Private Equity-Backed Buyout Deal Flow in North America Reaches

Press Release 4rd January 2013

Post-Lehman High in 2012 1,590 North American buyout deals announced in 2012 valued at $152.3bn

Preqin data shows that North American deal flow reached a post-Lehman high in 2012. This contributed to strong global deal flow recorded in 2012, with 2,866 buyout deals announced valued at $254.6bn. This nears the global post-2008 highs of 2011, which witnessed $264.8bn globally from 2,900 buyout deals; compared to 2010, global deal flow in 2012 represents a 14% increase in the number and a 15% rise in the value of buyout deals.

North America also witnessed a post-Lehman high in 2012 in relation to exits, with $147.1 worth of exits taking place in the region during the year. However, global private equity-backed exit flow for 2012 stood at 1,192 exits valued at $275.2bn, down from the 1,145 exits valued at $310.1bn in 2011, which was the highest level since the onset of the financial crisis. Q4 2012 witnessed 304 private equity-backed exits valued at $72.2bn, an 11% increase in the number and a 2% increase in the value of exits in comparison to Q3 2012.

Other Key Facts:

 Q4 2012 was the second strongest quarter for deal flow in North America in the post-Lehman era, with 431 buyout deals announced valued at $41.3bn, surpassed only by the $50.7bn in Q3 2012.  Europe, which continues to rebound from the declines in deal flow in mid-2011, saw 192 buyouts valued at $24.5bn during Q4 2012, a 76% increase in aggregate deal value compared to Q3 2012, which witnessed 194 buyouts valued at $13.9bn, and a 69% increase in deal value from the same period in 2011.  Buyout deal flow in Asia Q4 2012 dropped by almost a third in both the volume and value of deals witnessed compared to Q3 2012, with 53 buyout deals valued at an aggregate $5.4bn in Q4 2012.  43% of all deals in 2012 were leveraged buyouts, representing almost two-thirds of the aggregate value of deals globally during the year.  Add-on deals, which made up 18% of all buyout deals pre-financial crisis, accounted for a third of all buyout deals in 2012, as private equity firms continued to consolidate current holdings.  The majority of buyouts announced in 2012 were small-cap deals, with 58% of the number of deals announced in 2012 valued at less than $100mn, and 78% of all deals valued at less than $250mn.  The mid-market sector accounted for 14% of all deals and 28% of the value of deals in 2012.  Large-cap deals valued at over $1bn accounted for over half the aggregate value of deals globally during the year.

For more information, please see the factsheet that follows.

Comment:

“Despite a difficult opening to the year due to continued turbulent market conditions, 2012 has seen the buyout deal flow approach the post-Lehman high in deal number and aggregate value witnessed during 2011. In particular, North America witnessed a strong 2012, recording a post-2008 high for the year of 1,590 buyout deals valued at an aggregate $152.3bn. In contrast, European deal levels remained low in 2012. However, the $24.5bn of European deals announced during Q4 2012 is a 76% increase from the previous quarter, an encouraging indicator for 2013.

With buyout firms continuing to hold an estimated $357.9bn in dry powder as of January 2013, alongside a strong North American buyout market and a rebounding European deals market, private equity fund managers remain in a strong position in the coming months to continue to deploy their capital in opportunities globally, despite continuing market challenges.”

Anna Strumillo, Manager – Buyout and Venture Capital Deals

For more information and analysis, please see the PDF factsheet that follows. ______

Note to Editors:

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For more information, please contact: Anna Strumillo +44 (0)20 7397 9448 or [email protected] For general press information, please contact: Helen Kenyon +44 (0)20 7645 8880 or [email protected]

