VC & PE CANADIAN MARKET OVERVIEW // H1 2018

Transcription

1 VC & PE CANADIAN MARKET OVERVIEW // H1

2 CONTENTS PARTICIPATING DATA CONTRIBUTORS... 3 FOREWORD... 4 VENTURE CAPITAL CANADIAN MARKET OVERVIEW... 5 VENTURE CAPITAL HIGHLIGHTS... 6 VENTURE CAPITAL HEAT MAP... 7 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY... 8 VC ACTIVITY BY DEAL SIZE... 9 TOP 10 DISCLOSED CANADIAN VC DEALS...10 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES VC SECTOR BREAKDOWN VC STAGE BREAKDOWN VC EXITS TOP DISCLOSED VC EXITS MOST ACTIVE VC FIRMS // FUNDS PRIVATE EQUITY CANADIAN MARKET OVERVIEW PRIVATE EQUITY HIGHLIGHTS PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY PRIVATE EQUITY HEAT MAP // ALL PE DEALS QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY TOP 10 DISCLOSED CANADIAN PE DEALS PE ACTIVITY BY DEAL SIZE TOP CANADIAN CITIES // ADMINISTRATIVE CENTRES PE SECTOR BREAKDOWN PE EXITS TOP 10 DISCLOSED CANADIAN PE EXITS MOST ACTIVE PE INVESTORS CVCA METHODOLOGY VENTURE CAPITAL PRIVATE EQUITY... 30, 31 AUTHORS, ABOUT CVCA AND CONTACT INFO VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2

3 PARTICIPATING DATA CONTRIBUTORS If you would like to have your firm included in future reports, please contact either or CVCA thanks the following firms who participated in its Q1 survey. PARTICIPATING LIMITED PARTNERS Alberta Teachers' Retirement Fund Alberta Enterprise Corporation BDC Capital Inc. Bluesky Equities Ltd. Caisse de dépôt et placement du Québec Capital Régional et Coopératif Desjardins Dancap Private Equity Inc. Fondaction CSN Fonds de solidarité FTQ Fonds de solidarité FTQ (Regional) HarbourVest Partners (Canada) Ltd. Investissement Québec Kensington Capital Partners Limited Ontario Teachers' Pension Plan Teralys Capital 32 Degrees Capital AIP Private Capital ARC Financial Ardenton Capital Corporation ATB Capital Birch Hill Equity Partners Brookfield Asset Management CAI Capital Management Co. Clairvest Group Inc. Clearspring Capital Partners End of Petroleum First West Capital Fulcrum Capital Partners GrowthWorks Capital Hawthorne Capital Inc. Highland West Capital InstarAGF Asset Management Ironbridge Equity Partners Kayne Capital Killick Capital Inc. PARTICIPATING PRIVATE EQUITY & LSVCC FIRMS Lex Capital Management m2s Capital Mink Capital Mosaic Capital Corporation Novacap Management Inc. OMERS Private Equity Inc. Parallel 49 Equity Persistence Capital Partners PFM Capital Inc PRIVEQ Capital Funds Regimen Equity Partners Roynat Capital Inc. Seafort Capital Searchlight Capital Partners Signal Hill Equity Partners TIMIA Capital Corp TriWest Capital Partners Westcap Mgt. Ltd. Western Investment Company of Canada Ltd. XPND Capital PARTICIPATING VENTURE CAPITAL FIRMS Accelerate Fund McRock Capital Amorchem Venture Fund New Brunswick Innovation Foundation Anges Québec Northumberland CFDC Anges Québec Capital OMERS Ventures AVAC Ltd. OpenText Enterprise Apps Fund Avrio Ventures Management Corp Panache Ventures Azure Capital Partners Pangaea Ventures Bioindustrial Innovation Canada Pelorus Venture Capital Ltd. Brightspark Ventures Plaza Ventures CIBC Innovation Banking Quark Venture CTI Life Sciences Real Ventures Cycle Capital Management/Ecofuel Relay Ventures Emerald Technology Ventures Renewal Funds Epic Capital Roadmap Capital Espresso Capital Ltd. Ryerson Futures Evok Innovations ScaleUP Ventures Ferst Capital StandUp Ventures Fight Against Cancer Innovation Trust Tandem Expansion Freycinet Ventures TandemLaunch Golden Venture Partners TELUS Ventures Good News Ventures Top Renergy GreenSoil Investments Trellis Capital HIGHLINE V3-Ventures igan Partners Vancouver Founders Fund Information Venture Partners Vanedge Capital Partners Innovacorp VentureLink Funds inovia Capital Versant Ventures Island Capital Partners Version One Ventures Luge Capital White Star Capital Lumira Ventures Whitecap Venture Partners MaRS Catalyst Fund Yaletown Partners Inc. MaRS IAF VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 3

