MONTREAL, Feb. 19, 2013 /CNW Telbec/ - Réseau Capital today released its
second annual review of the buyout and private equity market in Québec,
prepared by Thomson Reuters. This report presents a picture of
investment fund activity in the market, which is vital to the financing
of established Québec companies. Buyouts and private equity consist
primarily of corporate acquisitions with majority stakes, investments
with minority ownership to finance the growth of companies, enabling
them to make acquisitions or achieve recovery and, finally, mezzanine
debt, or quasi-equity investment.
In 2012, the Québec buyout and private equity (PE) market had an
outstanding year, with a disclosed value of transactions totalling $4.4
billion, up sharply from the $1.4 billion reported in 2011. Overall,
112 transactions1 were recorded in 2012, 24% more than in the previous year and exceeding
the record set in 2008. This major increase is due in particular to
mega-transactions surpassing $1 billion, including the year's largest,
involving the privatization of Montréal-based Garda World Security
Corp., acquired by the British company Apax Partners ($1.1 billion) and
the investment by the Caisse de dépôt et placement du Québec in
Montréal-based CGI Group Inc. ($1.0 billion). The Garda deal was the
biggest recorded since 2007.
"With the Garda and CGI Group transactions, it's obvious that buyout-PE
activity in Québec was heavily focused on investments of $100 million
or more, accounting for 75% of the 2012 investment total," says Jack
Chadirdjian, President and Chief Executive Officer of Réseau Capital.
"Québec also stood out on the Canadian scene compared to 2011, holding
a dominant place in key indicators, with 36% of transactions and 38% in
Leading areas of activity
The information and media sectors posted the lion's share of disclosed
investment, at 31% (due largely to the CGI Group transaction), while
transportation and financial services had shares of 25% and 10%
respectively. Manufacturing and processing companies accounted for
nearly a quarter of all transactions, followed by the retail and
information and media sectors, at 19% and 11% respectively.
Transactions with minority stakes continued to predominate in terms of
activity in 2012, with 45% of the total number of deals, but
acquisitions with majority ownership had a 39% share in dollar terms
(due in particular to the Garda privatization).
In the areas of fundraising by buyout, mezzanine and other PE funds,
activity increased by 24%, bringing in $4.6 billion in new capital.
"The buyout and private equity market was not well documented in the
past," Mr. Chadirdjian concludes. "We hope the type of report we are
issuing today can make this capital contribution better known. This
market adds directly to the growth of our companies in Québec and
stimulates our economy."
About Réseau Capital
Réseau Capital, founded in 1989, is the only private-equity association
that brings together all stakeholders involved in the Québec investment
chain. The mission of Réseau Capital is to contribute to the
development and efficient operation of the private-equity industry,
which plays a major role in the development and financing of businesses
in Québec. Réseau Capital has more than 425 members representing
private-equity, tax-advantaged and public investment companies, as well
as banks and insurance companies, accounting and law firms, angel
investors, and many professionals working in the field.
1 Of the 112 transactions conducted in Québec in 2012, the dollar value
was disclosed to Thomson Reuters in 88% of cases.
SOURCE: Réseau Capital
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