January 2013 Page 1 of 2

Fig. 1: Number and Aggregate Value of Private Equity-Backed Fig. 2: Aggregate Value of Private Equity-Backed Buyouts by There were 714 private equity-backed buyout deals announced globally in Buyouts Globally: Q1 2006 - Q4 2012 Region: Q1 2008 - Q4 2012 ($bn) Q4 2012, valued at a total of $73bn, nearing the $75.4bn in buyout deals witnessed during Q3 2012, and surpassed only by Q2 2011 and Q3 2012 in the post-Lehman era. 1000 300.0 60 900 Aggregate Deal Value ($bn) The 2,866 buyout deals announced in 2012 valued at $254.6bn nears the 250.0 50 800 post-Lehman highs of 2011, which witnessed $264.8bn from 2,900 buyout 700 200.0 40 deals, and represents a 14% increase in the number and 15% rise in the 600 value of buyout deals in comparison to 2010. 500 150.0 30 400 No. of Deals North America witnessed a strong 2012, recording a post-Lehman high for 100.0 300 20 the year in relation to both buyouts and exits, with $152.3bn from 1,590 200 50.0 deals and $147.1bn worth of exits during the year.

Aggregate Deal Value ($bn) Aggregate Deal Value 10 100 0 0.0 0 Europe saw 192 buyouts valued at $24.5bn during Q4 2012, a 76% in- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 crease in aggregate deal value compared to Q3 2012, which witnessed 2006 2007 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 194 buyouts valued at $13.9bn, and a 69% increase in deal value from No. of Deals Aggregate Deal Value ($bn) North America Europe Asia Rest of World the same period in 2011, as the region rebounds from declines due to the Fig. 3: Global Number of Private Equity-Backed Exits by Type and Fig. 4: Breakdown of Number and Aggregate Value of Private sovereign debt crisis which emerged in mid-2011. Aggregate Exit Value: Q1 2006 - Q4 2012 Equity-Backed Buyout Deals in 2012 by Type 53 Asia-backed buyouts were announced during Q4 2012, with an aggregate value of $5.4bn, a drop of almost a third in both the volume and value 400 140.0 100% 2% of deals witnessed during Q3 2012. 4% 12% Public To Private

350 120.0 Aggregate Exit Value ($bn) 90% 3% 15% 4% Q4 2012 witnessed 304 private equity-backed exits valued at $72.2bn, an 300 80% 100.0 7% PIPE 11% increase in the number and 2% increase in the value of exits in com- 70% 250 11% parison to Q3 2012. Private equity-backed exit-ﬂ ow for 2012 stood at 1,192 80.0 200 60% 33% Recapitalisation exits valued at $275.2bn, down from the 1,145 exits valued at $310.1bn 60.0 150 50% during the post-Lehman high of 2011. No. of Exits Growth Capital 40.0 100 40% Proportion of Total This decrease in the value of exits in 2012 in comparison to the previous 62% 50 20.0 30% Add-on year can be primarily attributed to the absence of mega-sized exits valued

43% 0 0.0 20% at over $10bn during the year. While 2012 witnessed 81 exits valued at over Leveraged

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 10% $1bn against 66 exits in this size range in 2011, there were no exits valued Buyout at over $10bn in 2012, while 2011 hosted the €9.6bn sale of Nycomed by 2006 2007 2008 2009 2010 2011 2012 0% IPO Restructuring Sale to GP Trade Sale Aggregate Exit Value ($bn) No. of Deals Aggregate Deal Value Nordic Capital to Takeda Pharmaceutical Company and the £6.8bn listing of Blackrock and First Reserve-backed Glencore International. Fig. 5: Breakdown of Number and Aggregate Value of Private Fig. 6: Breakdown of Number and Aggregate Value of Private Equity-Backed Buyout Deals in 2012 by Value Band Equity-Backed Buyout Deals in 2012 by Industry In addition, the average exit size in 2012 stood at $496mn, down from the average exit size of $519mn in 2011. However, average size of a private equity realization in 2012 was higher than in both 2009 and 2010, which 100% 25% 8% 23% 22% witnessed average exits of $436mn and $465mn, respectively. 90% 6% 20% 80% 8% 16%16% 16% 43% of all deals in 2012 were leveraged buyouts, representing almost two- 55% 15% 70% 19% 15% thirds of the aggregate value of deals globally during the year. Add-ons, 12% 12% 60% 10% 10% 10% which made up 18% of all deals pre-crisis, accounted for a third of all deals 10% 50% in 2012, as private equity ﬁ rms continue to consolidate current holdings. 6% 7% 5% Proportion of Total 5% 40% 4% 17% 5% 3% 3% 2% 3% 58% of all deals in 2012 were valued at less than $100mn, with small-cap Proportion of Total 30% 58% 11% 0% deals valued at less than $250mn accounting for 78% of all deals. The 20% mid-market sector accounted for 15% of all deals, and 27% of the value of 10% 11% 7% Other deals in 2012. Large-cap deals valued at $1bn accounted for over half the Utilities Business Services & Retail 0% Energy & & Media Materials Food & Telecoms Industrials

