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EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

www.harriswilliams.com www.harriswilliams.de Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry Monjauze, authorised and regulated by the Financial Conduct Authority.

Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

HARRIS WILLIAMS & CO.

CONTACTS CONTENTS Thierry Monjauze Managing Director QUARTERLY QUICK READ 63 Brook Street London W1K 4HS United Kingdom EUROPEAN ECONOMIC CLIMATE Phone: +44 20 7518 8901 [email protected]

EUROPEAN M&A ENVIRONMENT Red Norrie Managing Director EUROPEAN INBOUND M&A ENVIRONMENT 63 Brook Street London W1K 4HS United Kingdom AEROSPACE, DEFENCE & GOVERNMENT SERVICES Phone: +44 20 7518 8906 [email protected]

BUSINESS SERVICES Jeffery Perkins Managing Director CONSUMER Bockenheimer Landstr. 33-35 60325 Frankfurt Germany ENERGY & POWER Phone: +49 69 3550638 00 [email protected]

HEALTHCARE & LIFE SCIENCES LONDON OFFICE 63 Brook Street INDUSTRIALS London W1K 4HS United Kingdom Phone: +44 20 7518 8900 TECHNOLOGY, MEDIA & TELECOM FRANKFURT OFFICE Bockenheimer Landstrasse TRANSPORTATION & LOGISTICS 33-35 60325 Frankfurt am Main Germany FEATURED THEME Phone: +49 69 3650638 00

FEATURED THEME – MOMENTUM IN ACQUISITIONS BY STRATEGIC BUYERS1

. Q2 2015 saw an accelerated growth in European acquisitions by strategic buyers, with a total of 965 deals in Q2 2015, up 15% on Q1 2015 and 14% on Q2 2014 . HW&Co. experienced a strong first half of 2015 with 14 acquisitions by strategic buyers

90% 89% Q2 2013 – Q2 2015 average: 87% a portfolio company of a portfolio company of

88% has been acquired by

87% has been acquired by has been acquired by 86% 85% 84%

83% a portfolio company of a portfolio company of a portfolio company of

% Strategicof Investors 82%

has sold its 81% aerospace assets to has been acquired by has been acquired by 80% Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015

Source: S&P Capital IQ www.harriswilliams.com 1. Includes closed M&A transactions of majority stakes only, where deal value was undisclosed or between €25m – www.harriswilliams.de €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 PAGE | 1 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

QUARTERLY QUICK READ

MANUFACTURING CONSUMER GDP2 CONSUMER PRICES3 CONFIDENCE3 CONFIDENCE3 EUROPEAN ECONOMIC +1.8% +0.6% -1.9 pts +0.6% ENVIRONMENT1 BUSINESS ENERGY & HEALTHCARE & ADG4 CONSUMER INDUSTRIALS5 TMT6 T&L7 SERVICES POWER LIFE SCIENCES Last Quarter (3.7%) (0.7%) (0.3%) (2.5%) (0.4%) 0.0% (1.2%) 0.1% EUROPEAN EQUITY Last Year 4.0% (1.1%) 3.6% (0.2%) (30.5%) 15.2% 7.9% 10.4% 8 MARKET Last 3 Years 45.6% 50.1% 41.6% 54.1% (29.3%) 0.0% 63.2% 68.8% EUROPEAN M&A DEAL VOLUME (61.5%) 55.7% (0.9%) (16.0%) 0.0% 37.6% (2.1%) 56.7% ACTIVITY9 INBOUND M&A DEAL VOLUME (80.0%) 5.6% 47.6% 0.0% (6.6%) 144.4% (7.8%) 0.0% TO EUROPE9 Sources: Eurostat, Bloomberg, Markit Economics, S&P Capital IQ . European middle market M&A activity increased by 11.9% in Q2 15, compared to Q2 14 with overall M&A transaction volumes up 12.5% Y-o-Y ENVIRONMENT . Healthcare, TMT and ADG attracted the highest relative level of international inbound M&A investment, at 22%, 21% and 20% of completed transactions in the quarter, respectively . The European Commission has approved €329m to co-fund air traffic management (ATM) projects in Europe, expected to support a total of €650m in public and private investment in ATM modernisation ADG . Shimtech Industries, the manufacturer of specialist gap management components for commercial and military aircraft, was acquired by Inflexion and Auctus Industries for $220m (€197m) . According to the Markit Index, Business Services growth reached a four year high in the second quarter, BUSINESS with growth accelerating in Germany, Italy and France SERVICES . The UK Business Services sector continued its trend of strong growth, rising sharply in June following the UK recent election results

