Toronto is home to one of Canada's most active private equity ecosystems. Firms like Birch Hill Equity Partners, Clairvest Group, and dozens of mid-market PE shops are actively acquiring Ontario businesses. But private equity is not the only option — and for many business owners, it is not the best one. This guide, informed by the experience of CMBB advisor Darie Urbanky — former President and COO of CI Financial Corp., one of Canada's largest asset management firms — explains the key differences between private equity and direct buyers.
How Private Equity Works
Private equity firms raise capital from institutional investors — pension funds, endowments, family offices — and deploy it into acquisitions with the goal of generating a return over a defined investment horizon, typically five to seven years. This means that when a PE firm acquires your business, they are doing so with the explicit intention of selling it again within that timeframe. Their value-creation strategy typically involves cutting costs, growing revenue, and either taking the business public or selling it to a larger buyer. For some sellers, this is an acceptable outcome. For others — particularly those who care about their employees, customers, and legacy — it is not.
The Private Equity Due Diligence Process
Private equity acquisitions are typically more complex and time-consuming than direct acquisitions. PE firms conduct extensive due diligence — often involving third-party accounting firms, legal teams, and operational consultants — that can take three to six months and cost significant management time and attention. The process is also less certain: PE firms frequently renegotiate terms or walk away after due diligence, leaving sellers in a difficult position. CMBB's due diligence process is thorough but efficient, and we do not use it as a tool to renegotiate the purchase price.
What Direct Buyers Offer Toronto Business Owners
Direct buyers like CMBB acquire businesses using their own capital, without the constraints of a fund structure or an investment horizon. This means we can hold businesses indefinitely — there is no pressure to sell within five years, no need to hit an IRR target, and no incentive to cut costs at the expense of the workforce or customer relationships. For Toronto business owners who have spent decades building something real, this is a fundamentally different kind of exit.
Comparing the Two Approaches
The key differences between private equity and a direct buyer like CMBB come down to three factors: timeline (PE firms have a defined exit horizon; CMBB does not), process (PE due diligence is longer and more disruptive; CMBB's is efficient and respectful), and outcome (PE firms optimise for financial returns; CMBB optimises for long-term business health). Neither approach is universally better — but for owners who prioritise legacy, workforce continuity, and a clean exit, a direct buyer is often the superior choice.
CMBB is actively acquiring businesses in Toronto and across Ontario. Start a confidential conversation today.
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