US M&A News and Trends

Media Questions/Requests FLASHWIRE US MONTHLY [email protected] November 2016

This Issue: US M&A News and Trends U.S. M&A deal activity decreased in October, going down 8.1% U.S. private equity activity decreased in October, down 15.7% 2 US Merger with 992 announcements compared to 1,079 in September. from September. There were 97 deals in October compared to 115 However, aggregate M&A spending increased. In October, 179.5% in September. Aggregate transaction value increased slightly, up by Metrics more was spent on deals compared to September. 1.3% to $24.5 billion from September's $24.2 billion.

2 US Middle Over the past 3 months, the sectors that have seen the biggest The top financial advisors for 2016 based on deal announcements, increases in M&A deal activity, relative to the same three-month are: JPMorgan Chase & Co, Morgan Stanley, Goldman Sachs & Co., Market Monitor period one year ago, have been: Industrial Services (163 vs. 127), Houlihan Lokey, Inc., and Evercore Partners, Inc. The top five Energy Minerals (63 vs. 32), Non-Energy Minerals (69 vs. 55), financial advisors, based on the aggregate transaction value of the 3 US Sector Communications (43 vs. 35), and Government (11 vs. 5). Seven of deals worked on, are: GGoldman Sachs & Co., Morgan Stanley, Bank Activity & Value the 21 sectors tracked by FactSet Mergerstat posted relative gains of America Merrill Lynch, JPMorgan Chase & Co, and Citigroup. in deal flow over the last three months compared to the same three months one year prior. The top legal advisors for 2016 based on deal announcements, are: 4 US Strategic Kirkland & Ellis LLP, Jones Day LP, Latham & Watkins LLP, Skadden, Buyer Report Over the past 3 months, the sectors that have seen the biggest Arps, Slate, Meagher & Flom LLP, and Morgan, Lewis & Bockius 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: Technology Services (445 vs. 570), value of the deals worked on, are: Sullivan & Cromwell LLP, Cravath, 4 US Private Equity Commercial Services (487 vs. 558), Finance (373 vs. 422), Health Swaine & Moore LLP, Simpson Thacher & Bartlett LLP, Wachtell, Report Services (165 vs. 202), and Distribution Services (157 vs. 174). Lipton, Rosen & Katz, and Weil, Gotshal & Manges LLP. Thirteen of the 21 sectors tracked by FactSet Mergerstat posted 5 Top US Advisors negative relative losses in deal flow over the last three months compared to the same three months one year prior, for a combined loss of 335 deals. 6 Top US Deals Scoreboard Topping the list of the largest deals announced in October are: AT&T, Inc. agreeing to acquire Time Warner, Inc. for $83.1 billion; British American Tobacco Plc offering to acquire the remaining 57.8% stake not already owned in Reynolds American, Inc. for $47 billion; QUALCOMM, Inc.'s agreement to acquire NXP Semiconductors NV for $38.1 billion; CenturyLink, Inc. entering an agreement to acquire Level 3 Communications, Inc. for $25.1 billion; General Electric Co.'s deal to acquire Baker Hughes, Inc. for an estimated $25.0 billion.

The US Mergers & Acquisitions Market Index

$450.0 1,500 $405.2 $400.0 1,250 $350.0

$300.0 $259.4 1,000 $236.4 $250.0 $225.8 $208.2 $205.7 750 $180.4 $200.0 $173.0 $145.0 $150.0 $141.1 500 $96.0 $111.2 $91.6 $120.5 $121.1 $114.7

$100.0 250 $50.0 1,305 1,092 1,156 1,206 1,085 1197 1,161 1,040 1,037 1,012 966 1,035 1,027 1,127 1,079 992 $0.0 0 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Deal Volume Aggregate Deal Value

US MergerMetrics November 2016

Merger Stats

Number of Deals Agg. Transaction Value ($Bil)

