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European Spring Update May 2014

Thierry Monjauze Managing Director [email protected]

Julien Darmon Managing Director [email protected]

Red Norrie Managing Director [email protected]

Jeffery Perkins Managing Director [email protected]

63 Brook Street London W1K 4HS United Kingdom Phone: +44 20 7518 8900 Bockenheimer Landstrasse 33-35 60325 Frankfurt am Main Germany Phone: +49 69 3650638 00 www.harriswilliams.com www.harriswilliams.de

Quarterly Quick Read

Manufacturing GDP2 Consumer Confidence3 Consumer Prices3 Confidence3 European Economic +1.1% +2.1% +4.2 pts (0.4%) Environment1 Business Energy & Healthcare & ADG4 Consumer Industrials5 TMT6 T&L7 Services Power Life Sciences

Last Quarter 1.5% 6.2% 3.4% 4.6% (0.4%) 5.3% 4.7% 5.6% European Equity Market8 Last Year 20.9% 24.6% 15.4% 25.8% (3.0%) 20.8% 26.7% 27.0% Last 3 Years 44.9% 30.2% 16.6% 18.7% (19.9%) 5.3% 23.3% 21.4% European M&A Deal Volume 0.0% 3.4% 24.3% 30.8% (5.9%) 12.3% 25.0% 15.0% Activity9 Inbound M&A Deal Volume (50.0%) (26.3%) (42.1%) 14.3% 400% 90.0% 16.7% 125.0% to Europe9 Sources: Eurostat, Bloomberg, Markit Economics, S&P Capital IQ • Overall European middle market M&A activity increased by 19.9% in Q1 2014 relative to Q4 2013 with volumes up 7.6% compared with Q1 2013. Capital raised in Europe in Q1 IPOs increased 63% versus 2013, according to Experian data M&A • UK & Eire transactions accounted for the largest share of overall European activity by volume (36%) in the quarter. Both Environment France and the DACH region recorded strong increases in activity (up c. 95% and 66% on Q4 2013, respectively) whilst Italy, Benelux and Scandinavia experienced a minor slowdown in activity • European countries continue to face pressure to increase budget spending and to commit greater resources to develop defense capabilities, particularly in light of increased political tensions in Eastern Europe ADG • Boeing took the lead over Airbus in new orders in Q1 2014, following recent Airbus order cancellations. In Q1 2014, Boeing secured 234 aircraft orders, surpassing 103 orders secured by Airbus • According to Markit Index, Business Services market growth in the Euro area slowed slightly in March 2014, continuing expansion of the market for the eighth successive month, driven by high business confidence and recovery in France and Spain Business Services • The UK services sector growth slowed in Q1 2014, representing the slowest growth since June 2013, although the UK services sector remains firmly in the growth territory • The IPO market for consumer businesses was active, with Poundland raising £375 million, Pets at Home raising £490 million, Ao World raising £423 million, and boohoo.com raising £300 million Consumer • Food price inflation in the UK has reached its lowest point in seven years, driven by food-price wars; Morrisons cut the price of 1,200 products in an attempt to win customers back • In February 2014, industrial production grew by 1.7% year-on-year in the Euro area and by 2.1% in the EU28 Industrials • Exova, a leading laboratory testing services company based in the UK, announced the pricing of its IPO at an implied market capitalisation of approximately £550 million, while Applus, a leading testing inspection and certification company, announced plans to raise €1.1 billion via an IPO in Madrid

• The European oilfield service and equipment M&A market remained active in Q1 2014 with several acquisitions by major Northern European companies, such the acquisition of KRG Industries by Proserv Group and Scanmet by Bergen Group Energy & Power • After limited inbound M&A activity by Non-European buyers in 2013, North American investors in particular have increasingly re-engaged in European M&A in Q1 2014, with 5 transactions, the highest level since Q1 2012

• Montagu Private Equity acquired the Healthcare Devices and Prescription Retail divisions of Rexam PLC in an MBO for $805 Healthcare & Life million Sciences • Cambian Group, a behavioural healthcare services provider backed by GI Partners, announced its intention to float on the LSE • Just-Eat raised c.£360m in an IPO valuing the Company at £1.5bn. Shares rose 9% in its first day of trading however, by the end of April were trading below the issue price. Historic shareholders including SM Trusts, Index Venture and Vitruvian sold TMT a proportion of their shares in the transaction • Worldwide IT spending is forecast to grow 3.2% in 2014, reaching $3.8 trillion, and expected to grow at a CAGR of 3.4% to 2018 reaching $4.3 trillion, largely driven by enterprise software • Germany, for the second time since 2007, leads the World Bank’s 2014 “World Logistics Performance Index”, with the Netherlands, Belgium and the UK in positions 2, 3, and 4, respectively T&L • The European Transport & Logistics M&A market showed an increase in Q1 2014, from a low level. North American buyers exhibited particular interest in European T&L in Q1 2014, with 8 transactions, the highest level since Q3 2012 Notes: For the purposes of this Quarterly Update, Europe is defined as: United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); Evolution calculation based on the quarter finishing 31 March, 2014 (1) For the countries based in the EU27; (2) Year-on-year GDP growth for Q1 2014; (3) PMI, CCI and CPI quarterly growth shown for December 2013 – January 2014; (4) Aerospace, Defence & Government Services; (5) Also includes Building Products and Paper & Packaging; (6) Telecom, Media & Technology; (7) Transportation & Logistics; Also includes Speciality Distribution; (8) For all listed companies based in the countries mentioned above and with a market cap greater than €50m; (9) Change from Q4 2013 to Q1 2014 1 European Economic Climate

