DOCSLIB.ORG

Deals, Dollars, and Disputes

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Deals, Dollars, and Disputes Deals, Dollars, and Disputes MAXIMIZING VALUE MINIMIZING RISK A Summary of Private Equity Transactions for the Quarter Ended March 31, 2015 CONTENTS Our Process and Methodology................................................. 1 Summary of Q1 2015 PE Firm Transaction Activity................. 2 Volume and Value of PE Deals Decreased in Q1 of 2015 ............................. 2 Distribution of Deal Values for the Trailing Five Quarters............................ 3 Top 20 PE Firm Transactions by Deal Value Completed During Q1 2015 ............................................................................................................. 5 Acquisitions, Divestitures, and Secondary Buyouts During the Trailing Five Quarters ................................................................... 6 Transaction Analysis by Industry ................................................................... 7 Featured Transactions and Insights ........................................ 8 FCPA Risk Mitigation – International Private Equity Targets ....................... 8 Value Opportunity in Market Reaction to Accounting Issues? ................. 11 Introduction We are pleased to present you with our Deals, Dollars, and Disputes report for the quarter ended March 31, 2015. Our quarterly report involves a study of the merger and and acquisition transactions involving private equity firms (“PE firms”) during the Our Objective recent quarter and over the past five quarters. Our objective in preparing this report is to provide a general overview of the volume and value of transactions during the year along with an analysis of trends when compared to prior periods. As an independent consulting firm with financial and accounting expertise, we are committed to contributing thought leadership and relevant research regarding business and valuation matters to assist our clients in today’s fast-paced and demanding market. This report is just one example of how we intend to fulfill this commitment. We appreciate your comments and feedback and welcome requests for any additional analysis that you might find helpful. Floyd Advisory APRIL 2015 Deals, Dollars, and Disputes | Q1 2015 | Floyd Advisory Our Process and Methodology We studied financial data for transactions involving PE firms, both as buyers and sellers, over the past five quarters for target companies headquartered in North America. As part of our review, we gathered and analyzed relevant transaction information and data such as industry sector, equity interest, and deal structure, and created a database for our further analyses. From this information, we analyzed market trends by industry, common attributes, valuation premiums, and other characteristics. We have prepared this report applying our professional judgment to these analyses. For the purposes of this report, the transaction data we have analyzed is limited to publicly available information. Page 1 Floyd Advisory | Q1 2015 | Deals, Dollars, and Disputes Summary of Q1 2015 The first quarter of 2015 experienced a significant dip in both value and PE Firm Transaction Activity activity compared to the fourth quarter of 2014. Volume and Value of PE Deals Decreased in Q1 of 2015 NORTH AMERICAN PE DEAL LANDSCAPE Trailing Five Quarters as of March 31, 2015 900 $140 ■ No. of Announced Deals ■ No. of Completed Deals Total Value of Completed Deals 800 OF DEALS (in Billions) VALUE TOTAL $120 700 759 743 686 700 $100 651 600 635 624 597 500 539 $80 510 400 $60 NO. OF DEALS 300 $40 200 $20 100 0 $0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Source: Zephyr Note: Includes data for which transaction details were reported and available. The first quarter of 2015 experienced a significant dip in both value and activity compared to the fourth quarter of 2014. The total value of completed deals decreased 24% and both announced and completed deals decreased more than 13% each. Many in the industry anticipated such first-quarter results given the continued climate of high valuations and increasing competition within the merger and acquisition markets. When comparing year-over-year results, this year’s first quarter scored significantly lower in terms of deal activity, but still slightly higher in terms of completed deal value relative to a year ago. In Q1 2015, the value of the top 20 completed North American deals was 33% more than those during the first quarter of 2014, driving at least in part this lower-activity/higher-value trend. Page 2 Deals, Dollars, and Disputes | Q1 2015 | Floyd Advisory Over the last five quarters, there has been an average of eight percent more deals announced than deals completed. Numerous factors including regulatory approval, break-ups, and terminations can explain the variance between deals being announced and those completed. The variance is also partly explained by the difficulties around confirming completions when transactions involve privately-held companies. Distribution of Deal Values for the Trailing Five Quarters The two graphs (shown below and on the next page) illustrate subsets of value, segmenting total quarterly PE acquisitions and PE divestitures, respectively. The transaction data behind the percentages depicted in these graphs does not encompass secondary buyouts, wherein both the buyer and seller groups included PE firms. DISTRIBUTION OF VALUE – PE ACQUISITIONS ■ Less than $50M ■ $50M – $499M ■ $500M – $999M ■ $1B – $2B ■ Greater than $2B “A rising economy and the increased availability of financing continue Q1 12% 43% 28% 17% 0% 2015 to give middle market company founders, and their private equity Q4 partners, reason to sell 2014 8% 37% 8% 35% 13% their companies and take advantage of high exit Q3 multiples.” 