Early Stage Later Stage
$ Millions Invested
# Deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 14
VC EXITS* // 2014-H1 2018
M&A IPO/RTO**
* INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES
** MARKET CAP AT TIME OF IPO/RTO
$ Millions Invested
# Deals
$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
$2,400
$2,700
$3,000
0
5
10
15
20
25
30
35
40
50
45
201620152014 201620152014
$50
3
$1,
392
$58
4
$1,
00
820172017
$32
6
H12018
H12018
29
41
30
7 6
0 0
32
16
3
$1,
051
$2,
150
$2,
945
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 15
TOP DISCLOSED VC EXITS // H1 2018
VC INVESTORS COMPANY SECTOR EXIT TRANSACTION ACQUIRED BY $ MIL.
TVM LIFE SCIENCE MANAGEMENT INC. AURKA PHARMA LIFE SCIENCES M&A ELI LILLY $141
TANDEM EXPANSION FUND, FONDS DE SOLIDARITÉ FTQ, INVESTISSEMENT QUÉBEC, BDC CAPITAL, PROPULSION VENTURES, FIER SUCCÈS, ACCÈS CAPITAL
COVEO SOLUTIONS INC. ICT M&A EVERGREEN COAST CAPITAL $100
THERE WAS 1 UNDISCLOSED EXITS OVER $50M IN H1 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 16
MOST ACTIVE VC FIRMS // FUNDS // H1 2018
MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
REAL VENTURES 33 $193
PANACHE VENTURES 17 $22
CYCLE CAPITAL MANAGEMENT/ECOFUEL 13 $78
INOVIA CAPITAL INC. 13 $63
YALETOWN PARTNERS INC 8 $98
GOLDEN VENTURE PARTNERS 6 $43
PLAZA VENTURES 6 $42
SCALEUP VENTURES 6 $20
GOOD NEWS VENTURES 6 $18
MOST ACTIVE FIRMS IN VC DEBT DEALS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
ESPRESSO CAPITAL LTD. 26 $25
DESJARDINS CAPITAL 10 $3
TIMIA CAPITAL CORP 4 $5
CIBC INNOVATION BANKING 2 $65
BDC CAPITAL INC. 2 $2
FONDS DE SOLIDARITÉ FTQ 2 $1
MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS
SIZE OF TOTAL ROUNDS*
(CDN$ MIL)
DESJARDINS CAPITAL 27 $62
FONDS DE SOLIDARITÉ FTQ 14 $80
WESTCAP MGT. LTD. 4 $10
OMERS VENTURES MANAGEMENT INC. 3 $143
MOST ACTIVE GOVERNMENT FUNDS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
BDC CAPITAL 22 $307
NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 13 $22
MARS IAF 10 $11
INNOVACORP 9 $26
BDC IT VENTURE FUND 7 $166
BDC INDUSTRIAL, CLEAN AND ENERGY TECHNOLOGY (ICE) VENTURE FUND 6 $44
ANGES QUÉBEC CAPITAL 6 $22
* TOTAL DEAL VALUES - INCLUDES ALL PARTICIPATING INVESTORS * * BDC HEALTHCARE FUND - 1 DEAL, $6M; BDC IT VENTURE FUND - 7 DEALS, $166M; BDC ICE FUND - 6 DEALS, $44M
# Rounds
Real Ventures
Desjardins Capital
BDC Capital
Panache Ventures
BDC Sector Funds**
Fonds de solidarité FTQ
Cycle Capital Management/Ecofuel
iNovia Capital Inc.
New Brunswick Innovation Foundation (NBIF)
MaRS IAF
33
27
22
17
14
14
13
13
13
10
Size of Total Rounds* (Cdn$ mil)
$193
$62
$307
$22
$216
$80
$78
$63
$22
$11
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 17
PRIVATE EQUITYCANADIAN MARKET
OVERVIEW // H1 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 18
$7.6B was invested over 146 PE deals in Q2 2018 bringing the YTD total to $14.5B over 288 deals.