• EU-28 GDP grew by 0.4% Q-o-Q in Q4 2013 and by 1.1% on a Y-o-Y basis, according to the latest figures available from Eurostat • The UK economy experienced relatively broad based growth in Q1 2014, expanding by 0.9% over the period, according to the latest estimates from the National Institute of Economic and Social Research • The Eurozone recovery is expected to gather pace in 2014, with GDP forecast to grow by 1.0% in the year, followed by 1.4% in 2015, as exports and domestic demand strengthens

Quarterly Real GDP Growth (% Y-o-Y for EU-28)

% Y-o-Y Growth 6% Key Countries Q4 13A Q4 14E Sweden +3.1% +2.2% 4% UK +2.7% +2.6%

2% Germany +1.4% +2.3% France +0.8% +0.6% 0% Netherlands +0.8% +1.2% Spain (0.1)% +0.7% (2%) Italy (0.9)% +0.6%

(4%)

(6%) Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14E Q3 14E Q1 15E Q3 15E Q1 16E Q3 16E Source: Eurostat, latest available data as of April 14th, 2014 • Latest estimates indicate that the Eurozone Composite Purchasing Managers Index increased to 53.2 in March from 52.1 in December, maintaining levels indicating growth (>50) • Industrial production in the Eurozone grew by 0.2% in February compared to January, driven by growth in intermediate goods, non-durable consumer goods and electronic component manufacturing • Consumer confidence continued to improve in March with the Eurozone Consumer Confidence Indicator increasing by 4.2 points relative to December 2013 • The European Central Bank kept interest rates at the record low of 0.25% in March and hinted that further rate cuts could take place in order to counter further strengthening of the Euro • Eurozone inflation fell to 0.5% in March 2014, its lowest level since November 2009, raising expectations of intervention by the European Central Bank • The Eurozone unemployment rate remained stable at 11.9% in February, with youth unemployment of 22.9%, a decrease of 0.7% compared to November 2013

European Manufacturing Confidence European Consumer Confidence

10% 60 20 10%

10 5%

M) 5% 55

- o - 0 0%

0% 50 (10) (5%)

(20) (10%) PMI Index Value Index PMI

(5%) 45 ConsumerIndex Price (%)

ConsumerConfidence Indicator Change in PMI (M PMI Change in (30) (15%)

(10%) 40 (40) (20%) Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 (1) (2) (3) Change (M-o-M %) Eurozone PMI CCI CPI Y-o-Y %

Sources: Bloomberg, Markit Economics, S&P Capital IQ Notes: (1) Purchasing Managers’ Index – A figure above 50 indicates economic growth, and below 50 indicates decline; (2) European Commission Consumer Confidence Index Eurozone; (3) Consumer Price Index 2 European M&A Environment

Market Observations

• European middle market M&A activity increased by c. 20% in Q1 2014, compared to Q4 2013 with overall transaction volumes up 7.6% Y-o-Y • TMT and Consumer were the two most active sectors, accounting for approximately 55% of total deal volume, with Q-o-Q growth of 25.0% and 24.3%, respectively • Senior loan volume for European LBOs in Q1 2014 increased to circa €8.1 billion, up from €7.9 billion during the same period in 2013 • The average purchase price multiple in the first quarter (TTM EBITDA basis) for European LBOs with an Enterprise Value of €250m or less was 7.7x EBITDA, an increase of 10.1% on the average for 2013 • Equity contribution1 in European LBOs averaged 54% during Q1 2014, compared to 44%, during the full year 2013 Source: S&P Leveraged Commentary & Data Notes: (1) Equity contribution including retained equity/vendor financing and contributed equity Middle Market M&A Activity – By Sector

Q1 - 14 Change of 1,500 Sector Q1 - 14 over Breakdown Q1 - 13

ADG 0.5% 150.0% 1,200

Energy & Power 1.7% (5.9%)

