private equity canadian market overview // h1 2020 · private equity canadian market overview // q1...
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PRIVATE EQUITY CANADIAN MARKET OVERVIEW
// H1 2020
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // Q1 2020 | 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 // Q1 2020 | 3
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If you would like to have your firm included in future reports, please contact [email protected]
PARTICIPATING DATA CONTRIBUTORS CVCA thanks the following firms
who participated in its H1 2020 survey.
7 Gate Ventures
Accelerate Fund
AmorChem Fund
Amplitude Ventures
Anges Quebec
Anges Quebec Capital
Arctern Ventures
AVAC Ltd.
Azure Capital Partners
BCF Ventures
Brightspark Capital
CIC Capital Ventures
Clanton Capital
Conexus Venture Capital
CTI Life Sciences
Cycle Capital Management/EcoFuel
Dash40 Ventures
Emerald Technology Ventures
Espresso Capital Ltd.
Evok Innovations
Ferst Capital
Fight Against Cancer Innova-tion Trust
First Ascent Ventures
Fonds Innovexport
Framework Ventures
Freycinet Ventures
Good News Ventures
GreenSoil Investments
Highline Beta
iGan Partners
Information Venture Partners
inovia Capital
Island Capital Partners
Klass Capital
Luge Capital
Lumira Ventures
Mantella Ventures Partners
MaRS Catalyst Fund
MaRS IAF
McRock Capital
Metiquity Ventures
Mistral VP
NAventures (National Bank of Canada)
New Brunswick Innovation Foundation
OMERS Ventures
Panache Ventures
Pangaea Ventures
Portag3 Ventures
Quark Venture
Real Ventures
Relay Ventures
Renewal Funds
Roadmap Capital
Round 13
ScaleUP Ventures
Sectoral Asset Management Inc.
Tactico Inc.
Tandem Expansion
TandemLaunch
TELUS Ventures
Top Renergy
TVM Life Sciences
V3-Ventures
Vanedge Capital Partners
Version One Ventures
White Star Capital
Yaletown Partners
Venture Capital FirmsAIP Private Capital
ARC Financial
Ardenton Capital Corporation
BDC Growth Equity
BDC Growth & Transition Capital
BMO Capital Partners
Bond Capital
CAI Capital Partners
Canadian Business Growth Fund
Capital Financière Agricole
Clairvest Group Inc.
Clearspring Capital Partners
Crédit Mutuel Equity
Founders Group of Food Compa-nies Inc.
Fulcrum Capital Partners
Highland West Capital
InstarAGF Asset Management
Ironbridge Equity Partners
Kayne Capital
Killick Capital Inc.
m2s Capital
Mink Capital
Mosaic Capital Corporation
Novacap Management Inc.
OMERS Private Equity Inc.
ONEX Corporation
PenderFund Capital Management
Persistence Capital Partners
PFM Capital Inc
PRIVEQ Capital Funds
Regimen Equity Partners
Seafort Capital
Searchlight Capital Partners
TIMIA Capital Corp
Tricor Pacific Capital Ltd.
TriWest Capital Partners
Vistara Capital Partners
Westcap Mgt. Ltd
Western Investment Company of Canada Limited
XPND Capital
Private Equity & LSVCC FirmsAlberta Enterprise Corporation
Alberta Teachers’ Retirement Fund (ATRF)
BDC Venture Capital
Bluesky Equities
Caisse de dépôt et placement du Québec
Desjardins Capital
Fondaction
Fonds de solidarité FTQ
Fonds de solidarité FTQ (Regional)
Investissement Quebec
Kensington Capital Partners Ltd.
Northleaf Capital Partners
Ontario Teachers’ Pension Plan (OTPP)
Teralys Capital
Limited Partners
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 4
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FOREWORD
PE investment Up 48% in Q2 2020 compared to Q1 2019
PE performance is pacing along with the average between 2015-2019 in both deals and dollars invested (565 deals and CAD $21B) with $4.5B invested over 145 deals in the second quarter of 2020 —48% higher than the amount in the same period last year (CAD $3B). There was a total of six mega deals (CAD $500M+) so far in 2020, totalling CAD $7B, 67% of total dollars invested (CAD $10.4B). 83% of PE deals were below $25M (198 out of 238 deals with disclosed values). “Canadian PE investors continue to pursue transactions despite COVID-19,” said Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association. “As Canada and international business cautiously open back up, I am encouraged to see resilience and confidence from Canadian Private Equity investors. There may still be some uncertainty ahead, but there is also opportunity.”