Two mega deals accounted for a lopsided share of investment (69%) in the first half of 2018—more than double the one-third share mega deals have typically captured in any of the three previous years:
the $5.1B recapitalization of Ontario-based GFL Environmental Inc. by an investor consortium that included Ontario Teachers’ Pension Plan (OTPP)
OMERS Private Equity selling its stake in Husky Injection Molding Systems Ltd. to a US PE firm via a $5B secondary buyout
Propelled by the Husky deal, the amount invested in secondary buyouts has already exceeded the total for each of the last five years
Deal activity in the small end of the market segment (deals less than $25M) garnered 65% of all deals, higher than last year’s 60% share. Deals between $25M-$100M captured a 7% share of deals, down from the 11% last year.
17% (50 deals totalling $1.9B) of all PE deals went to Montreal-based companies, with Toronto-based companies receiving a 14% share (41 deals totalling $10.5B).
A little over a fifth (22% or 64 deals) of PE deals this year have been closed in the industrial & manufacturing sector, with ICT companies receiving the second largest share (16% or 45 deals).
The pace of PE exits slowed with only 41 exits (totalling $10.5B) compared to last year with 152 exits (totalling $11.3B) with two IPO exits:
Quebec-based IPL Inc., backed by Caisse de dépôt et placement du Québec (CDPQ), Fonds de solidarité (FTQ) and Investissement Québec, completed its IPO on TSX with a market cap of $709M
ONCAP-backed BC-based Pinnacle Renewable Energy Inc. completed its IPO on TSX with a market cap of $370M
PRIVATE EQUITY HIGHLIGHTS // H1 2018
Key Findings:
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 19
12615
1 3
$44Mna
$91M
$630m
$0M
$5.3bOntario
BCAlberta
Saskatchewan
Québec
Nova Scotia
26
naManitoba
NewBrunswick
na
1 1
$6.1btotal
65 dealstotal #
PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY // H1 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 20
8 3
11
1772421
$304m$23m
$214m
$3.3b
na
$10.7bOntario
BCAlberta
Saskatchewan
Québec
Nova Scotia
53
naManitoba na
NewBrunswick
$14.5btotal 288 dealstotal #
PRIVATE EQUITY HEAT MAP // ALL PE DEALS // H1 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 21
Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
0
20
40
60
80
100
120
140
160
180
200
$6
,277
$5,
250
$7,
80
4
$22
,851
$7,
053
$1,
86
9
$11
,375
$2,
60
0
$3,
221
$3,
370
64
81
88
101
91
104
117
113
124
145
134
139
$3,
06
8
Q3
$4,
179
Q4
$5,
315
Q1 Q2 Q3 Q4
113
179
166 153
142 146
$8
,812
$7,
554
$4,
68
2
Q1
$6
,940
Q2
$7,
60
7
QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY
TOTAL:334 DEALS
$42.2B
TOTAL:425 DEALS
$22.9B
TOTAL:542 DEALS
$13.8B
TOTAL:611 DEALS
$26.4B
TOTAL:288 DEALS
$14.5B
$ Millions Invested
# Deals
2014 20162015 2017 2018
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 22
TOP 10 DISCLOSED CANADIAN PE DEALS // H1 2018
COMPANY NAME PROVINCE FIRMS INVOLVED IN TRANSACTION SECTOR $ MIL.