12 Months Ended 12 Months Ended Average Deal Size 10/31/16 10/31/15 Change 10/31/16 10/31/15 Change P/E

$1 Billion + 312 326 -4.3% $1,516.6 $1,799.8 -15.7% 32.8

$500M to $999.9M 206 237 -13.1% 146.2 165.4 -11.6% 28.5

$250M to $499.9M 314 332 -5.4% 110.7 118.2 -6.3% 29.2

$100M to $249.9M 502 566 -11.3% 79.8 90.0 -11.4% 25.8

$50M to $99.9M 393 458 -14.2% 28.6 32.0 -10.6% 22.3

$25M to $49.9M 371 496 -25.2% 13.4 17.8 -24.8% 23.7

$10M to $24.9M 457 639 -28.5% 7.4 10.5 -29.2% 19.1

Under $10M 866 1,058 -18.1% 2.8 3.7 -26.2% 17.1

Undisclosed 9,337 9,576 -2.5% N/A N/A N/A N/A

Total 12,758 13,688 -6.8% $1,905.4 $2,237.4 -14.8% 26.7

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

30.0x 45.0% 40.0% 25.0x 35.0%

20.0x 22.5x 30.0% 21.6x 32.1% 19.6x 25.0% 15.0x 26.6% 26.1% 20.0%

10.0x 15.0% 10.0% 5.0x 5.0%

0.0x 0.0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 L3M 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 L3M

US Middle Market Monitor MEDIAN EV/EBITDA MEDIAN PREMIUM

12.0x 60.0%

10.0x 50.0% 10.0x 8.0x 8.8x 8.8x 40.0% 40.4% 6.0x 30.0%

28.8% 27.3% 4.0x 20.0%

2.0x 10.0%

0.0x 0.0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 L3M 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 L3M

*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 2016 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 November 2016

SECTOR BY ACTIVITY L3M 10/31/16 L3M 10/31/15 Target Sector Deal Count Deal Count Difference Industrial Services 163 127 36 Energy Minerals 63 32 31 Non-Energy Minerals 69 55 14 Communications 43 35 8 Government 11 5 6 Consumer Services 257 254 3 Consumer Durables 56 55 1 Utilities 80 80 0 Process Industries 116 118 (2) Retail Trade 138 142 (4) Consumer Non-Durables 91 95 (4) Transportation 65 71 (6) Electronic Technology 130 139 (9) Health Technology 95 104 (9) Miscellaneous 6 17 (11) Producer Manufacturing 188 199 (11) Distribution Services 157 174 (17) Health Services 165 202 (37) Finance 373 422 (49) Commercial Services 487 558 (71) Technology Services 445 570 (125) Total 3,198 3,454 (256)

SECTOR BY VALUE L3M 10/31/16 L3M 10/31/15 Target Sector Value Value Difference Consumer Services $137,155.5 $44,163.2 $92,992.3 Industrial Services 82,357.4 18,986.0 63,371.4 Communications 36,332.6 2,769.5 33,563.1 Finance 72,807.7 56,873.5 15,934.2 Producer Manufacturing 16,978.2 8,739.2 8,239.1 Energy Minerals 18,955.0 15,060.0 3,895.0 Consumer Durables 4,691.4 2,311.1 2,380.3 Government 0.0 0.0 0.0 Miscellaneous 273.2 497.8 (224.6) Distribution Services 5,524.8 6,267.6 (742.9) Health Services 9,550.5 10,517.1 (966.6) Commercial Services 17,010.6 19,330.0 (2,319.4) Process Industries 9,671.2 12,528.6 (2,857.5) Transportation 2,087.7 6,803.6 (4,715.9) Retail Trade 23,951.4 32,817.3 (8,865.9) Electronic Technology 72,958.0 90,704.2 (17,746.2) Utilities 22,601.6 40,445.0 (17,843.5) Technology Services 38,428.5 59,857.1 (21,428.6) Health Technology 25,223.4 51,916.2 (26,692.9) Non-Energy Minerals 5,838.5 40,165.0 (34,326.5) Consumer Non-Durables 62,468.6 149,661.5 (87,192.9) Total $664,865.6 $670,413.5 ($5,547.9)

US Strategic Buyer Report November 2016

Merger Stats

Number of Deals Agg. Transaction Value ($Bil)

12 Months Ended 12 Months Ended Average Deal Size 10/31/16 10/31/15 Change 10/31/16 10/31/15 Change P/E $1 Billion + 165 178 -7.3% $908.7 $993.5 -8.5% 35.5 $500M to $999.9M 131 120 9.2% 93.3 83.1 12.2% 32.0 $250M to $499.9M 189 195 -3.1% 66.9 68.6 -2.5% 29.5 $100M to $249.9M 320 376 -14.9% 50.7 59.5 -14.8% 26.7 $50M to $99.9M 272 344 -20.9% 19.8 23.9 -17.2% 20.4 $25M to $49.9M 266 372 -28.5% 9.6 13.3 -27.7% 24.1 $10M to $24.9M 351 486 -27.8% 5.7 8.0 -29.4% 20.3 Under $10M 593 777 -23.7% 2.0 2.8 -28.7% 14.1 Undisclosed 7,327 7,756 -5.5% N/A N/A N/A N/A Total 9,614 10,604 -9.3% $1156.6 $1252.8 -7.7% 27.5