2014 9% 25% 14% 29% 23% “Private Equity Gearing up for Exits,” Nasdaq.com, 3/23/2015. Q2 2014 7% 20% 15% 18% 40% Q1 2014 11% 37% 23% 13% 16% Source: Zephyr Note: Includes data for which transaction details were reported and available. Two acquisition trends appear within the North American PE market over the past four quarters. First, there has been a steady decrease in the total value of acquisitions greater than $2 billion. Second, there has been more investment in the lower-middle market range ($50 million to $500 million). High prices and stiff competition could be partly accountable for these trends, but another dynamic may be the abundance of blockbuster deals over the past year. In a recently published article, The Wall Street Journal surmised that the private equity industry is apparently “fresh out of fat targets.”1 This may bear some truth throughout the past quarter, however PE firms are still sitting on sizeable funds awaiting investment. 1 Kessler, A. “The Glory Days of Private Equity are Over”, The Wall Street Journal, 3/29/2015. Page 3 Floyd Advisory | Q1 2015 | Deals, Dollars, and Disputes For PE divestitures, the graph below illustrates a seller’s market that is still thriving. PE firms have been able to part ways with their portfolio companies for sums greater “To be sure, private than $2 billion with relative consistency for the past three quarters. This uninterrupted equity firms will try to streak could be due to sustained low interest rates and strengthening equity markets innovate in their quest resulting in confident buyers. for better performance. But when it comes to fundamental structure, DISTRIBUTION OF VALUE – PE DIVESTITURES few firms will deviate ■ Less than $50M ■ $50M – $499M ■ $500M – $999M ■ $1B – $2B ■ Greater than $2B sharply from what has worked for them for decades. If there is Q1 0% 19% 21% 12% 47% 2015 movement, it will be glacial.” Q4 2014 0% 18% 13% 16% 53% Primack, D. “Private equity is changing slower than you’ve heard,” Fortune, 3/31/2015. Q3 2014 1% 20% 14% 11% 54% Q2 2014 1% 34% 33% 16% 17% Q1 2014 1% 24% 22% 20% 33% Source: Zephyr Note: Includes data for which transaction details were reported and available. Page 4 Deals, Dollars, and Disputes | Q1 2015 | Floyd Advisory Top 20 PE Firm Transactions by Deal Value Completed During Q1 2015 “Petsmart’s $8.7 billion sale to a consortium led by private Deal Value equity firm BC Partners is a big PE Deal Acquiring Entity Target Primary US USD Target Seller year-end coup for hedge fund Role(s) Type (Advisors) SIC Description (in Millions) Jana Partners. The deal is also the second major leveraged $11,184 Buyer, Safeway Inc. Jana Partners LLC, MAJ "AB Acquisition LLC Online groceries retailer, buyout spurred on by the Barry 1 Seller Shareholders (Cerberus Capital Supermarket operator Rosenstein-run activist fund in Management LP)” 2014, after the firm urged the sale of supermarket chain Safeway $8,700 Buyer, Petsmart Inc. Jana Partners LLC, MAJ BC Partners LTD, Online pet supply retailer, in the first half of the year. In 2 Seller Longviews Asset La Caisse de Depot Pet grooming services, Pet hotel Safeway and now Petsmart, Jana Management LLC, et Placement du services, Pet supplies retailer, identified large publicly traded Shareholders Quebecm Stepstone Pet training services, retailers that could be swallowed Group LLC Veterinary services up by private equity firms in spite of their reticence to do $8,100 Buyer, Indcor Properties Inc. The Blackstone Group LP MAJ Global Logistics Warehouses and industrial mega buyouts and doubts about 3 Seller Properties LTD, properties real estate services the ability of banks to finance GIC PTE LTD highly leveraged deals amid new regulations.” $6,205 Seller Rockwood Kohlberg Kravis Roberts & MAJ Albemarle Speciality chemicals 4 Holdings Inc. Company LP, Shareholders Corporation
Load more

Recommended publications
  • Scientific Papers of the University of Pardubice, Series D, 37 (2/2016)