GFL ENVIRONMENTAL INC. ONTARIOBC PARTNERS, HAWTHORN EQUITY PARTNERS, HIGHBRIDGE PRINCIPAL STRATEGIES, LLC, MACQUARIE RESOURCE CAPITAL CANADA LTD., ONTARIO TEACHERS' PENSION PLAN (OTPP)
CLEANTECH $5,125
HUSKY INJECTION MOLDING SYSTEMS LTD ONTARIO BERKSHIRE PARTNERS LLC, OMERS PRIVATE EQUITY INC., PLATINUM EQUITY, LLC INDUSTRIAL &
MANUFACTURING $4,964
STINGRAY DIGITAL GROUP INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ BUSINESS PRODUCTS & SERVICES $509
NAPEC INC. QUÉBEC FONDS DE SOLIDARITÉ FTQ, OAKTREE CAPITAL GROUP, LLC INDUSTRIAL & MANUFACTURING $320
BORALEX INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ OIL & GAS, POWER $200
POINTCLICKCARE CORP. ONTARIO DRAGONEER INVESTMENT GROUP LIFE SCIENCES $187
ESTRUXTURE QUÉBEC FENGATE CAPITAL MANAGEMENT LTD. ICT $180
ARTIS EXPLORATION LTD. ALBERTA WARBURG PINCUS LLC OIL & GAS, POWER $180
RÉSIDENCES POUR AÎNÉS IMMO 1ERE INC. QUÉBEC DESJARDINS CAPITAL REAL ESTATE $122
COVEO SOLUTIONS INC. QUÉBEC EVERGREEN COAST CAPITAL CORP., TANDEM EXPANSION FUND ICT $100
* THERE WERE 2 UNDISCLOSED DEALS TOTALLING $488M THAT WERE NOT INCLUDED IN THIS LIST
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 23
0
40
80
120
160
200
240
280
320
400
360
$0
$1,600
$3,200
$4,800
$6,400
$8,000
$9,600
$11,200
$12,800
$14,400
$16,000
201620152014 201620152014 201620152014 20152014
$8
49
$9
10
$1,
290
$6
,09
3
$6
,321
$3,
212
$5,
86
1
$3,
106 $
4,79
7 $6
,60
1
2016
$7,
630
$50
9
201620152014 201620152014
$10
,910
$4,
782
$4,
034
$3,
250
$3,
300
$4,
80
0
201720172017201720172017
$14
,927
116
183
362
55 56 49 27 3114 10 7 1149
7 3 3 22 1 0 1 2
$2,
80
4
$2,
788
$2,
197
$3,
337
$1,
485
H12018
366
188
67
20
28
< $25M $25M-$100M $100M-$500M $1B-$2.5B$500M-$1B $2.5B+
H12018
$1,
126
H12018
$1,
776
H12018
H12018
H12018
$10
,08
9
$1,
047
1
PE ACTIVITY BY DEAL SIZE // H1 2018
TOTAL:1215 DEALS
$5.6B
TOTAL:247 DEALS
$12.3B
TOTAL:109 DEALS
$23.3B
TOTAL:15 DEALS
$23B
TOTAL:33 DEALS
$22.6B
TOTAL:6 DEALS$33.1B
$ Millions Invested
# Deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 24
Total Deals $ Millions
1. Montreal
2. Toronto
3. Montérégie
4. Nord-du-Québec / Abitibi-Témis
5. Calgary
6. Saguenay-Lac-St-Jean/Côte-Nord
7. Vancouver
8. Québec
9. Bas-Saint-Laurent
10. Chaudière-Appalaches
50
41
21
16
15
14
13
11
11
10
$1,904
$10,544
$48
$38
$287
$123
$124
$285
$46
$142
TOP CANADIAN CITIES // ADMINISTRATIVE CENTRES // H1 2018 #1 montréal
$1.9b 50 DEALS
2
5
10
9
4
31
76
8
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 25
64
45
23
28
29
20
14
12
12
23
11
5
2
# Deals $ Millions
Industrial & Manufacturing
ICT
Life Sciences
Consumer & Retail
Business Products & Services
Agri-Forestry
Oil & Gas, Power
Automotive & Transportation
CleanTech
Mining & Resources
Financial
Real Estate
Others
$5,613
$578
$413
$229
$958
$421
$522
$116
$5,234
$222
$95
$147
NA
PE SECTOR BREAKDOWN // H1 2018
industrial & manufacturingmost active sector 64 deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 26
PE EXITS* // 2014-H1 2018 $ Millions Invested
# Deals
* INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES
** IPO VALUATION
201620152014 201620152014 201620152014
$8
,055
$2,
553
$1,
711
$4,
80
0
201720172017
$1,
079
H12018
$11
,679
$12
,655
$6
,542
$3,
073
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
5 61 2
5
50 51
55
138
10 7 48
IPO/RTO** M&A Secondary Buyout
H12018
H12018
$5,
212
35
$4,
177
4
$9
30
$2,
161
$3,
408
$1,
672
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 27
TOP 10 DISCLOSED CANADIAN PE EXITS // H1 2018
SELLER COMPANY NAME BUYER $ MIL.
