US M&A News and Trends

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This Issue: US M&A News and Trends U.S. M&A deal activity decreased in December, going down 9% U.S. private equity activity increased in December up 1.8% from 2 US Merger with 945 announcements compared to 1,039 in November. November. There were 114 deals in December compared to 112 in Aggregate M&A spending decreased as well. In December 27% less November. Aggregate transaction value decreased, down by 19.2% Metrics was spent on deals compared to November. to $17.3 billion from November's $21.4 billion.

2 US Middle Over the past 3 months, the sectors that saw the biggest increases The top financial advisors for 2018 based on deal announcements, in M&A deal activity, relative to the same three-month period one are: Goldman Sachs & Co., JPMorgan Chase & Co, Houlihan Lokey, Market Monitor year ago, was: Health Technology (150 vs. 97), Distribution Services Inc., Morgan Stanley, and Barclays Plc. The top five financial (186 vs. 152), Commercial Services (505 vs. 476), Finance (434 vs. advisors, based on the aggregate transaction value of the deals 3 US Sector 406), and Transportation (86 vs. 60). Seventeen of the 21 sectors worked on, are: Goldman Sachs & Co., Morgan Stanley, JPMorgan Activity & Value tracked by FactSet Mergerstat posted relative gains in deal flow Chase & Co, Barclays Plc, and Bank of America Merrill Lynch. 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, Morgan, Buyer Report Over the past 3 months, the sectors that have seen the biggest Lewis & Bockius LLP, and Skadden, Arps, Slate, Meagher & Flom 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: Utilities (69 vs. 88), Non-Energy value of the deals worked on, are: Wachtell, Lipton, Rosen & Katz, 4 US Private Equity Minerals (63 vs. 76), Retail Trade (103 vs. 113), Energy Minerals (42 Skadden, Arps, Slate, Meagher & Flom LLP, Latham & Watkins LLP, Report vs. 47), and Consumer Services (224 vs. 226). Six of the 21 sectors Cleary Gottlieb Steen & Hamilton LLP, and Sullivan & Cromwell LLP. tracked by FactSet Mergerstat posted negative relative losses in 5 Top US Advisors deal flow over 50 deals.

Topping the list of the largest deals announced in December are: 6 Top US Deals GlaxoSmithKline Plc entering into an agreement to acquire assets Scoreboard related to consumer health business from Pfizer, Inc. for a reported $20 billion; ESL Investments, Inc.'s offer to acquire the remaining 50.6% stake yet owned in Sears Holdings Corp. for $3.5 billion; Nexstar Media Group, Inc.'s agreement to acquire Tribune Media Co. for $4.1 billion; The Carlyle Group LP agreeing to acquire StandardAero Business Aviation Services LLC for a reported value of $5 billion; GlaxoSmithKline Plc entereing into an agreement to acquire TESARO, Inc. for $4.1 billion.

The US Mergers & Acquisitions Market Index

$350.0 1,350

$287.0 1,200 $300.0

$259.5 1,050 $250.0 $207.9 900

$197.3 $200.0 $187.6 $168.4 750 $162.6 $148.3 $150.0 $141.4 $144.4 $127.4 600 $115.9 $120.5 $118.3 $105.0 450 $93.1 $100.0 300

$50.0 150 910 1,070 1,049 931 1,146 949 1,026 1,090 1,166 1,239 1,193 1,116 1,069 1,265 1,039 945 $0.0 0 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Deal Volume Aggregate Deal Value

US MergerMetrics January 2019

Merger Stats

Number of Deals Agg. Transaction Value ($Bil)

