Tag archives: private equity

Venture capital and private equity exhibit disparate Canadian market trends in Q1 2017

According to a report recently published by the Canadian Venture Capital & Private Equity Association (CVCA) entitled “CVCA Q1 2017 VC & PE Canadian Market Overview: VC experiences robust quarter; PE flat in Q1”, Canadian venture capital (VC) recorded its second-best quarter since 2013, while Canadian private equity (PE) failed to outpace its current stagnant … Continue reading

Bye bye bye: private equity exit strategies

Exits are central to the private equity investing process and a PE firm will consider a variety of different exit strategies to realize its return on investment. Four of the most common PE exit strategies are: trade sale, initial public offering, secondary buyout and leveraged recapitalization. A fifth exit option is also discussed below. Trade … Continue reading

Shareholder activism in M&A

As noted by Kingsdale Advisors in a recently published report, corporate directors and their legal advisors continue to pay insufficient attention to shareholder activism in M&A. The authors of the 2017 special report caution that not only have shareholder activists been emboldened by post-financial crisis legislative changes that afford shareholders greater say, but that these investors … Continue reading

Private equity trends towards specialization

Competition has increased in the private equity (PE) market. In the US, PE firms paid a 31% premium for acquisitions in 2016, an eight-year high according to Bloomberg data. There are a growing number of market participants chasing after ever scarcer quality businesses thereby causing price appreciation of businesses. In addition, the availability of low … Continue reading

Optimistic M&A outlook for 2017

As we begin 2017, the 1,000 corporate and private equity executives surveyed for Deloitte’s M&A Trends Year-end report 2016 display optimism for the coming year. The survey was conducted in September 2016 and included participants from companies or private equity firms with annual revenues of $10 million or more, representing 18 industries. Respondents expect a … Continue reading

The PE lifecycle is expanding

While private equity firms are enjoying more dry powder than ever, the overall fund lifecycle is expanding. Mergermarket interviewed private equity partners, directors and principals from across the United States and their responses point to increases in time in all three lifecycle segments of a fund: raising capital, searching for suitable targets, and exit. Prolonged … Continue reading

Chinese outbound private equity on the rise

Chinese buyout frenzy Outbound private equity investments from China into North America and Europe have been growing rapidly. According to the investment bank Houlihan Lokey, in H1 of 2012, the outbound Chinese private equity transaction value was US$219M. Since then, Chinese private equity firms have drastically increased their offshore spending and recorded total transaction value … Continue reading

Exciting times for the defense sector

According to an article published by defensenews.com, we can expect to see a “steady” level of M&A activity in the defense sector in the coming years. This prediction comes from David Melcher, head of Aerospace Industries Association – the largest US aviation trade group. According to Melcher, M&A activity has begun to pick up in … Continue reading

M&A trends update

Earlier this month, we reported on the slow-down of M&A activity in the first quarter of 2016. Despite this challenging start to the year, a new report from Deloitte & Touche LLP entitled “M&A Trends Report 2016” found that executives remain optimistic about M&A activity going forward. The report provides that 87 percent of the 2,300 … Continue reading

Global M&A update: current market factors

Despite a number of challenging economic headwinds, the market’s desire for mergers and acquisitions remains strong, and analysts expect mergers and acquisitions to remain one of the major drivers of corporate growth. Ernst &Young (EY) recently published a report entitled  “Global Capital Confidence Barometer, Buying and bonding: Alliances join M&A as engines of growth” which … Continue reading

What can companies learn from PE sharks?

