Q3 2019 YTD VC & PE Canadian Market Overviews: Venture Capital Surpasses CAD $2B Mark; Canadian Private Equity Investment Continues Downward Trend
B driven by record-breaking number of mega-deals A spectacular CAD$2.4 B was invested in Q3– the highest
The $1.4 B mega-buyout by Thomas Bravo LLC of privately held London-based Autodata Solutions Inc.;
The $653M recapitalization of Montérégie-based McInnis Cement Inc. by Caisse de dépôt et placement du Québec (CDPQ); and
The $445M acquisition of Toronto-based Gluskin Sheff + Associates Inc. by ONEX Corporation.
“While the middle market stays generally strong for Canadian PE, the appraisal environment continues to be evident in efficiency numbers,” said Kim Furlong, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. “We are, nevertheless, discovering an underwhelming public market environment and a boost of companies being taken private (such as WestJet and HBC). These conditions are supplying chances for public companies to refocus on company imperatives.”
CANADIAN VENTURE CAPITAL CORRECTION NOTICE: CVCA’s Q3 2019 YTD VC Canadian Market Overview was released on November 21, 2019. The CVCA has corrected a mistake in which BDC IT Ventures was associated to Verafin Inc.’s CAD$515 development funding round. The involvement was actually from BDC Co-Investments. CVCA apologies for this mistake and links to the report are have actually been replaced. Q3 Venture CapitalSurpasses CAD$2B Mark; Largest Quarter On Record 2019 YTD VC financial investment reaches CAD$4.7
quantity given that 2013 and practically 80%greater than the CAD$1.3 B in the second quarter of 2019. A record-breaking increase in mega-deals ($50M+) drove the
A record proportion of deal circulation (25%) went into companies in the industrial and manufacturing sector– 3 per cent greater than 2017 and 5 per cent greater than last year. The information and communications technology (ICT) sector maintained its speed with a 17% share.
The speed of PE exits likewise slowed with only 23 exits (all M&A) which totaled CAD $1.1 B. By comparison, there were 87 exits amounting to CAD $12.2 B in 2018. Included in the 23 exits up until now this year:
The $753M business acquisition of Toronto-based Intelex Technologies Inc. from HarbourVest Partners, LLC and JMI Equity; and
The $260M acquisition of Langley-based 4Refuel Canada LP by Finning International Inc.
investment efficiency up until now in 2019. There were 12 mega-deals in Q3, bringing the YTD overall to 23, representing majority of all dollars invested. Of the 23 mega-deals, nine deals exceeded CAD$100M and three gone beyond CAD$200M which consisted of: John’s, Newfoundland-based Verafin Inc.’s CAD$515M growth funding with participation from BDC Co-Investments, Information Venture Partners
, Northleaf Capital Partners and Teralys Capital ; Vancouver-based Clio’s$332M series D round from US investors; and Montreal-based Element AI’s $200M series B round from a syndicated that included Caisse de dépôt et positioning du Québec(CDPQ), BDC CapitalCo-Investments and Real Ventures.”In the past 9 months, Canadian equity capital financial investment has gone beyond all
previous turning points,”said Kim Furlong,
Chief Executive Officer, Canadian Venture Capital and Private Equity Association.”The concentrate on growing Canadian business has never ever been more evident than what we are presently seeing in the market.”Far this year, the leading 3 sectors receiving VC dollars details and communications innovation(ICT)taking 66%of overall VC dollars invested(CAD $3.1 B over 223 deals), followed by life sciences getting a 19%share(CAD$886M over 77 offers)and cleantech business taking a 6%portion( CAD$262M over 23 deals). VC-backed exits are tracking towards exceeding 2018’s efficiency(35 exits amounting to CAD$978M). Far in 2019, there have been 32 finished exits totalling CAD$3B which consisted of 2 VC-backed Montreal-based companies: Lightspeed POS Inc.(TSE: LSPD)finished the biggest IPO exit because 2017, noting with a market cap of$1.1 B; and Turning Point Pharmaceuticals Inc.(NASDAQ: MIST)closed its IPO with a market cap of$468M. DOWNLOAD THE Q3 2019 YTD CANADIAN VENTURE CAPITAL MARKET OVERVIEW REPORT HERE CANADIAN PRIVATE EQUITY Canadian Private Equity Investment Continues Downward Trend Public market volatility pushing business
personal CAD $1.8 B was invested over 94 handle the third quarter of 2019. The bulk of PE activity at 66% remains in the mid market, with offers of CAD $25M and under. There has actually been one single CAD $1.4 B mega-deal (CAD $1B+) up until now in 2019 and one offer at CAD $653M with the rest of PE deals (with disclosed worths) listed below CAD $500M. The largest revealed private equity offers consisted of:
The CVCA has remedied a mistake in which BDC IT Ventures was attributed to Verafin Inc.’s CAD$515 growth funding round. Far this year, the top 3 sectors getting VC dollars details and interactions innovation(ICT)taking 66%of overall VC dollars invested(CAD $3.1 B over 223 deals), followed by life sciences getting a 19%share(CAD$886M over 77 deals)and cleantech business taking a 6%part( CAD$262M over 23 offers). VC-backed exits are tracking towards exceeding 2018Surpassing performance(Efficiency exits totalling CADAmounting to978M). There has been one single CAD $1.4 B mega-deal (CAD $1B+) so far in 2019 and one offer at CAD $653M with the remainder of PE deals (with divulged values) below CAD $500M. The pace of PE exits likewise slowed with just 23 exits (all M&A) which totaled CAD $1.1 B. By comparison, there were 87 exits amounting to CAD $12.2 B in 2018.