4 FOREWORD Third $1B Quarter In Last Twelve Months Propels Venture Capital Momentum; All Private Equity Segments Slowing With Overall Activity Eclipsed By Two Mega Deals Five-year upward trend for VC shows no signs of slowing for the remainder of ; PE mega deals in H1 doubles its share compared to the three previous years VENTURE CAPITAL Venture capital investment in Canada continued its five-year upward trajectory in the first half of showing no signs of slowing for the remainder of the year. Almost $1B was invested over 166 deals in Q2, bringing the year-to-date (YTD) total VC investment to $1.7B 7% higher than H Q2 is the third time since January 2017 where VC investment in Canada has surmounted $1B. Innovation in Canada is enjoying the best venture capital investment climate in well over a decade, says Mike Woollatt, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. We re consistently observing an increase in size and volume of deals at all stages; plus, a welcome resurgence in exits. We re bracing for to be another record year. There were 16 exits so far in continuing the rebound from last year. These included the $141M corporate acquisition by Eli Lilly of AurKa Pharma, a TVM Life Sciences Management portfolio company and the $100M transaction in Coveo Solutions Incorporated by a U.S.-based private equity firm. Keeping pace with the last two years, there were seven mega deals ($50M+) in the first half of, totalling almost a half a billion dollars. Of the seven, Toronto-based Ritual raised $90M in a series C round led by Georgian Partners. Toronto-based ecobee Inc received $80M in series C financing which included participation from Relay Ventures. Ecobee Inc also received a $47M follow-on investment from BDC Capital and Caisse de dépôt et placement du Québec. Toronto-based TouchBistro Inc. raised $72M in a series D round from a syndicate led by OMERS Ventures and included participation from BDC IT Venture Fund and Relay Ventures. ICT companies continue to receive the majority (64%) of total VC dollars invested in the first half of ($1.1B over 189 deals) with life sciences ($204M over 48 deals) and cleantech ($192M over 28 deals) companies receiving an equal 12% share. PRIVATE EQUITY Private equity investment in Canada continued its downward trend in the first half of. $7.6B was invested over 146 PE deals in Q2, bringing the year-to-date (YTD) total to $14.5B over 288 deals. So far in, overall investment was bloated by two mega deals ($2.5B+) which made up 69% of total dollars invested. In comparison, mega deals made up only 51% of dollars invested in H and 0% in H The two mega deals accounted for three quarters (69%) of YTD investment in and included the $5.1B recapitalization of Ontario-based GFL Environmental Incorporated by a consortium which included Ontario Teachers Pension Plan (OTPP) and the OMERS Private Equity sale of its position in Husky Injection Molding Systems Limited to a U.S. PE firm via a $5B secondary buyout. Canadian private equity appears on pace from previous years, however on the dollar side it is increasingly driven by significant deals; suggesting the levels are a bit more tenuous, says Mike Woollatt, Chief Executive Officer, Canadian Venture Capital and Private Equity Association. In the absence of a few large deals, activity in the Canadian PE market is being driven substantially by smaller deals as activity shifts to categories with typically smaller deal sizes. The momentum in exits also shifted downward in H1 with only 41 exits ($10.5B) compared to 152 exits ($11.5B) in There were two IPO exits which included Quebec-based IPL Incorporated (TSE: IPLP) with a market cap of $709M, backed by Caisse de dépôt et placement du Québec (CDPQ), Fonds de solidarité (FTQ) and Investissement Québec and ONCAP-backed BC-based Pinnacle Renewable Energy Incorporated (TSE: PL). VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 4

