Canada’s private equity market saw C$6.2 billion invested across 200 deals in the second quarter of 2021, according to a report issued this week by the Canadian Venture Capital and Private Equity Association. In dollar terms, this reflected major growth relative to Q1 2021. In the first half, C$8.8 billion was invested in 377 transactions, returning to levels on par with the five-year average. Deals sized less than C$25 million accounted for 85 percent of total H1 2021 values.
CVCA’s H1 2021 Canadian Private Equity Market Overview: Mid-Market Deals Represent 85% Of All PE Activity in H1 Supporting Canadian SMEs and Continuing Canada’s Economic Recovery PE Exits in the First Half Surpass Levels Realized In 2020
August 31, 2021 – Toronto, ON – Today, the Canadian Venture Capital and Private Equity Association (CVCA) released its H1 2021 report on private equity (PE) activity in Canada. CAD $6.2B PE dollars were invested in Canada in Q2 across 200 deals bringing the total for the first half of the year to CAD $8.8B across 377 deals.
PE deals under CAD $25M accounted for 85% of all deals with disclosed deal values in the first half of 2021, a continued trend since 2016, and underscoring the important investments Canadian PE makes into small and medium-sized Enterprises (SMEs), the engine of job creation in the economy.
There were 40 exits valued at CAD $4.4B in the first half, including five IPOs on the TSX, already surpassing exit levels observed in all of 2020. Among the top disclosed exits included the CAD $928M acquisition of Terrapure by GFL Environmental, the CAD $525M IPO listing of ABC Technologies on the TSX (TSE: ABCT), and the CAD $340M acquisition of Paybright by Affirm.
“We know that PE investment helps support Canadian business ownership transitions—preserving the value created over the company’s lifetime,” said Kim Furlong, Chief Executive Officer, CVCA. “In 2017, 49.3% of Canadian SME owners signaled their intention to exit their business within five years which has increased the demand for partnerships with PE funds and speaks to the significant activity we are seeing the mid-market. We anticipate this trend will continue as Canada’s economic recovery advances.”
The information, communication, and technology (ICT) sector continued to receive the majority of PE investment in H1, accounting for 23% of all PE investment activity and 13% of all dollars invested. Although the financial sector only accounted for 6% of total activity, the sector saw the highest share of dollars invested, 24% or CAD $2.1B. The dollars invested in the sector can largely be attributed to the $1.6B privatization of Sagen MI Canada by Brookfield Business Partners in Q2. The industrial and manufacturing sector stayed steady with 20% of all PE activity (75 deals).
About the CVCA
A thriving Canadian economy driven by private capital
CVCA’s mission is to help our members fuel the economy of the future by growing the businesses 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: http://www.cvca.ca.