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VC & PE CANADIAN MARKET OVERVIEW

// 2017

VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 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 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 DISCLOSED CANADIAN PE DEALS OVER $500M ............................................................................ 22 PE ACTIVITY BY DEAL SIZE ............................................................................................................................................ 23 TOP 10 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


PARTICIPATING DATA CONTRIBUTORS

Alberta Enterprise Corporation

Alberta Teachers’ Retirement Fund (ATRF)

BDC Capital Inc.

Caisse de dépôt et placement du Québec (CDPQ)

Capital Régional et Coopératif Desjardins

Dancap Private Equity Inc

Fondaction CSN

Fonds de solidarité FTQ

Fonds de solidarité FTQ (Regional)

HarbourVest Partners, LLC

Investissement Quebec

Kensington Capital Partners Limited

Northleaf Capital Partners

Ontario Teachers’ Pension Plan (OTPP)

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

Altas Partners LP

Arc Financial

Ardenton Capital Corporation

ATB Capital

Birch Hill Equity Partners

Brookfield Asset Management

CIEL Capital

Clairvest Group Inc.

First West Capital

Fulcrum Capital Partners

GrowthWorks Atlantic Venture Fund Ltd.

Growthworks Working Opportunity Fund (EVCC) Ltd.

Highland West Capital

Innovation Platform Capital

InstarAGF Asset Management

Ironbridge Equity Partners

Lex Capital Management

m2s Capital

Mink Capital

Mosaic Capital Corporation

Novacap Management Inc.

Parallel 49 Equity

Persistence Capital Partners

PFM Capital Inc

Pillarfour Capital

PRIVEQ Capital Funds

Regimen Equity Partners

Roynat Capital Inc.

Searchlight Capital Partners

TIMIA Capital Corp

Tricor Pacific Founders Capital

TriWest Capital Partners

VERTU Capital

Westcap Mgt. Ltd

Western Investment Company of Canada Limited

XPND Capital

CVCA thanks the following firms who participated in itsQ4 2017 survey.

Accelerate Fund

Amorchem Venture Fund

Anges Quebec

Anges Quebec Capital

Avrio Ventures Management Corp

Azure Capital Partners

Brightspark Ventures

CTI Life Sciences

Cycle Capital Management/Ecofuel

Difference Capital

Emerald Technology Ventures

Emerillon Capital

EnerTech Capital

Espresso Capital Ltd.

Eventi Capital Partners

Evok Innovations

Fight Against Cancer Innovation Trust

Freycinet Ventures

Georgian Partners

Golden Venture Partners

Good News Ventures

Green Acre Capital

GreenSoil Investments

iGan Partners

Information Venture Partners

Innovacorp

iNovia Capital

Investeco Capital Corp

Lumira Capital

MaRS Catalyst Fund

MaRS IAF

McRock Capital

New Brunswick Innovation Foundation

Northumberland CFDC

OMERS Ventures

Pangaea Ventures

Pelorus Venture Capital Ltd.

Plaza Ventures

Quark Venture

Real Ventures

Relay Ventures

Renewal Funds

Roadmap Capital

Ryerson Futures

ScaleUP Ventures

Tandem Expansion

TandemLaunch

TEC Venture Angels

Top Renergy

TVM Life Science Management Inc.

Vancity Capital Corp

Vancouver Founders Fund

Vanedge Capital Partners

VentureLink Funds

Versant Ventures

Version One Ventures

Wellington Financial

White Star Capital

Whitecap Venture Partners

Yaletown

PARTICIPATING VENTURE CAPITAL FIRMS


FOREWORD

Increase in Mega Deals Drives Canadian VC; Rebound Year for Canadian PE Investment

VENTURE CAPITALCanadian venture capital investment grew 11% in 2017 with $3.5B invested over 592 deals compared to the $3.2B invested over 534 deals in 2016. This is the latest increase, following years of steady investment growth for Canadian VC across the entire spectrum of stages in the ecosystem. Canadian venture capital investment is now approximately double the size it was just five years ago.

The record number of 15 mega deals ($50M+) included three deals over $100M. Building on the 10 mega deals in 2016, investors continued to scale high quality maturing Canadian startups. The three deals in 2017 over $100M were in Quebec-based companies and included the $207M Series D in Montreal-based Lightspeed POS Incorporated from a syndicate including Caisse de dépôt et placement du Québec (CDPQ), iNovia Capital and Teralys Capital; the $141M Series A financing of Montreal-based Element AI with participation from Real Ventures; and, the $128M Series C of Quebec City-based LeddarTech with participation from Fonds de solidarité FTQ.