5 VENTURE CAPITAL CANADIAN MARKET OVERVIEW // H1 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 5

6 VENTURE CAPITAL HIGHLIGHTS // H1 Key Findings: Almost $1B was invested over 166 deals in the second quarter this year, bringing the YTD total VC investment to $1.7B which is 7% higher than the first half of last year. This is the third quarter since the beginning of 2017 where VC investment has surmounted $1B. The five-year upward trend shows no signs of slowing for the remainder of. The average deal size was $6M, a 28% increase from the previous quarter and 13% higher than the average deal size in the five-year period between ($5.3M). The top 10 disclosed deals in H1 amounted to $624M, capturing a 38% share of total dollars invested the largest share since 2013 where they accounted for 34% of total dollars invested. The flotilla of $50M+ mega deals continued the same pace as the previous two years: seven deals totalling almost $0.5B and included: Toronto-based Ritual secured a $90M series C round led by Georgian Partners Inc. Toronto-based ecobee Inc. closed its series C financing: an $80M round from an investor syndicate that included Relay Ventures and a follow on $47M investment from BDC Capital and Caisse de dépôt et placement du Québec (CDPQ). Toronto-based TouchBistro Inc. raised a $72M series D round from a syndicate led by OMERS Ventures Management Inc. which included BDC IT Venture Fund and Relay Ventures. Deals between $1M-$5M captured 14% of total dollars invested, representing a 4% point gain from its share last year. Ontario-based companies received 55% of investment ($907M), up from their 39% share last year; Quebec-based companies received 19% ($319M) followed closely by BC-based companies with a 17% ($276M) share. Toronto-based companies received almost half ($793M over 89 deals) of total dollars disbursed, with Vancouver-based companies receiving a 16% ($264M over 38 deals) and Montreal-based companies a 15% share ($254M over 64 deals). ICT companies grabbed the lion s share (64%) of total dollars invested in H1 ($1.1B over 189 deals) with life sciences and cleantech companies receiving an equal 12% share ($204M over 48 deals and $192M over 28 deals respectively). There was a marked increase toward later-stage companies which received 54% ($901M) of total dollars compared to its 41% from last year; early stage companies received 37% ($612M) of investment, down from its 52% share in The market for exits continued the rebound from last year with 16 exits which included: the $141M corporate acquisition of TVM Life Science Management portfolio company AurKa Pharma by Eli Lilly the $100M transaction in Coveo Solutions Inc. from a US private equity firm VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 6

7 VENTURE CAPITAL HEAT MAP // H1 total $1.7b total # 308 deals $276M BC 42 $70M Alberta $3M Saskatchewan $7M Manitoba $907M Ontario $319m Québec $21M New Brunswick $4M $55M Nova Scotia Newfoundland & Labrador $1M Prince Edward Island VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 7

8 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY $ Millions Invested # Deals $1,200 $1,100 $ $900 $800 $700 $ $ $ $ $ $100 $0 $358 Q1 $414 Q2 $691 Q3 $613 Q4 $432 Q1 $665 Q2 $621 Q3 $585 Q4 $960 Q1 $713 Q2 $682 Q3 $841 Q4 $648 Q1 $908 Q2 $1,159 Q3 $1,099 Q4 $666 Q1 $996 Q TOTAL: 438 DEALS $2.1B TOTAL: 546 DEALS $2.3B TOTAL: 533 DEALS $3.2B TOTAL: 602 DEALS $3.8B TOTAL: 308 DEALS $1.7B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 8

9 VC ACTIVITY BY DEAL SIZE // H1 one-third Total Deals $ Millions of all deals were between $1m-$5m < $100K $100 - $500K $500K - $1M $1 $16 $30 $1M - $5M $5M - $20M $20M - $50M $50M $232 $290 $493 $600 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 9

