Deal-making in Canada’s buyout and private equity market was reduced in the third quarter of 2020, according to a report by the Canadian Venture Capital and Private Equity Association. A total of C$1.4 billion was invested in 155 deals in Q3 2020, which is 27 percent lower than the amount recorded a year earlier. Year-to-date, PE activity is tracking 25 percent below the four-year average across 2015-2019 in both dollars invested and deals, the CVCA report said.
CVCA Q3 2020 YTD Private Equity Canadian Market Overview: Slow Third Quarter Drives Canadian PE Investment 25% Lower Than the Four-Year Average
TORONTO – November 26, 2020 – The Canadian Venture Capital and Private Equity Association (CVCA) today released its quarterly report focused on Canadian private equity. CAD $1.4B was invested over 155 deals in the third quarter of 2020 which is 27% lower than the amount in Q3 2019 (CAD $1.9B over 177 deals). The YTD activity is tracking 25% below the four-year average across 2015-2019 in both dollars invested and deals (CAD $21B across 565 deals).
There were 15 PE-backed exits in the third quarter, a significant increase from the 11 exits in the entire first half of 2020. The most notable exit in Q3 was Nuvei’s IPO on the TSX for a total market capitalization of CAD $4.6B, backed by Novacap Management, Fonds de solidarité FTQ, and Caisse de dépôt et placement du Québec.
“Despite the uncertainty due to the COVID-19 pandemic, Canadian private equity firms are adapting to the evolving conditions,” said Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association. “Given Canadian PE’s long-term investment horizon, PE fund managers are well-positioned to help our businesses on a path to economic recovery.”
There were no megadeals (CAD $500M+) in the third quarter. The largest deal in Q3 was the CAD $354M growth investment in Toronto-based Superior Plus by Brookfield Asset Management.
Canadian Private Equity Highlights
• Deal size in Q3:
• <$25M: 37 deals, YTD 286 deals at $1.1B
• $25M-$100M: 6 deals, YTD 39 deals at $2B
• $100M+: 3 deals, YDT 14 deals at $8.6B
• PE Dollars invested by geography:
• Quebec: 43% ($4.9B across 261 deals)
• New Brunswick: 23% ($2.7B across 6 deals)
• Alberta: 19% ($2.2B across 28 deals)
• Ontario: 12% ($1.3B across 91 deals)
• Montreal: 13% ($1.6B across 105 deals)
• Toronto: 9% ($1.1B across 79 deals)
• Quebec City: 8% ($942 across 23 deals)
• Dollars invested by Sector
• Information, Communications & Technology: 28% ($3.3B across 82 deals)
• Energy: 24% ($2.8B across 10 deals)
• Industrial & Manufacturing: 13% ($1.6B across 85 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.
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