Activity in the smaller end of the deal spectrum also saw healthy growth, showcasing strong support for entrepreneurs at very early stages. There were 162 small deals (<$500k), a 33% increase compared to 2016 (122 deals); there was a 6% year-over-year increase in deals between $1M-$5M.

“The excitement many of us are feeling in the Canadian venture capital ecosystem is being validated by the data,” said Mike Woollatt, CEO, CVCA. “We’re seeing historic investment in cutting-edge businesses across the country underlining the confidence in Canadian innovation.”

Information communications technology (ICT) companies received the majority (71%) of total VC dollars invested ($2.5B over 375 deals) while life science companies received a fifth of the dollars invested ($696M over 105 deals).

2017 also saw a rebound from last year’s exit slump with 39 exits totalling $1.7B (compared to only 33 exits totalling $0.6B in 2016).

PRIVATE EQUITYTotal PE investment in 2017 saw a dramatic year-over-year rise to $26.3B (compared to $13.8B in 2016) over 603 deals (compared to 542 deals in 2016); an incredible 90% year-over-year surge and results in a return to historically high levels seen in 2014 and 2015.

There were 14 deals in the $500M+ category (totalling $15.7B), doubling the seven large deals (totalling $7.1B) in 2016. Notable $1B+ deals this year included the $4.8B privatization of Toronto-based DH Corporation in Q2, the $2.2B acquisition of Montreal-based Garda World Security Corporation in Q1 and the $1.1B private placement in Montreal-based Osisko Gold Royalties Limited by La Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ in Q3.

“We continue to see increasing Canadian private equity investment in the industrial and manufacturing and ICT sectors,” said Mike Woollatt, CEO, CVCA. “The increase represents the continued evolution of the global economy and 2017 levels are a testament to Canada’s healthy investment climate.”

Almost a fifth (19%) of all PE deal deals in 2017 were closed in the industrial and manufacturing sector with information communications technology (ICT) companies receiving the second largest share at 16%. Since 2013, both these sectors have seen a dramatic increase in deal flow, with the industrial and manufacturing sector seeing a 216% increase while ICT experiencing a 263% increase in deal activity.

89 deals totalling $6.7B (15%) of all PE deals in 2017 were made in Montreal-based companies, while both Calgary-based (54 deals totalling $3.1B) and Montérègie-based (53 deals totalling $0.5B) companies each receiving a 9% share.

Fuelled by a high valuation environment, the exit floodgates opened in 2017. There have been more than twice the number of PE exits (149) compared to only 65 last year. There were six IPOs, including the $445M dual listing of the iconic Canada Goose on (TSE/NYSE: GOOS), the $300M TSX-debut of Jamieson Laboratories Ltd (TSE: JWEL), the $200M IPO of Neo Performance Materials (TSE: NEO) and the $200M IPO of Roots Corp (TSE: ROOT)

VC ecosystem attracting larger financing rounds in later stages highlighting quality of Canadian startups; $26.3B in PE invested over 603 deals in 2017 with amount invested and exits both doubling from previous year


VENTURE CAPITALCANADIAN MARKET OVERVIEW // 2017


VENTURE CAPITAL HIGHLIGHTS // 2017

$739M was invested over 153 deals in the fourth quarter. This brings the total invested in 2017 to $3.5B over 592 deals, surpassing both last year’s deal count (534) and total invested ($3.2B) by 11%.

The average deal size ($5.98M) remains unchanged from last year’s high-water mark since 2013 ($5.19M).

The top 10 VC deals accounted for 27% of total dollars disbursed in 2017, slightly below the 31% share of 2016 dollars invested.

Building on the 10 $50M+ mega-deals (including four $100M+ deals) from the previous year, the ecosystem is continuing to attract larger rounds in later stages, underlining the quality of maturing Canadian start-ups. In 2017, there were a record number of $50M+ mega-deals (15), including 3 deals over $100M in the following Quebec-based companies:

Montreal-based Lightspeed POS Inc. raised a record $207M Series D round from a syndicate including CVCA members Caisse de dépôt et placement du Québec (CDPQ), iNovia Capital Inc. and Teralys Capital.

