CANADA Trends and Developments Contributed by: Grant McGlaughlin, Sean Stevens and Claire Gowdy, Fasken
Introduction Private equity (PE) investment in 2025 faces a novel mix of market dynamics. 2024 was a strong bounce - back year for PE in Canada. On the other hand, the first half of 2025 brought unusual macro-economic conditions, most notably regarding international trade and tariff policies. But deals continue to get done as dealmakers adjust their playbook and PE continues to demonstrate its adaptability and resilience. This summary covers private equity deal activity in Canada over 2024 and Q1 2025, common Canadian deal structures, and certain key Canadian legal con - siderations related to PE investment. 2024 Deal Activity PE deal activity in Canada rebounded strongly in 2024 from the subdued levels seen in 2023. Accord - ing to the Canadian Venture Capital & Private Equity Association (CVCA), PE deal value in 2024 exceeded CAD27 billion across 658 transactions. The CVCA also reports that a defining theme of the year was mega privatisation deals, with aggregate deal value exceed - ing CAD15 billion and being the highest on record. That said, deals under CAD25 million in value remained the primary focus, accounting for 84% of all deals with disclosed values. Québec accounted for 59% of deals (and CAD19.1 billion in deal value), Ontario accounted for 22% of deals (and CAD5.4 billion in deal value), British Columbia accounted for 10% of deals (and CAD470 million in deal value), and Alberta accounted for 6% of deals (and CAD918 million in deal value). 2024 Minority Investments The CVCA reports that PE minority investment in Can - ada in 2024 totalled CAD2.8 billion over 164 deals. Minority investments therefore represented 26% of deal volume and 10% of deal value in 2024. This large - ly mirrored the percentages seen in 2023. However, these percentages are also well below the historic lev - els seen in 2017 and 2022 as well as markedly below the most recent five-year average. This evidences a recent shift towards buyouts and add-on investments over minority investments, ie, a greater recent prefer - ence for controlling stakes.
2024 Private Equity Exits The CVCA reports that PE investors in Canada in 2024 realised CAD6.7 billion in value across 86 exits. No IPO exits occurred in 2024, continuing the IPO drought that has followed Canada’s IPO outburst in 2021 and early 2022. Secondary buyouts generated 70.6% of exit value with CAD4.7 billion realised over 22 exits. The average secondary buyout exit value was CAD213.9 million, which was significantly higher than 2023’s average secondary buyout exit value of CAD77.5 million. As the CVCA notes, this dominance of secondary buy - outs indicates a sturdy appetite for established PE- backed businesses, as firms continue to keep com - panies private for extended periods. Q1 2025 Deal Activity The CVCA reports that PE investment in Canada in Q1 2025 continued to be healthy and largely mirrored the levels seen in Q1 2024. Québec once again led all provinces in both deal value and deal volume, while investment activity in Ontario also remained strong. The most active sectors by deal count were (1) indus - trial and manufacturing, (2) information, communica - tion and technology, and (3) financial services. On the other hand, PE exit activity in Q1 2025 was comparatively muted, with only a handful of disclosed M&A exits and no IPO exits. The CVCA interprets this slowdown in exits as reflecting growing caution among buyers due to macro-economic uncertainty resulting from the uncustomary economic policies of the new US administration and the trade and tariff uncertainty that has accompanied them. Private Equity Deal Structure in Canada The most common deal structures used for private equity transactions for public take-privates are the plan of arrangement and the takeover bid. Private company transactions are generally structured as share deals or asset deals depending on tax and liability considerations. Here follows a brief discus - sion of these structures and current trends in these structures.
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