Canadian PE deals, dollars rise sharply in first nine months

Canada’s private equity market saw an increase in transaction values and volumes in Q3 2021, with C$17.7 billion invested in 190 deals.

Canada’s private equity market saw an increase in transaction values and volumes in the third quarter of 2021, with C$17.7 billion invested in 190 deals, according to final data released by Refinitiv. This brought total activity in the first nine months to C$32.6 billion invested in 544 deals, up 125 percent in values and 71 percent in volumes from a year earlier. Canadian PE investors participated in 288 cross-border transactions worth C$70.4 billion as of the end of September, up 3 percent in dollar terms from the same time in 2020.

A full PDF report of the Q3 2021 Canadian buyout and private equity market activity by Refinitiv is available here.

REPORT SUMMARY

Canada buyout and related deal values total $32.6 billion

Canadian buyout and related investment totaled $32.6 billion of deal values recorded across 544 transactions either announced or completed throughout the first nine months of the year. This resulted in a year-over-year increase in values of 125% and in volumes of 71% from the first nine months of 2020. The average size of disclosed transactions was $120.6 million, up 43% from the $84.6 million in the same period last year.

The top ten transactions for the first nine months brought in $23.3 billion of deal values, 72% of the total for the period. Topping the list was the $5.1 billion acquisition of energy transportation company, Inter Pipeline, by Brookfield Infrastructure Partners, announced in August. Coming in second was the completed $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. Rounding out the top three was the acquisition of entertainment company, Great Canadian Gaming, by Apollo Global Management for $3.3 billion, completed in September.

While the number of Canadian buyout deals increased 71% year-over-year, the overall number of Canadian M&A transactions declined by 16% to 2,279 during the same period. This resulted in the share of PE-backed deals increasing to 24% of overall Canada dealmaking, up from 17% throughout the entirety of 2020.

A total of sixteen Canadian buyout and related funds recorded closes in the first nine months of 2021 with total commitments of $22.9 billion. This was down 26% from the record-breaking first nine months of 2020 which saw $30.8 billion raised, but still remained the second strongest first nine month period ever recorded. The top fundraise for the period was the $8.8 billion first close of Brookfield’s Global Transition Fund, which will focus on investments in the clean energy and renewable power space. Placing second was the $5.0 billion close of Whitehorse Liquidity Partners’ oversubscribed Fund IV. Third was the $2.9 billion first close of Brookfield’s Special Investments Fund, bringing it halfway to its $6.2 billion target.

Canadian companies completed 77 PE-backed exits with aggregate disclosed exit values of $30.2 billion in the first nine months, resulting in volumes increasing by 67% and values by 122%. 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, announced in February last year and completed in January. The top announced exit was 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 announced in the third quarter was the $2.2 billion acquisition of Ontario-based sports betting company, theScore, by Penn National Gaming, announced in August.