. Dutch grocery chain, Royal Ahold, and Belgian grocery chain, Delhaize, have agreed to a merger valuing CONSUMER the combined company at approximately €26bn (expected to close mid-2016) . In the UK, retail sales volume in May 2015 increased by 4.6% compared prior year, the 26th consecutive month of Y-o-Y growth. Global sales for the 3 months to May 2015 were up 2.1% from prior year . Norway has overtaken Russia as Western Europe’s top natural gas supplier. After recent political tension over the Crimea region, the EU has increased its efforts to become less dependent on Russian gas imports ENERGY & POWER . The heads of Europe’s six largest energy companies have signed an open letter on climate change, urging governments to take decisive action at December’s UN summit to encourage the installment of natural gas and carbon pricing systems . A £10 billion ‘megafund’ has been proposed by the Mayor of London, which would be used to increase HEALTHCARE & investment in the sector as financing for UK life science companies reached its highest level in ten years LIFE SCIENCES . Cinven has agreed to acquire Synlab, the second largest laboratory operator in Europe, from BC Partners for c.€1.8bn . Economic indicators posted mixed results in June with positive signs from the composite PMI, while the economic sentiment indicator in the Euro area decreased in the EU by 0.9 points to 105.5 INDUSTRIALS . US agrochemicals firm, Monsanto, announced plans to acquire Swiss rival, Syngenta, which would provide the Company with combined turnover of €28 billion and 40% of global corn-seed market share . Charter Communications has made an offer to acquire Time Warner Cable, the US-based media and entertainment company, valuing the business at c.$77.8bn TMT . According to IDC, the worldwide Internet of Things market will grow from $656bn in 2014 to $1.7tn by 2020, representing a CAGR of 17.2% . During Q2 15, two major transactions by US corporates caused a significant market shift in the European T&L TRANSPORT & market with FedEX acquiring TNT Express and XPO Logistics acquiring Norbert Dentressangle LOGISTICS . Q2 15 has seen increased M&A activity in the air transportation market with Aer Lingus being acquired by IAG and the Portuguese government selling 61% of TAP Portugal to a group of private investors

Source: S&P Capital IQ 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 30 June, 2015; 1. For the countries based in the EU28; 2. Year-on- year GDP growth for Q1 2015; 3. PMI, CCI and CPI quarterly growth shown for March 2015 to June 2015; 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 Q1 2015 to Q2 2015 PAGE | 2 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

EUROPEAN ECONOMIC CLIMATE

. Growth in Europe is strengthening with the eurozone’s GDP increasing for the sixth quarter having grown by 1.4% Y-o-Y in Q2 2015 . Eurozone countries have reached an agreement to discuss a third bailout of Greece worth up to €86bn . Euro area’s monthly inflation rate was 0.2% as of June 30, 2015 compared with 0.5% in June 2014 . In March, the European Central Bank began a €1.1 trillion bond buying program to stimulate the eurozone’s economy . The euro area seasonally-adjusted unemployment rate was 11.1% in May 2015, down from 11.2% in April 2015, and from 11.6% in May 2014. This is the lowest rate recorded in the euro area since April 2012 . Business activity in the eurozone rose at its fastest pace in four years in June, boosted by higher spending by consumers and businesses

QUARTERLY REAL GDP GROWTH (% Y-O-Y FOR EU-28)1

% Y-O-Y Growth 4% Key Countries Q1 15A Q1 16E UK 2.9% 2.5% 2% Germany 1.0% 2.1% France 0.8% 1.1% Italy 0.1% 1.0% 0% Netherlands 1.5% 2.0% Spain 2.7% 3.0% (2%) Sweden 2.6% 1.7% Q1-10 Q3-10 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q3-14 Q1-15 Q3-15E Q1-16E Q3-16E Q1-17E

. Industrial Production in the euro area decreased 0.8% in April 2015 compared to the same month in the previous year . The retail sales index increased by 2.4% in the euro area and by 3.0 % in the EU28 in May 2015 compared with May 2014 . After a continuous decrease of the long-term interest rate of the euro area from December 2013 to April 2015, long-term rate has increased over the last two months to reach 1.7% in June 2015 . In April 2015 compared with March 2015, seasonally adjusted production in the construction sector grew by 0.3% in the euro area and fell by 0.3% in the EU28. Compared to April 2014, production in construction remained stable in the euro area and grew by 1.3% in the EU28 . The Business Climate Indicator (BCI) for the euro area decreased by 0.14 points to +0.14 in June 2015. While managers' production expectations and their assessments of past production, overall and export order books all worsened, their assessment of the adequacy of stocks of finished products improved . The Eurogrowth Indicator expects growth of 0.6% in the second quarter of 2015 from 0.4% in the first quarter and also expects growth of 0.7% for the third quarter of 2015,9 according to first estimates

EUROPEAN MANUFACTURING CONFIDENCE EUROPEAN CONSUMER CONFIDENCE

10% 60 20 10%

10 5% M)

- 5% 55 o - 0 0%

0% 50 (10) (5%)

PMI PMI Index Value (20) (10%) Change Change PMI in (M (5%) 45 Consumer Price Index (%)

Consumer Confidence Consumer Confidence Indicator (30) (15%)

(10%) 40 (40) (20%) Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15

2 3 4 5 Change (M-o-M %) Eurozone PMI CCI CPI Y-o-Y %

Sources: Financial Times, Bloomberg, Markit Economics, Eurostat, S&P Capital IQ 1. Historic figures are for the Eurozone and forecast figures are for the European Union; 2. Change in PMI between January and February 2015 was 0; 3. Purchasing Managers’ Index – Figure above 50 indicates economic growth, and below 50 indicates decline; 4. European Commission Consumer Confidence Index Eurozone; 5. Consumer Price Index PAGE | 3 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

EUROPEAN M&A ENVIRONMENT

MARKET OBSERVATIONS

. European middle market M&A activity increased by 11.9% in Q2 2015, compared to Q2 2014 with overall transaction volumes up 12.5% Y-o-Y . TMT and Consumer continue to be the two most active sectors, accounting for approximately 30.5% and 20.3% of total deal volume, respectively . Strategic investors continued to be active and represented 88% of the investors in Q2 2015

