PRINT THIS PAGE Buy-outs continue to set new records in Q2 200724/10/2007. Source: CVCA, Thomson Financial.
Investment by private equity buyout firms into Canadian companies continued its record setting pace during the second quarter of 2007, according to the industry’s quarterly statistical report released today by the CVCA and research partner Thomson Financial. A total of 52 transactions were announced during the quarter with a total value of approximately $55.6 billion, led by the record breaking $47.2 billion Bell Canada buyout. This is up dramatically from the 44 transactions recorded during the first quarter with a total value of $5.4 billion. “It is important to note that we achieved record growth in our buyout markets even without the massive Bell Canada transaction,” commented Rick Nathan, CVCA President and Managing Director of Kensington Capital Partners Limited, “A total of $8.4 billion in other buyouts were announced during the quarter, which would have been a record quarterly performance on its own.”
During the first half of 2007, a total of 96 Canadian buyout transactions were announced having a total value of $61.0 billion, including $13.8 billion outside of the Bell Canada transaction. This total already exceeds the full year totals for 2006 when 101 buyouts were recorded with a total value of $11.6 billion.
The growth in the Canadian market reflects similar growth in the U.S. and European markets. During the past several quarters, activity in Canada has trailed other markets because of a relative lack of mega-deals, which is no longer the case. The Bell Canada transaction represents a spike in Canadian market activity that puts Canada ahead of other international markets during the second quarter, based on the relative size of our economy. During the second quarter of 2007, a total of $242 billion was invested in U.S. based buyout transactions, with $155 billion invested in buyouts in the rest of the world.
Fundraising by Canadian buyout funds has declined from its peak level in 2006, with a total of $1.4 billion raised through the first half of 2007, compared to $7.9 billion raised during the full year of 2006. The majority of large Canadian buyout firms raised new capital during 2006, and would ordinarily expect to invest those funds for two to three years before returning to market to refresh their funding. Accordingly, the decline in fundraising during the current year represents part of the normal market cycle.
CVCA
The CVCA - Canada’s Venture Capital & Private Equity Association, was founded in 1974 and is the association that represents Canada’s venture capital and private equity industry. Its over 1200 members are firms and organizations which manage the majority of Canada’s pools of capital designated to be committed to venture capital and private equity investments. The CVCA fosters professional development, networking, communication, research and education within the venture capital and private equity sector and represents the industry in public policy matters.
Thomson Financial, with 2006 revenues of US$2 billion, is a provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a global leader in providing essential electronic workflow solutions to business and professional customers. With operational headquarters in Stamford, Conn., Thomson provides value-added information, software tools and applications to professionals in the fields of law, tax, accounting, financial services, scientific research and healthcare. The Corporation's common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
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