PUBLIC BUYER INDEX LTM 10/31/16

$300 350 $267.5 $250 300 250 $200 200 $150 $128.7 $93.8 $82.7 $93.5 150 $100 $68.9 $73.6 $54.4 $52.0 $48.0 100 $36.5 $50 $46.1 329 316 281 305 259 298 270 266 268 272 272 277 50 $0 0 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16

US Private Equity Report Indices Top Private Equity Fundraisings: YTD 2016

PE BUYER INDEX: LTM 10/31/16 Open Date Value ($Mil) Fund (Private Equity Sponsor) 1-Apr-2016 $12,000.0 Virtual Reality Venture Capital Alliance Fund $30 150 $24.4 $24.2 $27.1 Virtual Reality Venture Capital Alliance $22.1 $22.2 $25 $20.8 $20.3 $18.8 120 18-Feb-2016 8,000.0 Vista Equity Partners Fund VI $20 $16.9 $17.0 $15.2 90 Vista Equity Partners Management LLC $15 28-Jan-2016 7,600.0 Thoma Bravo Fund XII $7.2 60 $10 Thoma Bravo LLC $5 30 115 136 116 106 110 122 120 106 107 124 115 97 20-Jan-2016 6,500.0 GSO Capital Opportunities Fund III $0 0 GSO Capital Partners (Private Equity) Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 21-Mar-2016 6,000.0 Starwood Opportunity Fund XI

Starwood Capital Group Global LLC GOING PRIVATE INDEX: LTM 10/31/16 10-May-2016 5,600.0 Lone Star Fund X Lone Star Americas Acquisitions LLC $100 14 $90 4-Jan-2016 5,600.0 Mezzanine Partners III LP 12 $80 Highbridge Principal Strategies Mezzanine $70 10 1-Jan-2016 5,250.0 Trident Fund VII $60 8 $50 Stone Point Capital LLC 6 $40 26-Apr-2016 5,000.0 Vintage VII Fund $30 $16.5 $13.4 4 $8.1 $8.1 Goldman Sachs Private Equity Group $20 $7.2 $5.5 $4.3 $6.8 $3.4 $0.8 $2.2 $2.2 2 $10 4 6 3 7 2 4 12 8 8 7 6 6 25-May-2016 4,500.0 Platinum Equity Capital Partners IV LP $0 0 Platinum Equity LLC Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16