MIDDLE MARKET M&A ACTIVITY – BY SECTOR

1,500 Q2 15 CHANGE OF SECTOR Q2 15 OVER BREAKDOWN Q1 15

1,200 ADG 0.5% (61.5 %)

Energy & Power 1.9% (16.0%)

900 Transportation & Logistics 4.3% 56.7%

Healthcare 8.1% -

600

Business Services 18.7% 55.7% Number Number ofTransactions

Consumer 20.3% (0.9%) 300 TMT 30.5% (2.1%)

Industrials 15.8% 37.6% 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Total 100.0% 7.6%

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 Q2 20151 TRANSACTIONS BY TARGET COUNTRY2

100% 4% 4% 7% 7% Italy 12% 6% 7% 80% 12% 12% 3 Benelux

15% 60% 18% Spain

4 19% Scandinavia 17% 40% France

5 88% 20% DACH 35% 37%

UK & Eire

Strategic Financial 0% Q1-15 Q2-15

Source: S&P Capital IQ 1. Strategic buyers may include portfolio companies of private equity groups; 2. By volume; 3. Benelux defined as Belgium, the Netherlands and Luxembourg; 4. Scandinavia defined as Denmark, Norway, Sweden and Finland; 5. DACH defined as Germany, Austria, Switzerland PAGE | 4 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

EUROPEAN INBOUND M&A ENVIRONMENT

MARKET OBSERVATIONS

. International inbound M&A volume into Europe increased by 27% Y-o-Y with 174 closed transactions . The Healthcare, TMT and ADG sectors attracted the highest relative level of international inbound M&A investment, with international acquirers accounting for 22%, 21% and 20% of completed transactions in the quarter, respectively . The Industrials and Consumer sectors recorded the greatest Q-o-Q decreases in inbound M&A volume . North American groups accounted for 80% of transactions completed with non-European buyers, closing 135 transactions in the quarter. Asian groups, excluding China and India, were the second most active buyers, closing 17 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

2,000 Number of Transactions of Number

0 0 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15

International Activity by Number International Activity by Value

NON-EUROPEAN BUYERS BY COUNTRY Q2 151,2

Asia (excl. China & India) Africa & Middle East 10% 5% India 1% China 2%

South America 2% North America 80%

NON-EUROPEAN BUYERS AS A PERCENTAGE OF SECTOR DEAL VOLUME1,2,3

% of Total Deal Volume Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 ADG 30% 40% 60% 33% 73% 20% 38% 20% Business Services 11% 16% 11% 10% 9% 14% 18% 11% Consumer 8% 11% 5% 7% 9% 13% 9% 14% Industrials 10% 12% 10% 12% 16% 12% 7% 13% Energy & Power 16% 0% 31% 19% 17% 33% 12% 14% Healthcare 20% 14% 23% 13% 22% 22% 22% 22% TMT 24% 20% 19% 23% 23% 21% 23% 21% Transportation & Logistics 6% 10% 20% 9% 9% 2% 13% 9%

Source: S&P Capital IQ 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 PAGE | 5 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

AEROSPACE, DEFENCE & GOVERNMENT SERVICES

EUROPEAN ADG EQUITY MARKETS1 UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter (8.7%) 1.2% (10.7%) NA 1.8% (3.7%) 1.7% Cash on Balance Sheet (€ bn) 8.6 5.0 0.4 NA 0.4 8.9 0.1 Net Debt / LTM EBITDA Multiple 1.6x 1.7x 2.4x NA NM NM NM LTM EBITDA Multiple 10.3x 11.9x 9.4x NA 7.9x 13.9x 13.5x Change since last quarter (0.6x) (0.9x) (0.1x) NA 0.6x 6.3x 0.3x LTM EBITDA Margin 12.9% 11.6% 6.0% NA 9.6% 7.9% 14.2% Consensus 2Yr Fwd Revenue Growth (p.a.) 5.1% 6.4% 7.6% NA (6.5%) 4.9% 11.7%

EUROPEAN ADG MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2 14 10 12 8 10 8 6

6 4 4 2

Number of Transactions Number of Transactions 0 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

SELECTED MIDDLE MARKET EUROPEAN ADG M&A

Target Country Acquirer Country Sub Sector EV (€m) Alv est Sagard Aerospace Components 250

CTC Aviation Group L-3 Communications Holdings Training Serv ices 205 Shimtech Industries Inflexion; Auctus Industries Aerospace Components 197 Eurav ia Engineering & Supply Co. Magellan Aerospace Maintenance and Serv ices 41 SA RAFAUT ACE Management; Aerofund III Aerospace Components - Patricomp Aerometallic Components Maintenance and Serv ices -

