US M&A News and Trends

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This Issue: US M&A News and Trends U.S. M&A deal activity increased in June, going up 3.3% with 1,154 U.S. private equity activity decreased slightly in June, down 0.7% 2 US Merger announcements compared to 1,117 in May. However, aggregate from May. There were 142 deals in June compared to 143 in May. M&A spending decreased. In June 27.7% less was spent on deals Aggregate transaction value increased, up by 5.8% to $38.3 billion Metrics compared to May. from May's $36.2 billion.

2 US Middle Over the past 3 months, the sectors that saw the smallest The top financial advisors for 2018 based on deal announcements, decreases in M&A deal activity, relative to the same three-month are: Goldman Sachs & Co., JPMorgan Chase & Co, Morgan Stanley, Market Monitor period one year ago, was: Commercial Services (506 vs. 421), Citigroup and Barclays Plc. The top five financial advisors, based on Finance (447 vs. 395), Health Services (189 vs. 144), Technology the aggregate transaction value of the deals worked on, are: 3 US Sector Services (518 vs. 474), and Producer Manufacturing (218 vs. 193). Goldman Sachs & Co., Morgan Stanley, JPMorgan Chase & Co, Bank Activity & Value Fifteen of the 21 sectors tracked by FactSet Mergerstat posted of America Merrill Lynch and Centerview Partners LLC. relative gains in deal flow over the last three months compared to the same three months one year prior. The top legal advisors for 2018 based on deal announcements, are: 4 US Strategic Kirkland & Ellis LLP, Jones Day LP, Latham & Watkins LLP, Skadden, Buyer Report Over the past 3 months, the sectors that have seen the biggest Arps, Slate, Meagher & Flom LLP and Morgan, Lewis & Bockius LLP. declines in M&A deal volume, relative to the same three-month The top five legal advisors, based on the aggregate transaction period one year ago have been: Retail Trade (93 vs. 114), Electronic value of the deals worked on, are: Skadden, Arps, Slate, Meagher & 4 US Private Equity Technology (76 vs. 95), Utilities (62 vs. 79), Process Industries (109 Flom LLP, Wachtell, Lipton, Rosen & Katz, Simpson Thacher & Report vs. 122), and Energy Minerals (37 vs. 42). Six of the 21 sectors Bartlett LLP, Fried, Frank, Harris, Shriver & Jacobson LLP and tracked by FactSet Mergerstat posted negative relative losses in Cravath, Swaine & Moore LLP. 5 Top US Advisors deal flow over 79 deals.

Topping the list of the largest deals announced in June are: 6 Top US Deals Microsoft Corp. agreeing to acquire GitHub, Inc. for $7.5 billion; KKR Scoreboard & Co. LP's deal to acquire Envision Healthcare Corp. for $5.6 billion; Verscend Technologies, Inc. entering an agreement to acquire Cotiviti Holdings, Inc. for $4.2 billion; WP Carey, Inc.'s agreeming to acquire Corporate Property Associates 17 Global, Inc. for $3.8 billion; Gray Television, Inc. agreeing to acquire Raycom Media, Inc. for $3.6 billion.

The US Mergers & Acquisitions Market Index

$300.0 1,350 $275.1 $264.0 1,200 $250.0 1,050 $198.1 $200.0 $193.2 $193.0 900

$156.4 $156.4 750 $143.3 $150.0 $149.1 $143.9 $115.3 $113.8 $125.4 $119.3 600 $115.8 $117.3 $100.0 450

300 $50.0 150 1,083 939 1,061 1,046 981 964 894 1,050 1,027 903 1,077 906 976 1,026 1,117 1,154 $0.0 0 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Deal Volume Aggregate Deal Value

US MergerMetrics July 2018

Merger Stats

Number of Deals Agg. Transaction Value ($Bil)

