Canadian PE deal values dip last year, finishing at C$30.7bn

Canada’s buyout and private equity market saw an end to three consecutive years of growth in 2020, with C$30.7 billion disbursed across 436 deals.

Canada’s buyout and private equity market saw an end to three consecutive years of growth in 2020, according to final data released by Refinitiv, with C$30.7 billion disbursed across 436 deals. This represented a year-over-year decline in values of 23 percent and in volumes of 19 percent. Canadian PE investors participated in 271 cross-border deals worth C$94 billion during the year, down 30 percent in dollar terms from 2019 and the lowest since 2017. PE-backed businesses completed 71 exits worth C$13.6 billion in 2020, down 28 percent in dollar terms from 2019.

A full PDF report of the 2020 Canadian buyout and private equity market activity by Refinitiv is available here.

REPORT SUMMARY

Canada buyout and related deal values total $30.7 billion in 2020

Canadian buyout and related investment totaled $30.7 billion of deal values recorded across 436 deals either announced or completed throughout the year. This resulted in a year-over-year decline in values of 23% and in volumes of 15% from 2019 levels. The fourth quarter alone saw $16.3 billion of deal values across 114 transactions, down 31% from the $23.5 billion of values in Q4 2019.

The top three transactions for the year were all either announced or completed in the fourth quarter. Topping the list was the $4.8 billion acquisition of Alberta-based Northview Apartment REIT by Starlight Investments and KingSett Capital, completed in November. Placing second was the announced $3.3 billion acquisition of entertainment provider, Great Canadian Gaming, by funds managed by Apollo Global Management. Rounding out the top three was the completed $3.2 billion private placement issued by Intact Financial to CPP Investments, Ontario Teachers’ Pension Plan Board, and Caisse de dépôt et placement du Québec in support of its acquisition of RSA Group’s Canada, UK, and International operations.

While the number of Canadian buyout deals fell 15% year-over-year, the overall number of Canadian M&A transactions increased 18% to 2658 during the same period following a sharp rebound of activity in the second half, resulting in the share of PE-backed deals dropping to 16% of overall Canada dealmaking, down from 23% a year ago.

A total of 19 Canadian buyout and related funds recorded closes in 2020, reaching commitments of $32.2 billion during the year, a new record. The majority of this was for Brookfield’s fifth infrastructure fund, which closed in February and achieved total equity commitments of $26.6 billion. Brookfield also held closes in the third and fourth quarter for its Super-Core Infrastructure Fund, bringing its total commitments to $3.4 billion, while $1.3 billion was raised by TorQuest Partners for its Fund V, bringing total commitments to $1.4 billion.

Canadian companies completed 71 PE-backed exits with aggregate disclosed exit values of $13.6 billion, resulting in volumes decreasing by 1% and values decreasing 28%. The top exit announced in the year was the $10.4 billion sale of Bombardier Transportation to French transportation company Alstom, with Bombardier and Caisse de dépôt et placement du Québec exiting from the business. Newly announced in the fourth quarter was the $4.0 billion purchase of wood-based panel manufacturer, Norbord, by West Fraser Timber from Brookfield Asset Management.