MARKET OBSERVATIONS

. In Q2 – 15, Shimtech Industries was acquired by Inflexion Private Equity and Auctus Industries. Auctus was established in 2013 with the aim of building a diversified, high growth, predominantly civil global aerospace business over the long‐term . L-3 Communications acquired CTC Aviation group, the U.S. training services, for a total consideration of €205m . GKN has agreed to acquire Fokker Technologies Group, the specialist aerospace supplier, from Arle Capital for an enterprise value of €706m . German armored vehicle producer Krauss-Maffei Wegmann and French state-owned competitor Nexter are rumored to merge in the second half of 2015. Post merger, KMW and Nexter would each hold 50% stakes in the company with around 6,000 employees and revenues close to €2bn . The European Commission has approved €329 million ($363.5 million) to co-fund air traffic management (ATM) projects in Europe through a transportation infrastructure fund called Connecting Europe Facility established by the European Commission. The co- funding is expected to support a total of €650m in public and private investment in ATM modernisation . Airbus has committed to raising the A320 monthly production to 46 in 2016 and 50 in 2017, after Airbus and its A320 family is in risk of being pushed into second place on full-year commercial aircraft delivery behind Boeing’s 737 model . UK PM David Cameron has said that more resources should be allocated to unmanned air vehicles and surveillance aircraft, indicating that the upcoming Strategic Defense and Security Review (SDSR) could include more spending on these capabilities . Management moves: Aerojet Rocketdyne, Avon Rubber, Boeing, KEYW, Rolls Royce, and Sparton

Sources: S&P Capital IQ, Aviation Week, AIN Online, Flightglobal, Financial Times, Company websites 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) PAGE | 6 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

BUSINESS SERVICES

EUROPEAN BUSINESS SERVICES EQUITY MARKETS1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 4.5% 2.7% (8.3%) NM (14.1%) 1.7% (8.3%) Cash on Balance Sheet (€ bn) 6.5 8.1 4.7 0.3 0.0 1.3 NM Net Debt / LTM EBITDA Multiple 1.2x 1.5x 1.4x 2.3x 1.2x 2.2x 1.8x LTM EBITDA Multiple 11.5x 8.3x 9.5x NM 3.1x 13.3x 10.7x Change since last quarter 0.2x 0.1x (2.0x) NM (2.3x) (0.0x) (0.4x) LTM EBITDA Margin 11.6% 8.1% 5.2% 7.4% (1.6%) 5.4% 7.7% Consensus 2Yr Fwd Revenue Growth (p.a.) 6.3% 6.3% 3.7% 4.0% 4.7% 2.5% 5.9%

EUROPEAN BUSINESS SERVICES MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2

200 20

150 15

100 10

50 5

Number Number ofTransactions Number Number ofTransactions 0 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

SELECTED MIDDLE MARKET EUROPEAN BUSINESS SERVICES M&A

Target Country Acquirer Country Sub Sector EV (€m) Mouchel Group Kier Group Support Serv ices 425 Inspecta Group ACTA Consulting Serv ices 140 7S Group Manpower Group Human Resource Management 137 London Linen Supply Johnson Serv ice Group Support Serv ices 65 Lloyd's Register Rail Europe Ricardo Consulting Serv ices 59 Sav ille Consulting Towers Watson & Co Human Resource Management 59 TRaC Global Element Materials Technology Testing Serv ices 45 BM TRADA Group Exov a Group Consulting Serv ices 22

MARKET OBSERVATIONS

. Business Services in the Euro area reported growth in all nations, reaching four year highs in the second quarter, with the Markit Services Business Activity Index reaching 54.2 in June, up from 53.6 and 52.0 in May and April, respectively. Rates of growth improved in both manufacturing and services sub-sectors and economic growth accelerated in Germany, Italy and France . The UK services sector continues its trend of strong growth, rising sharply in June with the Business Activity Index reaching 58.5, a significant increase on the index in May of 56.5 following the recent election results . Business optimism for the sector remains positive. Optimism ticked higher in Germany and France, but edged lower in Italy, Spain and Ireland . Omers and Alberta, the Canadian-based private equity firms, acquired Environmental Ressources Management, the British-based environmental consulting services company, from Charterhouse for a total consideration of €1.5bn . Management moves3: Adecco, Berendsen, De La Rue, Edenred, Elior, Gunnebo, Intertek Group, Loomis

Sources: S&P Capital IQ, Markit Economics 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 PAGE | 7 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

CONSUMER

EUROPEAN CONSUMER EQUITY MARKETS1 UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 5.6% (0.5%) (2.9%) (3.6%) (5.9%) (1.4%) (1.9%) Cash on Balance Sheet (€ bn) 24.9 55.2 31.9 4.5 5.8 NM NM Net Debt / LTM EBITDA Multiple 1.9x 2.1x 1.4x 2.7x 2.0x 1.5x 1.7x LTM EBITDA Multiple 11.0x 8.0x 9.0x 12.4x 10.1x 8.6x 10.9x Change since last quarter 1.0x (0.5x) (0.2x) (1.7x) 0.5x (0.3x) 0.3x LTM EBITDA Margin 12.4% 9.3% 9.5% 13.6% 12.6% 11.6% 9.7% Consensus 2Yr Fwd Revenue Growth (p.a.) 4.6% 5.4% 3.9% 7.9% 6.1% 5.1% 5.5%

EUROPEAN CONSUMER MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2 350 35

300 30

250 25

200 20

150 15

100 10 5

50 Number ofTransactions Number Number ofTransactions

0 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15

UK & Eire Scan dinavia DACH France Bene lux Spain Italy North Ameri ca Asia (exc l. China & In dia) China India South America Africa & Middle East

SELECTED MIDDLE MARKET EUROPEAN CONSUMER M&A DEALS

Target Country Acquirer Country Sub Sector EV (€m) MHDV Holdings Frasers Centrepoint Hotels and Resorts 521