12 Months Ended 12 Months Ended Average Deal Size 6/30/18 6/30/17 Change 6/30/18 6/30/17 Change P/E

$1 Billion + 378 347 8.9% $1,636.5 $1,507.3 8.6% 31.3

$500M to $999.9M 263 256 2.7% 185.3 182.2 1.7% 23.5

$250M to $499.9M 304 297 2.4% 108.8 105.4 3.3% 23.0

$100M to $249.9M 508 554 -8.3% 81.8 89.6 -8.7% 29.6

$50M to $99.9M 439 434 1.2% 31.4 30.7 2.3% 24.6

$25M to $49.9M 386 490 -21.2% 13.9 17.5 -20.3% 34.4

$10M to $24.9M 452 524 -13.7% 7.5 8.5 -11.7% 25.4

Under $10M 929 1,076 -13.7% 3.0 3.3 -10.3% 17.0

Undisclosed 8,416 8,892 -5.4% N/A N/A N/A N/A

Total 12,075 12,870 -6.2% $2,068.2 $1,944.5 6.4% 27.8

M&A at a Glance MEDIAN P/E MEDIAN PREMIUM

30.0x 40.0%

35.0% 25.0x 30.0% 33.3% 23.3x 24.1x 20.0x 20.8x 25.0%

15.0x 20.0% 23.1% 22.7%

15.0% 10.0x 10.0% 5.0x 5.0%

0.0x 0.0% 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18

US Middle Market Monitor MEDIAN EV/EBITDA MEDIAN PREMIUM

12.0x 50.0% 45.0% 10.0x 40.0% 9.7x 9.3x 35.0% 8.0x 8.9x 36.7% 30.0% 32.7% 31.4% 6.0x 25.0% 20.0% 4.0x 15.0% 10.0% 2.0x 5.0% 0.0x 0.0% 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18

*Middle Market defined as deals valued between $1 million and $500 million, plus undisclosed deals.

Media: Media quotation with source attribution is encouraged. Reporters requesting additional information or editorial comment should contact [email protected]. Mergerstat gathers its data from sources it considers reliable; however, it does not guarantee the accuracy or completeness of the information provided in this publication. Copyright 2018 FactSet Research Systems Inc. All rights reserved. It is illegal under federal copyright law to reproduce or redistribute this publication or any portion of its contents without written authorization of the publisher.

US Sector Activity & Value July 2018

SECTOR BY ACTIVITY L3M 6/30/18 L3M 6/30/17 Target Sector Deal Count Deal Count Difference Commercial Services 506 421 85 Finance 447 395 52 Health Services 189 144 45 Technology Services 518 474 44 Producer Manufacturing 218 193 25 Industrial Services 146 129 17 Consumer Services 247 233 14 Non-Energy Minerals 84 71 13 Consumer Non-Durables 84 74 10 Distribution Services 181 172 9 Communications 38 30 8 Health Technology 109 105 4 Government 12 10 2 Consumer Durables 52 50 2 Miscellaneous 15 14 1 Transportation 75 79 (4) Energy Minerals 37 42 (5) Process Industries 109 122 (13) Utilities 62 79 (17) Electronic Technology 76 95 (19) Retail Trade 93 114 (21) Total 3,298 3,046 252

SECTOR BY VALUE L3M 6/30/18 L3M 6/30/17 Target Sector Value Value Difference Communications $64,575.6 $6,474.0 $58,101.6 Technology Services 81,792.0 24,967.2 56,824.8 Finance 99,226.7 46,734.1 52,492.6 Energy Minerals 47,698.5 21,928.4 25,770.1 Utilities 24,541.0 6,454.5 18,086.5 Health Services 25,363.8 8,537.0 16,826.8 Consumer Non-Durables 23,930.3 8,186.2 15,744.1 Industrial Services 26,494.4 14,283.6 12,210.8 Consumer Services 37,429.1 27,904.3 9,524.8 Process Industries 19,853.1 11,386.0 8,467.1 Producer Manufacturing 26,908.6 19,409.1 7,499.5 Consumer Durables 4,064.1 3,649.9 414.2 Non-Energy Minerals 4,261.3 4,368.7 (107.4) Government 14.3 1,760.0 (1,745.7) Miscellaneous 344.0 2,123.4 (1,779.4) Transportation 6,574.4 8,879.5 (2,305.1) Distribution Services 20,487.3 24,940.1 (4,452.8) Commercial Services 35,897.7 45,092.9 (9,195.2) Health Technology 28,039.5 41,833.6 (13,794.1) Electronic Technology 13,825.0 28,919.3 (15,094.4) Retail Trade 14,162.5 39,703.9 (25,541.4) Total $605,483.1 $397,535.7 $207,947.5