12 Months Ended 12 Months Ended Average Deal Size 12/31/18 12/31/17 Change 12/31/18 12/31/17 Change P/E

$1 Billion + 373 326 14.4% $1,503.0 $1,237.0 21.5% 31.0

$500M to $999.9M 268 260 3.1% 186.4 184.8 0.9% 23.1

$250M to $499.9M 322 300 7.3% 114.8 105.8 8.5% 21.3

$100M to $249.9M 519 557 -6.8% 82.5 91.1 -9.5% 35.4

$50M to $99.9M 440 477 -7.8% 31.6 33.7 -6.1% 24.7

$25M to $49.9M 392 467 -16.1% 14.0 16.6 -15.7% 19.3

$10M to $24.9M 453 528 -14.2% 7.5 8.7 -13.7% 20.8

Under $10M 922 1,064 -13.3% 2.9 3.5 -16.9% 17.1

Undisclosed 9,554 8,283 15.3% N/A N/A N/A N/A

Total 13,243 12,262 8.0% $1,942.7 $1,681.1 15.6% 26.8

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

30.0x 35.0%

25.0x 30.0% 32.4% 30.6% 25.0% 20.0x 22.7x 21.7x 21.1x 25.5% 20.0% 15.0x 15.0% 10.0x 10.0%

5.0x 5.0%

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

US Middle Market Monitor MEDIAN EV/EBITDA MEDIAN PREMIUM

12.0x 50.0% 45.0% 10.0x 40.0% 45.3% 9.8x 35.0% 40.1% 8.0x 8.2x 7.8x 30.0% 6.0x 25.0% 27.8% 20.0% 4.0x 15.0% 10.0% 2.0x 5.0% 0.0x 0.0% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

*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 2019 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 January 2019

SECTOR BY ACTIVITY L3M 12/31/18 L3M 12/31/17 Target Sector Deal Count Deal Count Difference Health Technology 150 97 53 Distribution Services 186 152 34 Commercial Services 505 476 29 Finance 434 406 28 Transportation 86 60 26 Electronic Technology 105 89 16 Health Services 147 131 16 Technology Services 487 477 10 Miscellaneous 18 9 9 Producer Manufacturing 181 174 7 Communications 39 32 7 Industrial Services 128 122 6 Government 10 6 4 Consumer Durables 58 55 3 Consumer Non-Durables 99 98 1 Process Industries 115 116 (1) Consumer Services 224 226 (2) Energy Minerals 42 47 (5) Retail Trade 103 113 (10) Non-Energy Minerals 63 76 (13) Utilities 69 88 (19) Total 3,249 3,050 199

SECTOR BY VALUE L3M 12/31/18 L3M 12/31/17 Target Sector Value Value Difference Technology Services $78,214.1 $33,941.6 $44,272.5 Health Technology 48,255.1 16,288.2 31,966.9 Electronic Technology 37,684.2 16,239.7 21,444.5 Transportation 14,353.1 3,548.8 10,804.3 Energy Minerals 18,088.3 8,860.2 9,228.1 Industrial Services 37,671.3 30,691.9 6,979.4 Retail Trade 11,188.5 6,540.8 4,647.7 Process Industries 14,734.5 13,123.2 1,611.3 Non-Energy Minerals 4,643.6 3,880.8 762.8 Government 58.9 400.0 (341.1) Miscellaneous 972.6 1,533.7 (561.1) Distribution Services 13,426.3 14,272.6 (846.3) Communications 2,243.9 3,195.1 (951.2) Consumer Non-Durables 9,960.9 14,550.4 (4,589.5) Commercial Services 20,202.3 30,832.0 (10,629.7) Producer Manufacturing 8,421.0 21,239.3 (12,818.3) Consumer Durables 2,303.6 16,608.6 (14,305.1) Utilities 10,523.5 29,787.3 (19,263.8) Finance 30,443.2 54,114.6 (23,671.4) Health Services 4,770.8 87,159.6 (82,388.7) Consumer Services 20,648.0 118,951.5 (98,303.5) Total $388,807.6 $525,760.0 ($136,952.4)

US Strategic Buyer Report January 2019

Merger Stats

Number of Deals Agg. Transaction Value ($Bil)

12 Months Ended 12 Months Ended Average Deal Size 12/31/18 12/31/17 Change 12/31/18 12/31/17 Change P/E $1 Billion + 214 172 24.4% $1,032.3 $747.1 38.2% 29.8 $500M to $999.9M 145 155 -6.5% 100.7 109.0 -7.6% 22.7 $250M to $499.9M 207 174 19.0% 74.5 61.5 21.1% 21.5 $100M to $249.9M 338 357 -5.3% 54.2 58.5 -7.4% 37.6 $50M to $99.9M 316 333 -5.1% 22.6 23.4 -3.3% 27.7 $25M to $49.9M 265 353 -24.9% 9.4 12.6 -25.5% 22.7 $10M to $24.9M 330 397 -16.9% 5.5 6.6 -16.9% 22.0 Under $10M 586 722 -18.8% 1.9 2.4 -21.6% 18.4 Undisclosed 7,364 6,243 18.0% N/A N/A N/A N/A Total 9,765 8,906 9.6% $1,301.0 $1,021.1 27.4% 27.3

