Insights & Info

Insights > Private Equity Trends: U.S. firms looking North to Canada

Private Equity Trends: U.S. firms looking North to Canada

By Generational Equity

Private Equity Trends

More often than not trends in M&A are consistent throughout the whole of North America. However, PitchBook has released research into specific trends impacting Private Equity activity in Canada that makes for interesting reading. Their analysis states:

The current Canadian private investment scene is shaped by a few key, relatively singular drivers. Proximity to the U.S., as well as key tax provisions, clearly play a considerable role in the flow of private equity and venture capital financing alike, with more and more U.S. firms migrating north in search of investment opportunities over the past few years.”

It is that final sentence that is the key consideration. According to a number of analysts U.S.-based firms are increasingly looking north of the U.S. border for opportunities. This is due to a number of factors. Not only does Canada offer security and economic safety, it is also geographically close to the U.S., which allows equity firms to visit their holdings with relative ease.

The good news for business owners in Canada is that the equity firms that operate here are attracted to middle-market and lower middle-market companies. PitchBook states:

The majority of Canadian transactions occur in the sub-C$25 million size bucket, and thus, the noticeable jump in add-on deals comes as no surprise as firms expand existing portfolio companies and protect future exit values—this notion has been playing out in the global PE landscape for quite some time now.”

This assertion is illustrated in the following chart based on PitchBook’s data:

In our exit planning seminars, we emphasize that bolt-on activity is at an all-time high right now, particularly here in Canada. Which is more good news for if you are the owner of a privately held company. It’s important to note that the above data is only reflective of publicized transactions. Most transactions, especially smaller ones, fly under the radar and are therefore not counted in data like this.

If you own a company and are considering eventually exiting your business, or finding an investor and being retained as a partner, it would be beneficial to attend one of the exit planning seminars that Generational Equity holds throughout the country.

To find out more about planning your exit strategy, you can attend one of our complimentary workshops.

Make an informed decision

The best decisions in life are informed decisions. We release educational business insights like this every week. Subscribe to make sure you don’t miss the latest news, views and analysis.

Success

Success, you have been added to our list.

We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”
Karen S. Williams, CFO, BW Manufacturing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.
Michael J Polarek, President, Paragon Packaging
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!
Andy Graham, Vice President, Modern Heating & Plumbing
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.
Michael J Polarek, President, Paragon Packaging
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.
Karen S. Williams, CFO, BW Manufacturing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software