US Strategic Buyer Report July 2018

Merger Stats

Number of Deals Agg. Transaction Value ($Bil)

12 Months Ended 12 Months Ended Average Deal Size 6/30/18 6/30/17 Change 6/30/18 6/30/17 Change P/E $1 Billion + 206 180 14.4% $1,112.3 $905.1 22.9% 30.7 $500M to $999.9M 150 146 2.7% 104.5 102.2 2.3% 23.7 $250M to $499.9M 190 170 11.8% 68.0 61.3 10.8% 22.3 $100M to $249.9M 333 360 -7.5% 53.9 58.2 -7.4% 30.6 $50M to $99.9M 322 299 7.7% 22.9 21.2 8.0% 23.9 $25M to $49.9M 274 356 -23.0% 10.1 12.6 -19.9% 35.2 $10M to $24.9M 334 399 -16.3% 5.6 6.5 -14.3% 25.2 Under $10M 608 746 -18.5% 2.0 2.3 -13.1% 17.0 Undisclosed 6,342 6,838 -7.3% N/A N/A N/A N/A Total 8,759 9,494 -7.7% $1,379.2 $1,169.4 17.9% 27.7

PUBLIC BUYER INDEX LTM 6/30/18

$250 360 $213.4 300 $200 $167.5 $140.7 240 $150 $96.0 $104.2 180 $100 $73.0 $67.7 $80.1 $75.7 $70.4 $67.0 120 $36.5 $50 60 284 282 251 286 239 249 275 253 238 272 283 250 $0 0 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18

US Private Equity Report Indices Top Private Equity Fundraisings: YTD 2018

PE BUYER INDEX: LTM 6/30/18 Open Date Value ($Mil) Fund (Private Equity Sponsor) 29-May-2018 $40,404.0 Canyon Laurel Co. Invest LLC $80 160 Canyon Partners Real Estate LLC (Real Estate) $70 140 $60 120 1-Mar-2018 16,000.0 Hellman & Friedman Capital Partners IX $46.7 $50 $36.3 $36.2 $27.1 100 Hellman & Friedman LLC $34.4 $40 $29.1 $28.1 80 12-Feb-2018 12,000.0 Lexington Capital Partners IX LP $27.8 $18.7 $21.7 $30 $17.0 60 $12.2 Lexington Partners LP $20 40 $10 134 117 96 122 132 112 129 102 127 138 143 142 20 20-Mar-2018 12,000.0 TPG Partners VIII Fund $0 0 TPG Capital LLC Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 1-Jan-2018 12,000.0 Vista Equity Partners Fund VII

Vista Equity Partners Management LLC GOING PRIVATE INDEX: LTM 6/30/18 1-Jun-2018 10,000.0 Thoma Bravo Fund XIII Thoma Bravo LLC $25 15 $20.2 29-Mar-2018 9,000.0 Coller International Partners VIII Fund $18.9 $20.5 $20 12 Coller Capital Ltd. $14.8 $15.0 $14.3 Sequoia Capital Global Growth Fund III- $15 9 1-Jan-2018 8,000.0 $10.5 Endurance Partners LP Sequoia Capital $10 6 $4.9 $4.3 $4.5 $4.2 9-May-2018 8,000.0 Strategic Partners Fund VIII $3.0 $5 3 Strategic Partners Fund Solutions Advisors LP 12 7 3 8 5 4 7 6 5 10 9 7 $0 0 16-Jan-2018 7,000.0 KKR Global Infrastructure III Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Kohlberg Kravis Roberts & Co. LP

