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2021 Canadian PIPE Deal Point Study

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Fasken is pleased to release its 2021 Annual Canadian PIPE (Private Investment in Public Equity) Deal Point Study (PDF , 2.47 MB).

 2021 Canadian PIPE Deal Point Study

Our third annual Canadian PIPE Deal Point Study offers market insights from a review of the 2021 Canadian PIPE deals that have a deal size of greater than $10 million and whose deal details are publicly available. We reviewed these deals for (i) basic characteristics of the target, the investor(s) and other transaction information, including market capitalization of the target, industry and transaction amount; (ii) attributes of the acquired securities; and (iii) the investor and issuer rights granted pursuant to the deal.

This third edition focuses on PIPE transactions completed in the 2021 calendar year in Canada, compares the results seen in our 2019 and 2020 studies, highlights the trend of PIPE transactions in the past three years, and looks ahead to 2022.

The 2021 Deal Point Study yielded notable trends, including:

  • The majority of the deals, approximately 69%, involved common equity.
  • The most prevalent rights negotiated were dilution protection rights (100% of the deals reviewed).
  • Board nomination rights were also common (approximately 82% of the deals reviewed).
  • The least common rights granted were redemption rights at the option of the investor, which were not granted in any of the deals reviewed in the 2021 sample.
  • The average market capitalization of target companies in the 2021 sample was $509.7 million, which was approximately 72% smaller than the 2020 sample. The average transaction size was $112.75 million, which was approximately 18% larger than the 2020 sample. However, on average, deals in the 2020 sample included more shareholder rights than the 2021 sample, including redemption rights by the issuer, voting rights and information rights.

If you are interested in transactional trends in Canada, we recommend also reading our inaugural Canadian PIPE Guide and 2019 Deal Point Study and 2020 Canadian PIPE Deal Point Study

We also suggest reading our Canadian Proxy Contest Study - 2020 Update, which offers a review of the country’s proxy contest activity in 2020, and our Directors' Handbook: Shareholder Activism, which provides practical guidance for public company directors and boards looking to bolster their defence against activists.

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