    !"#$ & %& !"#$ & % SCIENTIFIC PAPERS OF THE UNIVERSITY OF PARDUBICE Series D Faculty of Economics and Administration No. 37 (2/2016) Vol. XXIII SCIENTIFIC PAPERS OF THE UNIVERSITY OF PARDUBICE Series D Faculty of Economics and Administration No. 37 (2/2016) Vol. XXIII Registration MK ČR E 19548 ISSN 1211-555X (Print) ISSN 1804-8048 (Online) Contribution in the journal have been reviewed and approved by the editorial board. Contributions are not edited. © University of Pardubice, 2016 ABOUT JOURNAL Scientific Papers of the University of Pardubice, Series D journal aims to be an open platform for publication of innovative results of theoretical, applied and empirical research across a broad range of disciplines such as economics, management, finance, social sciences, law, computer sciences and system engineering with the intention of publishing research results, primarily academics and students of doctoral study programmes in the Czech Republic and abroad. The journal is published every year since 1996 and papers are submitted to review. The paper is included in the List of reviewed non-impacted periodicals published in the Czech Republic, it is also indexed in Scopus, EBSCO Publishing, ProQuest and CNKI Scholar. The journal is published 3x per year. CONTENTS ELECTIONS AND THE TAX STRUCTURE IN THE POST-SOCIALIST EU MEMBER STATES FORMANOVÁ LUCIE, MÁDR MICHAL ....................................................................................................................... 5 ECONOMIC ASPECTS
    [Show full text]
  • Corporate Focus
    September 8, 2016 Corporate Focus Gold Springs Gold-Silver Project, Nevada/Utah, USA Safe, Mining Friendly Jurisdictions www.trimetalsmining.com TSX: TMI & TMI.B US OTCQX: TMIAF & TMIBF TriMetals Mining Inc. – TSX: TMI, TMI.B For Safe Harbor Statement, Qualified Persons and Derivation of Information Refer to Pages 23 and 24 Cautionary Statement on Mineral Resources This Presentation uses the terms 'indicated resources' and 'inferred resources' which are terms recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the United States Securities and Exchange Commission. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will be converted into reserves. Mineral resources that are not mineral reserves, do not have demonstrated economic viability. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that an inferred resource will be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for preliminary economic assessment as defined under NI 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. All dollar figures in this presentation are expressed in United States dollars unless otherwise indicated 2 TriMetals Mining Inc.
    [Show full text]
  • The Perfect Blend? Looking at Private Equity’S Relationship with Family-Owned Businesses
    FUNDING THE FUTure SUMMER 2013 JOURNAL The perfect blend? Looking at private equity’s relationship with family-owned businesses Leading the way Talking Turkey Olympic ambitions New BVCA Chairman Simon Clark We investigate what investment How management teams should be outlines his vision for the year ahead opportunities are emerging in Istanbul learning lessons from London 2012 Introduction Contents Welcome to the fourth edition of the BVCA Journal, in which we introduce a new Chairman and a new Director General It is a huge pleasure to write the Finally, I believe there is more the introduction to this edition of the BVCA BVCA can do to help private equity and Journal. It is the first to be published venture capital houses offer a collective since Mark Florman changed role within message to investors about why this is an the association to become Strategic asset class that deserves their attention Adviser and Industry Ambassador and and a significant share of their money. 10 I had the honour of being appointed I have always been struck by the Director General of the BVCA. sheer diversity of our industry and its I have always This internal leadership transition undertakings. This is reflected in the been“ struck by inevitably involves some change but also extraordinary range of activities that the a very considerable amount of continuity. BVCA team engages in. 24 the sheer Under Mark’s leadership, the BVCA has This edition of the Journal reflects sought to broaden the range of actors this, with a focus on private equity diversity of our with whom it connects, both at home investment in family businesses, a and internationally.
    [Show full text]
  • October 2012 Investment Summary
    Marketing, Media, Technology, and Service Industries M&A & October 2012 Investment Summary Expertise. Commitment. Results. TABLE OF CONTENTS Overview of Monthly M&A and Investment Activity 3 Monthly M&A and Investment Activity by Industry Segment 7 Additional Monthly M&A and Investment Activity Data 26 About Petsky Prunier 34 M&A & INVESTMENT SUMMARY OCTOBER 2012 2 MARKETING, MEDIA, TECHNOLOGY, AND SERVICE INDUSTRIES Transaction Distribution • A to ta l of 310 dldeals worth approxima tltely $6.9 billion were announced in OtOcto ber 2012 • Digital Media/Commerce was the most active and highest value segment with 114 transactions worth approximately $3.2 billion • Strategic buyers announced 137 deals for approximately $3.5 billion (44% of total volume) • VC/Growth Capital investors announced 167 deals for approximately $1. 8 billion • Buyout investors announced six deals for approximately $1.6 billion OCTOBER 2012 BUYER/INVESTOR BREAKDOWN Transactions Reported Value Strategic Buyout Venture/Growth Capital # % $MM % # $MM # $MM # $MM Digital Media/Commerce 114 37% 3,161.9 46% 32 978.9 2 1,590.4 80 592.7 Marketing Technology 81 26% 813.9 12% 31 500.4 0 0.0 50 313.5 Software & Information 59 19% 1,924.0 28% 35 1,610.3 2 0.0 22 313.6 Agency/Consulting 25 8% 376.6 5% 21 326.6 1 40.3 3 9.8 Digggital Advertising 16 5% 119.4 2% 9 82.9 0 0.0 7 36.5 Out-of-Home & Specialty Media 10 3% 544.2 8% 6 25.0 1 0.0 3 519.2 Marketing Services 5 2% 3.2 0% 3 0.0 0 0.0 2 3.2 Total 310 100% 6,943.2 100% 137 3,524.2 6 1,630.7 167 1,788.4 Marketing, Media, Technology,
