Canada’s top 10 private equity deals in 2016 reflected values of more than $10.8 billion, down 11 percent from the $12.2 billion invested in the top 10 deals in 2015.
That number is based on PE Hub Canada’s list of the largest deals announced last year, supplemented by preliminary Thomson Reuters data. It suggests that PE dollar flows in Canada’s market declined in 2016, relative to a year ago, as they reportedly did on a global basis.
In fact, both PE-deal values and volume were reduced last year, according to preliminary Thomson Reuters data, which show nearly 300 transactions collecting about $15.2 billion. While the dollar amount is high by historical standards, it comes up 32 percent short of the $22.2 billion invested in 2015.
Last week, Preqin reported an increase in global PE deal-making in 2016, offset by a drop in values, which totalled US$319 billion.
Canada’s top deals, led by CDPQ’s investment in Bombardier’s rail arm, Thoma Bravo’s buy of Trader Corp and the Access Pipeline acquisition, are a varied group. The largest number were in the energy industry, as low prices created distress and value opportunities for investors.
1) Bombardier Transportation investment
In February, Bombardier closed a $2.1 billion (US$1.5 billion) convertible share investment in its rail arm by Caisse de dépôt et placement du Québec. The deal, announced in late 2015, gave CDPQ a 30 percent stake in the business. The pension fund later said it is open to further investment in Montréal’s Bombardier, which also manufactures planes.
2) Trader Corp buyout
Thoma Bravo acquired Trader Corp, a digital automotive marketplace and software-solutions provider, in September. Valued at about $1.57 billion (US$1.22 billion), the deal saw the Toronto company sold to Thoma Bravo by Apax Partners. Apax had acquired Trader from Yellow Media for $745 million in 2011.
3) Access Pipeline acquisition
Wolf Midstream, an energy-infrastructure company backed by Canada Pension Plan Investment Board, bought a 50 percent stake in Access Pipeline, operator of a heavy oil transportation pipeline network in Alberta. Calgary’s Wolf paid $1.4 billion to Devon Energy for the interest in October. CPPIB committed $825 million to the acquisition.
4) Constellation Brands Canada spin-out
In December, the private equity group of Ontario Teachers’ Pension Plan closed its acquisition of the Canadian wine business of Constellation Brands. Ontario Teachers’ partnered in the deal with the management of Mississauga, Ontario’s Constellation Brands Canada. The price tag was about $1.03 billion.
5) Give & Go sponsor-to-sponsor deal
OMERS Private Equity sold Give & Go Prepared Foods, a Toronto maker of baked goods, to Thomas H. Lee Partners. Terms of the August deal weren’t disclosed, but the value was reported at close to $1 billion (US$800 million). OMERS, which bought Give & Go from Kilmer Capital Partners in 2007, said it tripled its invested capital with the sale.
6) Teine Energy asset acquisition
Teine Energy, majority-owned by Canada Pension Plan Investment Board, bought oil-weighted assets in Saskatchewan for $975 million. The seller in the deal, closed in June, was Penn West Petroleum. The acquisition by Calgary-based Tiene was one of several undertaken last year by energy companies backed by CPPIB.
7) GFL Environmental buy of Matrec Services
GFL Environmental closed its buy of Matrec Services, a solid-waste business, from TransForce in February. The $800 million deal was backed by a $458 million investment from Macquarie Group and HPS Investment Partners, among others. Private equity firms deployed another $225 million to the Markham, Ontario company in October.
8) RimRock line-of-equity investment
In February, RimRock Oil & Gas secured a line-of-equity investment with a maximum of about $688 million (US$500 million). The investor was Warburg Pincus, which has several major investments in Canada’s oil-and-gas industry. Calgary-based RimRock was founded in 2015 by former executives of Talisman Energy (now Repsol Oil & Gas Canada).
9) Pacific E&P restructuring deal
Pacific Exploration & Production closed a restructuring deal with Catalyst Capital Group and other creditors in November. As part of the deal, Catalyst recapitalized the company with about $670 million (US$500 million). Toronto’s Pacific E&P, which produces natural gas and crude oil in Latin America, also received a bid from EIG Global Energy Partners.
10) Telus International acquisition
Telus Corp in May agreed to sell a 35 percent stake in outsourcing-services provider Telus International to Baring Private Equity Asia. The deal, closed in June, valued Telus International at $1.2 billion and awarded its former Canadian parent about $600 million in proceeds.
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