Monday Market Minute | Aug 18, 2025

PE deal flow stays steady through summer as domestic strategies dominate

What Moved

Contrary to the typical summer slowdown, Canadian PE deal activity maintained its pace through August. CVCA tracking data showed 47 completed transactions in July, with a total deal value of $3.1 billion — consistent with the monthly average for 2025. The composition, however, remained skewed toward domestically oriented businesses. Healthcare clinics, Canadian food processing, environmental services, and business-to-business software were the most active sectors. Cross-border PE deals remained at roughly 40% of their 2023 levels.

Why It Matters

The sustained domestic deal flow demonstrated that Canadian PE had adapted to the tariff environment rather than being paralyzed by it. Sponsors recalibrated their sourcing toward sectors with minimal US trade exposure, discovering a deep pool of Canadian mid-market companies that had been overlooked when cross-border deals commanded attention. For investors, the message was that Canadian PE returns were achievable without cross-border risk — a thesis that would have seemed limiting two years ago but now appeared prudent. Valuations in domestic sectors remained reasonable, with entry multiples below US comparables.

Signal to Watch

Whether the return of institutional capital to Canadian PE would compress domestic deal multiples, reducing the valuation advantage that had attracted opportunistic sponsors in the first half.

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