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Canadian Private Equity18/06/2008. Source: Blakes, mergermarket.
 The last two years have been remarkable years for private
equity in Canada. Paralleling the US and Europe, Canadian private equity has seen record buy-out activity; however, the recent tightening of financial markets has dampened private equity’s party, according to this perceptions study by law firm Blakes in association with mergermarket.
Study results suggest that respondents are cautious about prospects for Canadian private equity but not completely disheartened. Early indications in 2008 are that middle market transactions, which are the heart of the Canadian market, will continue to get financed, but at lower leverage multiples.
The credit tightening has been felt in Canada with respondents identifying Consumer Products, Industrial Manufacturing and Financial Services as the sectors most impacted by the current environment. According to our respondents, however, there does appear to be a light at the end of the tunnel with the majority expecting the credit crunch to last throughout 2008, but not far beyond.
The current picture is not all doom and gloom. Fueled by record-levels of fundraising, Canadian institutional investors and private equity firms have had an increasing presence in the international buyout markets. Furthermore, aided by the strength of the Canadian dollar, respondents believe that the US will present the most attractive targets for Canadian capital.
Canada also registered the largest ever announced buyout in 2007. In June, Ontario Teachers Pension Plan Board, Providence Equity Partners and Madison Dearborn Partners announced an agreement to purchase BCE, the Canadian telecommunications company, for approximately $48 billion.
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