Real Ventures participated in Montreal-based Element AI’s $141M Series A round

Quebec City-based LeddarTech closed its $128M series C round from Fonds de solidarité FTQ.

Activity in the smaller end of the deal spectrum was robust, illustrating strong support for entrepreneurs at very early stages:

There were 162 small deals (<$500k), 33% more than last year (122). These deals averaged $200K.

There were 183 deals between $1M-$5M (totalling $468M), 6% more than the 172 deals (totalling $362M) in 2016. The average deal size in this category increased 22% from $2.1M to $2.6M.

$1.4B or 40% of dollars invested this year were in Ontario-based companies with 37% ($1.3B) going to Quebec-based companies and 18% ($646M) to BC-based companies.

Montreal-based companies received 28% ($983M over 132 deals) of total dollars disbursed, with Toronto-based companies receiving a 26% share ($907M over 146 deals) and Vancouver-based companies a 14% share ($513M over 77 deals).

ICT companies grabbed the lion’s share (71%) of total dollars invested in 2017 ($2.5B over 375 deals); this compares to a 61% share in 2016, 58% in 2015, 64% in 2014 and 56% in 2013.

Life sciences companies received a fifth of dollars invested ($696M over 105 deals) which is only just below the 23% share from 2016 ($733M over 104 deals).

The market for exits rebounded from last year’s slump with 39 exits totalling $1.7B (compared to only 33 exits totalling $0.6B in 2016). Exits greater than $100M included:

The $392M acquisition of Montreal-based Luxury Retreats by Airbnb.

$301M take-private acquisition of TSX Venture-listed TIO Networks by Paypal.

Montreal-based Clementia Pharmaceuticals IPO which raised $174M (NASDAQ: CMTA)

Markham-based Real Matters IPO which raised $157M (TSE: REAL)

The acquisition of Saint-Laurent-based Accedian Networks by Bridge Growth Partners for $133M.

Key Findings:


18091

2

15

236 30

$1,322m

$1,416MOntario

$646MBC

$37MAlberta

$5MManitoba

Québec

Nova Scotia$77M

New Brunswick

Newfoundland& Labrador

$16M

$6M

$14MSaskatchewan

2110

7

$3.5btotal592 dealstotal #

VENTURE CAPITAL HEAT MAP // 2017


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 Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

$41

4

$33

9

$6

01

$54

0

$35

8

$41

4

$6

54

$6

13

$41

9

$6

65

$6

21

$58

5

$9

60

$72

4

85

81

102

97

110

93

111 122

134

140 142

130

127

147

Q3

$6

83

Q4

$8

41

Q1

$72

4

$8

98

Q3

$1,

178

Q4

$73

9

126134 137

149 153 153

TOTAL:365 DEALS

$1.9B

TOTAL:436 DEALS

$2.0B

TOTAL:545 DEALS

$2.3B

TOTAL:535 DEALS

$3.2B

TOTAL:592 DEALS

$3.5B

$ Millions Invested

# Deals

2013 2014 2015 2016 2017

QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY


Total Deals $ Millions

< $100K

$100 - $500K

$500K - $1M

$1M - $5M

$5M - $20M

$20M - $50M

$50M +

32

130

69

183

101

24

15

$2

$30

$47

$468

$984

$800

$1,208

VC ACTIVITY BY DEAL SIZE // 2017

Mega-deals greatest number of

in the last 5 years15


TOP DISCLOSED CANADIAN VC DEALS // 2017

COMPANY NAME PROVINCE DISCLOSED VC FIRM(S) SECTOR STAGE $ MIL

LIGHTSPEED POS INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), INOVIA CAPITAL INC., INVESTISSEMENT QUÉBEC, TERALYS CAPITAL ICT LATER STAGE VC $207

ELEMENT AI INC. QUÉBECBDC CAPITAL INC., DATA COLLECTIVE, FMR LLC (FIDELITY), HANWHA INVESTMENT CORP, INTEL CAPITAL, MICROSOFT VENTURES, NATIONAL BANK OF CANADA, NVIDIA CORPORATION, REAL VENTURES

