CAN

1H 2015

CROSS-BORDER BREAKDOWN
PAG E 6

CAPITAL CONTINUES
FLOCKING TO CANADA; BOTH
PE AND VC DOLLARS UP

PAGE 3

ACTIVITY BY PROVINCE
PAG E 12

LEAGUE TABLES
PAG E 16

CONTENTS
3
4-5
6
7
8
9
10
11
12
13
14
15
16

CREDITS & CONTACT

PitchBook Data, Inc.
JOHN GABBERT Founder, CEO

Introduction
Private Equity

ADLE Y BOWDEN Senior Director, Analysis

Content, Design, Editing & Data

ALE X LYKKEN Editor
ANDY WHITE Lead Data Analyst

Cross-Border Breakdown

DANIEL COOK Senior Data Analyst

GARRET T BL ACK Senior Financial Writer
BRIAN LEE Data Analyst

Venture Capital
PE Deals by Size
VC Rounds by Size

J ENNIFER SAM Senior Graphic Designer

J ESS CHAIDEZ Graphic Designer

Contact PitchBook
www.pitchbook.com
RESE ARCH
research@pitchbook.com
EDITORIAL

PE Investment by Industry

editorial@pitchbook.com
SALES
sales@pitchbook.com

VC Investment by Sector
Activity by Province
PE Exits
VC Exits
PE Fundraising
League Tables

COPYRIGHT 2015 by PitchBook Data,

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Contents are based on information from
sources believed to be reliable, but accuracy
and completeness cannot be guaranteed.
Nothing herein should be construed as any
past, current or future recommendation to
buy or sell any security or an offer to sell, or
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This material does not purport to contain
all of the information that a prospective
investor may wish to consider and is not to
be relied upon as such or used in substitution
for the exercise of independent judgment.

2
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

Introduction
Private investment in Canada is booming. Largely
thanks to the energy and software segments,
U.S. private equity (PE) and venture capital (VC)
firms are migrating north in search of deals, and
finding plenty of them. PE investors wrapped up 63
transactions in the first quarter totaling C$8.1 billion,
in line with previous strong quarters; VC investors
funneled C$420 million into Canada in 1Q across 88
rounds, including 24 late stage
investments. Almost half (45%)
of all VC investments in 1Q were
for software startups. On the PE
side, 30% of 1Q PE dollars went to
Canadian energy companies; in
2013 that percentage was a much
lower 16%.
Not only are more dollars coming
to Canada, so too are the number
of foreign investors looking to find
opportunities. The U.S. in particular
continues to head north; last year marked the first
time that the number of unique U.S. investment firms
operating in Canada outnumbered domestic investors
in both asset classes. For PE, thats been the case
for over a decade, though its worth noting that the
number of unique U.S. firms in Canada has grown at
a faster clip than the number of new Canada-based
firms being created. Between 2010 and 2013, there
was a 129% increase in the number of U.S. investors
striking deals in Canada, while the number of new
Canadian firms jumped a more modest 81%.

On the VC side, though, 2014 may turn out to have

been a watershed moment. In all, 134 unique U.S. VC
firms invested in Canada last year compared to 116
Canada-based firms. The two countries are going in
opposite directions on this point. Between 2012 and
2014 there was a 26% increase in unique U.S. investors
and a 9% decline for Canadian firms.
By size, PE investors have scaled back their focus
on smaller transactions, though
most activity is still very modest:
About 73% of 1Q deals were in the
sub-C$250 million range, split
evenly between the sub-C$25M
and C$25M-C$250M buckets.
Thats a big change, however,
looking back at 2010 levels, when
71% of all PE activity was in the
smallest of size categories, C$25
million and under. Its curious that
larger transactions are only now
beginning to come back, considering that leverage
use in Canada isnt very heavy and Canadas banking
system survived the crisis intact. Perhaps the main
difference between 2010 and 2015 is the number of
new U.S. entrantsand their appetites for larger deals
and smaller equity checks.
We hope the information and data in this report are
useful and help inform your decision-making process
in the coming quarters. As always, if you have any
questions, comments or suggestions, please contact
us at research@pitchbook.com.