900 Transportation & Logistics 4.9% (14.8%)

Healthcare 8.7% 6.5%

600

Business Services 13.0% 3.4% Number ofTransactions Number Industrials 16.3% 12.5% 300 Consumer 22.9% 5.9%

TMT 31.9% 12.8% 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Total 100.0% 7.6% Source: S&P Capital IQ Note: Includes closed M&A transactions of majority stakes only, where deal value was undisclosed or between €25m – €650m, within United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland)

Buyer Segmentation Q1 20141 Transactions by Target Country2

100% 5% 3% 6% 8% Italy 7% 11% 8% 80% 12% Benelux3 14%

16% Spain 939 10% 60% Middle Market 4 15% Scandinavia Transactions 21% 40% France

5 DACH 89% 20% 41% 36%

UK & Eire

Strategics Financials 0% Q4-13 Q1-14 Source: S&P Capital IQ Notes: (1) Strategic buyers may include portfolio companies of private equity groups; (2) By volume; (3) Benelux defined as Belgium, the Netherlands and 3 Luxembourg; (4) Scandinavia defined as Denmark, Norway, Sweden and Finland; (5) DACH defined as Germany, Austria, Switzerland European Inbound M&A Environment

Market Observations • International inbound M&A volume into Europe increased by 30% Y-o-Y with 139 closed transactions, reaching the highest level since Q2 2012 • The ADG and Energy & Power sectors attracted the highest relative level of international inbound M&A investment, with international acquirers accounting for 60% and 31% of completed transactions in the quarter, respectively • The Healthcare and Transportation & Logistics sectors recorded the greatest Q-o-Q increases in inbound M&A volume • North American groups accounted for 85% of transactions completed with non-European buyers, closing 111 transactions in the quarter. Asian groups, excluding China and India, were the second most active buyers, closing 11 transactions in the quarter

Acquisitions by Non-European Buyers1,2

200 10,000

8,000

150 m)

6,000 € 100

4,000 Deal Value ( ValueDeal 50 Number ofTransactions Number 2,000

0 0 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 International Activity by Number International Activity by Value Non-European Buyers by Country Q1 141,2

Asia (excl. China & India) 8% Africa & Middle East 2% India 2% China 2%

South America 1%

North America 85%

Non-European Buyers as a Percentage of Sector Deal Volume1,2,3

% of Total Deal Volume Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 ADG 0% 29% 25% 67% 50% 13% 30% 40% 60% Business Services 10% 8% 5% 10% 10% 15% 11% 18% 16% Consumer 9% 9% 6% 8% 8% 8% 8% 11% 5% Industrials 8% 11% 10% 9% 11% 12% 10% 12% 10% Energy & Power 19% 8% 7% 13% 18% 36% 16% 6% 31% Healthcare 15% 16% 14% 6% 9% 11% 20% 14% 23% TMT 16% 18% 21% 18% 20% 17% 24% 20% 19% Transportation & Logistics 5% 5% 10% 3% 0% 9% 6% 10% 20% Source: S&P Capital IQ Notes: (1) Includes closed M&A transactions of majority stakes only, where deal value was undisclosed or between €25m – €650m, within United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (2) International buyer defined as from outside Europe; (3) By volume 4 Aerospace, Defence & Government Services

European ADG Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 0.1% 2.8% 4.8% NA 30.2% (1.9%) (10.9%) Cash on Balance Sheet (€ bn) 8.7 5.9 0.2 NA 1.5 8.0 0.1 Net Debt / LTM EBITDA Multiple 1.0x 0.7x 0.8x NA NM NM NM LTM EBITDA Multiple 8.5x 13.5x 9.3x NA 9.3x 16.9x 14.2x Change since last quarter (1.0x) (0.6x) 0.8x NA 1.3x (0.2x) 3.8x LTM EBITDA Margin 14.7% 9.7% 9.4% NA 6.0% 7.0% 9.1% Consensus 2Yr Fwd Revenue Growth (p.a.) 3.8% 5.0% 6.0% NA (3.2%) 3.7% 3.2%

European ADG Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

16 5 14 4 12

10 3 8 6 2 4

1 NumberofTransactions Numberof Transactions 2

0 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

Selected European ADG M&A

Target Country Acquirer Country Sub Sector EV (€m) APPH Wichita Heroux-Devtek Aerospace Components 89 Elektro-Metall Export TransDigm Group Aerospace Components 34

Race Completions Specialist Technologies Aerospace Components NA Alkan TCR Capital; Groupe IDI Defense Components NA DutchAero K.M.W.E. Precisie Eindhoven Aerospace Components NA

