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Canadian Private Market Recap: June 17

  • Posted By: Ann Zhang, Louis Goldberg and Paris Aden

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Market Update

Stocks fell on the week as investor sentiment continued to weaken ahead of next week's "Brexit" vote. Uncertainty around the vote could keep markets on edge until the last vote is counted. The TSX fell on concerns about the EU and other global worries. The lowest oil prices in a month contributed to volatility and general bank pessimism hurt the financial sector. The Federal Open Market Committee this week voted unanimously to keep rates unchanged and indicated that the path for future rate hikes will likely be more gradual than the committee had forecast in March.

 

Close

 

Change From

U.S. Middle Market Loans

This Week

Last Week

Year Ago

 

Last Week

Year Ago

 

 

 

 

 

 

 

 

New Issue Clearing Yield ≤ $50 million

6.7%

6.8%

6.3%

 

-0.1%

+0.5%

 

Spread to Treasury

513 bps

519 bps

397 bps

 

-6 bps

+116 bps

 

Total Debt/EBITDA

n/a

n/a

5.2x

 

n/a

n/a

 

 

 

 

 

 

Valitas Insights: Deal count doesn't tell the full story with U.S. add-ons

According to PitchBook, the number of add-on deals declined significantly during the first five-plus months of 2016. Only 613 such acquisitions have been completed so far this year in the U.S., comparing with a total number of 1,790 add-ons in 2015. However, add-on acquisition activity as a percentage of total private equity buyout activity continues to rise:

Period

Add-on % of Total

2016 to date

63%

2015

60%

2014

59%

2013

58%

While a key sector responsible for that increase has been healthcare, the drive for scale in business to business markets remains prevalent. Here’s a full breakdown of 2016’s add-on activity by primary industry sector:

Click here to view the full article.

Weekly Canadian Private Market M&A Report

Closed Deals

SureWerx to Buy KP Industries

SureWerks, a pension fund-backed professional tool, equipment and safety products supplier, is to buy KP Industries, a knee and elbow guard manufacturer, for an undisclosed amount. Bill Jeffery, Senior Vice President of Corporate & Brand Development stated: “We expect to significantly increase market share as this proven product is made available to our North American distribution partners as part of our ‘One Source’ strategy.”

ARANZ Geo Limited Acquires 3point Science

ARANZ Geo, a provider of 3D geological modelling software for the mining, hydrogeology and geothermal industries, backed by Pencarrow Private Equity, has acquired 3point Science Inc., a Calgary-based developer of geoscience visualization tools for learning, training, evaluation and assessment, for an undisclosed amount. ARANZ Geo Managing Director, Shaun Maloney stated: “The purchase will add substantial new capability to ARANZ Geo, enabling the development of cloud-based solutions while accelerating options to enter new market sectors.”

Volaris Group Acquires Operations Support Systems Unit of Advanced Broadband Networks

Constellation Software Inc. subsidiary Volaris Group, a firm specializing in strengthening and growing vertical market technology companies has acquired the operations support systems unit of Advanced Broadband Networks (ABN), for an undisclosed amount. The acquired ABN business line becomes a business unit of Incognito Software Systems, headquartered in Vancouver, Canada. Stephane Bourque, Incognito’s CEO stated: “ABN’s products provide us with the opportunity to offer innovative new solutions to help our customers analyze and monetize the very high demand for data services from their broadband subscribers.”

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