10 TOP 10 DISCLOSED CANADIAN VC DEALS // H1 COMPANY NAME PROVINCE DISCLOSED VC FIRM(S) SECTOR STAGE $ MIL RITUAL ONTARIO GEORGIAN PARTNERS INC., GREYLOCK PARTNERS, INSIGHT VENTURE PARTNERS, MISTRAL VENTURE PARTNERS INC. ICT LATER STAGE VC $90 ECOBEE, INC. ONTARIO AMAZON.COM NV INVESTMENT HOLDING LLC, ENERGY IMPACT PARTNERS, RELAY VENTURES, THOMVEST VENTURES, INC. CLEANTECH LATER STAGE VC $80 TOUCHBISTRO INC. ONTARIO BDC IT VENTURE FUND, J.P. MORGAN PARTNERS, NAPIER PARK FINANCIAL PARTNERS, OMERS VENTURES MANAGEMENT INC., RELAY VENTURES ICT LATER STAGE VC $72 WEALTHSIMPLE FINANCIAL INC. ONTARIO POWER FINANCIAL CORPORATION ICT LATER STAGE VC $65 LEAGUE INC. ONTARIO BDC IT VENTURE FUND, OMERS VENTURES MANAGEMENT INC., QUANTUM VALLEY INVESTMENTS, RBC VENTURE PARTNERS, REAL VENTURES, TELUS VENTURES, WITTINGTON INVESTMENTS, LTD. OTHERS EARLY STAGE VC $62 BREATHER PRODUCTS INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), MENLO VENTURES, TEMASEK HOLDINGS (PRIVATE) LIMITED ICT LATER STAGE VC $59 ECOBEE, INC. ONTARIO BUSINESS DEVELOPMENT BANK OF CANADA (BDC), CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) CLEANTECH LATER STAGE VC $47 ELASTIC PATH SOFTWARE INC. BC BDC IT VENTURE FUND, SAGEVIEW CAPITAL LP, YALETOWN PARTNERS INC. ICT LATER STAGE VC $43 UBERFLIP ONTARIO UPDATA PARTNERS ICT LATER STAGE VC $41 * THERE WAS 1 UNDISCLOSED DEAL NOT INCLUDED IN THIS LIST VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 10

11 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES //H1 #1 toronto $793M 89 DEALS Total Deals $ Millions 1. Toronto 89 $ Montréal 3. Vancouver $254 $ Calgary 11 $32 5. Kitchener, Waterloo, Cambridge 10 $81 6. Ottawa 10 $27 7. Halifax 9 $50 8. Laval 9. St. John s (NF) 7 7 $18 $ Edmonton 6 $ VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 11

12 VC SECTOR BREAKDOWN // 2014-H1 $ Millions Invested # Deals $2,600 $2, $2, $2,200 $2,000 $1, $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $1, $1, $1, $ $721 $733 $ $204 $208 $409 $192 $185 $98 $ H H H H1 $ $ $27 20 $ ICT Life Sciences CleanTech AgriBusiness VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 12

13 VC STAGE BREAKDOWN // 2014-H1 $ Millions Invested # Deals $2,100 $1,925 $1,750 $1, $1, $1,225 $1,050 $875 $ $525 $350 $175 $0 $136 $159 $214 $ $142 $860 $1,210 $1,570 $1, $612 $1,068 $ $1,403 $1, $ H H H1 Seed Early Stage Later Stage VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 13

14 VC EXITS * // 2014-H1 $ Millions Invested # Deals $3,000 $2,700 $2, $2,100 $1,800 $1, $1, $900 $600 $300 $0 $503 $1,392 $584 $1, H $ $1,051 $2,945 $2, H M&A IPO/RTO** * ** INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES MARKET CAP AT TIME OF IPO/RTO VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 14

15 TOP DISCLOSED VC EXITS // H1 VC INVESTORS COMPANY SECTOR EXIT TRANSACTION ACQUIRED BY $ MIL. TVM LIFE SCIENCE MANAGEMENT INC. AURKA PHARMA LIFE SCIENCES M&A ELI LILLY $141 TANDEM EXPANSION FUND, FONDS DE SOLIDARITÉ FTQ, INVESTISSEMENT QUÉBEC, BDC CAPITAL, PROPULSION VENTURES, FIER SUCCÈS, ACCÈS CAPITAL COVEO SOLUTIONS INC. ICT M&A EVERGREEN COAST CAPITAL $100 THERE WAS 1 UNDISCLOSED EXITS OVER $50M IN H1 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 15