Top US Advisors November 2016 BASED ON US ANNOUNCED DEALS – RANKED BY TRANSACTION VALUE: YTD 2016 Transaction Total Transaction Total Financial Advisor Value ($Mil)* Deals** Legal Advisor Value ($Mil)* Deals** 1. Goldman Sachs & Co. $571,674.7 144 1. Sullivan & Cromwell LLP $541,108.3 95 2. Bank of America Merrill Lynch 482,596.1 98 2. Cravath, Swaine & Moore LLP 391,339.0 57 3. Morgan Stanley 461,168.5 117 3. Simpson Thacher & Bartlett LLP 378,877.5 92 4. JPMorgan Chase & Co 434,222.3 150 4. Wachtell, Lipton, Rosen & Katz 362,276.5 63 5. Citigroup 352,979.2 89 5. Weil, Gotshal & Manges LLP 335,970.9 119 6. Credit Suisse 336,381.8 93 6. Skadden, Arps, Slate, Meagher & Flom LLP 315,486.0 144 7. Barclays Plc 298,523.2 98 7. Shearman & Sterling LLP 227,372.9 73 8. Evercore Partners, Inc. 242,867.0 102 8. Paul, Weiss, Rifkind, Wharton & Garrison LLP 198,389.1 96 9. Centerview Partners LLC 210,816.1 33 9. Herbert Smith Freehills LLP 179,618.5 33 10. Lazard 204,829.4 88 10. Jones Day LP 172,952.4 206 11. Deutsche Bank AG 156,786.0 54 11. Latham & Watkins LLP 170,121.0 197 12. UBS Group AG 143,314.5 55 12. Davis Polk & Wardwell LLP 169,361.9 83 13. Moelis & Co. 142,292.8 60 13. Kirkland & Ellis LLP 157,397.8 242 14. Allen & Co., Inc. 140,340.3 6 14. Gibson, Dunn & Crutcher LLP 153,126.1 87 15. RBC Capital Markets 132,525.7 67 15. Allen & Overy LLP 140,886.4 44 16. Perella Weinberg Partners Group LP 115,124.8 10 16. Cleary Gottlieb Steen & Hamilton LLP 137,444.1 53 17. Rothschild & Co. 111,083.0 71 17. Arnold & Porter LLP 123,360.1 21 18. Qatalyst Group LP 100,516.1 11 18. Stikeman Elliott LLP 117,160.1 56 19. Guggenheim Capital LLC 88,988.4 20 19. Wilson Sonsini Goodrich & Rosati 116,568.6 99 20. Wells Fargo & Co. 82,536.9 56 20. Morrison & Foerster LLP 103,318.6 50 21. PricewaterhouseCoopers 74,186.9 65 21. Debevoise & Plimpton LLP 98,318.1 40 22. Ducera Partners LLC 64,027.8 2 22. Clifford Chance LLP 84,989.4 48 23. Bank of Montreal 57,310.7 33 23. Fried, Frank, Harris, Shriver & Jacobson LLP 82,962.2 45 24. Jefferies LLC 48,854.6 93 24. DLA Piper Group 76,881.1 64 25. Scotiabank 35,323.7 11 25. Morris, Nichols, Arsht & Tunnell LLP 71,880.7 20 26. Sandler O'Neill & Partners 27,648.5 53 26. Luthra & Luthra 67,796.5 9 27. Mizuho Financial Group, Inc. 26,705.7 10 27. Alston & Bird LLP 65,055.3 43 28. Canadian Imperial Bank of Commerce 25,178.7 4 28. Willkie Farr & Gallagher LLP 60,273.3 57 29. BNP Paribas SA 20,953.1 21 29. Moore & Van Allen PLLC 57,767.4 3 30. KeyCorp 20,848.7 19 30. Goodmans LLP 47,120.7 6 31. PJT Partners, Inc. 20,400.5 18 31. Vinson & Elkins LLP 46,748.1 47 32. Crédit Agricole SA 20,177.3 2 32. De Brauw Blackstone Westbroek NV 45,873.3 1 33. Sumitomo Mitsui Financial Group, Inc. 18,651.9 2 33. McCarthy Tetrault LLP ( Canada) 43,142.9 3 34. Mitsubishi UFJ Financial Group, Inc. 18,400.0 1 34. Freshfields Bruckhaus Deringer LLP 41,066.0 22 34. U.S. Bancorp 18,400.0 1 35. Sidley Austin LLP 39,665.5 41 36. Ernst & Young Global Ltd. 16,465.2 63 36. Ropes & Gray LLP 37,888.4 47 37. Houlihan Lokey, Inc. 15,148.9 106 37. AZB & Partners 37,453.7 20 38. KPMG International 14,983.8 62 38. Hogan Lovells 36,754.6 43 39. The Raine Group LLC 12,843.3 4 39. Morgan, Lewis & Bockius LLP 35,376.0 134 40. Greenhill & Co., Inc. 12,345.4 16 40. Jones Walker LLP 34,489.8 7 41. LionTree LLC 12,168.2 9 41. A&L Goodbody 31,170.3 2 42. Stifel, Nicolaus & Co., Inc. 12,133.7 79 42. Baker Botts LLP 29,480.7 27 43. HSBC Holdings Plc 11,332.8 6 43. Cooley LLP 29,106.1 26 44. Macquarie Group 10,518.6 27 44. Arthur Cox & Co. (UK) 28,984.6 1 45. William Blair & Co. LLC 10,309.5 55 45. Fenwick & West LLP 28,128.0 47 46. Grant Samuel & Associates Pty Ltd. 7,813.1 4 46. Blake, Cassels & Graydon LLP 27,642.9 33 47. Deloitte LLP 7,664.7 33 47. Mayer Brown LLP 25,480.6 31 48. Raymond James Financial, Inc. 7,522.1 61 48. Covington & Burling LLP 24,775.4 28 49. Société Générale SA 7,459.5 3 49. Cadwalader, Wickersham & Taft LLP 24,738.6 4 50. Numis Corp. Plc 7,298.0 9 50. King & Wood Mallesons Ltd. 24,270.0 25