Top US Advisors July 2018 BASED ON US ANNOUNCED DEALS – RANKED BY TRANSACTION VALUE: YTD 2018 Transaction Total Transaction Total Financial Advisor Value ($Mil)* Deals** Legal Advisor Value ($Mil)* Deals** 1. Goldman Sachs & Co. $454,837.6 129 1. Skadden, Arps, Slate, Meagher & Flom LLP $327,544.3 83 2. Morgan Stanley 383,395.1 88 2. Wachtell, Lipton, Rosen & Katz 283,608.9 41 3. JPMorgan Chase & Co 329,181.6 112 3. Simpson Thacher & Bartlett LLP 249,417.2 63 4. Bank of America Merrill Lynch 257,355.3 59 4. Fried, Frank, Harris, Shriver & Jacobson LLP 214,773.1 41 5. Centerview Partners LLC 250,956.8 24 5. Cravath, Swaine & Moore LLP 192,641.0 34 6. Credit Suisse 223,756.0 66 6. Davis Polk & Wardwell LLP 186,082.3 44 7. Evercore, Inc. 198,064.7 65 7. Latham & Watkins LLP 171,100.3 112 8. Barclays Plc 187,100.2 72 8. Sullivan & Cromwell LLP 156,675.4 59 9. Deutsche Bank AG 160,376.3 35 9. Cleary Gottlieb Steen & Hamilton LLP 154,840.6 30 10. Lazard 156,621.0 49 10. Hogan Lovells 144,879.0 55 11. Citigroup 124,272.0 73 11. Weil, Gotshal & Manges LLP 139,926.3 64 12. PJT Partners, Inc. 119,131.1 12 12. Allen & Overy LLP 127,000.0 35 13. Rothschild & Co 71,327.2 54 13. Paul, Weiss, Rifkind, Wharton & Garrison LLP 124,460.7 54 14. Wells Fargo & Co. 66,535.9 25 14. Kirkland & Ellis LLP 112,436.4 194 15. Morrison & Foerster LLP 59,224.1 8 15. Gibson, Dunn & Crutcher LLP 108,505.6 58 16. The Raine Group LLC 58,875.6 3 16. Jones Day LP 103,844.0 148 17. Mizuho Financial Group, Inc. 58,472.6 2 17. Blake, Cassels & Graydon LLP 97,315.1 36 17. Sumitomo Mitsui Financial Group, Inc. 58,472.6 2 18. Goodwin Procter LLP 89,712.8 38 19. Jefferies LLC 43,742.6 70 19. Morgan, Lewis & Bockius LLP 83,841.1 81 20. Robey Warshaw LLP 39,110.6 2 20. DLA Piper Group 83,474.0 46 21. UBS Group AG 38,817.3 32 21. Clayton Utz 77,545.0 2 22. RBC Capital Markets 35,929.3 40 22. Freshfields Bruckhaus Deringer LLP 76,851.8 25 23. Macquarie Group 33,885.3 24 23. Pillsbury Winthrop Shaw Pittman LLP 75,416.4 40 24. Guggenheim Capital LLC 33,693.7 8 24. Shearman & Sterling LLP 71,071.7 35 25. BDT & Co. LLC 25,373.3 2 25. Richards, Layton & Finger PA 69,135.6 11 26. AFW LP 25,308.3 1 26. Holland & Knight LLP 68,500.7 8 27. Perella Weinberg Partners Group LP 22,956.3 17 27. K&L Gates LLP 62,162.5 13 28. Moelis & Co. 22,200.4 43 28. Morris, Nichols, Arsht & Tunnell LLP 62,020.4 13 29. Dyal Co. LLC 20,742.6 3 29. Clifford Chance LLP 61,775.1 28 30. Sandler O'Neill & Partners 19,998.7 45 30. Potter Anderson & Corroon LLP 60,341.0 4 31. Qatalyst Group LP 18,942.9 8 31. Herbert Smith Freehills LLP 48,000.4 21 32. BNP Paribas SA 18,433.9 7 32. Vinson & Elkins LLP 45,631.6 28 33. HSBC Holdings Plc 18,130.4 10 33. Debevoise & Plimpton LLP 44,297.9 23 34. Scotiabank 16,119.0 10 34. Mayer Brown LLP 40,648.4 23 35. Ernst & Young Global Ltd. 14,621.0 40 35. Proskauer Rose LLP 37,235.1 21 36. The Toronto-Dominion Bank 13,810.0 9 36. Linklaters LLP 36,190.7 22 37. The Valence Group LLC 13,324.7 3 37. Sidley Austin LLP 35,623.2 36 38. Raymond James Financial, Inc. 13,114.3 65 38. Baker Botts LLP 34,172.4 24 39. JMP Group LLC 12,464.2 3 39. Alston & Bird LLP 30,135.0 28 40. Greenhill & Co., Inc. 12,208.9 12 40. Stikeman Elliott LLP 29,360.9 24 41. Canson Capital Partners I Ltd. 11,000.0 1 41. Wilson Sonsini Goodrich & Rosati 26,776.6 45 42. PricewaterhouseCoopers 10,826.6 37 42. Hogan Lovells LLP 26,557.3 35 43. William Blair & Co. 10,188.9 40 43. McDermott Will & Emery LLP 25,339.8 17 44. Stone Key Partners LLC 9,714.5 1 44. Willkie Farr & Gallagher LLP 25,190.3 33 45. Stifel, Nicolaus & Co., Inc. 9,636.4 50 45. Paul Hastings LLP 24,739.7 51 46. KPMG International Coop. 9,193.2 31 46. Akin, Gump, Strauss, Hauer & Feld LLP 24,734.9 20 47. Bank of Montreal 8,334.6 12 47. Cooley LLP 24,478.1 21 48. Houlihan Lokey, Inc. 8,329.6 70 48. Khaitan & Co. LLP 22,390.7 12 49. Robert W. Baird & Co. 8,133.0 46 49. Cyril Amarchand Mangaldas 21,459.0 7 50. Natixis SA 6,143.0 10 50. Slaughter & May Ltd. 19,457.6 6