For the first time,

U.S. investors
outnumber
domestic PE and
VC firms active
in Canada.

PitchBook

Bet ter Data. Bet ter Decisions.

PitchBook for Private Equity Firms

demo@pitchbook.co m | pitchbook.com

No one offers more insight on

the private equity landscape than

PITCHBOOK FOR PE FIRMS

What will you do with it?

Private Equity
CANADIAN PE DEAL FLOW BY QUARTER
C$14

100

C$12

86

80

C$10

66

C$8

63

61
52

49

C$6

33

39

66

90

82

80

71

72
74

63

60

65

53
56

50

55

36

40

C$4

30
20
C$8

C$12

C$12

C$10

C$9

C$9

C$7

C$8

C$7

C$10

C$8

C$8

C$6

C$6

C$5

C$9

C$6

C$5

C$4

C$3

C$0

C$3

34

C$2

70

10
0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2010

2011

2012

Capital Invested (C$B)

We wouldnt be
shocked to see
Canadian PE
activity challenge
its 2007 record
this year.
DEAL FLOW BY YEAR

C$8

C$43

C$30

C$33

C$27

C$16

C$45
312
C$40
C$35
238
273
213
C$30
C$25 157
C$20
C$15
63
C$10
C$5
C$0
2010 2011 2012 2013 2014 2015*

350
300
250
200
150
100
50
0

Capital Invested (C$B)

# of Deals Closed
Source: PitchBook
*as of 3/31/2015

2013

2014

# of Deals Closed

Canada recovered much more

quickly from the financial
crisis than the U.S. did, at least
from a PE perspective. Between
2010 and 2013, Canadian activity
popped 99% on a deal flow basis
versus a respectable 26% in the
States. Of course, the more mature
U.S. market has become more
saturated relative to the Canadian
market, which is still something
of a green field for private equity.
Canadas banking system was
largely unhurt by the crisis, which
helped minimize the countrys
decline in PE deal flow to -25%
between 2007 and 2009. In the
U.S., PE activity was cut in half
(-51%) in the same two-year period.
Another comparison: Canadian
deal flow was back at pre-crisis
levels as quickly as 2011 (9% higher
than 2007, in fact) while U.S. deal
flow only hit that milestone last

2015
Source: PitchBook

year. Whats more, capital invested

levels in the U.S. havent come
close to approaching 2007s $908
billionthe $527 billion invested
last year would have covered just
58% of the 2007 tab. In Canada,
the C$42.6 billion invested in
2014 was only 9% off the 2007
record (C$47 billion). And with the
Canadian energy sector looking
increasingly lucrative, we wouldnt
be shocked if 2015 challenges that
record.
Energy investments are already
strong at C$2.4 billion through
1Q, about 30% of all first quarter
value. 2015 is already approaching
2013s final tally of C$4.9 billion
and should compare favorably
to the C$11.7 billion invested
last year, a record. At least one
massive PE deal is in the works
this year, a C$1.7 billion offer
for Torontos Pacific Rubiales

4
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

Private Equity
70%

180

80

72

89

70%

50%
40%
30%
20%

97
28 12

95

85

28

66

53

29
43

65

32

55

40
20

52%

80%

60%

35%
44

60

41%

57%

56%

56

42%

60

79

120
100

54%

52%

140

66

60%

160

10%
0%

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Add-on
Non Add-on
Add-On % of Buyout

Source: PitchBook
*as of 3/31/2015

INVESTMENTS BY DEAL TYPE

100%
Platform
Creation

90%
80%

PIPE

70%
60%

PE Growth

50%
40%

Recap

30%
20%

Add-on

2013 compared to the height of the

boom in 2007. In Canada, platform
activity actually increased between
those years, from 79 in 2007 to
89 in 2013 (+13%). Add-ons, on the

2014

2013

2012

2011

2010

2009

0%

2015*

10%
2008

of equity from Helios Investment

Partners.
By and large, however, a majority
of PE deals in Canada are of the
buy-and-build variety, which has
been the case since 2008. On a
percentage basis, Canada has
been more active with add-ons
compared to U.S. investors, which
eclipsed the 50% mark for the first
time in 2011. One notable difference
between the two markets, however,
is that in Canada, platform activity
has been relatively steady the
past few years, while its been the
opposite in the U.S., where platform
activity was 42% lower by count in

200

2007

Buy-and-build
is prevalent in
Canada, but addons have evened
out by count in
recent years.