    [Show full text]
  • Dynacast International Inc. Form 10-K Annual Report Filed 2013-03-15
    SECURITIES AND EXCHANGE COMMISSION FORM 10-K Annual report pursuant to section 13 and 15(d) Filing Date: 2013-03-15 | Period of Report: 2012-12-31 SEC Accession No. 0001193125-13-110261 (HTML Version on secdatabase.com) FILER Dynacast International Inc. Mailing Address Business Address 14045 BALLANTYNE 14045 BALLANTYNE CIK:1540563| IRS No.: 900728033 | State of Incorp.:DE | Fiscal Year End: 1231 CORPORATE PLACE, SUITE CORPORATE PLACE, SUITE Type: 10-K | Act: 34 | File No.: 333-179497-05 | Film No.: 13695104 CHARLOTTE NC 28277 CHARLOTTE NC 28277 SIC: 3360 Nonferrous foundries (castings) 704.927.2790 Copyright © 2014 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF 1934 For the transition period from to Commission File Number 333-179497 DYNACAST INTERNATIONAL INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 90-0728033 (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 14045 Ballantyne Corporate Place, Suite 300, Charlotte, North Carolina 38377 (Address of Principal Executive Offices) (Zip Code) Registrants telephone number, including area code: (704) 927-2790 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
    [Show full text]
  • Gold Springs Gold-Silver Project Nevada/Utah with District Scale Potential and Demonstrating Value of the Escalones Copper-Gold Porphyry Near El Teniente Chile
    Focus: Exploration and Development of the Gold Springs Gold-Silver Project Nevada/Utah With District Scale Potential And Demonstrating Value of The Escalones Copper-Gold Porphyry Near El Teniente Chile September 11, 2017 PHOTO: Looking south down the 5.5 km long Jumbo Structural Trend www.trimetalsmining.com TriMetals Mining Inc. – TSX: TMI Safe Harbor Certain statements contained in this presentation constitute “forward-looking information” under Canadian securities laws (“forward-looking statements”). Forward looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as “will”, “intent”, “estimate”, “potential”, ”contingent”, “plan”, “further”, “believe”, “goal”, “target”, “and similar expressions. These forward-looking statements are based on current expectations and various estimates, factors and assumptions and involve known and unknown risks, uncertainties and other factors. Information concerning mineral resource estimates, preliminary economic assessments, and the interpretation of exploration programs, drill results, including the strength of the mineralization, and metallurgical testing may also be considered as forward-looking statements, as such information constitutes a prediction of what mineralization might be found to be present and economically mineable if and when a project is actually developed. Readers are cautioned not to place undue reliance on these statements as the Company’s actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Company’s business, or if the Company’s estimates or assumptions prove inaccurate.
    [Show full text]
  • Alternative Sources of Business Development: Mezzanine Financing
    ALTERNATIVE SOURCES OF BUSINESS DEVELOPMENT: MEZZANINE FINANCING Sergey Petrovich Sazonov, Irina Alexandrovna Ezangina, Elena Anatolievna Makarova, Natalia Valerievna Gorshkova, Konstantin Dmitrievich Vaysbeyn Abstract: The purpose of the study is to conduct a comprehensive analysis of the nature of mezzanine financing, its pros and cons, role in the system of investment activity in the world practice, as well as to assess the degree of adoption of the tool at the national capital market in Russia. The study lists multiple options of realization and tools of mezzanine financing with private placement. The characteristic features of this type of financial product are listed. Belonging to the mezzanine area of bridge financing is proved, as well as a new mortgage refinancing tool – "factory of mortgage-backed securities." The significance of the use of the mezzanine product in the state support programs abroad, as well as in Russia in the field of residential mortgage lending and co-financing of international transactions, was emphasized. The admissibility of various structures of the transaction and therefore its universality were determined as the basic advantage of mezzanine financing. The subjects of mezzanine capital were described, acting both as a lender and investor due to its specifics. The conclusion emphasized the limited possibilities of the development of mezzanine financing practice in Russia, mediated by the passivity of credit institutions, as well as the imperfection of the legislation regulating loan subordination and mortgage loan securitization. Keywords: Mezzanine financing, Mezzanine loan, Option, Bridge financing, Mezzanine financing fund, Mortgage security, Convertible debt note. JEL Classification: E52, G11, F21, O16. Introduction In the conditions when the banking organizations cannot come to terms with the incurrence of operating losses, while demanding to secure the loan agreement with highly liquid collateral, the offers of alternative loans become inevitable.
    [Show full text]