M&A

10 November, 2009

Canada Q3 venture capital deals hit 14-year low

* Venture capital deals down 51 pct to $191 mln in Q3

* Ontario leads slide with drop to $24 mln from $179 mln (In U.S. dollars)

TORONTO, Nov 10 (Reuters) - Activity in Canada's venture capital market hit a 14-year low in the third quarter, tumbling 51 percent to $191 million from the same period a year ago as uneasy investors stayed out of the market.

According to data put out by the Canadian Venture Capital and Private Equity Association (CVCA) and Thomson Reuters, the province of Ontario saw the steepest fall in investment, sagging to $24 million from $179 million a year earlier.

For all of Canada, venture capitalists invested only $682 million in the first nine months of the year, compared with $1.1 billion in the January-September period last year.

"There is increasing frustration in finding co-investment partners to fully capitalize companies to be successful and compete globally," said Greg Smith, president of the CVCA.

At the current rate, venture capital is seen coming in under $1 billion for the full year, something it has not done since 1995.

Canadian venture capital activity is also down abroad, with funds investing only $38 million around the globe in the third quarter, compared with $151 million a year earlier.

At the same time, U.S. venture capital funds and other foreign investors boosted their presence in the Canadian market, bringing $77 million to deals, accounting for a hefty 40 percent of total activity.

($1=$1.05 Canadian) (Reporting by Pav Jordan; editing by Rob Wilson)

Source: http://www.reuters.com