BUYOUTS: ADD-ONS VS. NON ADD-ONS

2006

Energy that includes PE-backed

Harbour Energy on the buy side.
Other pending deals include
Coral Hill Energy, which is being
purchased by Aspenleaf Energy
(backed by ARC Financial and
OTPP) for C$324 million, and
Calgary-based GASFRAC, which
agreed to terms with another ARC
portfolio company after receiving
bankruptcy approval in March.
Not all energy opportunities are in
the form of buyouts. A number of
PIPE investments are also popping
upPE firms are buying stock in
Pershimco Resources (TSX: PRO),
Sama Resources (TSX: SME) and
Africa Oil (TSE: AOI), the latter of
which is taking in C$122 million

Buyout
Source: PitchBook
*as of 3/31/2015

other hand, arent as prevalent in

Canada as one might think. Add-on
counts have evened out somewhat
since 2012, and on a much smaller
scale, as well.
5
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

Cross-Border Breakdown
UNIQUE PE INVESTOR COUNT (#) BY HEADQUARTERS AND YEAR
200

183

163
150
100
50

126
84

82

131

124
87

83
58

62
15

22

25

22

2007

2008

2009

80
64

84

16

19

2010

2011

116

92

35

36

2012

2013

167
110

27

0
2006

Canada
The extent to which Canada
has drawn outside investment
is evident in the chart above,
which shows the number of
unique investors in Canada-based
companies per year. Despite the
decline between 2013 and 2014,
the sheer increase in foreign
interest is unmistakable. By count,
PE investors increased the most,
with the number of U.S. VC firms
alone reaching a decade high
last year at 134. More U.S.-based
VC investors were active last
year than even local VC firms,

United States

2014

Other

2015*
Source: PitchBook
*as of 3/31/2015

to take advantage of troubled

commodity players and changes
in certain tax provisions. Some
attribute the increase in U.S.-based
investor activity to not only market
dynamics but also to changes
in clearance certificates for taxexempt gains by non-residents
and eliminating withholding on
certain payments that occurred
several years ago. On top of that,
the recent devaluation of the
Canadian dollar versus the USD
has given a little extra pop to U.S.
dry powder.

which could signify that there is

a lack of significant VC funding
by Canadian firms at the Series B
stage, leading growing startups
to look elsewhere for capital.
Investors headquartered outside
the U.S. may be flocking to the
Canadian scene to fulfill that need,
with already a handful of firms
investing in 1Q.
A number of factors are likely
driving this surge in outside
investment, including heightened
competition elsewhere,
opportunistic investors looking

UNIQUE VC INVESTOR COUNT (#) BY HEADQUARTERS AND YEAR

160
140

116

120

94

100
80

73

69

40

47

59

20

18

60

71
62

22

26

2007

2008

66
37
20

88

128
106

121

134

116

116

31

30

53
14

24

23

0
2006

2009
Canada

2010
2011
United States

2012
2013
Other

2014

2015*

Source: PitchBook
*as of 3/31/2015

6
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

Venture Capital
CANADIAN VC ACTIVITY BY QUARTER
C$600

109

103

C$500

120

105

C$400

76

74

C$300

62

53

C$200 36

34 29
27

46

70
60

53

45

86

100

92 88

88

80

79 82

80

67

60
40

35

C$100

20

C$0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2009

2010

Capital Invested (C$M)

2011

2012

# of Rounds Closed

2013

Angel/Seed

2014
Early VC

2015

Later VC
Source: PitchBook

Canada is becoming a
bigger hunting ground for
VC investors. The C$1.8 billion
invested last year was easily
a record by total value, and
2013s 374 rounds were about
three times as many rounds
recorded in 2005 and 2006
each. The increase has been
across the board, with angel/
seed, early stage and late stage
financings all becoming much
more frequent. Five of the last six
quarters have eclipsed C$420
million in aggregate, with 1Q
2015 representing the sixth
highest quarter for Canadian VC
capital invested. While its true
that Canada wont be reaching
Silicon Valley heights any time
soon, it also doesnt seem to be
experiencing the same crunch
thats hitting the U.S. market,
where financings were down 24%
between 3Q 2014 and 1Q 2015.
And Canadian activity should
remain strong for the foreseeable
future, with about C$2.2 billion of
VC capital raised since 2013.