BERKSHIRE PARTNERS LLC, OMERS PRIVATE EQUITY INC. HUSKY INJECTION MOLDING SYSTEMS LTD PLATINUM EQUITY, LLC $4,964
PERMIRA, FONDS DE SOLIDARITÉ, CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) ATRIUM INNOVATIONS INC. NESTLÉ S.A. $2,973
TORQUEST PARTNERS WSB TITAN GMS INC. $811
CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ (FTQ), INVESTISSEMENT QUÉBEC, ONE51 PLC IPL INC. NA - IPO $709
ONCAP PINNACLE RENEWABLE ENERGY INC. NA - IPO ON TSX $370
Husky Injection Molding Systems Ltd
bought by Platinum Equity, LLC $4,964m#1
* THERE WERE 5 UNDISCLOSED $50M+ EXITS
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 28
88
56
23
21
14
7
7
# Deals $ Millions*
Fonds de solidarité FTQ
Desjardins Capital
Caisse de dépôt et placement du Québec (CDPQ)
Investissement Québec
Fondaction CSN
BDC Capital Inc.
PFM Capital Inc.
$2,070
$693
$1,259
$560
$167
$62
$51
MOST ACTIVE PE INVESTORS // H1 2018
* TOTAL DEAL VALUES – INCLUDES ALL PARTICIPATING INVESTORS
most active PE FIRM
88 DEALSFonds de solidarité FTQ
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 29
CVCA METHODOLOGY // VENTURE CAPITAL
VC DEVELOPMENT STAGES
SEED STAGE COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL.
EARLY STAGE COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE.
LATER STAGE PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE.
VC SECTORS
ICT COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE AND TELECOM TECHNOLOGIES AND SERVICES
LIFE SCIENCES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES
CLEANTECH ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES
AGRIBUSINESS TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES
Venture Capital Data:
Verified completed equity or quasi-equity venture capital deals only (non-equity or project-based government funding, pharmaceutical development deals, senior debt, venture capital-backed acquisitions, and angel financing are not included)
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 30
CVCA METHODOLOGY // PRIVATE EQUITY
Private Equity Data:
Dataset includes only completed private equity deals (announced but yet to be completed deals are not included)
PE DEAL TYPE
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
continued
PE SECTORS
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
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 31
CVCA METHODOLOGY // PRIVATE EQUITY continued
PE SECTORS
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
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2018 | 32
CVCA ABOUT & CONTACT
AuthorsDarrell oversees all data related to Canadian private capital investments, exit and fundraising activities for the CVCA. Darrell has held senior positions at several global organizations including the Toronto Stock Exchange, Institutional Limited Partners Association, Thomson Reuters, Glaxosmithkline and the Interac Association. In between these, he also started his own successful management consulting company. He has worked in New York, London and Shanghai, but Toronto remains his favourite working city. He brings to the CVCA a passion for telling compelling stories with data. Darrell is currently on the board of a non-profit social housing in Peel, a member of Volunteer Toronto as well as an active volunteer with Woodgreen Community Services. He holds a BA in Philosophy/History from the University of Western Ontario and an MBA from the Rotman School of Management.
[email protected] | 416-487-0519 ext. 208
Carolyn oversees all of the CVCA’s communications and marketing efforts, which includes managing the Association’s brand, coordinating media outreach programs, and managing the development of all online content and social media engagements. Carolyn also brings with her a background in journalism, and is keen on positioning the CVCA as the industry thought leader for all things private capital through informative and engaging content. Carolyn has a BA in Popular Culture and Communications from Brock University, a diploma in Journalism from Niagara College Canada, and an interdisciplinary Master of Arts degree in Communication Studies from Brock University.
[email protected] | 416-487-0519 ext. 204
David executes research on venture capital and private equity deals within Canada. David is responsible for monitoring industry activity and maintaining the CVCA’s Infobase by entering data, including investments, exits, deals and fundraising activities on a daily basis. David holds a BA in Philosophy and Psy-chology from the University of Toronto.
[email protected] | 416-487-0519 ext. 202
DARRELL PINTOResearch Director
DAVID KORNACKIResearch Analyst
CAROLYN GOARDSenior Manager, Communications
About CVCAThe Canadian Venture Capital and Private Equity Association is the voice of Canada’s venture capital and private equity industry. We are focused on improving the private capital ecosystem by broadening indus-try awareness and providing market research, networking, and professional development opportunities.
We also advocate on behalf of the industry to ensure sound public policy that encourages a favourable investment environment. The CVCA works alongside its members, who represent the vast majority of pri-vate capital firms in Canada, to improve the industry and drive innovation and growth.
For more information, 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 InfoBase data reports please contact [email protected]