ICT EARLY STAGE VC $141

LEDDARTECH INC. QUÉBEC FONDS DE SOLIDARITÉ FTQ ICT LATER STAGE VC $128

REPARE THERAPEUTICS INC. QUÉBEC BDC CAPITAL INC., CELGENE EUROPEAN INVESTMENT CO. LLC, FONDS DE SOLIDARITÉ FTQ, FONDS RÉGIONAUX DE SOLIDARITÉ FTQ, VERSANT VENTURE MANAGEMENT, LLC LIFE SCIENCES EARLY STAGE VC $91

VISION CRITICAL COMMUNICATIONS INC. BC

DIFFERENCE CAPITAL FINANCIAL INC., GEORGIAN PARTNERS INC., KENSINGTON CAPITAL PARTNERS LIMITED, NORTHLEAF CAPITAL PARTNERS, OMERS VENTURES MANAGEMENT INC., RECAPHEALTH VENTURES, TELUS VENTURES, W CAPITAL PARTNERS, WELLINGTON FINANCIAL LP

ICT LATER STAGE VC $76

MILESTONE PHARMACEUTICALS INC. QUÉBEC BDC CAPITAL INC., DOMAIN ASSOCIATES, L.L.C., FONDS DE SOLIDARITÉ FTQ, FORBION CAPITAL PARTNERS, NOVO NORDISK A/S, PAPPAS VENTURES LIFE SCIENCES LATER STAGE VC $71

VISIER INC. BC ADAMS STREET PARTNERS, LLC, FOUNDATION CAPITAL, SORENSON CAPITAL PARTNERS, SUMMIT PARTNERS ICT LATER STAGE VC $61

IGLOO INC. ONTARIO FRONTIER CAPITAL, INFORMATION VENTURE PARTNERS INC. ICT EXITS - VC $60

BORROWELL INC. ONTARIO EQUITABLE BANK, FIRSTONTARIO CREDIT UNION, PORTAG3 VENTURES, WHITE STAR CAPITAL INC. ICT EARLY STAGE VC $57

FRESHBOOKS ONTARIO ACCOMPLICE, LLC, GEORGIAN PARTNERS INC., OAK INVESTMENT PARTNERS ICT EARLY STAGE VC $57


TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES // 2017 #1 toronto

$907M 146 DEALS $907

$983

$513

$210

$148

$68

$11

$14

$5

$14


1. Toronto

2. Montréal

3. Vancouver

4. Kitchener, Waterloo, Cambridge

5. Ottawa

6. Halifax

7. Fredericton

8. Estrie

9. Moncton

10. Saskatoon

146

132

77

37

21

19

18

11

10

10

1

87

10

425

39

6


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

2016201520142013 2016201520142013 2016201520142013 201520142013

$1,

947

$20

8

$14

$18

5

2016 2017201720172017

234

274

329

332

375

113

104

5378

$48

8 $72

1

$73

3

$6

96

$39

4

$27

1

$1,

06

0 $1,

305

$1,

335

105

40

47 44 35 614

2027 24

$17

7

$13

8

47

$27

$42

$2,

498

$13

7

$9

8

VC SECTOR BREAKDOWN // 2013-2017

ICT CleanTechLife Sciences AgriBusiness

$ Millions Invested

# Deals


VC STAGE BREAKDOWN // 2013-2017

0

30

60

90

120

150

180

210

240

300

270

330

390

360

$0

$160

$320

$480

$640

$800

$960

$1,120

$1,280

$1,440

$1,600

$1,760

$1,920

$2,080

2016201520142013 2016201520142013 2016201520142013

$8

5

$13

5

$15

9

$21

4

$6

57

$1,

139

$8

24

$1,

06

8

$1,

210

$8

93

$1,

569

$1,

973

$1,

403

201720172017

108

138

180 178

142

178

220

261

106

238

117135

93

143

$1,

347

203

$20

5

Seed Early Stage Later Stage

$ Millions Invested

# Deals


VC EXITS* // 2013-2017

M&A IPO** RTO

* INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES;

** IPO VALUATION

$ Millions Invested

# Deals

$0

$160

$320

$480

$640

$800

$960

$1,120

$1,280

$1,440

$1,600

0

5

10

15

20

25

30

35

40

50

45

2016201520142013 2016201520142013 2016201520142013

$6

83

$50

9

$1,

524

$58

2

$1,

166

$11

7

$19

$6

6

201720172017

28

33

43

31

46

4

0 11

20 0

$41

7

34

3

$34

6

$12

9

$53

7


TOP DISCLOSED VC EXITS* // 2017

VC INVESTORS COMPANY NAME SECTOR EXIT TRANSACTION ACQUIRED BY $ MIL.

