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Private Equity In Volume 1• Issue 1 Private equity Bill Curbow leads the global panel • Interviews in 19 key jurisdictions Cross border transactions • Inside track • Trends for 2014 www.gettingthedealthrough.com Corporate counsel? Register for free access at www.gettingthedealthrough.com/in-house GTDT IFC ad August 2014 copy.indd 1 04/09/2014 14:38 Publisher: Gideon Roberton Senior business development manager: Adam Sargent [email protected] Product manager: Rachel Nurse Marketing assistant: Sophie Pallier [email protected] Head of production: Adam Myers Editorial assistant: Eve Ryle-Hodges Welcome to GTDT: Market Intelligence. Senior subeditor: Caroline Rawson Senior production editor: Amie Retallick This first issue focuses on the global private equity markets. Production assistant: Nathan Clark Getting the Deal Though invites leading practitioners to reflect on evolving legal Cover: and regulatory landscapes. Through engaging and analytical interviews, featuring a Chad Baker/Photodisc/Thinkstock uniform set of questions to aid in jurisdictional comparison, Market Intelligence offers an opportunity for readers to gain closer insight into key markets and legal jurisdictions. No photocopying. CLA and other agency licensing systems do not apply. For an Market Intelligence is available in print and online at www.gettingthedealthrough.com. authorised copy contact Adam Sargent, tel: +44 20 7908 1193 Getting the Deal Through This publication is intended to provide London general information on law and policy. The September 2014 information and opinions which it contains are not intended to provide legal advice, and should not be treated as a substitute for specific advice concerning particular situations (where appropriate, from local advisers). Law In this issue Business Global trends ........................................................................................2 Research Australia ...............................................................................................4 Brazil ..................................................................................................10 Published by Law Business Research Ltd Canada ...............................................................................................17 87 Lancaster Road China ��������������������������������������������������������������������������������������������������24 London, W11 1QQ, UK Denmark .............................................................................................30 Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 Germany ���������������������������������������������������������������������������������������������36 ©2014 Law Business Research Ltd India ���������������������������������������������������������������������������������������������������42 ISSN: 2056-9025 Indonesia ............................................................................................49 Italy ����������������������������������������������������������������������������������������������������55 Japan ..................................................................................................60 Strategic Research Sponsor of the Korea ..................................................................................................66 ABA Section of International Law Mexico ������������������������������������������������������������������������������������������������70 Netherlands ���������������������������������������������������������������������������������������� 76 Russia .................................................................................................82 Spain ..................................................................................................88 Printed and distributed by Sweden ...............................................................................................95 Encompass Print Solutions Switzerland .......................................................................................100 Tel: 0844 2480 112 United Kingdom ���������������������������������������������������������������������������������107 United States ������������������������������������������������������������������������������������� 113 GLOBAL TRENDS William E Curbow is a partner at Simpson Thacher & Bartlett LLP and a member of the firm’s corporate department where he concentrates on mergers and acquisitions. He recently represented Vodafone Group in the US$130 billion sale of its 45 per cent stake in Verizon Wireless to Verizon Communications – the third-largest M&A transaction in history. Bill also frequently represents Simpson Thacher’s private equity clients in transactional matters – in particular, First Reserve, a global private equity and infrastructure investment firm exclusively focused on investments across the energy spectrum. Other clients include L-3 Communications, Crestwood Midstream Partners and Genesee & Wyoming. Here, Curbow and fellow Simpson Thacher Panel Leader William partners Atif Azher and Jason Herman look Curbow, Simpson at developments in private equity markets Thacher & Bartlett LLP around the world. GLOBAL TRENDS WILLIAM CURBOW, ATIF AZHER AND JASON HERMAN OF SIMPSON THACHER & BARTLETT LLP Global M&A activity levels have Americas been at near-record levels in the first M&A deal volume announced in the first half of 2014 in the Americas totalled half of 2014, having increased by approximately US$866 billion, reflecting an increase of 63.7 per cent from approximately 73 per cent relative to the first half of 2013. US-based buyout transactions totalled approximately the first half of 2013 and representing US$80.1 billion in the first half of 2014, which represented approximately 43.8 per cent of all buyouts in the first half of 2014 as compared to US-based buyouts approximately US$1.8 trillion of representing nearly 53.5 per cent of all buyouts in the same period last year. deal volume. Worldwide private Though buyout activity is slightly lagging, Pitchbook reported that United States equity buyout transaction activity also private equity investors invested nearly US$244 billion of capital in the first increased, though not at the same half of 2014 as compared to US$192 billion of capital in the first half of 2013. In pace. There were 109 more private addition, the number of private equity deals that closed in the United States in equity buyouts in the first half of 2014 the first half of 2014 increased to 1,272 as compared to 1,187 in the first half of 2013. Notable private equity transactions in the Americas in the first half of 2014 as compared to 2013, amounting to include: the US$5.4 billion acquisition of Gates Corporation by affiliates of The US$182.9 billion of deal activity and Blackstone Group; the US$4.4 billion acquisition of MultiPlan Inc by Partners representing a 9 per cent increase Group Holding’s and Starr Investment Holdings LLC’s from affiliates of BC relative to the first half of 2013. One Partners and Silver Lake Partners; the US$4.2 billion acquisition of the ortho- notable bright spot for private equity clinical diagnostic business of Johnson & Johnson by affiliates of The Carlyle sponsors was exit activity. As would Group; and TPG’s US$750 million minority investment in Chobani Inc and US$450 million minority investment in Airbnb Inc. be expected at a time when valuations remain high, private equity sponsors Europe, Middle East and Africa achieved US$260.2 billion in exits in the Announced M&A deal volume in Europe, the Middle East and Africa (EMEA) first half of 2014, surpassing the previous totalled approximately US$697.2 billion in the first half of 2014, an approximate record set in the first half of 2007. 98 per cent increase in deal volume from the first half of 2013. Of this amount, Europe alone accounted for approximately US$508.8 billion of total M&A deal 2 www.gettingthedealthrough.com GLOBAL TRENDS volume, and realised an approximate 118.5 per cent increase relative to the first half of 2013. EMEA-targeted private equity sponsor buy-side activity totalled approximately US$89.6 billion in the first half of 2014, as compared to US$59.3 billion in the first half of 2013, an increase of approximately 51 per cent. Asia-Pacific Announced M&A deal volume in the Asia-Pacific region totalled approximately US$337.8 billion in the first half of 2014, which represented an approximately 82.4 per cent increase from comparable deal volume in the first half of 2013. Notably, Japan did not experience the same M&A activity levels in the first half of 2014 as compared with the rest of Asia. Announced M&A deal volume in Japan totalled approximately US$31.3 billion, representing an approximately 26.4 per cent decrease in the first half of 2014 as compared to the first half of 2014. China remained the most targeted country in the Asia-Pacific region. Interestingly, private equity activity in Asia-Pacific (excluding Japan) in the first half of 2014 was valued at approximately US$38.1 billion, which represents a 161.5 per cent increase as compared to the first half of 2013. Debt financing markets Debt financing markets in the United States continue to remain strong in the first half of 2014. The use of leverage by private equity sponsors has increased in the first half of 2014. Through the first six months of 2014, median debt/ EBITDA multiples for private equity investments reached 8.2x, which represents a significant increase from 6.9x for all of 2013. In addition, during the first half of 2014, the median leverage percentage for buyouts was
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