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Making a market for micro-cap

Small and medium Canadian enterprises: A private equity opportunity

Make a market for micro-cap

The Canadian economy is easing into a post-financial crisis “new normal,” with myriad forces shaping and re-shaping traditional market strategies. As some doors close, new opportunities surface, often in previously untapped areas. For private equity (PE) firms, that means looking downmarket to the rapidly increasing availability of stable, well-run, small- and medium-sized enterprises (SMEs).

While PE firms and SMEs may seem strange bedfellows, market forces have converged to create a mutually beneficial situation. With Canada anticipating the largest workforce exodus in its history as Baby Boomer retirement begins in earnest, numerous strong mid-cap companies will be available. At the same time, PE firms—with the huge transactions and credit surpluses of pre-2008 behind them—are re-evaluating their business models and looking to new markets. Under the right conditions, both sides can benefit.  

The recent Deloitte publication Making a market for micro-cap explores this perfect storm, detailing the PE case on one side, the SME case on the other, and suggesting strategies each can employ to maximize this opportunity.

Learn how the new economy is creating opportunities for shrewd PE firms and SMEs in exit strategy mode.

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