INOVIA CAPITAL, TERALYS CAPITAL, CLARIDGE, INTERMEDIA PARTNERS, GROUPE DYNAMITE

LUXURY RETREATS INTERNATIONAL INC. ICT M&A AIRBNB $392

CORE INNOVATION CAPITAL, EDISON PARTNERS, INDUCTIVE CAPITAL, INTER-ATLANTIC GROUP, NAPIER PARK FINANCIAL PARTNERS

TIO NETWORKS CORP. ICT M&A PAYPAL $301

KENSINGTON CAPITAL, WHITECAP VENTURE PARTNERS, RADAR CAPITAL, WELLINGTON FINANCIAL REAL MATTERS INC. ICT IPO NA $157

FONDS DE SOLIDARITÉ FTQ, RHO CANADA VENTURES, SUMMIT PARTNERS, SKYPOINT CAPITAL CORPORATION ACCEDIAN NETWORKS INC. ICT M&A BRIDGE GROWTH

PARTNERS $133

BDC CAPITAL, LUMIRA CAPITAL, ELI LILLY AND COMPANY, CELGENE, CTI LIFE SCIENCES FUND, FONDS DE SOLIDARITÉ FTQ, PERCEPTIVE ADVISORS, TERALYS CAPITAL, NORTHLEAF VENTURE CATALYST FUND, BRACE PHARMA CAPITAL, MERLIN NEXUS, TVM LIFE SCIENCE MANAGEMENT INC.

ZYMEWORKS INC. LIFE SCIENCES IPO NA $87

KENSINGTON CAPITAL, NORTHLEAF CAPITAL, RECAPHEALTH VENTURES, DIFFERENCE CAPITAL, OMERS VENTURES, TELUS VENTURES, WELLINGTON FINANCIAL

VISION CRITICAL COMMUNICATIONS INC. ICT SECONDARY

SALEGEORGIAN PARTNERS,

W CAPITAL $76

INFORMATION VENTURE PARTNERS, ONTARIO CAPITAL GROWTH CORPORATION IGLOO INC. ICT M&A FRONTIER CAPITAL $60

REAL VENTURES VRVANA INC. ICT M&A APPLE $38

BDC CAPITAL, WESTCAP MANAGEMENT LTD., INVESTMENT SASKATCHEWAN

SOLIDO DESIGN AUTOMATION INC. ICT M&A SIEMENS $14

* THERE WERE 3 UNDISCLOSED EXITS IN THE TOP 10 THAT WERE EXCLUDED FROM THIS TABLE


MOST ACTIVE VC FIRMS // FUNDS // 2017MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDS

SIZE OF TOTAL ROUNDS*

(CDN$ MIL)

REAL VENTURES 58 $427

500 STARTUPS CANADA 26 $11

CYCLE CAPITAL MANAGEMENT/ECOFUEL 19 $140

INOVIA CAPITAL INC. 16 $395

IGAN PARTNERS INC. 11 $30

RELAY VENTURES 10 $90

YALETOWN PARTNERS INC 9 $40

GOOD NEWS VENTURES 8 $3

TOP RENERGY INC. (TRE) 8 $2

PORTAG3 VENTURES 7 $134

LUMIRA CAPITAL INVESTMENT MANAGEMENT INC. 7 $79

SCALEUP VENTURES 7 $34

VANCOUVER FOUNDER FUND 7 $15

MOST ACTIVE VC DEBT FIRMS # ROUNDSSIZE OF TOTAL

ROUNDS*(CDN$ MIL)

ESPRESSO CAPITAL LTD. 84 $51

CAPITAL RÉGIONAL ET COOPÉRATIF DESJARDINS (CRCD) 12 $2

TIMIA CAPITAL CORP 4 $3

MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS

SIZE OF TOTAL ROUNDS*

(CDN$ MIL)

CAPITAL RÉGIONAL ET COOPÉRATIF DESJARDINS (CRCD) 46 $252

FONDS DE SOLIDARITÉ FTQ 29 $534

OMERS VENTURES MANAGEMENT INC. 10 $191

FONDACTION CSN 9 $19

MOST ACTIVE GOVERNMENT FUNDS # ROUNDSSIZE OF TOTAL

ROUNDS*(CDN$ MIL)

