Canadian private equity (PE) investment declined in 2019, according to new data from the Canadian Venture Capital and Private Equity Association (CVCA).
The group reported that PE investment for 2019 came in at $19 billion, down from $22.7 billion the previous year.
The year finished strongly, with the bulk of the PE investment coming in the fourth quarter (Q4) of 2019.
The closing of a couple of mega-deals (worth over $1 billion) in that quarter helped generate $12.4 billion in Q4 deal activity.
More than half of the year’s deal value came from mega-deals.
Overall, $11.6 billion of 2019’s PE investment was due to just three mega-deals, including the $5-billion buyout of WestJet Airlines Ltd. by Onex Corp.
While these big transactions dominate overall deal value, the CVCA also reported that there were 111 PE deals classified as “growth” investments in 2019, accounting for $1.5 billion in deal value.
“Private equity continues to pick up momentum as an attractive source of value-add financing for growing companies in the Canadian market,” Kim Furlong, CEO of the CVCA said in a release.
The top sector for PE investment was the industrial and manufacturing sector, followed by the tech sector and agri-forestry.
Desjardins Capital Inc. was the most active PE investor, with 145 deals, followed by Fonds de solidarité FTQ at 104 deals. BDC Capital Inc. was a distant third with 44 deals.
The number of deal exits by PE-backed companies also dropped in 2019. The CVCA reported that there were 37 exit acquisitions during the year, down from 84 in 2018.
There were also no initial public offerings in 2019, down from four in 2018.