MONTREAL, Feb. 27, 2014 /CNW Telbec/ - A total of $588 million was
invested in QuÉbec's venture capital (VC) market in 2013, up 46% from
2012 and the highest amount since 2007. Dollars invested in the buyout
and private equity (PE) market remained at a high level, substantially
above those recorded in 2011, 2010 and 2009. These observations are
drawn from the 2013 annual report on activity in the VC market and the
buyout and PE market in QuÉbec, compiled by Thomson Reuters and
released today by RÉseau Capital.
Venture capital in QuÉbec reaches its highest level in six years
Investment activity on the North American market was more dynamic in
2013. The Canadian market saw 31% growth with $2 billion in activity,
while the U.S. market showed a more modest 7% advance, at $29.4
billion. But the QuÉbec market, with $588 million invested - up 46% -
took top spot with its highest level since 2007, the record year in the
previous market cycle. QuÉbec transactions accounted for a higher
proportion of all dollars invested in Canada, at 30%.
"It is worth noting that U.S. and overseas funds played a decisive role
in QuÉbec in 2013, injecting $195 million, which is 84% more than in
the previous year," says Jack Chadirdjian, President and CEO, RÉseau
Capital. "This clearly shows QuÉbec's ability to attract new capital
from abroad to support development of our local companies."
The size of VC financing rounds also rose significantly in QuÉbec, going
from average investments of $2.7 million per company in 2012 to $3.9
million in 2013. Various companies at later stages of development, such
as Enerkem, iBwave Solutions, Distech Controls and Beyond the Rack,
contributed heavily to this trend, picking up substantial investments.
The non-technology ($208 million) and clean technology ($200 million)
sectors were in the forefront of VC investment growth in QuÉbec in
2013, accounting for 36% and 34% respectively of the amounts invested,
a trend also seen elsewhere in the country. The information technology
and life sciences sectors, meanwhile, lagged in comparison to 2012.
Buyout and private equity market remains vigorous
Despite a 20% decline in the buyout and PE market compared to 2012, an
exceptionally active year in QuÉbec, investments totalled $3.6 billion,
well above the levels recorded in 2011, 2010 and 2009. Control-stake
acquisitions, growth investments and other PE transactions in QuÉbec
numbered 120 in 2013, almost the same as in 2012.
"While large-cap transactions remain the market's driving force, in
particular with the $1.1-billion investment in ArcelorMittal Mines
Canada and $1.1 billion in Atrium Innovations, small and medium-sized
enterprises account for nearly two-thirds of transactions, with
disclosed values of $10 million or less," Mr. Chadirdjian says, adding:
"Although these transactions account for only 7% of all investments
recorded in this market, we are seeing a major trend, indicating how
important this market is in stimulating and supporting the growth and
innovation projects of QuÉbec SMEs."
QuÉbec also accounted for the largest number of Canadian buyout-PE
transactions in 2013, at 37%, and it brought in 29% of the dollars
invested, behind Ontario, which posted slightly less than half the
total. Canadian fundraising activity in buyouts, mezzanine investments
and other types of PE transactions broke all earlier records at $16.1
billion, more than triple the $4.9 billion committed in 2012. The
previous record year dates back to 2006.
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. Its mission 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.
SOURCE RÉseau Capital