PUBLIC BUYER INDEX LTM 12/31/18

$200 360 $166.0 300 $150 $142.7 $117.0 $111.0 240 $101.2 $102.2 $100 180 $81.5 $67.7 $59.5 $63.6 $49.0 120 $50 $25.4 60 292 256 242 281 292 267 284 260 234 345 280 232 $0 0 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

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

PE BUYER INDEX: LTM 12/31/18 Open Date Value ($Mil) Fund (Private Equity Sponsor) 29-May-2018 $40,444.4 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 $44.0 $50 100 Hellman & Friedman LLC $33.9 $36.4 $27.8 $32.3 $40 80 1-Jan-2018 16,000.0 Vista Equity Partners Fund VII $21.4 $30 $17.8 $27.1 60 $13.9 $16.8 Vista Equity Partners Management LLC $20 $16.1 $11.3 40 $10 130 105 133 149 151 153 145 105 126 147 112 114 20 1-May-2018 13,750.0 Warburg Pincus Global Growth Partenrs Fund $0 0 Warburg Pincus LLC Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 12-Feb-2018 12,000.0 Lexington Capital Partners IX Fund

Lexington Partners LP GOING PRIVATE INDEX: LTM 12/31/18 20-Mar-2018 12,000.0 TPG Partners VIII Fund TPG Capital LLC $25 15 1-Oct-2018 10,435.2 Seventh Cinven Fund $20 12 Cinven Group Ltd. $15.0 $14.7 1-Jun-2018 10,000.0 Thoma Bravo Fund XIII $15 $12.6 $12.3 $11.9 9 Thoma Bravo LLC $9.0 $10 6 $7.8 $5.9 $7.1 29-Mar-2018 9,000.0 Coller International Partners VIII Fund $5.3 $5.6 $3.0 $5 3 Coller Capital Ltd. Sequoia Capital Global Growth Fund III- 7 4 6 10 5 7 6 9 7 9 5 6 1-Jan-2018 8,000.0 $0 0 Endurance Partners LP Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Sequoia Capital