* 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 November 2016

Seller (Unit Sold) Buyer Transaction

Financial Advisor Financial Advisor Value**

Rank Legal Advisor Legal Advisor ($Mil) Seller Sector

Time Warner, Inc. AT&T, Inc. $105,235.7 Consumer Services Allen & Co., Inc. Bank of America Merrill Lynch Citigroup JPMorgan Chase & Co. Morgan Stanley Moelis & Co. 1 Cravath, Swaine & Moore LLP Perella Weinberg Partners Group LP Herbert Smith Freehills LLP Arnold & Porter LLP Simpson Thacher & Bartlett LLP Sullivan & Cromwell LLP Weil, Gotshal & Manges LLP

Monsanto Co. Bayer AG $62,027.8 Process Industries Ducera Partners LLC Bank of America Merrill Lynch Morgan Stanley Credit Suisse Cravath, Swaine & Moore LLP Rothschild Debevoise & Plimpton LLP Allen & Overy LLP 2 Morrison & Foerster LLP Clifford Chance LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Luthra & Luthra Wachtell, Lipton, Rosen & Katz Shearman & Sterling LLP Stikeman Elliott LLP Sullivan & Cromwell LLP

Reynolds American, Inc. British American Tobacco Plc $57,767.4 Consumer Non-Durables Goldman Sachs & Co. Centerview Partners LLC JPMorgan Chase & Co. Deutsche Bank AG Lazard PricewaterhouseCoopers 3 Jones Day LP UBS Group AG Moore & Van Allen PLLC Cravath, Swaine & Moore LLP Simpson Thacher & Bartlett LLP Herbert Smith Freehills LLP Weil, Gotshal & Manges LLP

NXP Semiconductors NV QUALCOMM, Inc. $45,873.3 Electronic Technology Barclays Plc Centerview Partners LLC Credit Suisse Evercore Partners, Inc. Qatalyst Group LP Goldman Sachs & Co. De Brauw Blackstone Westbroek NV Allen & Overy LLP 4 Skadden, Arps, Slate, Meagher & Flom LLP Cravath, Swaine & Moore LLP DLA Piper LLP (US) Paul, Weiss, Rifkind, Wharton & Garrison LLP Shearman & Sterling LLP Sullivan & Cromwell LLP

Spectra Energy Corp. Enbridge, Inc. $43,085.2 Industrial Services Barclays Plc Bank of America Merrill Lynch Bank of Montreal Credit Suisse Citigroup RBC Capital Markets 5 Goldman Sachs & Co. Alston & Bird LLP Morgan Stanley McCarthy Tetrault LLP ( Canada) Goodmans LLP Sullivan & Cromwell LLP Skadden, Arps, Slate, Meagher & Flom LLP Wachtell, Lipton, Rosen & Katz

Level 3 Communications, Inc. CenturyLink, Inc. $34,441.3 Communications Citigroup Bank of America Merrill Lynch Credit Suisse Evercore Partners, Inc. 6 Lazard Jones Walker LLP Latham & Watkins LLP Wachtell, Lipton, Rosen & Katz Willkie Farr & Gallagher LLP

St. Jude Medical, Inc. Abbott Laboratories $29,975.3 Health Technology Guggenheim Capital LLC Bank of America Merrill Lynch Gibson, Dunn & Crutcher LLP Evercore Partners, Inc. 7 Cleary Gottlieb Steen & Hamilton LLP Wachtell, Lipton, Rosen & Katz Wilson Sonsini Goodrich & Rosati PC

Johnson Controls, Inc. Tyco International Plc $28,984.6 Producer Manufacturing Barclays Plc Citigroup Centerview Partners LLC Goldman Sachs & Co. 8 A&L Goodbody Lazard Cleary Gottlieb Steen & Hamilton LLP Arthur Cox & Co. (UK) Sullivan & Cromwell LLP Simpson Thacher & Bartlett LLP Wachtell, Lipton, Rosen & Katz Skadden, Arps, Slate, Meagher & Flom LLP

LinkedIn Corp. Microsoft Corp. $24,385.6 Technology Services Allen & Co., Inc. Morgan Stanley Qatalyst Partners LP Cadwalader, Wickersham & Taft LLP 9 Davis Polk & Wardwell LLP Latham & Watkins LLP Gibson, Dunn & Crutcher LLP Paul, Weiss, Rifkind, Wharton & Garrison LLP Weil, Gotshal & Manges LLP Simpson Thacher & Bartlett LLP Wilson Sonsini Goodrich & Rosati PC

Baker Hughes, Inc. General Electric Co. $24,293.8 Industrial Services Goldman Sachs & Co. Centerview Partners LLC 10 Davis Polk & Wardwell LLP Morgan Stanley Sullivan & Cromwell LLP Shearman & Sterling LLP **Total Market Value of Top 10 Deals YTD $458,069.9