Canada’s Buyout & Private Equity Market in 2014

Table of Contents Canada’s Buyout & PE Market in 2014 $ Invested and # Companies Financed Top Buyout Deals Canada by Market Segment Canada by Sector & Province Canadian Investments Abroad VC Funds Raised Public and M&A Exits Explanatory Notes & Contacts

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Overview of Canadian PE Buyout Market Activity in 2014 Canadian buyout-PE market trends Deal-making activity in Canada’s buyout and related private equity (PE) market showed substantial growth in 2014. Disclosed values of transactions (announced and completed) totaled $32.2 billion as of December 31st, more than tripling the $10.3 billion in values reported in 2013. As a result, disbursement levels last year were the highest since the peak of Canada’s buyout boom in 2007. Transactional volume was also up on a year-over-year basis. Control-stake acquisitions, growth-related and other PE deals (announced and completed) in the domestic market totaled 410 in 2014, or 23% greater than the number of deals done in 2013. Indeed, this level of deal-making set a new Canadian record, surpassing even 2007 levels Canadian buyout-PE market activity received a significant bounce in the final three months of 2014, when 105 transactions accounted for disclosed values totaling $6.4 billion. Top deals included a $1.6 billion investment in dairy group Agropur Cooperative, $864 million in LuluLemon Athletica, and $479 million in Osisko Mining for their PE-backed acquisition of Virginia Mines. At the end of December, thirteen large-cap transactions sized $500 million or greater captured three quarters of all disclosed disbursements made in the Canadian market. Deals sized between $100 million and $500 million took the second largest share of the total, or 15%, while deals sized less than $100 million accounted for the balance. Canadian market trends by sector Canadian oil & gas companies accounted for the largest share of buyout-PE deal-making last year with 63 transactions, or 15% of the national total. Manufacturing followed a close second with 62 deals, with software companies coming in third with 40 transactions. When measured by disclosed deal values, market trends by sector were quite different. By this measure, activity was led in the Hospitality & Entertainment sector, led by Burger King’s PE-backed acquisition of Tim Hortons at $12.5 billion. However, even without Tim Hortons, dollars invested in Canadian PE-Buyout activity were still nearly double that of the previous year. The oil & gas sector came in second with $6.6 billion in investment activity, or 20% of the year’s total.

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Overview of Canadian PE Buyout Market Activity in 2014 Canadian market trends by region The majority of buyout-PE transactions (announced and completed) in the Canadian market in 2014 involved businesses that were located in Québec (42%) and Ontario (24%). A substantial number of deals were also recorded in Alberta, which accounted for 19% of the total number, and British Columbia, which reflected a 9% market share. The number of large-cap deals located in Ontario in 2014 ensured that that province led market activity in disclosed dollar terms. Ontario took just under half of all disbursements this time around. Alberta and Québec followed with both receiving 23% of all disbursements last year. Canadian investor activity in global markets Canadian buyout and related PE funds were substantially more active in international transactions in 2014 relative to the year before. As of December 31st, Canadian funds led or participated in a total of 112 deals in other countries, and these were valued at approximately $44 billion. This compares against a total of 67 deals valued at $19 billion reported in 2013. As in past years, the global market activity of Canadian funds was focused on businesses based in the United States, which accounted for over three-quarters of disclosed transaction values and two-thirds of all deals. Most remaining activity occurred in Europe and Latin America. Trends in Canadian buyout-PE fund-raising The fundraising activities of Canadian buyout funds maintained strong levels in 2014 with a total of $14.7 billion of new capital committed to 26 funds. Though 9% below the $16.1 billion raised in 2013, this was still a strong showing for Canadian funds, representing the second best year on record.

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Buyout – PE Deal Values Top $32 Billion, Tripling 2013 - Best Year Since 2007 $35

$32.2

Deal Value (CAD Billions)

$30 $25

$20 $15

$11.8

$11.9

$10.3

$10 $6.5 $5 $0 2010

2011

2012

Q1

Q2 5

2013 Q3

2014 Q4

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Buyout - PE Deal Volumes Up 22% Best Year on Record 450

410

400 350

335

335

2012

2013

Number of Deals

302

300 250

228

200 150 100 50 0 2010

2011 Q1

Q2 6

Q3

2014 Q4

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Canadian Investors Funding More Domestic Deals – Up 28% Over Last Year 450

410

400 350

335

335

2012

2013

Number of Deals

302

300 250

228

200 150 100 50 0 2010

2011 Domestic Investors 7

2014

Foreign Investors Contributors to our venture capital & private equity analyses are entitled to packages of additional data. Please contact us to participate.

Top Buyout-PE Deals of 2014 Province

Value (CAD $ Millions)

Burger King-Tim Hortons

ON

$12,500

Jupiter Resources-Big Horn

AB

$2,000

Company

Disclosed Investors 3G Capital, Berkshire Hathaway Inc. Apollo Global Management

Agropur Cooperative

QC

$1,575

Caisse de dépôt et placement du Québec, -Fonds de solidarité FTQ, Investissement *Québec, Desjardins, Fondaction

Patheon-DPx Holdings BV

ON

$1,460

JLL Partners, Royal DSM

McInnis Cement

QC

$1,100

Investissement Québec, Caisse de dépôt _et placement du Québec, Beaudier Inc.