VC round sizes have been

creeping up, however. The
median Series B financing was
C$17.3 million in 1Q, a 33% jump
over the 2014 median of C$13
million. Late stage round sizes in
Canada are consistent with U.S.

sizes, with the Series C median

at C$22.9 million in 1Q and the
median Series D+ at C$26.5
million. The median U.S. Series C
size was $15.4 million in 2014 and
Series D+ was $27 million.

MEDIAN ROUND SIZE BY SERIES AND YEAR

C$20

C$17.3

C$18
C$16
C$14
C$12

C$13.0
C$11.6
C$8.6

C$10
C$8

C$6.4

C$6

C$7.2
C$4.6

C$4
C$2

C$8.8

C$10.2
C$7.8

C$3.6 C$4.0 C$4.2

C$5.1

C$10.1
C$9.0

C$3.1

C$4.1

C$6.1 C$6.4

C$1.4 C$1.2
C$1.2 C$1.2
C$0.5 C$0.6 C$0.5 C$0.8 C$0.7 C$0.5

C$0
2006

2007

2008 2009
Seed

2010 2011
Series A

2012 2013
Series B

2014

Source: PitchBook

2015*

*as of 3/31/2015

7
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

PE Deals by Size
DEAL COUNT BY DEAL SIZE
100%

C$2.5B+

90%
80%

C$1B-C$2.5B

70%
60%

C$500M-C$1B

50%
C$100MC$500M

40%
30%

C$25MC$100M

20%
10%
2014

2013

2012

2011

2010

2009

2008

2007

2006

2015*

Under C$25M

0%

Source: PitchBook
*as of 3/31/2015

About 70% of all PE capital invested

in Canada is in the upper and core
middle markets.
CAPITAL INVESTED (C$) BY DEAL SIZE
100%

C$2.5B+

90%
80%

C$1B-C$2.5B

70%
60%

C$500MC$1B

50%

C$100MC$500M

40%
30%

C$25MC$100M

20%
10%
2014

2013

2012

2011

2010

2009

2008

2007

2015*

Under C$25M

0%
2006

As the Canadian PE scene

has thrived over the past
few years, it has seen a gradual
increase in middle-market
activity, similar to that in the U.S.
In 2010, deals in the sub-C$25
million range accounted for 70%
of all deal flow, while in 2014, that
percentage fell to a little over
40%. Deals in the C$25 million to
C$500 million rangethe heart
of the middle marketaccounted
for nearly 48% of all activity in
2014. The proportions of capital
invested at different size ranges
also aligns with that trend, as the
share of money invested in the
C$25 million-C$250 million range
has remained pretty steady over
the past five years. This push
to the middle market reflects
growing price pressure resulting
from competition and bids
from strategics, with investors
paying up more for quality in an
uncertain economic environment.
In addition, PE firms are said to
be increasingly specializing in
particular industries, developing
in-house expertise in order
to unlock growth. This also
supports the growing use of
add-ons, which, along with
growth investments, make up
the majority of deal flow in the
lower price ranges of the market.
The proliferation of small, familyowned businesses in the country
offers plenty of opportunities
for local PE firms to cut deals in
the lower middle market, which
often leaves outside investors to
target divested assets of larger
companies in the core and upper
middle markets.