* Transaction Value is the aggregate base equity plus the target’s net debt, where applicable. ** Total Deals includes deals that reported a deal value as well as those that did not. If you would like to participate in our league table rankings or have questions about league table criteria, please contact [email protected].

Top US Deals Scoreboard July 2018

Seller (Unit Sold) Buyer Transaction

Financial Advisor Financial Advisor Value**

Rank Legal Advisor Legal Advisor ($Mil) Seller Sector

Express Scripts Holding Co. Cigna Corp. $67,685.5 Health Services Centerview Partners LLC Morgan Stanley Lazard Paul, Weiss, Rifkind, Wharton & Garrison LLP 1 Cravath, Swaine & Moore LLP Wachtell, Lipton, Rosen & Katz Holland & Knight LLP Skadden, Arps, Slate, Meagher & Flom LLP

SoftBank Group Corp. (Sprint Corp.) T-Mobile US, Inc. $58,472.6 Communications Centerview Partners LLC Credit Suisse JPMorgan Chase & Co Deutsche Bank AG Mizuho Securities Co., Ltd. Evercore, Inc. Morrison & Foerster LLP Goldman Sachs & Co SMBC Nikko Securities Inc. Morgan Stanley The Raine Group LLC PJT Partners LP 2 Goodwin Procter LLP Cleary Gottlieb Steen & Hamilton LLP Pillsbury Winthrop Shaw Pittman LLP Cravath, Swaine & Moore LLP Potter Anderson & Corroon LLP DLA Piper LLP (United States) Simpson Thacher & Bartlett LLP Fried, Frank, Harris, Shriver & Jacobson LLP Skadden, Arps, Slate, Meagher & Flom LLP Latham & Watkins LLP Richards, Layton & Finger PA Wachtell, Lipton, Rosen & Katz Weil, Gotshal & Manges LLP