BDC CAPITAL 30 $188

NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 27 $15

MARS IAF 21 $38

INVESTISSEMENT QUÉBEC 14 $290

BDC IT VENTURE FUND 14 $183

INNOVACORP 13 $24

BDC INDUSTRIAL, CLEAN AND ENERGY TECHNOLOGY (ICE) VENTURE FUND 9 $103

BDC HEALTHCARE FUND 8 $266

* TOTAL ROUND VALUES - INCLUDES ALL PARTICIPATING INVESTORS

# Rounds

Real Ventures

Capital Régional et Coopératif Desjardins (CRCD)

BDC Sector Funds**

BDC Capital


New Brunswick Innovation Foundation (NBIF)

500 Startups Canada

MaRS IAF

Cycle Capital Management/Ecofuel

iNovia Capital Inc.

Investissement Québec

Innovacorp

iGan Partners Inc.

OMERS Ventures Management Inc.

Relay Ventures

58

46

31

30

29

27

26

21

19

16

14

13

11

10

10

Size of Total Rounds* (Cdn$ mil)

$427

$252

$551

$188

$534

$15

$11

$38

$140

$395

$290

$24

$30

$191

$90** BDC HEALTHCARE FUND - 8 DEALS, $266M*;

BDC IT VENTURE FUND - 14 DEALS, $183M*; BDC ICE FUND - 9 DEALS, $103M*


PRIVATE EQUITYCANADIAN MARKET OVERVIEW // 2017


Private equity activity climbed 12% compared to the same quarter last year ($4.2B to $4.7B).

This brings the total PE dollars invested in 2017 to $26.3B over 603 deals, a 90% spike compared to the $13.8B over 542 deals last year and a 15% increase over the 2015 total of $22.9B over 425 deals.

The number of $500M+ deals almost doubled to $15.7B (14 deals) accounting for 60% of total dollars invested in 2017 (compared to only $7.1B (7 deals) in 2016). These included the following three $1B+ mega-deals:

The $4.8B privatization of Toronto-based DH Corporation, the $2.2B acquisition of Montreal-based Garda World Security Corp. and the $1.1B private placement in Montreal-based Osisko Gold Royalties Ltd. by Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ.

Deal activity in all small-to-mid market segments have exceeded last year’s totals:

66 deals between $25M-$100M have surpassed the 2016 total (49) by 35% with a total value of $3.2B.

28 deals between $100M-$500M have doubled the 2016 total (14) with a total value of $5.9B.

15% (89 deals totalling $6.7B) of all PE deals went to Montreal-based companies, with Calgary- and Montérègie-based companies each receiving a 9% share (54 deals totalling $3.1B and 53 deals totalling $0.5B respectively). Toronto-based companies received a 7% share of deal flow (44 deals totaling $5.4B).

Almost a fifth (19%) of PE deals this year have been closed in the industrial & manufacturing sector with ICT companies receiving the second largest share (16%); both these sectors have been receiving a steadily increasing share of PE deal flow since 2013 when industrial & manufacturing captured only a 14% share and ICT a 10% share. Inversely, the oil and gas sector deal flow share has dropped from 19% in 2013 to 7% in 2017.

Six IPOs including the $445M dual listing of the iconic Canada Goose on (TSE/NYSE: GOOS), the $300M TSX-debut of Jamieson Laboratories Ltd (TSE: JWEL), the $200M IPO of Neo Performance Materials (TSE: NEO) and the $200M IPO of Roots Corp (TSE: ROOT).

There have been more than twice the number of PE exits (149) compared to 65 last year.

Secondary buyouts have contributed to almost half (46%) of the $7.4B in total exit value.