16 MOST ACTIVE VC FIRMS // FUNDS // H1 Real Ventures Desjardins Capital BDC Capital Panache Ventures BDC Sector Funds** Fonds de solidarité FTQ # Rounds Size of Total Rounds* (Cdn$ mil) $193 $62 $307 $22 $216 $80 MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) REAL VENTURES 33 $193 PANACHE VENTURES 17 $22 CYCLE CAPITAL MANAGEMENT/ECOFUEL 13 $78 INOVIA CAPITAL INC. 13 $63 YALETOWN PARTNERS INC 8 $98 GOLDEN VENTURE PARTNERS 6 $43 PLAZA VENTURES 6 $42 SCALEUP VENTURES 6 $20 Cycle Capital Management/Ecofuel 13 $78 GOOD NEWS VENTURES 6 $18 inovia Capital Inc. 13 $63 New Brunswick Innovation Foundation (NBIF) 13 $22 MaRS IAF 10 $11 MOST ACTIVE GOVERNMENT FUNDS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) DESJARDINS CAPITAL 27 $62 FONDS DE SOLIDARITÉ FTQ 14 $80 WESTCAP MGT. LTD. 4 $10 OMERS VENTURES MANAGEMENT INC. 3 $143 MOST ACTIVE FIRMS IN VC DEBT DEALS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) ESPRESSO CAPITAL LTD. 26 $25 DESJARDINS CAPITAL 10 $3 TIMIA CAPITAL CORP 4 $5 CIBC INNOVATION BANKING 2 $65 BDC CAPITAL INC. 2 $2 FONDS DE SOLIDARITÉ FTQ 2 $1 BDC CAPITAL 22 $307 NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 13 $22 MARS IAF 10 $11 INNOVACORP 9 $26 BDC IT VENTURE FUND 7 $166 BDC INDUSTRIAL, CLEAN AND ENERGY TECHNOLOGY (ICE) VENTURE FUND 6 $44 ANGES QUÉBEC CAPITAL 6 $22 * TOTAL DEAL VALUES - INCLUDES ALL PARTICIPATING INVESTORS * * BDC HEALTHCARE FUND - 1 DEAL, $6M; BDC IT VENTURE FUND - 7 DEALS, $166M; BDC ICE FUND - 6 DEALS, $44M VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 16

17 PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 17

18 PRIVATE EQUITY HIGHLIGHTS // H1 Key Findings: $7.6B was invested over 146 PE deals in Q2 bringing the YTD total to $14.5B over 288 deals. Two mega deals accounted for a lopsided share of investment (69%) in the first half of more than double the one-third share mega deals have typically captured in any of the three previous years: the $5.1B recapitalization of Ontario-based GFL Environmental Inc. by an investor consortium that included Ontario Teachers Pension Plan (OTPP) OMERS Private Equity selling its stake in Husky Injection Molding Systems Ltd. to a US PE firm via a $5B secondary buyout Propelled by the Husky deal, the amount invested in secondary buyouts has already exceeded the total for each of the last five years Deal activity in the small end of the market segment (deals less than $25M) garnered 65% of all deals, higher than last year s 60% share. Deals between $25M-$100M captured a 7% share of deals, down from the 11% last year. 17% (50 deals totalling $1.9B) of all PE deals went to Montreal-based companies, with Toronto-based companies receiving a 14% share (41 deals totalling $10.5B). A little over a fifth (22% or 64 deals) of PE deals this year have been closed in the industrial & manufacturing sector, with ICT companies receiving the second largest share (16% or 45 deals). The pace of PE exits slowed with only 41 exits (totalling $10.5B) compared to last year with 152 exits (totalling $11.3B) with two IPO exits: Quebec-based IPL Inc., backed by Caisse de dépôt et placement du Québec (CDPQ), Fonds de solidarité (FTQ) and Investissement Québec, completed its IPO on TSX with a market cap of $709M ONCAP-backed BC-based Pinnacle Renewable Energy Inc. completed its IPO on TSX with a market cap of $370M VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 18

