Canadian PE sees rebound in deal values, volumes in Q2

Canada’s private equity market saw growth in transaction values and volumes in Q2 2021, with C$14.1 billion invested across 191 deals.

Canada’s private equity market saw growth in transaction values and volumes in Q2 2021, with C$14.1 billion invested across 191 deals, according to final data released by Refinitiv. This brought the first-half total to C$17.8 billion across 341 deals, resulting in a year-over-year increase in values of 41 percent and in volumes of 59 percent. Canadian PE investors participated in 179 cross-border deals worth C$52.9 billion in H1 2021, up 58 percent in dollar terms from a year earlier. 

A full PDF report of the H1 2021 Canadian private equity market activity by Refinitiv is available here.

REPORT SUMMARY

Canada buyout and related deal values total $17.8 billion

Canadian buyout and related investment totaled $17.8 billion of deal values recorded across 341 transactions either announced or completed throughout the first six months of the year. This resulted in a year-over-year increase in values of 41% and in volumes of 59% from 1H 2020 levels. The average size of disclosed transactions was $103.1 million, down 2% from the $105.6 million in the first half of 2020.

The top ten transactions for the first half brought in $14.0 billion of deal values, 78% of the total for the period. Topping the list was the $3.9 billion acquisition of K+S AG’s Americas salt business by Ontario-based Kissner Group Holdings, which was acquired by Stone Canyon Industries the previous year. Enwave, a multinational energy company based in Ontario, saw its Canadian energy business get acquired by Ontario Teachers’ Pension Plan and IFM Investors from Brookfield Infrastructure Partners for $2.8 billion. Rounding out the top three was the purchase of the remaining shares of Ontario-based residential mortgage insurer Sagen (formerly Genworth Canada) for $1.6 billion by Brookfield Business Partners, completed in April.

While the number of Canadian buyout deals increased 59% year-over-year, the overall number of Canadian M&A transactions increased just 37% to 1,612 during the same period. This resulted in the share of PE-backed deals increasing to 21% of overall Canada dealmaking, up from 18% in the first half of 2020.

A total of ten Canadian buyout and related funds recorded closes in the first half of 2021 with total commitments of $11.8 billion. This was down 61% from the record-breaking first half of 2020, but still remained the third strongest first six month period ever recorded following the $30.1 billion in 2020 and the $24.2 billion in 2016. The top three fundraisings for the period were the $5.0 billion close of Whitehorse Liquidity Partners’ oversubscribed Fund IV, the $2.9 billion first close of Brookfield’s Special Investments Fund bringing it halfway to its $6.2 billion target, and the $2.4 billion close of Novacap’s oversubscribed TMT VI fund.

Canadian companies completed 47 PE-backed exits with aggregate disclosed exit values of $24.0 billion in the half, resulting in volumes increasing by 27% and values by 94%. The top completed exit remained the $10.9 billion sale of Bombardier Transportation to French transportation company Alstom, with Bombardier and Caisse de dépôt et placement du Québec exiting from the business. The top announced exit remained the $2.8 billion secondary sale of Enwave’s Canadian business by Brookfield Infrastructure Partners to Ontario Teachers’ Pension Plan Board and IFM Investors. The top exit newly added in the second quarter was the $1.2 billion sale of Alberta-based Black Swan Energy by rival business Tourmaline Oil, announced in June.