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Take-Private Wave Fueled by Private Equity Capital

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  Published in Business and Finance on Wednesday, February 25th 2026 at 6:35 GMT by The Globe and Mail
      Locales: Ontario, CANADA

The Drivers Behind the Take-Private Wave

Several converging factors are fueling this dramatic increase in privatization activity. At the forefront is the substantial amount of "dry powder" - uninvested capital - held by private equity (PE) firms. Following years of robust fundraising, these firms are actively seeking opportunities to deploy capital and generate returns. Canadian public companies, particularly those deemed undervalued or possessing potential for operational improvement, are proving to be attractive targets.

"We're seeing a real appetite from private equity to deploy capital," explains Scott Sullivan, a partner at CIBC Capital Markets. "They're looking at these public companies and saying, 'We can improve their performance, make them more efficient, and create value.'" This assessment underscores a key motivation: PE firms believe they can unlock value in publicly traded entities by implementing strategic changes that might be hindered by the demands of quarterly reporting and public market pressures.

Beyond capital availability, shareholder appetite for immediate value creation is playing a critical role. Take-private offers often come with a significant premium over the current market price, providing shareholders with an attractive exit opportunity. This is particularly appealing in a market characterized by volatility and uncertainty. The immediacy of a cash offer bypasses the potentially longer-term, but also riskier, prospect of future stock price appreciation.

Another significant contributor is the increased burden of compliance and regulatory scrutiny faced by publicly listed companies. Navigating complex regulations, maintaining investor relations, and responding to media inquiries can be resource-intensive and detract from core business operations. "Public companies have to deal with a lot of scrutiny from investors, regulators and the media," notes John Gamble, a partner at McMillan LLP. "Private companies can operate with more freedom and flexibility." This flexibility allows private owners to pursue long-term strategic initiatives without the constant pressure to deliver short-term results.

Finally, the relative weakness of the Canadian dollar has added another layer of appeal for foreign investors. A lower dollar effectively reduces the price of Canadian assets, making them more accessible to international private equity firms.

Concerns and Potential Consequences

While the surge in take-private deals presents opportunities for shareholders and PE firms, it also raises legitimate concerns about the long-term health of the Canadian economy. A primary worry is the potential erosion of Canadian ownership and control over strategically important industries. As more companies fall into foreign hands, there's a risk of decisions being made that prioritize foreign interests over Canadian ones. This concern is amplified in sectors such as natural resources, technology, and critical infrastructure.

David Denison, chairman of the Canada Pension Plan Investment Board, highlights this risk, stating, "It's important to make sure that we're not losing too many Canadian companies to foreign ownership. These companies are an important part of the Canadian economy."

Furthermore, the continued reduction in the number of publicly traded companies could limit investment opportunities for ordinary Canadians. A vibrant public market provides a platform for retail investors to participate in the growth of the Canadian economy. A shrinking public market could concentrate wealth and reduce financial inclusivity.

Looking Ahead: Regulatory Responses and Future Trends

The Canadian government and regulatory bodies are now facing the challenge of balancing the benefits of private investment with the need to protect Canadian interests. Potential responses could include stricter scrutiny of foreign takeovers, enhanced regulations to prevent the dismantling of Canadian companies, and policies to encourage the growth of domestic private equity firms.

The trend is likely to continue into 2026, particularly if public market volatility persists and interest rates remain relatively stable. We can expect to see private equity firms increasingly focusing on sectors with strong growth potential, such as renewable energy, technology, and healthcare. Moreover, innovative deal structures, including leveraged buyouts and strategic partnerships, are likely to become more prevalent.

The current wave of privatization is more than just a financial phenomenon; it's a reflection of evolving corporate governance practices, shifting investor preferences, and the increasing influence of private capital in the Canadian economy. Careful monitoring and proactive policy interventions will be crucial to ensure that this trend benefits all stakeholders and contributes to a sustainable and prosperous future for Canada.