Source: PitchBook
*as of 3/31/2015

8
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

VC Rounds by Size
ROUND COUNT BY SIZE
100%

C$25M+

90%
80%
70%

C$10MC$25M

60%

C$5M-C$10M

50%
C$1M-C$5M

40%
30%

C$500KC$1M

20%

2014

2013

2012

2011

2010

2009

2008

2007

2006

0%

2015*

10%

Under
C$500K
Source: PitchBook
*as of 3/31/2015

Rounds worth C$25M+ have steadily

increased their share of total capital
invested.
CAPITAL INVESTED (C$) BY ROUND SIZE
100%

C$25M+

90%
80%
70%

C$10MC$25M

60%

C$5M-C$10M

50%
C$1M-C$5M

40%
30%

C$500KC$1M

20%

2014

2013

2012

2011

2010

2009

2008

2007

2006

0%

2015*

10%

Under
C$500K
Source: PitchBook
*as of 3/31/2015

By many accounts the

Canadian tech scene is
flourishing; VC firms are taking
note, with last year seeing a
decade high of C$1.8 billion
invested. Thats a 22% increase
over the tally in 2013, and even
though round counts in 2014
fell from a high of 374 in 2013,
the number of financings was
robust at 341. Somewhat similar
to the U.S. venture scene, quite a
few of those financings were of
considerable size, with 31 rounds
in the C$10 million to C$25
million range in 2014. Unlike VC
in the U.S., however, 1Q numbers
remained stable. Early stage
numbers were actually up the
most in 1Q, although breaking
down the data by quarters
reveals a gradual (if volatile)
rise in the number of late stage
rounds from 2010 to 2012, with
the merest of upticks in 2Q and
4Q 2014.
Theres been talk of a capital
crunch at the Series B or later
stages, with startups in search
of larger checks often turning
to U.S.-based firms capable
of shelling out larger sums.
Some attribute this to a surge in
startups across Canada, which
may be the case. In addition, the
median size of Series C rounds
has taken off in the past two
years to crest at C$17.3 million in
1Q. Although not as expensive as
certain areas of the U.S. VC scene,
the Canadian VC ecosystem
appears to be experiencing
its own surge in prices, which
could be contributing to investor
reticence.

9
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

PE Deals by Industry
DEAL COUNT BY INDUSTRY
120
100
80
60
40
20
0
2006

2007

2008

IT

2009

2010

2011

2012

Healthcare

2013

2014 2015*

B2C

B2B
Source: PitchBook
*as of 3/31/2015

Energy is taking up a bigger slice of

Canadian PE dollars in 2015 as U.S.
investors head north while prices are low.
CAPITAL INVESTED (C$) BY INDUSTRY
100%

B2B

90%

B2C

80%
70%

Energy

60%

Financial
Services

50%
40%

Healthcare

30%

IT

20%

2014

2013

2012

2011

2010

2009

2008

2007

0%

2015*

10%
2006

Through 1Q 2015, each

industrys proportion of PE
deal flow remained relatively steady
compared to both 2013 and 2014.
B2B captured the largest share of
deals once again, topping out at
37% of 1Q activity, with energy a
distant second at 17%. The extent
to which PE firms target Canadian
commodities is evident in that latter
percentage; with commodities
futures and prices still in flux to a
large extent, PE firms are investing
opportunistically if cautiously, with
several big names such as Warburg
Pincus amassing capital specifically
for energy plays that may well be put
to work in Canada. B2Bs prevalence
is partially due to PE investors
attention to quality deal sourcing
when it comes to commodities in
particular, as timing is crucial, given
commodity business cycles.
Percentages of capital invested
only further illustrate PEs focus
on B2B and energy, with the two
industries combined accounting for
49% of all dollars invested in 2014
and 62% in 1Q. The fact materials &
resources saw a staggering C$5.9
billion in capital invested last year,
the most in years, should also be
noted. Theres been talk of PE firms
looking at the mining sector, where
valuations remain depressed and
companies are low on cash, in order
to put their hoard of dry powder to
work for some time now. Last year
saw what could be the first definite
signs of that shift being realized,
given the totals of capital invested
and deal activity. In 1Q, however, only
a handful of deals in the materials &
resources space occurred, so it may
be a little premature to declare a
definitive surge in PE mining deals is
occurring.