Divestment is one strategy that a corporation can use to unlock funds for future growth and create long‑term shareholder value. According to a recent E&Y study, a successful divestment must meet three criteria: (i) it must create a positive impact on the valuation multiple of the remaining company; (ii) it must generate a sale price … Continue reading

M&A trends for 2016

The last 18 months has seen a rebirth in M&A. For the first time since the 2008 financial crisis, deal activity has reached pre-recession levels. This has been fueled by low interest rates, high equity prices and capital availability. CDI Global’s Managing director, Jeff Schmidt, has gone on the record stating that while it’s hard … Continue reading

Private equity exits and outlook

A private equity company generally receives the large majority of its returns on an investment upon exit of the investment, and as such the exit is an important part of the life-cycle of a private equity transaction. The most commonly used methods available to private equity investors to exit their investments are described below: Initial … Continue reading

Performance incentives for portfolio companies

Private equity investors (PEIs) when investing in new portfolio companies, seek to align management’s interests with that of the PEI to grow the value of the portfolio company and achieve a profitable return in the investment upon exit. Typically, PEIs incentivize management to adopt such interests through compensation arrangements in  the form of performance incentives. … Continue reading

Private equity investments and common governance rights in investee companies

Private equity investors (PEIs) are often a good source of capital for companies looking to start, maintain, or grow their operations and can also provide significant operational and transactional expertise. Like other investors, PEIs operate with a primary goal in mind; that is, to receive a favourable return on their investment. However, PEIs generally seek … Continue reading

Canadian private equity market continuing to grow in the first half of 2015

A recent Thomson Reuters report indicates the Canadian buyout-private equity market had a record first half of the year in terms of deal volume. With at least two deals valued at over $1 billion, the value of buyout-private equity deals in the first half of 2015 was also the most since 2007, up 69% over … Continue reading

Oil & gas M&A activity in Q1 2015: review and outlook

According to PWC’s First-quarter 2015 oil & gas industry mergers and acquisitions analysis report, mergers and acquisitions activity in the oil and gas industry stalled in the first quarter of 2015. The large swing in oil prices over the past 10 months has been a major factor in continued low deal volumes with 39 oil … Continue reading

Foreign investors eye Canadian companies

Canadian companies are becoming increasingly attractive to American and European companies as targets of foreign investment according to a recent article from the Lexpert Special Edition on Canada’s Leading Corporate Lawyers, published within the June edition of The Globe and Mail’s Report on Business Magazine. The Lexpert article states that both U.S. and U.K.-based investors … Continue reading

Cross-border and private equity activity in Q2 2015

As we move towards the end of the second quarter of 2015, many have wondered whether this year will be able to live up to the bumper year of 2014 in terms of cross-border private equity activity. Despite volatile commodity prices and an unsteady European market, a recent survey conducted by integrated communications firm RR Donnelley revealed … Continue reading

Future of private equity leveraged buyout financing optimistic

Recently, RR Donnelley sought the assistance of Mergermarket Group to interview professionals in the US, Europe, and Asia-Pacific about leveraged buyout financing. Mergermarket Group published its survey results on the environment of leveraged buyout financing in its April 2015 edition of the Venue Market Spotlight. Availability of buyout financing A majority of survey respondents indicates … Continue reading

Common liquidity rights in private equity investments in early stage companies

Early stage companies face an uphill climb in growing their business and ensuring their viability going forward. Private equity firms can provide capital as well as significant operational and transactional expertise to aid in a company’s growth. However, private equity investors often intend to exit any investment within a defined time period. As a result, … Continue reading

Mid-cap companies expected to continue growing internationally

In a recent study, Business Without Borders International Growth at Mid-Cap Companies, Mergermarket and Mazars have reported that most mid-market companies are looking at ways of driving growth through expansion into new international markets rather than growing domestically. The study analyzed the opinions of over one hundred senior corporate decision makers (CEO, COO, CFO or … Continue reading

Preliminary data points to a promising year ahead for Canadian M&A, despite sluggish start

Bureau van Dijk (BvD), a private business intelligence advisory company, recently released its Zephyr North American monthly M&A reports for the months of January 2015 and February 2015. The January and February monthly reports detail the value and number of M&A deals targeting Canadian and U.S. companies. These numbers should be of particular interest to … Continue reading
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