19 PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY // H1 total$6.1b total # 65 deals $91M BC $44M Alberta na Saskatchewan na Manitoba 26 $5.3b Ontario $630m Québec 1 1 na New Brunswick $0M Nova Scotia VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 19

20 PRIVATE EQUITY HEAT MAP // ALL PE DEALS // H1 total $14.5b total # 288 deals $214m BC $304m Alberta $23m Saskatchewan na Manitoba 53 $10.7b Ontario $3.3b Québec 1 1 na New Brunswick na Nova Scotia VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 20

21 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY $ Millions Invested # Deals $30, $25,000 $20,000 $15,000 $10, $5,000 $0 $6,277 Q1 $5,250 Q2 $7,804 Q3 $22,851 Q4 $7,053 Q1 $1,869 Q2 $11,375 Q3 $2,600 Q4 $3,221 Q1 $3,370 Q2 $3,068 Q3 $4,179 Q4 $5,315 $8,812 $7,554 $4,682 Q1 Q2 Q3 Q4 $6,940 Q1 $7,607 Q TOTAL: 334 DEALS $42.2B TOTAL: 425 DEALS $22.9B TOTAL: 542 DEALS $13.8B TOTAL: 611 DEALS $26.4B TOTAL: 288 DEALS $14.5B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 21

22 TOP 10 DISCLOSED CANADIAN PE DEALS // H1 COMPANY NAME PROVINCE FIRMS INVOLVED IN TRANSACTION SECTOR $ MIL. GFL ENVIRONMENTAL INC. ONTARIO BC PARTNERS, HAWTHORN EQUITY PARTNERS, HIGHBRIDGE PRINCIPAL STRATEGIES, LLC, MACQUARIE RESOURCE CAPITAL CANADA LTD., ONTARIO TEACHERS' PENSION PLAN (OTPP) CLEANTECH $5,125 HUSKY INJECTION MOLDING SYSTEMS LTD ONTARIO BERKSHIRE PARTNERS LLC, OMERS PRIVATE EQUITY INC., PLATINUM EQUITY, LLC INDUSTRIAL & MANUFACTURING $4,964 STINGRAY DIGITAL GROUP INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ NAPEC INC. QUÉBEC FONDS DE SOLIDARITÉ FTQ, OAKTREE CAPITAL GROUP, LLC BUSINESS PRODUCTS & SERVICES INDUSTRIAL & MANUFACTURING $509 $320 BORALEX INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ OIL & GAS, POWER $200 POINTCLICKCARE CORP. ONTARIO DRAGONEER INVESTMENT GROUP LIFE SCIENCES $187 ESTRUXTURE QUÉBEC FENGATE CAPITAL MANAGEMENT LTD. ICT $180 ARTIS EXPLORATION LTD. ALBERTA WARBURG PINCUS LLC OIL & GAS, POWER $180 RÉSIDENCES POUR AÎNÉS IMMO 1ERE INC. QUÉBEC DESJARDINS CAPITAL REAL ESTATE $122 COVEO SOLUTIONS INC. QUÉBEC EVERGREEN COAST CAPITAL CORP., TANDEM EXPANSION FUND ICT $100 * THERE WERE 2 UNDISCLOSED DEALS TOTALLING $488M THAT WERE NOT INCLUDED IN THIS LIST VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 22

23 PE ACTIVITY BY DEAL SIZE // H1 $ Millions Invested # Deals $16,000 $14, $14, $12,800 $11,200 $10,910 $10, $9,600 $8,000 $6,400 $4,800 $3,200 $1,600 $0 $ $ $1,290 $1, $1,047 $2,804 $2, $2,197 $3, H H H $1,126 $6,093 $6, $3, $5, $1,776 9 $6,601 $4,797 $3, $7, $509 1 H1 $4,782 $4,034 $3,250 $3, H $4, H < $25M $25M-$100M $100M-$500M $500M-$1B $1B-$2.5B $2.5B+ TOTAL: 1215 DEALS $5.6B TOTAL: 247 DEALS $12.3B TOTAL: 109 DEALS $23.3B TOTAL: 33 DEALS $22.6B TOTAL: 15 DEALS $23B TOTAL: 6 DEALS $33.1B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 23