Top US Advisors January 2019 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. $628,679.5 256 1. Wachtell, Lipton, Rosen & Katz $376,002.6 78 2. Morgan Stanley 600,726.8 154 2. Skadden, Arps, Slate, Meagher & Flom LLP 372,510.9 156 3. JPMorgan Chase & Co 547,256.9 209 3. Latham & Watkins LLP 326,713.7 239 4. Barclays Plc 366,197.4 149 4. Cleary Gottlieb Steen & Hamilton LLP 311,482.0 74 5. Bank of America Merrill Lynch 319,527.5 121 5. Sullivan & Cromwell LLP 272,028.1 120 6. Citigroup 317,094.6 144 6. Cravath, Swaine & Moore LLP 265,873.4 71 7. Credit Suisse 295,339.4 115 7. Davis Polk & Wardwell LLP 254,936.9 86 8. Evercore, Inc. 269,969.2 131 8. Simpson Thacher & Bartlett LLP 251,222.9 120 9. Lazard 249,982.0 105 9. Paul, Weiss, Rifkind, Wharton & Garrison LLP 235,981.9 138 10. Centerview Partners LLC 228,005.0 45 10. Kirkland & Ellis LLP 227,550.3 416 11. Deutsche Bank AG 161,291.4 81 11. Weil, Gotshal & Manges LLP 187,080.5 145 12. PJT Partners, Inc. 135,539.0 17 12. Gibson, Dunn & Crutcher LLP 165,848.5 131 13. Guggenheim Capital LLC 111,494.9 24 13. Vinson & Elkins LLP 162,362.3 84 14. Rothschild & Co 103,066.4 97 14. Fried, Frank, Harris, Shriver & Jacobson LLP 156,758.8 62 15. UBS Group AG 90,146.5 68 15. Hogan Lovells LLP 193,133.9 141 16. Mizuho Financial Group, Inc. 82,220.0 13 16. Richards, Layton & Finger PA 146,983.1 19 17. Wells Fargo & Co. 81,351.3 42 17. Jones Day LP 133,452.7 310 18. RBC Capital Markets 81,332.5 80 18. Shearman & Sterling LLP 126,790.2 81 19. Moelis & Co. 79,624.6 91 19. Potter Anderson & Corroon LLP 126,466.5 7 20. Jefferies LLC 76,958.3 140 20. Clifford Chance LLP 121,158.4 58 21. Macquarie Group 64,620.2 47 21. Freshfields Bruckhaus Deringer LLP 113,880.1 45 22. Robey Warshaw LLP 60,023.1 3 22. Debevoise & Plimpton LLP 108,660.0 47 23. The Raine Group LLC 59,713.0 4 23. Goodwin Procter LLP 103,786.0 79 24. Sumitomo Mitsui Financial Group, Inc. 58,910.0 2 24. Morrison & Foerster LLP 103,880.2 58 25. Perella Weinberg Partners Group LP 57,987.1 32 25. Morgan, Lewis & Bockius LLP 93,728.7 162 26. Qatalyst Group LP 57,310.1 23 26. Stikeman Elliott LLP 91,726.1 84 27. Greenhill & Co., Inc. 40,626.1 29 27. Baker Botts LLP 88,416.3 68 28. Sandler O'Neill & Partners 37,789.3 93 28. Herbert Smith Freehills LLP 88,100.8 43 29. The Toronto-Dominion Bank 36,642.7 15 29. DLA Piper Group 86,403.1 89 30. Scotiabank 35,993.0 18 30. Pillsbury Winthrop Shaw Pittman LLP 84,565.2 78 31. Houlihan Lokey, Inc. 33,137.2 168 31. Allen & Overy LLP 79,185.7 86 32. Ernst & Young Global Ltd. 31,683.2 108 32. Morris, Nichols, Arsht & Tunnell LLP 74,740.8 16 33. BDT & Co. LLC 29,428.0 5 33. Holland & Knight LLP 70,755.8 19 34. BNP Paribas SA 27,146.2 20 34. Blake, Cassels & Graydon LLP 70,668.9 76 35. AFW Associates LLC 27,024.9 1 35. Sidley Austin LLP 69,374.8 77 36. HSBC Holdings Plc 24,158.6 14 36. K&L Gates LLP 65,435.8 20 37. Bank of Montreal 22,145.2 24 37. Slaughter & May Ltd. 63,036.2 19 38. Dyal Co. LLC 20,742.6 3 38. Covington & Burling LLP 55,269.5 51 39. Stifel, Nicolaus & Co., Inc. 19,993.7 102 39. Akin, Gump, Strauss, Hauer & Feld LLP 54,632.9 58 40. PricewaterhouseCoopers 19,141.4 76 40. Wilson Sonsini Goodrich & Rosati 54,267.9 113 41. Robert W. Baird & Co. 19,066.6 103 41. Linklaters LLP 51,330.8 45 42. William Blair & Co. 18,750.2 94 42. Alston & Bird LLP 49,682.0 76 43. Allen & Co., Inc. 18,130.4 11 43. Mayer Brown LLP 46,742.6 48 44. Raymond James Financial, Inc. 17,713.2 120 44. Proskauer Rose LLP 42,678.1 31 45. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 17,638.6 9 45. Willkie Farr & Gallagher LLP 38,016.2 66 46. KPMG International Coop. 16,169.4 102 46. Paul Hastings LLP 35,498.6 104 47. The Valence Group LLC 14,424.7 6 47. McDermott Will & Emery LLP 34,722.1 30 48. Piper Jaffray Cos. 13,974.8 87 48. Bracewell LLP 33,105.1 18 49. KeyCorp 13,065.6 50 49. Cooley LLP 31,913.5 52 50. JMP Group LLC 12,579.4 5 50. Dechert LLP 31,712.1 66