The private equity exit landscape is trending lower (11 exits in H1 2020) in comparison to the average (78 per year) but, included some significant transactions:
The GFL Environmental IPO on both TMX and NYSE with a market capitalization of CAD $7.8B
Northleaf Capital Partners’ CAD $2.7B sale of Xplornet Commununications Inc. to Stonepeak Infrastructure Partners
The CAD $425M Stonepeak Infrastructure Partners sale of Voortman Cookies by Swander Pace to Hostess
Novacap’s CAD $347M sale of Calgary-based Interlad to HG
PE in 2020 is pacing along the 2015-2019 average
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 5
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PRIVATE EQUITY HIGHLIGHTS // H1 2020
Key Findings $4.5B was invested over 145 deals in the second quarter of
2020, 48% higher than the amount in the same quarter from last year ($3B)
H1 2020 has seen a total of 6 mega deals ($500M+) so far, totalling $7B or 67% of total dollars invested ($10.4B)
83% (198 out of 238 deals with disclosed values) of PE deal flow were less than $25M
2020 is pacing along with the average between 2015-2019 in both deals and dollars invested (565 deals and $21B)
Although a fifth of all deals (61 out of 297) were closed in the Industrial and Manufacturing sector, the sector only represented 11% of total dollars invested with CAD $1.2B. The lion’s share of invested dollars was captured by the ICT
sector (CAD $3B) driven by the $2.7B secondary buyout of Xplornet Communications Inc. by Northleaf Capital Partners to a US-based private equity firm.
The pace of PE exits slowed in comparison to the average (11 exits in H1 2020) but included some significant transactions:the GFL Environmental IPO on both TMX and NYSE with
a market capitalization of $7.8BNorthleaf Capital Partners’ $2.7B sale of Xplornet
Commununications Inc. to Stonepeak Infrastructure Partners
the $425M sale of Voortman Cookies by Swander Pace to Hostess
Novacap’s $347M sale of Calgary-based Interlad to HG
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 6
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16
8
9
$1.7BAlberta
$228MOntario
$857MQuébec
$88MBritish
Columbia
51
1
$36MSaskatchewan
$2.7BNew Brunswick
$5.6Btotal 40 deals
PRIVATE EQUITY HEAT MAP BUYOUT & ADD-ON DEALS ONLY // H1 2020
total #
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 7
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15
493
$5MSaskatchewan
$7MAlberta
$135MBritish
Columbia
$129MOntario
$2.8BQuébec
5
4
$3btotal
76 deals
PRIVATE EQUITY HEAT MAP PE GROWTH DEALS ONLY // H1 2020
total #
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 8
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11
1
1
3
2025
17759$287M
BritishColumbia $2B
Alberta $55MSaskatchewan
$734MOntario
$4.6bQuébec
$2.7bNew Brunswick
$35MNova Scotia
$2MNewfoundlandand Labrador
$10.4btotal
297 dealstotal #
PRIVATE EQUITY HEAT MAP ALL PE DEALS // H1 2020
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 9
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QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY
TOTAL:541 DEALS
$13.8B
TOTAL:607 DEALS
$26.3B
TOTAL:590 DEALS
$22.7B
TOTAL:661 DEALS
$19.4B
TOTAL:297 DEALS
$10.4B
2016 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
Q4Q1
$3,2
21
Q2
$3,3
70
124
146
133
138
Q3
$3,0
38
$4,17
9
Q4
$5,3
29
178
163
152 156
162
124
164178 177
148
Q1
$8,7
80
Q2$7
,491
Q3
$4,6
72
Q1
$6,7
48
Q2
$8,0
57
Q3
$1,9
77
Q4
$5,8
70
Q1
$2,0
71
Q2
$3,0
19
Q3
$1,9
52
Q1
$5,8
81
Q2
$4,4
83
Q4
$12,
333
114
142152 145
$ Millions Invested # Deals
2019 2020
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 10
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TOP 10 DISCLOSED CANADIAN PE DEALS // H1 2020
company name province firms involved in transaction sector $ mil
XPLORNET COMMUNICATIONS INC. NEW BRUNSWICK STONEPEAK PARTNERS LP, NORTHLEAF CAPITAL PARTNERS ICT $2,675
ALTAGAS CANADA, INC. ALBERTA ALBERTA TEACHERS RETIREMENT FUND, PSP INVESTMENTS OIL & GAS, POWER $1,000
GROUPE CANAM INC. QUEBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), PLACEMENTS CMI, AND FONDS DE SOLIDARITÉ FTQ
INDUSTRIAL &MANUFACTURING $840
CONA RESOURCES LTD. ALBERTA WATEROUS ENERGY FUND OIL & GAS, POWER $740
EDDYFI/NDT QUÉBEC NOVACAP MANAGEMENT INC., CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC, INVESTISSEMENT QUÉBEC, FONDACTION OIL & GAS, POWER $600
BESTAR QUÉBEC NOVACAP MANAGEMENT INC, DESJARDINS CAPITAL, FONDS DE SOLIDARITÉ FTQ CONSUMER & RETAIL $344
SEVEN ACES ONTARIO TRIVE CAPITAL OTHERS $179
SEMIOS BRITISH COLUMBIA MORNINGSIDE GROUP AGRI-FORESTRY $101
XNRGY QUÉBEC CERBERUS INDUSTRIAL & MANUFACTURING $75
WSP GLOBAL INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), CANADA PENSION PLAN INVESTMENT BOARD (CPP INVESTMENTS)
INDUSTRIAL & MANUFACTURING $70
There were 10 undisclosed deals totalling $2.13B ommitted from this table.