Materials &
Resources

Source: PitchBook
*as of 3/31/2015

10
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

VC Rounds by Sector
ROUND COUNT BY SECTOR
100%

Software

90%
80%

Media

70%
60%

Commercial
Services

50%

HC Devices
& Supplies

40%
30%

Pharma &
Biotech

20%
10%
2014

2013

2012

2011

2010

2009

2008

2007

2006

2015*

Non-core

0%

Source: PitchBook
*as of 3/31/2015

Software is gaining as a percentage

of both activity and dollar amounts.
CAPITAL INVESTED (C$) BY SECTOR
100%

Software

90%
80%

Media

70%
60%

Commercial
Services

50%

HC Devices
& Supplies

40%
30%

Pharma &
Biotech

20%
10%
2014

2013

2012

2011

2010

2009

2008

2007

2006

2015*

Non-core

0%

Even as Canadian venture

activity picked up its pace
over the past few years, software
accounted for a growing
proportion of all financings.
2013 recorded 148 financings
for software companies, a 36%
increase from 2012 and easily a
high for the decade. 2014 saw
a bit of a slump in the count of
software rounds but was still the
second most active of the past
10 years by a healthy margin.
Commercial services took
second place in terms of share of
rounds. 2013 was a banner year
for that sector in terms of capital
invested, with about C$429
million amassed.
Software, however, has grown
considerably over the past
few years; its proportion of
total dollars invested last year
approached 40% for the first time,
a massive C$687 million. That was
not only a record for the decade
but a rapid jump upward from the
previous highest tally in 2012a
66% increase. Among the overall
rise in VC invested last year in
Canada, however impressive the
software numbers were, other
sectors racked up plenty of cash.
Pharma & biotech startups raked
in around C$145 million, a sum
closer to what the space saw in its
heyday prior to the financial crisis.
Healthcare devices & supplies saw
more capital funneled by VC firms
than ever before, a hefty C$67
million.

Source: PitchBook
*as of 3/31/2015

11
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

Activity by Province
PE DEALS (#) BY PROVINCE
100%

Alberta

90%

British Columbia

80%

Manitoba

70%

New Brunswick

60%

Newfoundland

50%

Nova Scotia

40%

NW Territories

30%

Ontario

10%

Prince Edward
Island
Quebec

2014

2013

2012

2011

2010

2009

2008

2007

2006

0%

2015*

20%

Saskatchewan
Source: PitchBook
*as of 3/31/2015

Taking both PE and VC investment

into account, Ontario claims the
lions share of Canadian deal flow.
VC ROUNDS (#) BY PROVINCE
Alberta

100%

British
Columbia

90%
80%

Manitoba

70%

New Brunswick

60%
50%

Newfoundland

40%

Nova Scotia

30%

Ontario

20%

Prince Edward
Island

10%
2014

2013

2012

2011

2010

2009

2008

2007

2015*

Quebec

0%
2006

Analyzing deal flow by

province doesnt produce too
many surprises. When it comes to
PE activity, the heaviest hitters are
Ontario, Quebec, British Columbia
and Alberta. In 2014, Ontario
accounted for 35% of all PE deal
flow, while Alberta was home to
23%in 1Q 2015, Ontarios share of
deal flow stood at a bare majority
of 51%, while Quebec and Alberta
matched at 16% apiece. The ebb
and flow of provincial activity
makes sense given relative levels
of economic activity, particularly
by sector. For instance, BCs
economy is apparently doing
well given plunging oil prices and
a boost in consumer spending,
Vancouvers thriving tech scene
and more. Meanwhile, Alberta
long enjoyed steady growth in PE
activity, but the past two quarters
have seen a significant drop. That
could indicate wariness as oil
prices remain depressed, although
that may be more of a temporary
pullback, since canny investors will
likely take advantage of oil & gas
producers running into difficulty
given the drop in prices.
On the venture capital side,
Alberta doesnt see too much
activity, while BCs portion of
overall financings soars. Last year
saw BC capture over 20% of all VC
activity, with Quebec roughly the
same, while Ontario dominated
at about 40%. From 2013 to 2014,
Quebec was the only one among
those three provinces to see its
total round count grow, albeit by a
small amount. Through the end of
1Q, however, only Ontario appears
on pace to remain at relatively high
levels, with just about 50% of all
Canadian VC rounds.