WWRD Holdings Fiskars Homewares 406

The Gritti Palace Nozul Hotels & Resorts Hotels and Resorts 105

CH&Co Catering MML Capital Partners and CH&Co Group Restaurants 108

The Groucho Club Alcuin Capital Partners; Isfield Inv estments Leisure Facilities 57

SMA Vehicle Remarketing BCA Marketplace Consumer Serv ices 62

Napier Brown Foods Tereos Participations Food Distributors 49

MARKET OBSERVATIONS

. Dutch grocery chain Royal Ahold and Belgian grocery chain Delhaize have agreed to a merger, valuing the company at approximately €26bn. The merger is in line with the strategy to gain market share in the competitive U.S. market . CVC Capital Partners, the UK-based private equity firm, has agreed to acquire Douglas Holding, the Germany-based retailer of perfume, body care, jewelry, fashion and sports products, from Advent International Corporation. The transaction is estimated to be valued at €2.8bn . New Look Group, UK based apparel retailer, was acquired from Apax Partners and Permira Advisers by Brait along with the management team and founding family of New Look Group for €2.6bn . CVS Pharmacy has agreed to acquire Target Corporation’s pharmacy and clinic businesses for €1.7bn. The new clinics will be part of CVS/minuteclinic’s plan to operate 1,500 clinics by 2017 . The European Consumer Price Index increased by 0.3% in Q2 2015, versus a earlier estimate of 0.2%, representing the first increase in six months, driven by strengthening consumer demand coupled with higher energy costs . In the UK, retail sales volumes for June 2015 decreased by 0.2% compared with May 2015 and increased by 4.0% compared with June 2014. This was the 27th consecutive month of Y-o-Y growth, the longest period of sustained growth since May 2008 . Management moves3: Accor, Beiersdorf, Carlsberg, Diageo, Kingfisher, Koninklijke Ahold, Marks & Spencer Group, Nestlé, Unilever and Whitbread

Sources: S&P Capital IQ, Bloomberg, Company press releases 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 Netherlands, Luxembourg) and Scandinavia (Denmark, PAGE | 8 Norway, Sweden and Finland); 3. Resignation or appointment of CEO or CFO for companies with market capitalisation over €10bn EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

ENERGY & POWER

EUROPEAN ENERGY & POWER EQUITY MARKETS1 UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 2.5% (4.9%) (1.3%) (3.7%) (4.5%) (6.8%) (4.6%) Cash on Balance Sheet (€ bn) 44.0 42.1 10.4 16.2 22.5 23.4 16.0 Net Debt / LTM EBITDA Multiple 1.6x 2.4x 3.0x 3.2x 3.3x 4.5x 4.6x LTM EBITDA Multiple 5.8x 4.6x 6.5x 11.0x 7.4x 11.3x 7.9x Change since last quarter 1.1x (0.4x) (0.2x) 0.2x (1.2x) 0.5x (0.8x) LTM EBITDA Margin 18.0% 14.6% 8.0% 16.7% 14.8% 36.7% 33.1% Consensus 2Yr Fwd Revenue Growth (p.a.) (0.6%) 3.2% 1.0% 5.0% (2.2%) (5.3%) (1.8%)

EUROPEAN ENERGY & POWER MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2 30 8 7 25 6 20 5 15 4 3 10 2 - 5

SELECTED MIDDLE MARKET EUROPEAN ENERGY & POWER M&A3

Target Country Acquirer Country Sub Sector EV (€m) Ithaca Petroleum Norge MOL Hungarian Oil and Gas Exploration and Production 84 MSIS Group Primary Capital Oilfield Serv ices 28 Drilling Systems Blue Water Energy Oilfield Training Software NA Harv est Energy State Oil Petroleum Distribution NA Petroceltic Romania GVC Inv estment Exploration and Production NA MacKellar Sub-Sea Ferguson Marine Engineering Offshore Equipment NA SEABOX National Oilwell Varco Oilfield Equipment NA

MARKET OBSERVATIONS

. In Q2 2015, the European oil & gas and energy M&A market was primarily driven by transactions of European private equity firms. Primary Capital acquired MSIS, the UK-based oilfield environmental services and equipment specialist, Blue Water acquired Drilling Systems, the UK-headquartered provider of oilfield training simulation technology, and HitecVision sold its portfolio company SEABOX, the Norwegian provider of water treatment technology to the offshore oil and gas industry, to National Oilwell Varco . Norway has overtaken Russia as western Europe’s top natural gas supplier. After recent political tension over Russia's annexation of Ukraine's Crimea region, the European Union increased its efforts to become less dependent on Russian gas imports. Gazprom will discontinue gas transit through Ukraine to Europe after 2019 and signed an agreement with Greece in June for a new €2.3bn pipeline, which will be completed in 2019 . The heads of Europe’s six largest energy companies have signed an open letter on climate change, urging governments to take decisive action at December’s UN summit to encourage the installment of natural gas and carbon pricing systems. The letter has driven a wedge between European and US energy companies, as Exxon Mobil and Chevron refused to sign. Chevron head John Watson criticized that a carbon pricing system is not practicable, as costs will be passed on to the consumer . Management moves4: Vestas Wind Systems, Faroe Petroleum, Fortum, Afren, Gulfsands Petroleum, Volga Gas, OMV, CropEnergies, IGas Energy, Panoro Energy, Circle Oil, Lundin Petroleum Sources: 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 €800m (excl. Redhall) 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 4. Resignation or PAGE | 9 appointment of CEO or CFO EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