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 11
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PE ACTIVITY BY DEAL SIZE // H1 2020
0
40
80
120
160
200
240
280
320
400
440
480
360
$0
$16,000
$17,600
$19,200
$10
,200
$1,600
$3,200
$4,800
$6,400
$8,000
$9,600
$11,200
$12,800
$14,400
20172016 20172016 20172016 2016
$1,2
90
$3,
212
$6,
290
$3,
106
2017
$7,
630
$50
9
$65
3
$3,
296
20172016 20172016
$4,
034
$3,
250
$1,6
27
$1,3
50
$1,0
00
$4,
800
201820182018201820182018
359
48
198
60
3614 114
203 2 0 21 1 1 3
$2,16
7
$2,8
24
$2,6
75
$1,8
29
$1,4
78
2019 H12020
H12020
H12020
H12020
H12020
H12020
364 392
443
37 2815 6
29
2019
$1,9
78
2019 $
4,19
42019 2019 2019
$12
,749
$1,7
44
$1,7
24
$881
$1,4
01
$3,
470
$1,11
1
1 1 141
< $25M $100M - $500M $1B - $2.5B$25M - $100M $500M - $1B $2.5B+
$ Millions Invested # Deals
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 12
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TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // H1 2020
Total Deals $ Millions
1. Montreal
2. Toronto
3. Québec City
4. Vancouver
5. Calgary
6. Montérégie
7. Estrie
8. Regina
9. Edmonton
10. Saguenay
85
39
19
15
14
13
8
7
5
5
$1,380
$488
$940
$189
$1,964
$118
$10
$12
$8
$8
#1 montreal $1.4b 85 DEALS
2
610 3
1
9
8
7
45
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 13
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PE SECTOR BREAKDOWN // H1 2020
61
48
30
29
26
24
19
14
13
12
11
7
3
# Deals $ Millions
Industrial & Manufacturing
ICT
Business Products & Services
Agri-Forestry
Consumer & Retail
Life Sciences
Mining & Resources
Automotive & Transportation
Oil & Gas, Power
Others
Financial
Real Estate
CleanTech
$1,170
$2,996
$211
$326
$1,045
$200
$478
$291
$2,830
$299
$23
$379
$117
most active sectorindustrial & manufacturing
61 deals
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 14
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PE EXITS // 2016 - H1 2020
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
20172016 20172016 20172016
$1,7
11
201820182018
$3,7
10
2019 H12020
H12020
$7,0
02
$7,8
44
$2,8
49
1 45
59
43
137
58
9
0 0
2019 2019 H12020
83
$8,5
47
$3,4
08
$3,5
15
$1,6
87
$4,8
00
10 2
$1,8
91 $772
IPO/RTO** M&A* SECONDARY BUYOUT*
* includes transactions with undisclosed values ** IPO valuation Exit Value ($ Millions) # Exits
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 15
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TOP DISCLOSED CANADIAN PE EXITS // H1 2020
GFL ENVIRONMENTALCOMPLETED IPOON TSX & NYSE $7.8B#1
seller company name buyer $ milONTARIO TEACHERS' PENSION PLAN, BC PARTNERS, HPS INVESTMENT PARTNERS, LLC, MACQUARIE GROUP LIMITED, HAWTHORN EQUITY PARTNERS LP
GFL ENVIRONMENTAL IPO ON TSX & NYSE $7,843
NORTHLEAF CAPITAL PARTNERS XPLORNET COMMUNICATIONS INC. STONEPEAK INFRASTRUCTURE PARTNERS $2,675
SWANDER PACE VOORTMAN COOKIES HOSTESS $425
NOVACAP TMT IV INTERLAD HG $347
There were 4 deals with undisclosed amounts excluded from this table.
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 16
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MOST ACTIVE PE INVESTORS // H1 2020
61
60
33
18
15
12
7
6
4
# Deals $ Millions*
Desjardins Capital
Fonds de solidarité FTQ
BDC Capital Growth & Transition Capital
Investissement Québec
Caisse de depot et placement du Québec
Fondaction
BMO Capital Partners
Espresso Capital
CAI Capital Partners
$860
$1,684
$77
$1,611
$3,013
$287
$15
$6
$76
* Total deal values – includes all participating investors
most active pe firmdesjardins Capital
61 deals
PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2020 | 17
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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 // H1 2020 | 18
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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]
Authorsdavid kornacki associate, research & [email protected]
jon jackson head of [email protected]
Izadella Sta. Romana Marketing & Brand [email protected]