Saskatchewan
Source: PitchBook
*as of 3/31/2015

12
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

PE Exits
CANADIAN EXIT FLOW BY EXIT TYPE (C$B) AND YEAR
C$35
C$30
C$25
C$20
C$15
C$10
C$5
C$0
2009

2010

Corporate Acquisition

2012

IPO

2013

2014

Secondary Buyout

2015*
Source: PitchBook
*as of 3/31/2015

EXIT FLOW BY EXIT SIZE (#)

100%
90%

C$2.5B+

80%
C$1BC$2.5B

70%
60%

C$500MC$1B

50%
40%

C$100MC$500M

30%

C$25MC$100M

20%
10%
2014

2013

2012

2011

2007

2015*

Under
C$25M

0%
2006

With a mammoth first

quarter, PE capital exited
last year skyrocketed to about
C$29.5 billion across 67 liquidity
events. Just edged out by the
72 exits in 2013, last years
tally of value exited handily
outpaced any other year of the
decade. Quarterly data reveals
considerable fluctuation,
however, with 2012second
place in terms of capital exited
exhibiting a steadier spate of exit
events. Last years record value
was largely due to a bevy of highprofile, blockbuster purchases
by strategic buyers, like Aptalis
Pharmas $2.9 billion acquisition
by Forest Laboratories (NYSE:
FRX). The gradual increase
in purchase price multiples,
although detrimental to buyers,
has been quite beneficial to
sellers, with healthy exit activity
in the C$100 million to C$500
million range in particular over
the last few years. In addition,

2011

2010

2008

2009

2007

2008

2006

Source: PitchBook
*as of 3/31/2015

with corporate M&A picking up

over the same timeframe, PE
investors may have difficulty
competing with strategics, but
for those looking to unload aging
portfolio companies, it is a boon.

13
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

VC Exits
CANADIAN EXIT FLOW BY EXIT TYPE AND YEAR
C$25

50
45

C$20

40

C$2.0
C$0.4
C$18

35

C$0.4
C$15

C$15

C$10
C$0.5
C$7

C$5

C$1.6
C$0.5
C$4

C$0.2
C$5

30

PE Buyout (#)

C$14

25

IPO ($)

C$1.6
C$0.4
C$10

C$2.3
C$0.6
C$8

20
15

2006

2007

C$0.3
C$3

2008

For both the PE and VC

industries, the past couple
years have been a selling spree.
Canadian VC is no exception, with
2013 and 2014 seeing a total of 132
VC-backed exits. Although the tally
of yearly capital exited was highest
in 2012due in large part to Enobia
Pharmas purchasethe C$29 billion
total between 2013 and 2014 is
immense, reflecting how successful
VC firms were at achieving liquidity
as of late. Breaking down exit flow
by size yields some interesting
points. In 2014, the majority of VCbacked exits were worth C$100
million or more, while out of the past
decade, only 2013 saw a sudden
flurry of sales in the sub-C$25
million range. There havent been
many public flotations of VC-backed
companies, though its worth noting
VC-backed Canadian companies
raked in a decade high of C$2 billion
through public offerings last year,
Lumenpulse and Kinaxis notable
among them. The vast majority

2009

C$0.7
C$1

2010

IPO (#)
Corp. Acq. ($)
Corp. Acq. (#)

10

C$6

C$0
2005

PE Buyout ($)

C$0.7
C$2.0

2011

2012

2013

2014

5
0

Source: PitchBook
*as of 3/31/2015

2015*

MEDIAN EXIT SIZE BY TYPE (C$M)

C$1,400
C$1,206

C$1,200

C$1,024

C$1,000

C$400 C$349

C$0

C$580

C$671

C$600

C$200

C$775

C$739

C$800

C$337

C$248
C$225
C$182
C$134 C$128
C$114 C$59
C$59

C$242
C$85

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Acquisition/Buyout
of exits are achieved through
corporate acquisitions, although
over the past couple years a fair
amount of startups have been
snapped up by PE buyers. When it
comes to which firms shell out the

IPO

Source: PitchBook
*as of 3/31/2015

most capital, however, corporates

dominate. 2012 saw a vast C$18
billion paid out for VC-backed
holdings, with 2014 taking third
place for the decade at nearly C$14
billion.

