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Canada’s private capital industry is poised to have its best year for deal activity in buyout and related private equity (PE) markets since 2007, according to the Canadian Venture Capital and Private Equity Association’s (CVCA) Q3, 2014 report.

Deal-making in Canada’s buyout and PE market rose sharply in both dollar amounts and number of transactions. Disclosed amounts totaled $19.8 billion in this period, fueled largely by the $12.5 billion investment in the merger of Tim Hortons with 3G Capital-backed Burger King Worldwide.

Read: Primer on private equity

Even without this transaction, disclosed dollars invested still totaled $7.3 billion in Q3, 2014, well above the $1.2 billion in values recorded in the same time period last year. As of September 30, PE deals secured a disclosed $26.4 billion invested – more than twice the amount made during the whole of 2013 ($10.2 billion).

The number of deals also grew substantially – by more than 40% year-over year. Between July and September there were 94 deals, bringing the total to 289 for the first nine months of 2014.

Highlights:

  • $2 billion sale of Encana Corporation’s Big Horn assets to Jupiter Resources Inc. – a portfolio company of Apollo Capital Management was closed.
  • Riverstone Holdings led a $675 million investment in Canadian Non-Operated Resources LP.
  • Advent International’s $927 million investment in Lululemon Athletica.

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  • Top sector: Oil and gas companies lead share of buyout-PE transactions accounting for 14% of the total number for the first nine months of 2014.
  • Top regions: Quebec currently has the largest share of domestic buyout-PE transactions for the first nine months of 2014, accounting for almost half (45% of all transactions. Ontario accounts for 23%, and Alberta for 19% of market share.
  • The market is on pace to surpass 2013’s total number of buyout-PE exits, which is currently at 65 for the first nine months.

VC funds invested a total of $734 million in financing rounds during Q3, up 26% (from $581 million) year-over-year. Disbursement also grew by as much as 45% from Q2, 2014.

Canadian VC market activity continues to track ahead of activity from last year. Over the first nine months, VC funds have invested more than $1.6 billion in total – a 16% increase (from $1.4 billion). The number of VC deals has also grown by 6% year-over-year, with a total of 361 financings counted at the end of September 30.

Read: How alternatives boost portfolios

Originally published on Advisor.ca

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