HEALTHCARE & LIFE SCIENCES

EUROPEAN HEALTHCARE & LIFE SCIENCES EQUITY MARKETS1 UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 3.4% (0.7%) 0.2% (9.1%) (0.6%) 0.3% 4.6% Cash on Balance Sheet (€ bn) 20.2 3.4 24.0 1.7 0.7 1.3 NM Net Debt / LTM EBITDA Multiple 1.5x 1.4x 1.4x 2.0x 1.9x 2.4x 1.6x LTM EBITDA Multiple 14.2x 11.6x 13.2x 12.5x 12.5x 15.0x 15.6x Change since last quarter (1.0x) (0.6x) (0.1x) (0.6x) (0.6x) (0.7x) (0.8x) LTM EBITDA Margin 18.3% 12.8% 15.8% 14.4% 15.5% 9.1% 18.0% Consensus 2Yr Fwd Revenue Growth (p.a.) 8.8% 12.8% 6.5% 8.5% 8.5% 9.6% 13.9%

EUROPEAN HEALTHCARE & LIFE SCIENCES MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2 140 25

120 20 100

80 15

60 10 40 5

Number Number ofTransactions Number Number ofTransactions 0 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 North Ameri ca Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Ital y India South America Africa & Middle East

SELECTED MIDDLE MARKET EUROPEAN HEALTHCARE & LIFE SCIENCES M&A Target Country Acquirer Country CountrySub Sector EV (€m) Sigma Tau Pharma Baxter International Pharmaceuticals 805 Medisupport Sonic Healthcare Healthcare Serv ices 310 Biomnis Eurofins Scientific Healthcare Serv ices 220 Celsis International Charles Riv er Laboratories Biotechnology 192 Aerocrine Circassia Healthcare Equipment 190 BBI Group Exponent Priv ate Equity Healthcare Equipment 150 EirGen Pharma ORKO Ireland Pharmaceuticals 120 Prosonix Circassia Pharmaceuticals 97

MARKET OBSERVATIONS

. Four of the largest health insurers in the U.S. are set to combine with the recent announcements that Anthem plans to acquire Cigna and Aetna plans to acquire Humana at purchase prices of ~$54bn and ~$37bn, with 1-month share price premiums of 35% and 29%, respectively . TEVA, Mylan and Perrigo, the Israeli, Netherlands and Irish manufacturer of generic pharmaceuticals, are involved in a three-way takeover battle where TEVA is attempting to acquire Mylan for €45bn, while Mylan is attempting to buy Perrigo in order to outsize TEVA’s hostile takeover . Panasonic Healthcare acquired Bayer Diabetes Care, the Diabete division of Bayer for a total consideration of €1.0bn . Cinven has agreed to acquire Synlab, the second largest laboratory operator in Europe, from BC Partners for c.€1.8bn . The global Biomarkers market is expected to grow from $24.1bn in 2015 to $45.6bn in 2020, representing a CAGR of 13.6%, driven by increased diagnostics development, personalised medicine and drug discovery . The Mayor of London has proposed a plan for a £10 billion ‘megafund’, which would use both equity and debt from institutional investors to increase investment in the sector as financing for UK life science companies reached its highest level in ten years . Management moves3: Lundbeck, Oriala and Shire

Sources: S&P Capital IQ, Ricoh Europe, European Commission, Financial Times, Bloomberg, Healthcare Dive 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 (Belgium, The Netherlands, Luxembourg) PAGE | 10 and Scandinavia (Denmark, Norway, Sweden and Finland); 3. Resignation or appointment of CEO, CFO or Chairman EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

INDUSTRIALS

EUROPEAN INDUSTRIALS EQUITY MARKETS1 UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 3.6% (3.1%) (2.9%) (10.0%) (7.4%) (6.3%) (3.5%) Cash on Balance Sheet (€ bn) 16.6 32.2 39.9 12.8 5.1 7.7 NM Net Debt / LTM EBITDA Multiple 1.1x 1.9x 1.6x 5.9x 3.1x 2.3x 2.1x LTM EBITDA Multiple 10.2x 7.8x 8.9x 10.4x 8.9x 9.9x 10.9x Change since last quarter (0.1x) (0.3x) (0.0x) 1.2x (0.7x) 0.1x (0.7x) LTM EBITDA Margin 11.8% 10.0% 8.8% 11.7% 9.3% 9.6% 9.9% Consensus 2Yr Fwd Revenue Growth (p.a.) 5.0% 6.0% 4.5% 4.5% 8.1% 5.9% 6.2%

EUROPEAN INDUSTRIALS MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2 200 30

25 150 20

100 15

10 50

5 Number Number ofTransactions 0 Number ofTransactions 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East SELECTED MIDDLE MARKET EUROPEAN INDUSTRIALS M&A

Target Country Acquirer Country Sub Sector EV (€m) Mirror Controls International Flextronics Automotiv e Equiment 457