Consumer aggregate value of deals globally during the year. Agriculture Healthcare

No. of Deals Aggregate Deal Value Information Technology Less than $100mn $100-249mn $250-499mn $500-999mn $1bn or More No. of Deals Aggregate Deal Value Q4 2012 Private Equity-Backed Buyout Deals and Exits

January 2013 Page 2 of 2

Fig. 7: 10 Largest Private Equity-Backed Buyout Deals in 2012

Firm Deal Date Investment Type Deal Size (mn) Investors Bought From/Exiting Company Location Primary Industry El Paso Corporation Oil And Natural Apollo Global Management, Riverstone Holdings, Access Gas Exploration And Production Feb-12 Buyout 7,150 USD El Paso Corporation US Oil & Gas Industries, Korea National Oil Corporation Assets Charterhouse Group, Goldman Sachs Merchant Banking Division, Cequel Communications Jul-12 Buyout 6,600 USD BC Partners, CPP Investment Board Jordan Company, Oaktree Capital Management, Quadrangle US IT Group Annington Homes Nov-12 Buyout 3,200 GBP Terra Firma Capital Partners Nomura Securities UK Property DuPont Performance Coatings Aug-12 Buyout 4,900 USD Carlyle Group DuPont US Manufacturing Carlyle Group, China Everbright Ltd., CITIC Capital, Advertising and Focus Media Dec-12 Public To Private 3,700 USD - China FountainVest Partners Digital Media Neodyne Industries May-12 Buyout 3,460 USD BC Partners, Carlyle Group Hamilton Sundstrand, United Technologies Corporation US Aerospace Getty Images Aug-12 Buyout 3,300 USD Carlyle Group Farallon Capital Management, Hellman & Friedman US Digital Media AOT Bedding Super Holdings Aug-12 Buyout 3,000 USD Advent International Ares Management, Teachers' Private Capital US Manufacturing Advent International, Goldman Sachs Merchant Banking TransUnion Feb-12 Buyout 3,000 USD Madison Dearborn Partners, The Pritzker Group US Financial Services Division

Fig. 8: Notable Private Equity-Backed Exits in 2012

Investment Entry Investment Entry Deal Primary Firm Investors (Entry) Exit Date Exit Type Exit Value Acquiror (Exit) Location Date Type Size (mn) Industry Charterhouse Group, Goldman Sachs Merchant BC Partners, CPP Investment Cequel Communications Apr-06 Buyout - Banking Division, Jordan Company, Oaktree Jul-12 Secondary Buyout Sale 6,600 USD IT US Board Capital Management, Quadrangle Group Actavis Group May-07 Public To Private 3,000 USD Novator Partners Apr-12 Trade Sale 4,250 EUR Watson Pharmaceuticals Inc. Pharmaceuticals Switzerland NDS Group Limited Jun-08 Public To Private 2,461 EUR News Corporation, Permira Mar-12 Trade Sale 5,000 USD Cisco Media UK Healthcare Partners Holdings Jun-05 Growth Capital - Summit Partners May-12 Trade Sale 4,420 USD DaVita Inc. Healthcare US Avio* Aug-06 Buyout 2,570 EUR Cinven, Finmeccanica Dec-12 Trade Sale 4,300 USD GE Aviation Aerospace Italy *Denotes partial exit

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