Canadian private equity deal values just shy of $13bn in first half

The pace of investment activity in Canada’s buyout and private equity market remained strong in the first half of 2020, according to final data released by Refinitiv, with $12.9 billion deployed across 214 transactions. Deal values in this period increased 40 percent relative to the same time in 2019, marking the fifth most active first half on record. Deal volumes, however, declined 12 percent compared to a year earlier. Between April and June, 83 transactions reflected values totaling $5.5 billion, up 58 percent from Q2 2019.

A full PDF report of H1 2020 Canadian buyout and private equity market activity by Refinitiv is available here.

REPORT

Canada buyout and related deal values total $12.9 Billion in H1

Canadian buyout and related investment totaled $12.9 billion of deal values recorded across 214 deals either announced or completed between January and June. Despite volumes being down 12% from 2019 levels, deal values were up 40% year-over-year. The second quarter alone saw $5.5 billion of deal values across 83 transactions, a year-over-year increase in values of 58%.

Four deals with values of $1 billion or greater were either announced or completed in the first half of the year. Included in those newly announced in 2020 was the top deal for the half, the $2.0 billion purchase of Kitchener-based salt manufacturing business Kissner Milling Company by Stone Canyon Industries. The remaining three such transactions were previously announced in 2019 but completed in the first quarter, including the $1.3 billion acquisition of Competence Call Center by TELUS International backed in part by the 35% stake owned by Baring Private Equity Asia, the $1.0 billion purchase of AltaGas Canada by an investment vehicle backed by pension plans PSP Investments and Alberta Teachers’ Retirement Fund Board, and the $1.0 billion acquisition of aerospace company MDA from Maxar Technologies by a consortium led by Northern Private Capital.

While the number of Canadian buyout deals fell 12% year-over-year, the overall number of Canadian M&A transactions declined 10% to 1050 during the same period, resulting in the share of PE-backed deals dropping to 20% of overall Canada dealmaking from 21% a year ago.

11 Canadian buyout and related funds recorded closes in the first half of 2020, raising total commitments of $30.0 billion during the six month period, more than was raised throughout the full twelve months of any previous year. The majority of this was for Brookfield’s fifth infrastructure fund, which closed in February and achieved total equity commitments of $26.6 billion. Other closings completed over $1 billion were InstarAGF’s $1.6 billion Essential Infrastructure Fund II, TorQuest Partners’ $1.3 billion closing for its $1.4 billion Fund V, and Birch Hill Equity Partners’ Fund VI, which raised $1.2 billion in a single closing with total commitments across all fund structures of $1.8 billion.

Canadian companies completed 34 PE-backed exits in the first half of the year with aggregate disclosed exit values of $14.4 billion, resulting in volumes declining by 3% year-over-year while values increased 174%. Top exits newly announced in the first half included the $2.0 billion previously mentioned secondary sale of Kissner Milling Company to Stone Canyon Industries with firms Metalmark Capital and Silvertree Capital exiting from the business, and the $839 million purchase of Canam Group’s Canadian operations from American Industrial Partners (AIP) by Placements CMI, Caisse de dépôt et placement du Québec, and Fonds de solidarité FTQ.