Canadian dealmaking rebounded in 2019, but the massive piles of money amassed by private-equity firms and pension funds are beginning to cast a long shadow on public markets and share sales.
Corporate and government debt raised last year was $369.3 billion, up from $323.7 billion in 2018 and $356.8 billion in 2017. Total equity sales, meanwhile, were $32.8 billion, down from $35.2 billion in 2018 and $47.8 billion in 2017, which was a record year for Canadian dealmaking. What is becoming more apparent, though, is that issuers are noticing these private war-chests exist.
Claiming the fifth spot was National Bank Financial Inc., with 150 deals raising $38.3 billion, followed by Scotia Capital Inc. at 132 deals for $31 billion. The first non-Canadian firm on the FP Data’s list was Bank of America Merrill Lynch, which clocked in at seventh with 45 deals involving $12.8 billion.
“Which is interesting because strategics should have an embedded advantage given they’ve got greater synergy opportunities,” Lawrence said. “But the amount of capital that’s gone private has really given these sponsors a desire to get that capital to work.” The biggest corporate debt deal of 2019 came from Bausch Health Co. Inc. , which on Dec. 30 completed an offering of nearly $3.3 billion in notes. Next closest was Bank of Montreal’s $3-billion issue in March.
“I would say that 2019 was a below-average year from an issuance perspective, again, largely driven by the lack of energy issuance,” said Sante Corona, the head of equity capital markets at TD Securities. The energy sector, according to TD, was only 10 per cent of the total, compared to 40 to 50 per cent a few years ago.
Sprinkled among the FP Data’s top-10 equity deals of 2019 were the initial public offerings of three special purpose acquisition companies, all of which were spearheaded by Canaccord Genuity Corp. In July, for example, Subversive Capital Acquisition Corp. closed an IPO valued at more than $750 million.
The legal side of 2019 shook out much the same as the financing side. The number of deals compared to 2018 was down about four per cent, at 447 but the dollar amount was up more than 24 per cent, to $120.7 billion.
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