Sky Plc Comcast Corp. $40,632.7 Consumer Services Barclays Plc Bank of America Merrill Lynch Morgan Stanley Evercore, Inc. 3 PJT Partners LP Robey Warshaw LLP Herbert Smith Freehills LLP Wells Fargo Securities LLC Davis Polk & Wardwell LLP Freshfields Bruckhaus Deringer LLP

Andeavor Marathon Petroleum Corp. $31,311.9 Energy Minerals Goldman Sachs & Co Barclays Plc 4 Cleary Gottlieb Steen & Hamilton LLP Jones Day LP Morgan, Lewis & Bockius LLP Shearman & Sterling LLP Sullivan & Cromwell LLP

Dr Pepper Snapple Group, Inc. Keurig Green Mountain, Inc. $25,266.3 Consumer Non-Durables Credit Suisse AFW LP Morgan, Lewis & Bockius LLP Bank of America Merrill Lynch Morris, Nichols, Arsht & Tunnell LLP BDT & Co. LLC 5 Goldman Sachs & Co JPMorgan Chase & Co Clifford Chance LLP McDermott Will & Emery LLP Skadden, Arps, Slate, Meagher & Flom LLP

Flipkart Internet Pvt Ltd. Walmart, Inc. $16,000.0 Technology Services Goldman Sachs & C Barclays Plc Allen & Gledhill LLP JPMorgan Chase & Co Allen & Overy LLP Fried, Frank, Harris, Shriver & Jacobson LLP 6 Cyril Amarchand Mangaldas Gibson, Dunn & Crutcher LLP Dentons Rodyk & Davidson LLP Hogan Lovells US LLP Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP Shardul Amarchand Mangaldas & Co. Khaitan & Co. LLP

SCANA Corp. Dominion Energy, Inc. $14,195.7 Utilities Morgan Stanley Credit Suisse 7 RBC Capital Markets Latham & Watkins LLP Kirkland & Ellis LLP McGuireWoods LLP Mayer Brown LLP Morgan, Lewis & Bockius LLP

CYS Investments, Inc. Two Harbors Investment Corp. $12,287.4 Finance Barclays Plc JMP Securities LLC 8 Credit Suisse Sidley Austin LLP Sullivan & Cromwell LLP Vinson & Elkins LLP

General Electric Co. (GE Transportation) Westinghouse Air Brake Technologies Corp. $11,100.0 Distribution Services Dyal Co. LLC Goldman Sachs & Co 9 Morgan Stanley Cleary Gottlieb Steen & Hamilton LLP Davis Polk & Wardwell LLP Jones Day LLP (Texas) Stikeman Elliott LLP

Thomson Reuters Corp. (Thomson Reuters Corp. /F&R Business/) Blackstone Corporate Private Equity $11,000.0 Finance Centerview Partners LLC Bank of America Merrill Lynch Guggenheim Capital LLC Canson Capital Partners I Ltd. Lazard Citigroup The TorontoDominion Bank Goldman Sachs Group, Inc. 10 Allen & Overy LLP JPMorgan Chase & Co Clifford Chance LLP Morgan Stanley Gibson, Dunn & Crutcher LLP Dechert LLP Norton Rose Fulbright LLP Simpson Thacher & Bartlett LLP Torys LLP Weil, Gotshal & Manges LLP Wachtell, Lipton, Rosen & Katz **Total Market Value of Top 10 Deals YTD $287,952.2