Market Observations • Boeing took the lead over Airbus in new orders in Q1 2014, following recent Airbus order cancellations. Boeing secured 234 aircraft orders, surpassing 103 orders secured by Airbus. Airbus led the way in 2013, having secured 1,619 jet orders compared to Boeing’s 1,355 • The global air travel market expanded by 6.9% in the first two months of 2014 compared to the same period in 2013, while European air travel grew by 6.4% over the same period, supported by an improving economic environment • The global commercial airline industry is forecast to generate net profit of $18.7bn in 2014, up from $12.9bn in 2013, representing an increase of 45% • The European Parliament voted to exempt international flights from paying for their carbon emissions following intense pressure from national governments not to extend current rules beyond domestic air travel • European countries continue to face pressure to increase budget spending on defence in light of increased political tensions in Eastern Europe. The US has encouraged its European NATO allies to commit greater resources to develop defence capabilities • Safran entered into an agreement to acquire Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions Business of Eaton Corporation for $270 million Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Aerospace, Defence, & Government Services companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, 5 CFO or Chairman Business Services

European Business Services Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 5.6% 11.0% 6.8% NM 48.3% 1.4% 3.7% Cash on Balance Sheet (€ bn) 4.9 8.4 4.6 0.3 0.0 1.2 NM Net Debt / LTM EBITDA Multiple 1.3x 1.0x 1.4x 9.2x 14.9x 2.2x 2.3x LTM EBITDA Multiple 10.5x 8.1x 10.2x NM 4.2x 13.3x 11.5x Change since last quarter (0.8x) 1.1x (0.6x) NM NM 1.7x 0.9x LTM EBITDA Margin 10.7% 8.7% 5.3% 8.3% 2.0% 5.0% 10.5% Consensus 2Yr Fwd Revenue Growth (p.a.) 5.4% 4.6% 4.4% 6.7% 15.4% 8.7% 6.1%

European Business Services Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

250 20

200 15

150 10 100

Numberof Transactions Numberof Transactions

Selected European Business Services M&A

Target Country Acquirer Country Sub Sector EV (€m) Aktiv Kapital Portfolio Recovery Associates Financial Services 950

Marlin Financial Group Cabot Credit Management Group Financial Services 380

Rentokil Initial, Facilities Business Interserve Facility Management 304

ISS Espaces Verts Chequers Capital Facility Management 130

BRFkredit Jyske Bank Financial Services 45

LAS Claims Management Innovation Group Facility Management 43

Zenith Vehicle Contracts HgCapital Fleet Management NA

Chaucer Group Growth Capital Partners Professional Services NA

Alfakonsult Sweco Professional Services NA

Gout International Landmark Global Distribution NA

Desplat Paprec Waste Management NA

Market Observations • Business services market growth in the Euro area slowed slightly in March 2014. The Markit Services Business Activity Index fell to 52.2 in March, compared to 52.6 in February but still represented continuing expansion of the market for the eighth successive month, driven by high business confidence and recovery in France and Spain • UK services sector growth also slowed in Q1 2014 with the Markit Index falling to 57.6 in March, compared to 58.2 in February. This was the fifth month in a row the index had fallen and represented the slowest growth since June 2013, although the UK services sector remains firmly in growth territory • In its report, the European Commission identified the business services sector as crucial for growth in Europe's economy. As part of the Europe 2020 Strategy, the proposed action plan includes the completion of the single market for services, seizing international opportunities and developing the right skills and technological infrastructure needed by European companies • Management moves3: Aggreko, De La Rue, Domestic & General, Johnson Service, Serco Group, Telegate Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Business Services companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman 6 Consumer

European Consumer Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 3.4% 3.1% 1.9% -% 11.0% 3.1% 4.2% Cash on Balance Sheet (€ bn) 25.1 37.9 28.0 5.4 4.4 NM NM Net Debt / LTM EBITDA Multiple 1.9x 1.6x 1.3x 2.8x 2.3x 1.6x 2.2x LTM EBITDA Multiple 10.4x 7.9x 9.5x 11.0x 9.5x 9.2x 9.9x Change since last quarter (0.0x) (0.3x) 0.7x 0.8x 0.5x (0.1x) 0.1x LTM EBITDA Margin 13.2% 10.6% 10.5% 14.1% 10.4% 10.5% 9.2% Consensus 2Yr Fwd Revenue Growth (p.a.) 4.0% 3.6% 5.1% 4.6% 4.8% 4.1% 4.5%

European Consumer Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

400 35

350 30

300 25 250 20 200 15 150 10

100 Numberof Transactions Numberof Transactions 50 5 0 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14

North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

Selected European Consumer M&A Deals

Target Country Acquirer Country Sub Sector EV (€m) Nidera COFCO Corporation Agri Products c.2,900 Kurt Geiger Sycamore Partners Apparel c.1,600 Diana Group Symrise Processed Food c.1,300 Nuova Castelli Charterhouse Processed Food 300 Mr. Bricolage Kingfisher Retail 275 Premier Foods (Hovis) The Gores Group Processed Food 106 Izico Bocholt Egeria Processed Food 68 Loch Lomond Distillery Exponent Private Equity Beverage NA Lutosa Retail Findus Group Processed Food NA MEC3 The Riverside Company Processed Food NA The Gym Pure Gym Leisure NA