PRIVATE EQUITY HIGHLIGHTS // 2017

Key Findings:


302222

4 5

$1.2B$10m

$1.5B

$5.3b

na

$6.7bOntario

BCAlberta

Saskatchewan

Québec

Nova Scotia

50

$970MManitoba

4Prince Edward

Island

na

NewBrunswick

na

22

$15.9btotal

141 dealstotal #

PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY // 2017


3306755

22 9

$3.1B$76m

$2.9B

$10.7b

na

$8.6bOntario

BCAlberta

Saskatchewan

Québec

Nova Scotia

110

$981MManitoba

5

Prince EdwardIsland

na2

$33mNew

Brunswick

3

$26.3btotal 603 dealstotal #

PRIVATE EQUITY HEAT MAP // ALL PE DEALS // 2017


QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY

Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

0

20

40

60

80

100

120

140

160

180

200

$2,

530

$2,

933

$1,

846

$4,

120

$6

,277

$5,

250

$7,

80

4

$22

,851

$7,

053

$1,

86

9

$11

,36

7

$2,

60

0

$3,

221

$3,

370

57

81

48

84

64

81

88

101

91

104

117

113

124

145

134

139

$3,

06

8

Q3

$4,

180

Q4

$5,

224

Q1 Q2 Q3 Q4

110

177

163153

$8

,819

$7,

571

$4,

69

3

TOTAL:270 DEALS

$11.4B

TOTAL:334 DEALS

$42.2B

TOTAL:425 DEALS

$22.9B

TOTAL:542 DEALS

$13.8B

TOTAL:603 DEALS

$26.3B

$ Millions Invested

# Deals

2013 2014 2015 2016 2017


TOP DISCLOSED CANADIAN PE DEALS OVER $500M // 2017

COMPANY NAME PROVINCE FIRMS INVOLVED IN TRANSACTION SECTOR $ MIL.

DH CORPORATION (D+H) ONTARIO VISTA EQUITY PARTNERS BUSINESS PRODUCTS & SERVICES $4,800

GARDA WORLD SECURITY CORP. QUÉBEC APAX PARTNERS LLP, RHÔNE GROUP LLC OTHERS $2,200

OSISKO GOLD ROYALTIES LTD. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ MINING & RESOURCES $1,050

TEEKAY OFFSHORE PARTNERS L.P. BC BROOKFIELD ASSET MANAGEMENT INC., TEEKAY OFFSHORE PARTNERS L.P. OIL & GAS, POWER $938

CANAM GROUP INC. QUÉBEC AMERICAN INDUSTRIAL PARTNERS (AIP), CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ)

INDUSTRIAL & MANUFACTURING $890

ARCTIC GLACIER HOLDINGS INC. MANITOBA H.I.G. CAPITAL, LLC, THE CARLYLE GROUP CONSUMER & RETAIL $723

CQ ENERGY PARTNERSHIP ALBERTA CAN-CHINA GLOBAL RESOURCES FUND, MERCURIA ENERGY TRADING S.A., MIE HOLDINGS CORPORATION OIL & GAS, POWER $722

ALIMENTATION COUCHE-TARD INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) CONSUMER & RETAIL $700

HUDSON’S BAY COMPANY ONTARIO RHÔNE GROUP LLC CONSUMER & RETAIL $638

OLD PSG WIND-DOWN LTD. BC ANTARAS CAPITAL, L.P., FAIRFAX FINANCIAL HOLDINGS LIMITED CONSUMER & RETAIL $575

LUNDIN GOLD INC. BC BLACKSTONE GROUP L.P., ORION RESOURCE PARTNERS (USA) LP MINING & RESOURCES $572

SANDVINE INC. ONTARIO FRANCISCO PARTNERS ICT $562

LOBLAW GAS STATION BUSINESS ONTARIO BROOKFIELD ASSET MANAGEMENT INC., BROOKFIELD BUSINESS PARTNERS LP CONSUMER & RETAIL $540