24 TOP CANADIAN CITIES // ADMINISTRATIVE CENTRES //H1 #1 montréal $1.9b 50 DEALS Total Deals $ Millions 1. Montreal 50 $1, Toronto 41 $10, Montérégie 21 $48 4. Nord-du-Québec / Abitibi-Témis 16 $38 5. Calgary 15 $ Saguenay-Lac-St-Jean/Côte-Nord 14 $ Vancouver 13 $ Québec 11 $ Bas-Saint-Laurent 10. Chaudière-Appalaches $46 $ VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 24

25 PE SECTOR BREAKDOWN // H1 # Deals $ Millions Industrial & Manufacturing 64 $5,613 ICT Life Sciences Consumer & Retail Business Products & Services Agri-Forestry Oil & Gas, Power Automotive & Transportation $578 $413 $229 $958 $421 $522 $116 CleanTech 12 $5,234 Mining & Resources 23 $222 Financial 11 $95 Real Estate Others 5 2 $147 NA most active sector industrial & manufacturing 64 deals VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 25

26 PE EXITS * // 2014-H1 $ Millions Invested # Deals $14,000 $12,000 $10,000 $8, $6, $4, $2,000 0 $8,055 $2, $1,711 1 $4,800 5 $1,079 2 $11,679 $12,655 $6,542 $3,073 $4,177 $ $2,161 7 $1,672 4 $3,408 8 $5, H H H1 IPO/RTO** M&A Secondary Buyout * ** INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES IPO VALUATION VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 26

27 TOP 10 DISCLOSED CANADIAN PE EXITS // H1 Husky Injection Molding Systems Ltd #1 bought by $4,964m Platinum Equity, LLC SELLER COMPANY NAME BUYER $ MIL. BERKSHIRE PARTNERS LLC, OMERS PRIVATE EQUITY INC. HUSKY INJECTION MOLDING SYSTEMS LTD PLATINUM EQUITY, LLC $4,964 PERMIRA, FONDS DE SOLIDARITÉ, CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) ATRIUM INNOVATIONS INC. NESTLÉ S.A. $2,973 TORQUEST PARTNERS WSB TITAN GMS INC. $811 CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ (FTQ), INVESTISSEMENT QUÉBEC, ONE51 PLC IPL INC. NA - IPO $709 ONCAP PINNACLE RENEWABLE ENERGY INC. NA - IPO ON TSX $370 * THERE WERE 5 UNDISCLOSED $50M+ EXITS VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 27

28 MOST ACTIVE PE INVESTORS // H1 # Deals $ Millions* Fonds de solidarité FTQ 88 $2,070 Desjardins Capital 56 $693 Caisse de dépôt et placement du Québec (CDPQ) 23 $1,259 Investissement Québec 21 $560 Fondaction CSN 14 $167 BDC Capital Inc. 7 $62 most active PFM Capital Inc. 7 $51 PE FIRM Fonds de solidarité FTQ 88 DEALS * TOTAL DEAL VALUES INCLUDES ALL PARTICIPATING INVESTORS VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 28

29 CVCA METHODOLOGY //VENTURE CAPITAL Venture Capital Data: Verified completed equity or quasi-equity venture capital deals only (non-equity or project-based government funding, pharmaceutical development deals, senior debt, venture capital-backed acquisitions, and angel financing are not included) VC DEVELOPMENT STAGES SEED STAGE EARLY STAGE LATER STAGE COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL. COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE. PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE. VC SECTORS ICT LIFE SCIENCES CLEANTECH AGRIBUSINESS COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE AND TELECOM TECHNOLOGIES AND SERVICES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 29