14
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

PE Fundraising
CANADIAN PE FUNDRAISING BY YEAR
C$12

25
21

C$10

15

17

10

10

11

C$4

9
2

C$8

C$6

C$2

C$3

C$6

C$2

5
C$3

C$0

15

13

15

C$6

C$2

20

C$4

C$8

19

C$10

Fundraising by PE Canadian
investors is more sporadic
than in more mature PE
ecosystems, which must be taken
into account when analyzing
capital raised. The C$500
million raised in 1Q 2015 isnt as
meager as it may appear at first
glance, given the sheer level of
fluctuation on quarterly basis.
The yearly data from 2013 and
2014 offers a clearer picture and
explains why the fundraising trail
may be the road less traveled so
far in 2015. Canadian PE firms
closed 23 pools of capital from
2013 to 2014, amassing over C$14
billion in commitments. With that
much raised, investors might have
more than enough overhang to
deal with, especially as finding
quality targets remains difficult
by many accounts.
Fewer vehicles under C$100
million in size have also been
raised as of late, reflecting how,
in a competitive dealmaking
environment, LPs appear to
be placing their confidence in
larger, more established firms.
Consider, for example, Onex,
which closed its latest flagship
fund on $5.7 billion last year.
That level of confidence is further
evidenced by the prevalence of
successful fund closings over the
past couple years, with 75% of
funds hitting their target in 2014.
Buyout-dedicated vehicles are
preferred by LPs among other
private equity fund types; that
particular preference may be
skewed by the fact that a handful
of highly successful buyout shops
have been the ones collecting
commitments.
Looking ahead, its hard to see
that state of affairs changing.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Capital Raised (C$B)

# of Funds Closed

Source: PitchBook
*as of 3/31/2015

PE fundraising is not as frequent today

as it was pre-crisis, but managers are
starting to hit their targets again.
PE FUNDS TO HIT FUNDRAISING TARGET (%)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2006

2007

2008

2009

Hit Target

2010

2011

2012

Missed Target

2013

2014 2015*
Source: PitchBook
*as of 3/31/2015

15
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N

1Q 2015 Deals

League Tables
PE INVESTOR

DEALS

LAW FIRM

PE DEALS

Warburg Pincus

Cassels Brock & Blackwell

ARC Financial

Stikeman Elliott

Brookfield Asset Management

Bennett Jones

Fulcrum Capital Partners

Davies Ward

GI Partners

Paul Hastings

Klass Capital

Fasken Martineau

Madison Dearborn Partners

Goodmans

Resource Capital Funds

BakerHostetler

Torys

Orrick Herrington & Sutcliffe

Norton Rose Fulbright

DLA Piper

Wachtell, Lipton, Rosen & Katz

Vista Equity Partners

Source: PitchBook

VC INVESTOR

ROUNDS

Real Ventures

13

Kirkland & Ellis

Business Development Bank of Canada

iNovia Capital

BDC Capital

MaRS Investment Accelerator Fund

ADVISOR

Innovacorp

William Blair & Company

BDC Healthcare Venture

Signal Hill

Fonds de solidarit FTQ

Shea & Company

OMERS Ventures

RBC Capital Markets

500 Startups

Perella Weinberg Partners

Angel One Investor Network

NewPoint Capital Partners

Atlantic Canada Opportunities Agency

National Bank Financial

Blue Sky Capital

Morgan Stanley

Capital Angel Network

Mesirow Financial

Cycle Capital Management

KPMG

Export Development Canada

Houlihan Lokey

Federal Econ Dev. Agency for S. Ontario

Harris Williams & Co.

Kayne Anderson Capital Advisors

Generational Equity

Lumira Capital

CIBC World Markets

New Brunswick Innovation Foundation

CCC Investment Banking

Plaza Ventures

BMO Capital Markets

Relay Ventures

BDO Canada

SoftTech VC

Telesystem

Source: PitchBook

PE DEALS

1
Source: PitchBook

2
Source: PitchBook

16
P I TC H B O O K 1 H 2015
C A N A DA B R E A K D OW N