Canadian buyouts dip through Q3

The number of private equity deals in Canada has slowed in 2013, however fundraising through Q3 has already surpassed the total raised in 2012. 

Buyouts in Canada reached C$7.4 billion (€5.2 billion; $7 billion) during the first nine months of 2013, representing a 3 percent drop compared to the same period last year, according to data from Canada’s Venture Capital and Private Equity Association and Thomson Reuters.

While both the number of deals and the combined value of buyouts in the third quarter of 2013 grew compared to Q3 2012, muted activity during the first half of 2013 has kept year-to-date volume down compared to the first nine months of 2012. The number of Canadian buyouts in 2013 stood at 212 at the end of the third quarter, compared to 250 during the same period last year. 

“While it is difficult to draw too many conclusions from year to date data it would appear that most of the decline is attributable to fewer ‘big deals’ as the mid-market buyout and growth-equity deals are still getting done at levels consistent with what we have seen for the past 2-3 years,” said Peter van der Velden, president of the CVCA, in a statement.

As of 30 September, two deals valued at more than C$1 billion have generated more than half of all deal value during the first three quarters: the C$2.97 billion investment in Hudson’s Bay Trading Company by a group of investors led by NRDC Equity Partners and the C$1.1 billion deal for ArcelorMittal Mines Canada by EQ Partners and other investors.  

Despite slower investment activity, fundraising in Canada has grown considerably year-over-year, with C$6.1 billion raised through the first three quarters, more than the total of C$4.8 billion raised in all of 2012 and the C$3.8 billion raised in 2011. Final closes during the first three quarters include DRI Capital’s $1.5 billion Fund III and TorQuest Partners’ C$535 million Fund III. Firms having hit a first close include Onex Partners, which collected $1.2 billion for its Fund IV, and Imperial Capital, which raised C$250 million for its Fund V. 

Canadian venture capital activity has risen sharply in 2013, with investments up 27 percent to C$1.4 billion through Q3. Venture capital fundraising, meanwhile, is down 37 percent year-over-year, having fallen to $940 million though the first nine months of 2013.