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 $

631

2016201520142013 2016201520142013 2016201520142013 201520142013

$8

49

$9

02

$1,

291

$5,

015

$6

,09

3

$6

,321

$3,

212

$5,

86

1

$3,

106 $

4,79

7 $6

,60

1

$97

5

2016

$7,

630

2016201520142013 2016201520142013

$3,

405

$10

,910

$4,

782

$4,

034

$3,

250

$3,

300

$4,

80

0

201720172017201720172017

$14

,927

86

116

183

362

3155 56 49 24 27 31

141

10 7 114 3 7 3 3 2N/A2 1 0 1

$1,

403

$2,

80

4

$2,

788

$2,

197

$3,

246

$1,

520

363

6628

< $25M $25M-$100M $100M-$500M $1B-$2.5B$500M-$1B $2.5B+

PE ACTIVITY BY DEAL SIZE // 2017

TOTAL:1110 DEALS

$5.2B

TOTAL:257 DEALS

$12.4B

TOTAL:124 DEALS

$26.5B

TOTAL:18 DEALS

$26.4B

TOTAL:33 DEALS

$23.1B

TOTAL:4 DEALS$23.0B

$ Millions Invested

# Deals


TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES // 2017 #1 montréal

$6.7B 89 DEALS

4

2

9

5

31

6 7

10

8


1. Montréal

2. Calgary

3. Montérégie

4. Toronto

5. Nord-du-Québec / Abitibi-Témis

6. Vancouver

7. Québec

8. Saguenay-Lac-St-Jean/Côte-Nord

9. Chaudière-Appalaches

10. Laval

89

54

53

44

33

33

28

18

15

15

$6,722

$3,053

$533

$5,400

$263

$2,883

$267

$59

$1,037

$941


117

98

78

57

54

43

39

37

33

15

14

13

5

# Deals $ Millions

Industrial & Manufacturing

ICT

Consumer & Retail

Agri-Forestry

Mining & Resources

Oil & Gas, Power

Business Products & Services

Automotive & Transportation

Life Sciences

Others

CleanTech

Financial

Real Estate

$1,603

$2,821

$4,355

$1,157

$2,928

$3,903

$5,535

$606

$388

$2,272

$437

$286

$16

PE SECTOR BREAKDOWN // 2017

industrial & manufacturing

most active sector

117 deals


PE EXITS* // 2013-2017 $ Millions Invested

# Deals

* INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES;

** IPO VALUATION

2016201520142013 2016201520142013 2016201520142013

$6

94

$2,

252

$1,

147

$30

6 $1,

245

$29

4

$9

30

$2,

161

$1,

672

201720172017

3

$11

,039

$11

,497 $

12,8

12

$7,

00

2

$2,

790

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

6

52

48 50

59

134

10 10 74

$3,

408

8

IPO/RTO** M&A Secondary Buyout


TOP 10 DISCLOSED CANADIAN PE EXITS // 2017

SELLER COMPANY NAME BUYER $ MIL.

APAX PARTNERS LLC GARDA WORLD SECURITY CORP. RHONE CAPITAL $2,200

H.I.G. CAPITAL, LLC ARCTIC GLACIER HOLDINGS INC. CARLYLE PARTNERS LP $723

MILESTONE PARTNERS LLC PRECISION PARTNERS HOLDING CO. AK STEEL CORP. $457

BAIN CAPITAL CANADA GOOSE, INC. NA - IPO ON TSX & NYSE $445

EDGESTONE CAPITAL PARTNERS, BREGAL CAPITAL, PINE BROOK PARTNERS, SOROS STRATEGIC PARTNERS AURIGEN CAPITAL LIMITED PARTNERRE $375

CCMP CAPITAL ADVISORS LLC JAMIESON LABORATORIES LTD. NA - IPO ON TSX $300

CLAIRVEST GROUP INC. CRS CONTRACTORS RENTAL SUPPLY LIMITED PARTNERSHIP SUNBELT RENTALS OF CANADA INC $275

RIVERSTONE HOLDINGS AND NGP ENERGY CAPITAL MANAGEMENT NORTHERN BLIZZARD RESOURCES INC. WATEROUS ENERGY FUND (WEF) $244

ARC FINANCIAL CORP. UGR BLAIR CREEK LTD. PAINTED PONY PETROLEUM LTD. $224

OAKTREE CAPITAL GROUP LLC NEO PERFORMANCE MATERIALS NA - SALES OF SHARES ON TSX $200

Garda World Security Corp.

bought by RHONE CAPITAL $2,200m#1


133

118

33

33

29

20

14

14

10

# Deals $ Millions*


Capital Régional et Coopératif Desjardins (CRCD)

Caisse de dépôt et placement du Québec (CDPQ)

Fondaction CSN

Investissement Québec

PFM Capital Inc.

BDC Capital Inc.

First West Capital

XPND Capital

$4,193

$833

$4,306

$434

$877

$332

$193

$24

$30

MOST ACTIVE PE INVESTORS // 2017

* TOTAL DEAL VALUES – INCLUDES ALL PARTICIPATING INVESTORS

most active PE FIRM

133 DEALSFonds de solidarité FTQ


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)


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


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


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.


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.


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 /CVCACanada

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]

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