Canadian Mid-Market Deal Activity
After a rush of activity in 2021, the Canadian private equity market cooled down substantially for 2022. However, 2022 was still a very active year with 1637 mid-market transactions completed (those less than $500mm). Comparatively, 2019 saw 1610 mid-market deals get done.
Canadian Private Equity Deal Activity
For 2022, increasing borrowing costs, major geopolitical events, continued supply chain disruptions and rising inflation had PE firms acting more cautiously. Despite some slowdown, Private Equity buyers are representing a growing share of buyers in the market. Globally, Private Equity accounted for more than 40% of total deal value in 2022.
Global Private Equity Dry Powder ($B)
Dry powder is a slang term referring to cash reserves. In a corporate setting these funds can be deployed in case of emergency. However, in the context of Private Equity, high levels of ‘dry powder’ can create challenges as investors expect PE firms to deploy capital on a timely basis. This ‘overhang’ of cash is waiting on investments to deploy on.
Canadian Federation of Independent Business Owner Exit Survey
The latest survey results show that 76% of business owners plan to leave their business within the next 10 years. Looking closer at the data, 15% plan to exit within 12 months, and 41% within 1 to 5 years. CFIB estimates that this could amount to nearly $2 trillion worth of business assets trading hands over the the next decade.
Alberta Net Migration
The corresponding chart includes both international and inter-provincial migration to Alberta. Notably, net migration is up 377% for the first three quarters of 2022 compared to the prior year. While this does apply pressure to civil services, its a positive factor driving economic growth in the Province.
Wells Drilled
For the first 11 months of 2022 there were 7,883 wells drilled compared to 5,009 for the same period in 2021. This represents a 57% increase. The number of wells drilled in November 2022 increased by 27.2% from the same period a year earlier, from 650 to 827 wells.
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