Market Observations • The IPO market for consumer businesses was active, with Poundland raising £375 million in an IPO valuing the Company at £750 million, Pets at Home raising £490 million at a valuation of £1.2 billion, Ao World raising £423 million at a valuation of £1.6 billion, and boohoo.com raising £300 million at a valuation of £560 million • Mars acquired Procter & Gamble’s pet food brands, including Iams, Eukanuba and Natura, for $2.9 billion • Despite the Europe-wide trend towards lower spend in grocery shopping, private label and discount stores have lost market share in France, which dropped 0.8 and 0.6 percentage points in 2013, respectively, while private label products have continued to gain market share • Food price inflation in the UK has reached its lowest point in seven years, as food-price wars continue to drive more promotions and lower prices in efforts to gain market share; Morrisons cut the price of 1,200 products in an attempt to win customers back • The number of UK consumers using “Click and Collect” services is expected to increase from 35% of online shoppers to 76% in 2017, as customers look to avoid delivery costs and inconvenient delivery times • Management moves3: AG Barr, Burberry, Co-Operative Group, Creston, Kuoni, Mulberry, Tesco, The Restaurant Group Sources: S&P CapitalIQ, Bloomberg, Retail Gazette, Food and Drink Europe, Kantar Worldpanel, Company Press Releases Notes: (1) Based on HW&Co. indices including the most relevant Consumer companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The 7 Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Industrials

European Industrials Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 0.7% 10.4% 2.1% 5.0% 19.7% 7.1% 6.1% Cash on Balance Sheet (€ bn) 8.0 33.4 36.6 11.7 6.8 6.5 NM Net Debt / LTM EBITDA Multiple 1.2x 1.7x 1.3x 4.5x 2.9x 1.7x 1.9x LTM EBITDA Multiple 10.8x 8.4x 8.8x 8.5x 8.9x 9.0x 11.9x Change since last quarter 0.2x 0.4x (0.3x) (1.2x) (0.1x) (1.0x) 0.9x LTM EBITDA Margin 12.1% 9.7% 9.0% 10.2% 10.4% 8.7% 9.3% Consensus 2Yr Fwd Revenue Growth (p.a.) 5.0% 3.5% 5.4% 3.4% 4.8% 4.5% 5.9% European Industrials Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

250 25

200 20

150 15

100 10

50 5

NumberofTransactions Numberof Transactions

Selected European Industrials M&A Target Country Acquirer Country Sub Sector EV (€m)

Rautaruukki SSAB Steel 16,227

Foster Wheeler AMEC Construction & Engineering 2,752

Avincis Mission Critical Services Babcock International Diversified Services 1,625

Sulzer Metco Management Oerlikon Balzers Coating Industrial Machinery 1,000

Fandstan Electric Wabtec Electrical Equipment 215

Market Observations • In February, seasonally adjusted industrial production rose by 0.2% month-on-month in the euro area (EA18) and by 0.4% in the EU28 according to according to estimates from Eurostat − February 2014 showed year-on-year growth in industrial production of 1.7% in the euro area and 2.1% in the EU28 • In March, the Economic Sentiment Indicator (ESI) increased by 1.2 points in the euro area (to 102.4), while remaining broadly flat in the EU (a marginal increase of 0.3 points to 105.3) • According to Eurostat’s April estimate, real GDP in the euro area will grow by 0.6% in the first quarter of 2014 and 0.4% in the second quarter • Two of the major European testing services companies, Exova (UK) and Applus (Spain) announced the pricing of their planned initial public offerings at market capitalisations of £550 million and €1.1 billion, respectively. • Alstom has accepted General Electric's €12.4bn offer to buy its energy division despite a government outcry over the deal. However, the group is prepared to consider a counter-bid from Siemens • Onex Corporation and CPPIB announce the sale of Gates Corporation, a division of Tomkins, to the Blackstone Group for US$5.4 billion • Management moves3: Aggreko, Augean, Ballast Nedam, BE Group, CRH, De La Rue, DMG Mori Seiki, FLSmidth, Geberit, Indutrade, ITM Power, Johnson Service Group, Kier Group, KONE, Koninklijke Philips, Manitou Group, Orkla, Sensata Technologies, Serco Group, Speedy Hire, Systemair, Vossloh Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Industrials companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The 8 Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Energy & Power

