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PE Spotlight: B2B, IT leading 2016 activity in Ontario

Within Canada, the Ontario province has been a particularly popular destination for PE capital, boasting more than one-third of the country’s completed deals each year since 2011.

It’s clear Ontario is a popular destination for private equity capital in Canada, a country that garnered a decade-high C$49 billion across 283 deals last year, according to our latest Canada Breakdown Report. PE activity in the province has consistently outpaced that of its neighbors, amounting to at least one-third of Canadian transactions each year since 2011.

Deal Count by Canadian Provinces

Source: PitchBook Platform

Much like what we’ve seen globally, PE activity in Ontario began this year with a lackluster first quarter. The province saw 25 deals close in 1Q, a 32% drop YoY. This quarter has been sluggish, as well, with just 12 thus far. Interestingly, 2Q 2015 had just 13 transactions at the same point but ultimately finished with 27, so it may be too soon to judge.

PE Deals in Ontario

Source: PitchBook Platform

Digging into investments by sector, Ontario’s IT space has seen a recent jump with six deals closed in 1Q 2016 (24% of activity), tripling the two (8.3%) closed the quarter prior. One of the notable IT transactions last quarter was the TPG-sponsored purchase of Keal Technology, a broker & commercial management systems provider, by U.S. insurance software company Vertaforte; the add-on extended Vertaforte’s market reach into Canada. This quarter, the B2B sector has accounted for half of the completed deals thus far.

Ontario PE Deals by Sector

Source: PitchBook Platform

Here are the most active investors in Ontario-based PE deals since 2011, along with deal counts (including add-ons). Notably, all but one of these busy firms (Audax) are headquartered in Canada.

1. Lynx Equity (13)

T-2. TorQuest Partners (11)

T-2. Birch Hill Equity Partners (11)

T-3. Audax Group (8)

T-3. Fulcrum Capital Partners (8)

T-3. OMERS Private Equity (8)

T-3. Ontario Teachers’ Pension Plan (8)

(*Note: All the data in this post is through May 24, 2016)

Download our Canada Breakdown Report for free by clicking here.

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