Yes, we’re in the late innings of this business cycle, but for business owners considering an exit or a sale of a majority or minority stake in their business, it’s still a seller’s market. That was apparent at the recent ACG Toronto Peivate Equity Mid-Market M&A Trends & Opportunities Seminar, hosted by Stikeman Elliot LLP.
Deal advisors, including our own Al Chettiar, joined US private equity firms for a panel discussion on US PE activity in Canada. There was consensus that US PE firms, particularly when bidding on targets in the $5 – 10 million EBITDA range, often bring other offerings, beyond price, to the table in an effort to win deals. For example, Bluepoint, a US mid-market Private Equity firm, offers up their data analytics team, which works to improve financial and operational performance of Bluepoint’s portfolio companies, and an office in China that helps with sourcing and supply change productivity.
For those business owners thinking that their company may be too small for PE interest, think again. As Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association, points out in her recent Op-Ed, PE investment is not restricted to larger companies: In 2018, PE firms invested in 399 Canadian companies in the $25 million and under category.
You’ll find further discussion of the M&A outlook for 2020 in our recent Market Insight.