European Energy & Power Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter (6.8%) 12.6% 3.8% 11.3% 20.6% 1.3% (4.2%) Cash on Balance Sheet (€ bn) 27.5 33.8 10.8 19.6 15.1 12.9 16.7 Net Debt / LTM EBITDA Multiple 0.9x 1.8x 1.8x 3.2x 2.9x 4.9x 3.2x LTM EBITDA Multiple 6.7x 5.4x 7.5x 8.8x 6.6x 12.2x 8.2x Change since last quarter (0.6x) (0.2x) (0.6x) 1.2x (0.4x) 0.2x 0.0x LTM EBITDA Margin 18.0% 17.5% 11.2% 21.4% 13.5% 34.0% 31.8% Consensus 2Yr Fwd Revenue Growth (p.a.) 9.5% 1.9% 2.9% 3.8% (0.5%) 0.5% 8.5%

European Energy & Power Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

45 6 40 5 35 30 4 25 3 20 15 2

10 NumberofTransactions

NumberofTransactions 1 5 0 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

Selected European Energy & Power M&A3 Target Country Acquirer Country Sub Sector EV (€m) RWE Dea AG LetterOne Group Exploration and Production 5,100

Shelton Petroleum Petrogrand Exploration and Production 51

Reef Subsea HitecVision Subsea Services 22

Cubility Triton Partners Oilfield Equipment NA

Applied Drilling Technology International Sun Capital Partners Offshore Services NA

Scanmet Bergen Group Offshore Services NA

KRG Industries Proserv Group Oilfield Equipment NA

Market Observations • The European oilfield service and equipment M&A market remained active in Q1 2014 with several acquisitions by major Northern European construction, service, and oil & gas companies. Proserv Group acquired KRG Industries, a precision engineering company for oil & gas while Bergen Group acquired the Norwegian oil & gas decommissioning specialist Scanmet • After limited inbound M&A activity by Non-European buyers in Q4 2013, North American investors in particular increasingly re-engaged in European M&A activity in 2014, with 5 transactions • European and US-based private equity demonstrated strong interest in the sector with Triton Partners acquiring Cubility, HitecVision acquiring Reef Subsea and Sun Capital Partners acquiring Applied Drilling Technology International • The largest transaction during Q1 2014 was LetterOne Group, a Luxembourg-based investment company's acquisition of RWE Dea, a crude oil and natural gas exploration & production company, from RWE AG • Management moves4: Pacific Drilling, Rockhopper Exploration, comScore, Fortum Oyj, Premier Oil, Xcite Energy, Centralschweizerische Kraftwerke, Centrica, BowLeven

Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Energy & Power companies for each country (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Includes 9 acquisitions of majority stakes only (4) Resignation or appointment of CEO or CFO Healthcare & Life Sciences

European Healthcare & Life Sciences Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 0.5% 14.0% 2.4% 1.7% 12.8% 14.1% 3.6% Cash on Balance Sheet (€ bn) 18.2 10.7 16.0 0.9 0.5 1.5 NM Net Debt / LTM EBITDA Multiple 1.3x 1.0x 2.0x 1.5x 1.1x 2.1x 1.5x LTM EBITDA Multiple 12.5x 10.4x 12.0x 15.7x 9.9x 16.9x 12.1x Change since last quarter (0.1x) (0.5x) (0.0x) (1.7x) 0.2x 1.7x (2.8x) LTM EBITDA Margin 21.0% 12.1% 15.6% 15.4% 16.2% 14.9% 14.5% Consensus 2Yr Fwd Revenue Growth (p.a.) 8.6% 8.6% 6.2% 7.7% 9.3% 5.8% 8.4% European Healthcare & Life Sciences Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

120 20 18 100 16

80 14 12 60 10 8 40 6

4 Numberof Transactions 20 Numberof Transactions 2 0 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East Selected European Healthcare & Life Sciences M&A

Target Country Acquirer Country CountrySub Sector EV (€m) Rexam (Devices and Packaging Divisions) Montagu Private Equity Pharmaceuticals 580

