CVCA’s Q1 2021 Canadian PE Market Overview: Small Mid-Market Deals Dominate PE Q1 Activity
May 19, 2021 – Toronto, ON – Today, the Canadian Venture Capital and Private Equity Association (CVCA) released its Q1 2021 report on private equity (PE) activity in Canada. Although Q1 had the highest level of PE investment activity on record in a first quarter with 177 deals, the first quarter had the third-lowest level of Q1 dollars invested based on CVCA records, with only CAD $2.6B invested.
There were two PE-Backed initial public offerings (IPO) in Q1, setting 2021 on track to have the greatest number of IPOs on record. There were 10 exits in the first quarter overall, with five merger and acquisition (M&A) transactions and three secondary buyouts. 2021 is pacing above 2020’s exit levels. The largest exit was the IPO of Ontario-based automotive component manufacturer ABC Technologies which went public on the TSX with a valuation of CAD $525M.
“For the first time, we’re seeing more ICT companies receive PE dollars than any other sector,” said Kim Furlong, CEO, Canadian Venture Capital and Private Equity Association. “We have been waiting for this evolution in PE as Canada’s innovation sector continues to grow and mature. The exit environment is also hot, and the current IPO activity is expected to continue throughout 2021.”
The information, communication, and technology (ICT) sector had the most investment activity in Q1, accounting for 23% of all private equity investment activity and 21% of all dollars invested. The industrial and manufacturing sector accounted for 22% of all PE activity (23% of all dollars invested) and saw an increase in average deal size to CAD $15.8M, a 17% increase from 2020 and a 66% increase from 2019 levels. The financial sector saw an increased boost in dollars invested, surpassing the total amount invested in 2020 with CAD $421M dollars invested across 9 deals.
For a deeper look into the performance of Q1 as well as the trends uncovered in 2020, the Canadian private capital industry will be gathering for CVCA’s Invest Canada ’21 on June 8 and 9. This year, there are several expert-led panels dedicated to exploring current themes including behind the IPO boom, the increase in SPACs, and industry and investment perspectives featuring Kewsong Lee, CEO, The Carlyle Group. For more information, visit the Invest Canada website.
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