Atrium Innovations

QC

$1,100

Permira Funds, Fonds de solidarité FTQ, _Caisse de dépôt et placement du Québec

Lululemon Athletica

BC

$864

Advent International

$675

Riverstone Holdings, Grafton Asset *Management

Canadian Non-Operated Resources

AB

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Six Largest Buyout-PE Transactions Take 61% of Dollars # of Deals Done

Dollars Invested (Disclosed)

> $1 Billion

6

$19,735 Million (61%)

$500 Million - $1 Billion

7

$4,460 Million (14%)

$100 Million - $500 Million

19

$4,921 Million (15%)

$10 Million - $100 Million

82

$2,583 Million (8%)

< $10 Million

165

$469 Million (1%)

Deal Values Undisclosed

131

$0 (0%)

Deal Size Range

Total Deals With Disclosed Values: 279 (of 410) Total Invested: $32.2 Billion

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Oil & Gas, Manufacturing and Software Drive Deal Volumes Total Deals: 410 Oil & Gas Manufacturing Software Mining Retail Healthcare & Life Sciences Finance Construction & Engineering Transportation Energy-Power & Environmental

IT & Media Hospitality & Entertainment Business Services Distribution & Wholesale Forestry & Agriculture 0

10

20

10

30

40

50

60

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Burger King-Tim Hortons Deal Vaults Hospitality & Entertainment to Top Spot Total Deal Values: $32.2 Billion Hospitality & Entertainment Oil & Gas Healthcare & Life Sciences Construction & Engineering Forestry & Agriculture Mining Energy-Power & Environmental Retail Manufacturing Transportation

Finance Distribution & Wholesale Software IT & Media Business Services $0

$2

$4

11

$6

$8

$10

$12

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$14

Deal Volumes Growing Canada-Wide Québec Sees Greatest Gain, Up 29% 200 180

# of Deals

160 140 120 100 80 60 40 20 0 British Columbia

Alberta

Ontario

2013

12

Quebec

Rest of Canada

2014

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Investment in Foreign Companies Up 2.3X Over 2013 – Best Year Since 2007 150

$45

$44

$40 $35

125

100

$30

$30 $25

75

$23

$20

$19

$17

$15

50

$10

25

$5 $0

0

2010

2011

2012

Total Deal Values

13

2013

2014

# of Deals

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# of Deals

Amount Invested (CAD $ Billions)

$50

Two Thirds of Canadian Investments Abroad Target U.S. Companies 2 2 $1.7

4 8

$9.2 22 74 $33.2

Total Invested: $44.4 Billion

United States

Europe

Total Deals: 112

Australia

14

Latin America

Asia

Africa

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Canadian Buyout-PE Exits Up 18% Trade Sales Comprise 64% of Exits 90 79

75

80 # of Exit Events

70

64

64

2012

2013

60 52 50 40 30 20 10 0

2010 IPO

2011 Financial Sale 15

Trade Sale

2014 Other

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Canadian Buyout-PE Fundraising Holding Strong Since 2012 Funds Raised (Billions of $ CAD)

$18.0 $16.1

$16.0

$14.7

$14.0 $12.2 $12.0 $10.0 $8.0

$7.3

$6.0 $3.8

$4.0 $2.0 $0.0

2010

2011

2012 16

2013

2014

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Explanatory Notes 1.

Data collected and analyzed by Thomson Reuters for this statistical report were drawn from a variety of sources. These include Thomson Reuters M&A databases and public and proprietary sources among the members of Réseau du capital d’investissement du Québec and other Canadian and non-resident fund managers responding to Thomson Reuters’ annual and quarterly surveys.

2.

All current and previous years data is as of Tuesday, January 27th, 2015. Data is continuously updated and is therefore subject to change.

3.

All figures are in Canadian dollars unless otherwise noted.

4.

Key statistical indicators (e.g., total disbursements, per quarter or per annum) are influenced by the fact that a substantial fraction of buyout and other PE deals are not fully disclosed. For instance, “dollars invested” in a given period pertain only to those deals with values that have been published or confidentially disclosed to Thomson Reuters.

5.

The data also highlight the deal-making of Canadian funds in non-Canadian companies. “Dollars invested” pertain to the total value of disclosed deals in which Canadian funds have participated and not the specific Canadian financial contributions to these deals.

6.

Statistical data reflect all essential forms of buyout-PE deal-making, including control-stake acquisitions of businesses, minority equity investments, restructuring and special-situations transactions, mezzanine deals over $3 million, and other quasi-equity investments.

7.

For further information on Thomson Reuters venture capital and private equity offerings, please visit us at: http://thomsonreuters.com/financial/venture-capital-and-private-equity/

8.

If you would like to participate in the submission process, receive quarterly press releases, or have questions about our venture capital criteria, please contact us at:

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