ARKOPHARMA Laboratories Montagu Private Equity Pharmaceuticals 300

Activaero Vectura Group Healthcare Equipment 134

BioFocus DPI / Argenta Charles River Laboratories Biotechnology 134

BERCHTOLD Stryker Corporation Healthcare Equipment 124

Benson Group Graphic Packaging Healthcare Equipment 119

Arseus NV (Five Businesses) Henry Schein Healthcare Technology 50

AQTIS Medical Sinclair IS Pharma Healthcare Equipment 47

Vitalitec International Peters Surgical SAS Healthcare Equipment 40

4-Antibody Agenus Biotechnology 37

DORC Montagu Private Equity Healthcare Equipment NA

Market Observations • Pfizer, the American pharmaceutical group, has made a tentative approach to AstraZeneca, the UK pharmaceutical group, about a possible takeover valuing the Company at more than £60 billion • GI Partners-backed Cambian Group, a behavioural healthcare services provider, announced its intention to float on the LSE. The listing is expected to value the Company at around £400 million and will raise gross proceeds of approximately £200 million • Nestlé acquired the remaining 50% stake in Galderma Pharma, a medical dermatology solutions and therapeutic skin care products manufacturer, which had previously been structured as a JV with L'Oreal SA, for €2.7 billion • Vidara Therapeutics, a specialty pharmaceutical company, was acquired by Horizon Pharma for $660 million • Management moves3: bioMérieux SA, Curanum AG, Merck, Nicox SA, Shire Plc, Stallergenes and UCB

Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Healthcare & Life Sciences companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux 10 (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Technology, Media & Telecom

European Technology, Media & Telecom Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 2.5% 12.1% 4.9% 3.9% 17.8% 2.8% 2.2% Cash on Balance Sheet (€ bn) 21.5 22.9 21.1 11.3 7.3 16.2 NM Net Debt / LTM EBITDA Multiple 1.5x 1.0x 1.0x 2.4x 3.5x 1.9x 1.2x LTM EBITDA Multiple 12.3x 9.1x 11.3x 11.8x 11.0x 11.2x 9.2x Change since last quarter 0.2x 0.8x (0.0x) (1.5x) 1.4x 0.6x (0.3x) LTM EBITDA Margin 16.3% 11.1% 10.0% 8.6% 11.6% 20.2% 11.2% Consensus 2Yr Fwd Revenue Growth (p.a.) 5.7% 4.9% 7.2% 7.7% 4.7% 4.0% 6.0%

European Technology, Media & Telecom Middle Market M&A Activity M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2 400 80 350 70 300 60 250 50 200 40 150 30

100 20 Numberof Transactions 50 NumberofTransactions 10 0 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

Selected European Technology, Media & Telecom M&A

Target Country Acquirer Country Sub Sector EV (€m) Ziggo Liberty Global Telecoms c.10,000 ONO Vodafone Telecoms c.7,200 Nets Holding Advent International / Bain Capital IT Services c.2,280 Groupe Steria Sopra Group IT Services 730 Callcredit GTCR IT Services 583 CarTrawler BC Partners / Insight Ventures Digital Media 450 Octo Telematics Renova Group IT Services 405 NaturalMotion Zynga Software 389 Avantia ECI Partners Fintech 70 Performance Interactive Alliance Equistone Parters Media NA Trader Media Group Apax Partners Media NA

Market Observations • Time Warner Cable has been acquired by Comcast for $45.2 billion, representing a 1-month premium of 16.8% • Facebook acquired Whatsapp for c.$19 billion in order to expand their presence and user base in mobile • Rakuten acquired Viber for $900 million in order to expand the distribution channel for its digital products • Just-Eat raised c.£360m in an IPO valuing the Company at £1.5bn. Shares rose 9% in its first day of trading however by the end of April were trading below the issue price. Historic shareholders including SM Trusts, Index Venture and Vitruvian sold a proportion of their shares in the transaction • Worldwide IT spending is forecast to grow 3.2% in 2014, reaching $3.8 trillion, and is expected to grow at a CAGR of 3.4% to 2018, reaching $4.3 trillion in annual spend largely driven by enterprise software • Mobile services revenue in Europe is expected to be $454 billion in 2014 and grow at a 1.4% CAGR to reach $480 billion in 2018, driven by data services. Growth is offset by declines in legacy voice services • LTE connections in the UK are expected to grow from 4.3 million registered lines in 2013 to 33.1 million in 2017, as the UK and Germany work together to develop 5G technology and other M2M solutions • Management moves3: Atea, Cable & Wireless Communications, Cineworld, Millicom, Nokia and UBM Sources: S&P CapitalIQ, Gartner, Yankee Group, Company Press Releases Notes: (1) Based on HW&Co. indices including the most relevant Technology, Media & Telecom companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux 11 (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Transportation & Logistics

European Transportation & Logistics Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 4.3% 12.9% 5.6% 2.6% 14.3% (0.5%) 1.6% Cash on Balance Sheet (€ bn) 5.9 24.8 61.1 9.4 25.8 1.6 NM Net Debt / LTM EBITDA Multiple 1.7x 2.0x 3.5x 4.7x 2.7x 2.4x 3.6x LTM EBITDA Multiple 7.5x 9.7x 8.4x 10.5x 10.5x 9.3x 8.3x Change since last quarter (0.7x) 0.8x (1.4x) 0.7x (0.6x) (1.8x) (0.6x) LTM EBITDA Margin 10.9% 8.4% 13.9% 42.7% 20.2% 9.5% 10.0% Consensus 2Yr Fwd Revenue Growth (p.a.) 4.3% 4.4% 3.8% 1.7% 4.0% 3.5% 5.8%