30 CVCA METHODOLOGY //PRIVATE EQUITY Private Equity Data: Dataset includes only completed private equity deals (announced but yet to be completed deals are not included) PE DEAL TYPE BUYOUT GROWTH ADD-ON DEBT INFRASTRUCTURE INVESTMENT FOR THE CONTROL OF A PORTFOLIO COMPANY, INCLUDING PLATFORM CREATION, SECONDARY BUYOUT SIGNIFICANT MINORITY INVESTMENT INTO A PORTFOLIO COMPANY, THROUGH NEW CAPITAL INFUSION AND RECAPITALIZATION CORPORATE ACQUISITIONS BY MAJORITY CONTROLLED PE BACKED PORTFOLIO COMPANIES DEBT INVESTMENT INTO PORTFOLIO COMPANIES INVESTMENTS INTO DEVELOPMENT AND MANAGEMENT OF INFRASTRUCTURE ASSETS BUT PE DOES NOT OWN THE UNDERLYING ASSETS PE SECTORS AGRI-FORESTRY AUTOMOTIVE & TRANSPORTATION BUSINESS PRODUCTS & SERVICES CLEANTECH AGRICULTURE, FOODS AND FORESTRY TRANSPORTATION, LOGISTICS AND RELATED SERVICES BUSINESS PRODUCTS AND SERVICES ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES continued VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 30

31 CVCA METHODOLOGY //PRIVATE EQUITY continued PE SECTORS CONSUMER & RETAIL FINANCIAL ICT INDUSTRIAL & MANUFACTURING LIFE SCIENCES MINING & RESOURCES OIL & GAS, POWER REAL ESTATE CONSUMER PRODUCTS AND SERVICES, BRICK AND MORTAR RETAIL FINANCIAL SERVICES COMPUTER HARDWARE/SOFTWARE & SERVICES, INTERNET SOFTWARE & SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE & TELECOM AND SERVICES EQUIPMENT AND MATERIAL MANUFACTURING BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES NON OIL AND GAS NATURAL RESOURCES OIL & GAS, POWER AND UTILITIES PROPERTY DEVELOPMENT AND MANAGEMENT VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 31

32 CVCA ABOUT & CONTACT To obtain estimates for additional custom InfoBase data reports please contact Authors DARRELL PINTO Research Director Darrell oversees all data related to Canadian private capital investments, exit and fundraising activities for the CVCA. Darrell has held senior positions at several global organizations including the Toronto Stock Exchange, Institutional Limited Partners Association, Thomson Reuters, Glaxosmithkline and the Interac Association. In between these, he also started his own successful management consulting company. He has worked in New York, London and Shanghai, but Toronto remains his favourite working city. He brings to the CVCA a passion for telling compelling stories with data. Darrell is currently on the board of a nonprofit social housing in Peel, a member of Volunteer Toronto as well as an active volunteer with Woodgreen Community Services. He holds a BA in Philosophy/ History from the University of Western Ontario and an MBA from the Rotman School of Management. DAVID KORNACKI Research Analyst David executes research on venture capital and private equity deals within Canada. David is responsible for monitoring industry activity and maintaining the CVCA s Infobase by entering data, including investments, exits, deals and fundraising activities on a daily basis. David holds a BA in Philosophy and Psychology from the University of Toronto. dkornacki@cvca.ca ext. 202 dpinto@cvca.ca ext. 208 CAROLYN GOARD Senior Manager, Communications Carolyn oversees all of the CVCA s communications and marketing efforts, which includes managing the Association s brand, coordinating media outreach programs, and managing the development of all online content and social media engagements. Carolyn also brings with her a background in journalism, and is keen on positioning the CVCA as the industry thought leader for all things private capital through informative and engaging content. Carolyn has a BA in Popular Culture and Communications from Brock University, a diploma in Journalism from Niagara College Canada, and an interdisciplinary Master of Arts degree in Communication Studies from Brock University. cgoard@cvca.ca ext. 204 About CVCA The Canadian Venture Capital and Private Equity Association is the voice of Canada s venture capital and private equity industry. We are focused on improving the private capital ecosystem by broadening industry awareness and providing market research, networking, and professional development opportunities. We also advocate on behalf of the industry to ensure sound public policy that encourages a favourable investment environment. The CVCA works alongside its members, who represent the vast majority of private capital firms in Canada, to improve the industry and drive innovation and growth. For more information, visit CVCA CVCA - Canadian Venture Capital and Private Equity Association 372 Bay St., Suite 1201 Toronto, ON M5H 2W9 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 32