Private buyouts hit record in Canada in 2011

The number of corporate buyouts in Canada by private equity firms reach a record high in 2011, according to the annual survey by Canada's Venture Capital & Private Equity Association.

The number of corporate buyouts in Canada by private equity firms reached a record high in 2011, according to the annual survey by Canada’s Venture Capital & Private Equity Association.

There were 235 disclosed deals in 2011, up 38 per cent over 2010, surpassing the previous high of 229 in 2007. And the total value of transactions reached $11.5 billion, up 69 per cent from the year earlier, and a three-year high.

Gregory Smith, President of the association and a managing partner of Brookfield Financial Corp. said the gains in investment in 2011 furthered the economic recovery.

"Not only did we see the return of large-cap deals backing major firms in growth mode," he said, "we saw record levels of mid-market investment that engaged large numbers of small and medium-sized businesses."

"As the overall economy continues to shift gears in the months ahead, the evidence from 2011 suggests that private equity deal-making is playing a vital role in spurring Canadian business investment, expansion and employment creation."

The biggest single deal in 2011 was the $2.1 billion acquisition of Husky International Ltd. of Bolton, Ontario, by OMERS Private Equity and Berkshire Partners from Onex Corp.

It was the largest private equity transaction completed since 2008.

The largest deal in the last quarter of the year was Sterling Partners’ $590 million acquisition to take Ottawa’s MOSAID Technologies Inc. private.

Mining has largest number

Mining deals accounted for 23 per cent of transactions within Canada. Manufacturing and processing firms took second spot, accounting for 16 per cent, followed by oil and gas and other energy-related firms at 14 per cent.

The largest share of Canadian transactions involved businesses headquartered in Ontario, at 36 per cent, followed by Quebec at 23 per cent. British Columbia accounted for 20 per cent and Alberta for 18 per cent.

The manufacturing sector led in dollar terms, accounting for one quarter of deal value followed by oil and gas-related activity at 19 per cent.

Canadian private equity funds took part in deals totalling $19.9 billion involving the takeover of foreign companies in 42 transactions last year. That value was down by a third from the previous year.