Univ ersal Robots Teradyne Holdings Industrial Machinery 309

SimonsVoss Allegion Electronic Equipment 210

Alfa Valv ole IDEX Corporation Industrial Machinery 102

Ammeraal Beltech Adv ent International Industrial Machinery NA

Weener Plastik 3i Group Packaging NA

Wittur Bain Capital Industrial Machinery NA

MARKET OBSERVATIONS

. Economic indicators posted mixed results in June with positive signs from the composite purchasing managers index, which rose to 54.2 (its highest reading since May 2011), and underwhelming results from the economic sentiment indicator, which decreased in the Euro area by 0.3 points to 103.5 and decreased in the E.U. by 0.9 points to 105.5 . U.S. agrochemicals firm, Monsanto, announced plans to acquire Swiss rival, Syngenta, which would provide the Company with combined turnover of €28 billion and 40% of global corn-seed market share . Holcim and Lafarge completed their global merger on July 10th and have launched LafargeHolcim, a world leader in the building materials industry . Following a string of recent spin-offs, which included GE and NOV, industrial conglomerate, Danaher Corporation, announced plans to split from several industrial business units once it completes its planned acquisition of Pall Corporation for €12.5 billion, and Emerson Electric announced plans to spin-off its Network Power business unit . Management moves3: Abengoa, Eaton, Keller Group, Kone, Rolls Royce, Volvo, Scania, SKF, and Smiths Group Sources: S&P Capital IQ, European Commision, Reuters, Markit Economics, Business Report, IMCD investor presentation 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 Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); 3. Resignation or appointment of CEO, CFO or Chairman PAGE | 11 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

TECHNOLOGY, MEDIA & TELECOM

EUROPEAN TECHNOLOGY, MEDIA & TELECOM EQUITY MARKETS1 UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 4.3% (1.4%) (3.2%) (10.0%) (11.1%) (3.3%) (2.5%) Cash on Balance Sheet (€ bn) 30.0 34.7 24.9 5.4 7.4 17.1 NM Net Debt / LTM EBITDA Multiple 1.6x 1.1x 1.6x 2.8x 1.6x 1.9x 1.3x LTM EBITDA Multiple 13.0x 9.9x 11.8x 12.3x 10.5x 10.9x 10.0x Change since last quarter 0.8x (0.2x) (0.1x) (0.4x) 0.4x (0.3x) (0.2x) LTM EBITDA Margin 16.2% 10.3% 10.5% 10.1% 11.0% 17.0% 12.3% Consensus 2Yr Fwd Revenue Growth (p.a.) 9.3% 7.0% 7.7% 6.8% 5.9% 6.6% 7.3%

EUROPEAN TECHNOLOGY, MEDIA & TELECOM MIDDLE MARKET M&A ACTIVITY M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2

400 100 350 80 300

250 60 200 150 40 100 20

50 Number ofTransactions 0 Number ofTransactions 0 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

SELECTED MIDDLE MARKET EUROPEAN TECHNOLOGY, MEDIA & TELECOM M&A

Target Country Acquirer Country CountrySub Sector EV (€m) Elektrobit Automotiv e Continental Systems Software 600 The Foundry Visionmongers HgCapital OnlineApplication Gaming Software 280 uSwitch Zoopla Property Group Online Price-comparison Serv ices 274 * Phoenix IT Group Daisy Group IT Infrastructure 270 Dailymotion Viv endi Video-sharing Serv ices 265 e-conomic international Visma Cloud-based Software 201 Priv ax AVG Technologies Security Software Solutions 54 IS Group KPN Managed serv ices prov ider NA * Including c.€40m earn out MARKET OBSERVATIONS

. Charter Communications has made an offer to acquire Time Warner Cable, the US-based media and entertainment company, valuing the business at c.$77.8bn . Nokia has made an offer for Alcatel-Lucent, the France-based provider of telecommunication services, valuing the business at €16.2bn . Hutchison Whampoa has agreed to acquire Telefonica UK, the UK-based provider of integrated mobile, fixed and broadband services, for an initial amount of £9.3bn and an additional £1.0bn in deferred consideration . Equinix has agreed to acquire the Telecity Group, the UK-based provider of data centres in Europe, valuing the business £2.7bn . Telenet, a subsidiary of Liberty Global, has agreed to acquire BASE, the Belgium-based provider of mobile telephony, digital TV, internet and fixed telephony solutions, from Koninklijke KPN, valuing the business at €1.3bn . According to Gartner’s latest research, mobile phone sales to end users will increase by 3.3% in 2015 to 1.9bn units and will reach 2.1bn units by 2019, representing a CAGR of 2.5% . According to IDC, the worldwide Internet of Things (‘IoT’) market will grow from $656bn in 2014 to $1.7tn by 2020, representing a CAGR of 17.2%. . Management moves3: Alcatel-Lucent, Cisco Systems and Coms Sources: S&P Capital IQ, Company Press Releases, Merger Market, Gartner, eMarketer 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 (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); 3. Resignation or appointment of CEO, CFO or Chairman PAGE | 12 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

