20 Reasons why this was a banner year for Canada’s capital markets

But U.S. monetary policies, Europe’s debt crisis and food inflation cause for concern: PwC

TORONTO, December 10, 2010 — PwC’s December Capital Markets Flash report highlights 20 reasons why Canada is the place to be from a markets perspective. Despite a backdrop of global macro weakness, Canada’s public debt capital has been plentiful and investor demand for equities has been very healthy.

Kristian Knibutat, PwC’s National Deals Leader, outlines in the report that the three external risks most likely to disturb Canada’s growth trajectory through 2011 are 1) U.S. monetary policies related to quantitative easing 2) Europe’s sovereign debt crisis and 3) Food inflation. Acknowledgement and appreciation of this interconnectedness, and the necessity to govern our actions to neutralize these threats, cannot be understated, states Knibutat.

For the positive, there’s never been a better time to participate in Canadian capital markets. Here are 20 statistics to back up that statement:

1. 475%: annual increase in number of corporate IPOs on the TSX in 2010.
2. 119%: annual increase in equity capital raised year to date in 2010 by TSX-V listed companies.
3. 2,813: number announced M&A deals in 2010 involving a Canadian entity. 2,937: number of announced Canadian deals at all-time peak in 2007.
4. $67.1 billion: Aggregate year to date value of corporate debt new issues; $64.4 billion: aggregate value in 2009; $38.5 billion: aggregate value in 2000.
5. 13%: appreciation of the TSX since December 9, 2009. 9%: appreciation of the S&P 500 during the same period.
6. $76 billion: estimated size of assets under management by Canadian PE and VC players.
7. 28%: annual increase in venture capital dollars invested in Canada in 2010. 10.5%: three year net return on first quartile Canadian VC investments; -2.7%: three year return on the NASDAQ.
8. 27%: year to date appreciation in price of gold. 12%: year to date appreciation in WTI crude.
9. 48.6%: proportion of TSX (by market cap) represented by the energy and mining sectors in 2010; 27%: proportion of TSX (by market cap) represented by the energy and mining sectors in 2002.
10. $5 billion: Amount paid by Onex & Canada Pension Plan to acquire British manufacturer Tomkins; #1 rank of deal on North American PE league tables (by size).
11. $1.5 billion: high yield debt issued in Canada year to date 2010; 86: number of high yield issuers in Canada; non-existent: Canadian high yield market in 2000.
12. 1^st: global rank of TSX for number of mining and energy companies publicly traded.
13. 80%: percentage of global equity financings in the mining sector completed in Canada.
14. 72%: proportion of cross border activity involving a Canadian entity taking control of a foreign entity.
15. $660 million: size of Smart Technologies IPO, the largest Canadian tech IPO in a decade.
16. $1,156: Q3 2010 cash flow per share publicly traded Canadian companies; $633: cash flow per share, comparable quarter, 2002.
17. $4.65 billion: amount paid by China’s state-owned Sinopec to acquire a 9.03% interest in Syncrude Canada; #1: deal rank in league table of acquisitions in North America by China (by size).
18. 27,000: number of times “Saskatchewan” mentioned in the global media year to date 2010. 2,750, number of times Saskatchewan mentioned in 2000.
19. $1,156: Q3 2010 cash flow per share publicly traded Canadian companies, $633: cash flow per share, comparable quarter, 2002.
20. 2x: EBITDA multiple expansion for North American middle market M&A deals ($100 - $500 million).

PwC deal data includes announced M&A transactions involving at least one Canadian entity and the source of all our data is Capital IQ. The full report, including graphs and detailed analysis, is available from the contacts above and at: www.pwc.com/ca/cmf. Go to this url to subscribe to the bi-weekly capital market series: www.pwc.com/ca/cmf.

Methodology Notes:

In this report, a “Canadian” deal refers to an M&A or spinoff transaction involving at least a Canadian entity as a target. Deal statistics may include cancelled transactions.

TSX issuance data current to November 30, 2010.

M&A data current to November 30, 2010; Balance Sheet and Income statement data of public companies per Q3 2010 or as otherwise noted; Venture Capital Data as at September 30^th 2010. All other year to date data and trending as at December 3, 2010.

In the case of hostile or competing bids, more than one announcement for the same target may be included in statistics. Our methodology includes these announcements as we consider them to be a proxy for the state of the M&A market.

About PwC’s Deal Team

PwC’s Deal Team (www.pwc.com/ca/deals) helps clients to achieve deal success—from concept to close and beyond. As part of the world’s largest Transaction Advisory practice¹, and with our global Corporate Finance group being 2010 Upper Mid Market M&A Advisor of the Year², the PwC Canada Deals Team is your gateway to an exciting new world of emerging M&A opportunities.

¹ Source: Kennedy; ”Business Advisory Services Marketplace 2009-2011”; ©BNA Subsidiaries, LLC. Reproduced under license.
² Source: Acquisitions Monthly Awards 2010