Gauging first-half activity

What to focus on given that various measures point to different conclusions? We are referring to the level of private equity activity in the first half of the year. The numbers were released Wednesday by the Canadian Venture Capital & Private Association.

First the stats: for the period, $7.766 billion of deals were completed and there were 145 deals — meaning an average deal size of $53.6 million.

Brookfield Asset Management’s purchase of Brookfield Residential Properties ($1.013 billion); KKR and Veresen’s purchase of Encana natural gas assets ($760 million); Brookfield’s $605-million purchase of Encana Clearwater’s assets) and

CEF Holdings’ purchase of Niobec ($597 million) were the biggest deals. Brookfield was involved in four of the top 12 private equity transactions.

The biggest exists were: a secondary offering in Hudson’s Bay by Ontario Teachers ($316 million); Fairfax’s initial public offering of

Cara Operations ($230 million); TriWest’s $172 million sale of Gardenwire Group LP and NovaCap and Telesystem’s initial public offering of Stingray Digital. Now the assessments: In the same period of 2014 the deal value was $11.392 billion. There were 147 deals — meaning that, on average, each deal was valued at $78.6 million.

In the final six months of 2014, the 175 deals were valued at $30.463 billion — which means the average deal size was $174.1 billion. That quarter was dominated by the acquisition of Tim Hortons by Burger King.

While the overall numbers point to a period of slowing activity compared with both halves of 2014, there were two other differences: ❚ ❚In a break from the norm, there were more Alberta-based deals in the first six months of the year — $2.7 billion — than from Ontario where there was $2 billion of activity. But there were more deals (54) done in Ontario than in Alberta (20); and; ❚ ❚The leading sectors were different this year compared with last year: in 2015 oil gas and energy led the way ($3.413 billion or 44 per cent) whereas in 2014 consumer and retail ($13.512 billion or 32 per cent) was the leader.

The CVCA also publishes numbers on venture capital investing. For that type of investment, in the first half there were 244 completed deals valued at $939 million. On both measures, the first half of 2015 was busier than in 2014: deal value was up by 23 per cent while deal volume was up by 21 per cent.

Corporate finance, or raising capital for Canadian corporations, is the activity other than providing advice on mergers and acquisitions that keep investment banking firms busy.

According to data supplied by FP Informart, it’s been a hectic six months. The data shows that in the first half of 2015, $29.719 billion of equity has been raised for Canadian corporations. That amount (which combines the sale of common shares, trust units and convertible debentures) has been raised in 218 offerings.

In contrast, for the first six months of 2014, $22.036 billion of equity was raised in 282 transactions. Accordingly while there have been fewer deals, the average deal size is considerably larger: $136.3 million this year vs. $78.1 million last year. The $2.78 billion raised by Ele

ment Financial is the key reason for this year’s increase: without Element the average deal size would drop to $124.7 million.