TRANSPORTATION & LOGISTICS

EUROPEAN TRANSPORTATION & LOGISTICS EQUITY MARKETS1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 8.4% 1.2% (7.6%) (5.2%) (1.6%) 0.6% 3.7% Cash on Balance Sheet (€ bn) 5.8 31.5 54.0 8.4 4.5 1.3 4.9 Net Debt / LTM EBITDA Multiple 1.4x 2.8x 3.0x 4.6x 3.1x 3.0x 3.2x LTM EBITDA Multiple 7.8x 10.3x 9.7x 8.8x 11.1x 8.8x 8.6x Change since last quarter 0.1x 0.9x (0.0x) (1.6x) (1.8x) (2.6x) 0.9x LTM EBITDA Margin 10.0% 9.4% 13.5% 39.3% 22.8% 4.8% 12.0% Consensus 2Yr Fwd Revenue Growth (p.a.) 5.4% 3.1% 4.3% 4.6% 0.3% 0.2% 3.8%

EUROPEAN TRANSPORTATION & LOGISTICS MIDDLE MARKET M&A ACTIVITY

M&A DEALS BY COUNTRY OF TARGET2 ACQUISITIONS BY NON-EUROPEAN BUYERS2

60 10

50 8 40 6 30 4 20

10 2

0 Number of Transactions 0 Number of Transactions Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

SELECTED MIDDLE MARKET EUROPEAN TRANSPORT & LOGISTICS M&A3

Target Country Acquirer Country Sub Sector EV (€m) Prime Cargo Mitsui-Soko Freight Forwarding 39

LRG Logistics Galliker Transport Perishable Freight Transport NA

Gee's Customs Solutions KGH Customs Perishable Freight Transport NA

Royale Research Next Wav e Partners Parcel Deliv ery NA

Trans Europa Express Holding Constellation Capital Railway Logistics NA

Partner Solution Blue Water Shipping Freight Forwarding NA

MARKET OBSERVATIONS

. The European T&L M&A market showed increased transaction activity in Q2 2015 after two consecutive quarters of decline. The majority of transactions was conducted by European buyers, who primarily showed appetite for UK and Ireland-headquartered companies . During the second quarter, two major transactions by US corporates caused turmoil in the European transport and logistics market. FedEX, the US global logistics giant, acquired TNT Express, the European parcel delivery corporation. The Netherlands- listed TNT generated revenues of €6.7bn and the transaction is valued at €4.4bn. In addition, XPO Logistics, the New-York-listed transport and logistics provider has agreed to acquire France-listed freight forwarding giant Norbert Dentressangle with an enterprise value of €3.2bn. The transaction will create the world’s second-largest freight brokerage firm with a combined revenue of more than €8bn . Increased M&A activity in the air transportation market: Aer Lingus, the Ireland-based and listed airline received an offer of c.€820m from International Consolidated Airlines Group and Portuguese government owned TAP-Airline sold 61% of its share to private investors for an estimated transaction value of €354m. Both transactions are expected to close during Q3 2015 . German freight forwarders invest in the USA: During Q2 2015 Kühne + Nagel acquired 500m revenue logistics company ReTrans (the transaction is expected to close during the following quarter) and DHL invested €100m in its US-hub airport of Cincinnati Sources: 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 PAGE | 13 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

FEATURED THEME

INCREASING STRATEGIC ACQUIRER APPETITE

. Q2 2015 saw an accelerated growth in European acquisitions by strategic buyers, with a total of 965 deals in Q2 2015, up 15% on Q1 2015 and 14% on Q2 2014 . Strategic buyers are actively seeking to deploy capital to make synergistic acquisitions, with corporate cash balances at historical highs . Acquisitions by strategic buyers comprised 88% of the total mid-market deal volume in Q2 2015, the highest proportion seen since Q1 2013 – E&P, HCLS and TMT have the largest relative proportion of strategic acquirers within their sectors, at 95%, 93% and 92%, respectively – E&P has seen a significant increase in the proportion of strategic buyers since Q3 2014 (63%), reaching 95% in Q2 2015, as strategic acquirers continued to pursue acquisitions despite the drop in oil price from Q3 2014 . The global M&A market reached record levels in Q2 2015 amid mega acquisitions by strategic buyers, including Charter’s acquisition of Time Warner for €72bn, Shell’s acquisition of BG for €64bn and Avago Technologies' acquisition of Broadcom for €34bn . HW&Co. experienced a strong first half of 2015 with 14 acquisitions by strategic buyers – In 2015, HW&Co. closed 14 transactions with strategic buyers – HW&Co.’s deals with strategic investors covered a broad range of sectors, including ADG, Business Services, Consumer, HCLS, T&L and TMT

STRATEGIC BUYERS SHARE OF TOTAL DEAL VOLUME1 EUROPEAN CORPORATE CASH BALANCES2

90% 1,000 89%

88% Q2 2013 – Q2 2015 average: 87% 800 bn) 87% € 600 86% 85% 400 84% 200 % Strategicof Buy ers 83%

82% Cash Balances ( 0 81% Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 80% Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 France UK and Eire DACH Benelux Spain Italy Scandinavia

SELECTED HW&CO. 2015 DEALS WITH STRATEGIC ACQUIRERS

a portfolio company of a portfolio company of a portfolio company of

has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by a portfolio company of

a portfolio company of a portfolio company of a portfolio company of a portfolio company of a portfolio company of

has been acquired by

has sold its has been acquired by aerospace assets to has been acquired by has been acquired by has been acquired by

Sources: S&P Capital IQ, European Commission 1. 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); 2. Cash balances of selected listed companies in European geographies as defined above, with a market cap greater than €50m PAGE | 14 EUROPEAN UPDATE INDUSTRY UPDATE │ SUMMER 2015

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