European Transportation & Logistics Middle Market M&A Activity

M&A Deals by Country of Target2 Acquisitions by Non-European Buyers2

120 10 9 100 8 7 80 6 60 5 4 40 3

2 NumberofTransactions 20 Numberof Transactions 1 0 0 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 North America Asia (excl. China & India) China

UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

Selected European Transport & Logistics M&A3

Target Country Acquirer Country Sub Sector EV (€m) Norwegian Car Carriers J.P. Morgan Asset Management & Klaveness Invest Transport Logisitics 56

Kerpen & Kerpen HeidelbergCement Transport Logisitics 35

Wallaces of Ayr C&C Group Beverage Distribution NA

European Food Transport Bakker Logistiek Groep Transport Logisitics NA

Pocketstället CapTech Distribution Media Distribution NA

Lehtipiste Sponsor Capital Media Distribution NA

Polar Speed Distribution United Parcel Service Pharmaceuticals Distribution NA

NACCO CIT Group Railcar Lessor NA

Stef, Logistics Activities in Scotland DFDS Logistics Logistics Services NA

EDT SDV Logistique Internationale Transport Logisitics NA

Market Observations • Germany, for the second time since 2007, leads the World Bank’s 2014 “World Logistics Performance Index”. The World Bank ranks logistics markets by parameters among others such as infrastructure, customs, logistics competence, and timeliness. The Netherlands, Belgium, and the UK gained positions 2, 3, and 4, respectively • The EU Parliament voted against cross-border traffic of 25m-plus road trains. The Parliament calls on the Commission to research safety, congestion, and infrastructure issues beforehand • The European Transport & Logistics (“T&L”) M&A market showed an increase in Q1 2014, albeit from a low level • North American buyers demonstrated significant interest in the sector in Europe, with 8 in-bound transactions, the highest since Q3 2012. Significant examples included the acquisition of France-based railcar lessor NACCO by the NYSE listed CIT Group and the acquisition of pharmaceuticals distributor Polar Speed Distribution by United Parcel Service (UPS)

Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Transport & Logistics companies for each country (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Includes acquisitions of majority stakes only 12 Featured Theme

Key Trends in Technology, Media & Telecom European TMT M&A activity rose 25% in Q1 2014, with 300 closed transactions, the highest level since Q3 2012. Notable trends in the industry include: − Global mobile advertising spending is forecast to reach $18.0bn in 2014, growing c.7% over 2013, while mobile value added services revenues are expected to grow at a CAGR of 10% from 2013 to 2018 − During the quarter, Brandstone, an Ireland-based mobile marketing company focusing Mobile on developing and emerging markets, received €14m funding from Syngenta Ventures, Marketing Unilever Ventures and Verlinvest; Pozitron Yazilim, a Turkey-based mobile banking, payments and commerce solutions provider, was acquired by Monitise for £60m − HW&Co. advised on the sale of Upstream, a leading emerging markets mobile monetisation company, to Actis Capital

− IT Operations Management software spending is forecast to grow at c.7% annually through 2016, driven by increasing demand for comprehensive solutions and emergence of cloud and virtualisation Infrastructure − During the quarter, Axway Software acquired 66% stake in Systar, a publicly listed Software performance management software provider, for €34m; Network Automation, a business process automation software solutions provider, was acquired by Help/Systems − HW&Co. is advising on the planned sale of ORSYP, a global IT automation and optimisation software solutions provider, to EQT

− Enterprise software revenue is forecast to increase by 6.9% to $320bn in 2014, driven by increased interest in social software, database technologies and data management technologies − During the quarter, Court Square Capital Partners and management acquired a majority Enterprise stake in AFS Technologies, a provider of integrated business enterprise and on-demand Software software solutions; WABCO Europe acquired Transics International, a provider of fleet management solutions for the transport and logistics sectors, for €100m − HW&Co. advised on the sale of ECi Software Solutions, leading ERP business management and e-commerce systems software provider, to Carlyle Group

European TMT M&A Deals (46%) 25% 500 450 431 383 400 369 349 343 350 331 327 300 300 276 266 263 240 250 233 200 150 100 50 25% 0 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Source: S&P Capital IQ Note: Includes closed M&A transactions of majority stakes only, where deal value was undisclosed or between €25m – €650m, within the United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland) HW&Co. Selected Recent Technology, Media & Telecom Transactions

a portfolio company of a portfolio company of a portfolio company of has received a is in exclusive significant strategic and and discussions with investment from has been acquired by has been acquired by has been acquired by a portfolio company of

13 Contacts and Disclosures

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