* 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 January 2019

Seller (Unit Sold) Buyer Transaction

Financial Advisor Financial Advisor Value**

Rank Legal Advisor Legal Advisor ($Mil) Seller Sector

Express Scripts Holding Co. Cigna Corp. $67,852.5 Health Services Centerview Partners LLC Morgan Stanley Lazard Davis Polk & Wardwell LLP 1 Cravath, Swaine & Moore LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Holland & Knight LLP Wachtell, Lipton, Rosen & Katz Skadden, Arps, Slate, Meagher & Flom LLP

Energy Transfer Partners LP Energy Transfer Equity LP $62,530.5 Industrial Services Barclays Plc Citigroup 2 Cleary Gottlieb Steen & Hamilton LLP Latham & Watkins LLP Richards, Layton & Finger PA Potter Anderson & Corroon LLP Vinson & Elkins LLP

SoftBank Group Corp. (Sprint Corp.) T-Mobile US, Inc. $58,910.0 Communications Centerview Partners LLC Credit Suisse JPMorgan Chase & Co. Deutsche Bank AG Mizuho Securities Co., Ltd. Evercore, Inc. SMBC Nikko Securities Inc. Goldman Sachs & Co The Raine Group LLC Morgan Stanley Goodwin Procter LLP PJT Partners LP 3 Morrison & Foerster LLP Cleary Gottlieb Steen & Hamilton LLP Pillsbury Winthrop Shaw Pittman LLP Cravath, Swaine & Moore LLP Potter Anderson & Corroon LLP DLA Piper LLP 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. $46,105.8 Consumer Services Barclays Plc Bank of America Merrill Lynch Morgan Stanley Evercore, Inc. PJT Partners LP Robey Warshaw LLP 4 Herbert Smith Freehills LLP Wells Fargo & Co. CMS International BV Davis Polk & Wardwell LLP Freshfields Bruckhaus Deringer LLP Wachtell, Lipton, Rosen & Katz

Red Hat, Inc. International Business Machines Corp. $32,332.4 Technology Services Guggenheim Capital LLC Goldman Sachs & Co. Morgan Stanley JPMorgan Chase & Co. 5 Blake, Cassels & Graydon LLP Lazard Debevoise & Plimpton LLP Hogan Lovells LLP Skadden, Arps, Slate, Meagher & Flom LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Stikeman Elliott LLP

Andeavor Marathon Petroleum Corp. $31,312.5 Energy Minerals Goldman Sachs & Co Barclays Plc 6 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. $27,024.9 Consumer Non-Durables Credit Suisse AFW LP Morgan, Lewis & Bockius LLP Bank of America Merrill Lynch Morris, Nichols, Arsht & Tunnell LLP BDT & Co. LLC 7 Goldman Sachs & Co JPMorgan Chase & Co Clifford Chance LLP McDermott Will & Emery LLP Skadden, Arps, Slate, Meagher & Flom LLP

Pfizer Inc. (Pfizer, Inc. /Consumer Health Business/) GlaxoSmithKline Plc $20,000.0 Health Technology Centerview Partners LLC Citigroup Guggenheim Capital LLC Greenhill & Co., Inc. 8 Morgan Stanley JPMorgan Chase & Co. Clifford Chance LLP Kirkland & Ellis LLP Skadden, Arps, Slate, Meagher & Flom LLP Slaughter & May Ltd. Wachtell, Lipton, Rosen & Katz

L3 Technologies, Inc. Harris Corp. $18,699.5 Electronic Technology Goldman Sachs & Co Morgan Stanley 9 Cravath, Swaine & Moore LLP Davis Polk & Wardwell LLP Simpson Thacher & Bartlett LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Sullivan & Cromwell LLP

CA, Inc. Broadcom, Inc. $18,201.9 Technology Services Qatalyst Group LP Bank of America Merrill Lynch Morrison & Foerster LLP Barclays Plc Wilson Sonsini Goodrich & Rosati PC Citigroup 10 Credit Suisse Deutsche Bank AG Morgan Stanley Cleary Gottlieb Steen & Hamilton LLP Wachtell, Lipton, Rosen & Katz **Total Market Value of Top 10 Deals YTD $382,970.1