Private Equity Capital Briefing Monthly Insights and Intelligence on PE Trends

April 2018

Private Equity Capital Briefing Monthly insights and intelligence on PE trends

Analyzing the exits PE firms get more programmatic in their sales processes The Private Equity Capital Briefing has been designed to help you remain current on capital market trends. It captures key insights from subject-matter professionals across EY and distills this intelligence into a succinct and user-friendly publication. Private Equity Capital Briefing provides perspectives on both recent developments and the longer-term outlook for private equity (PE) fundraising, acquisitions and exits, as well as trends in global M&A, cross- border deal flows, IPOs and the debt and bond markets. Please feel free to reach out to any of the subject-matter contacts listed on the back page of this document if you wish to discuss any of the topics covered. Contents Section 1 Private equity: fundraising 4 Private equity: acquisitions 5 Private equity: exits 6 Section 2 Infrastructure 7 Section 3 Private credit 8 Section 4 M&A 9 Section 5 IPOs 11 Section 6 Loans 12 Section 7 Bonds 13 Appendices Appendix A PE activity by geography 15 Appendix B M&A activity monthly flash 24 Appendix C M&A multiples and bid premium 25 1.i. Private equity: fundraising

Executive summary • Fundraising activity remained strong in Q1, though off the lofty levels of last year. PE firms closed funds valued at US$117b, down 33% from Q1 2017. • Buyout funds continue to be heavily represented, accounting for nearly 40% of aggregate fundraising so far this year. • Buyout firms now have US$637b in capital available for investment that is growing at a rate of 10.5% annually.

Current state PE fundraising by quarter (US$b) Source: Preqin While down from last year, fundraising environment remains strong

• Fundraising activity remained strong in the first quarter of 2018, $250 450 with 157 funds closing on US$117b in commitments. While this 400 represented a 33% decline from the first quarter of 2017 (a $200 350 record year for PE fundraising), it was roughly in line with the 300 $150 first quarter of 2016, when US$114b was raised. Buyout funds 250 200 continue to be heavily represented in the totals, accounting for $100 39% of Q1 2018 fundraising, versus 30% over the same period 150 last year. $50 100 50 • Buyout firms now have US$637b in capital available for $0 0 investment. Dry powder is currently growing at a three-year compounded growth rate of 10.5%, significantly lower than the 36% rate at which dry powder grew between 2005-2007, when the industry experienced its fastest growth spurt. Commitments Number of funds closed

PE fundraising by region Source: Preqin Top funds raised so far this year Source: Preqin

Value Fund Type (US$b) Americas: Asia-Pacific: Q1 2017 – US$110b Q1 2017 – US$28b EQT VIII Buyout $13.2 Q1 2018 – US$11b Q1 2018– US$62b BC European Cap X Buyout $8.5 Starwood Global Opportunity Fund XI Real estate $7.6

EMEA: American Securities Partners VIII Buyout $7.0 Q1 2017 – US$80b Blackstone Real Estate Partners Asia II Real estate $7.0 Q1 2018 – US$44b

Broad Street Real Estate Credit Partners III Real estate $4.2

Special Clearlake Capital Partners V situations $3.6 Environment and horizon Equistone Partners Europe Fund VI Buyout $3.4 Firms continue to seek stakes in PE GPs • Magnetar Capital, based in Evanston, IL., joined the ranks of Natural firms seeking to acquire minority stakes in PE GPs when it EnCap Flatrock Midstream Fund IV resources $3.3 announced that it was raising US$1b for such investments. Similar vehicles have been raised by other firms, including Partners Group Direct Infrastructure 2016 Infra $2.7 Blackstone, Goldman Sachs’ Petershill, Carlyle’s AlpInvest Partners and Neuberger Berman Group’s Dyal Capital Partners. • Blackstone co-founder Pete Peterson, one of the founders of the PE industry, died March 20 at the age of 91. Peterson co- Buyout dry powder – three-year compounded growth rates founded Blackstone with Steven Schwarzman in 1985. In 2008, Source: Preqin. Peterson stepped back from Blackstone in order to focus on the Peter G. Peterson Foundation, which is active on a number of 40% policy issues around US federal entitlements and budget deficits. 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15%

4 Private Equity Capital Briefing 1.ii. Private equity: acquisitions

Executive summary • PE deal activity is up 60% by value versus a year ago. It was the most active first quarter for PE since 2007. • Activity remains strong in both EMEA and the Americas, while Asia-Pacific has seen declines. • PE firms expect to add to their headcount in the coming months, particularly for deal-related professionals, as they seek to deploy some US$640b in dry powder.

Current state PE acquisition values and volumes by quarter PE deal activity up 60% from Q1 2017 Source: Dealogic

• PE firms announced 423 acquisitions valued at US$101b in the $140 600 first quarter of 2018, up 60% by value from the same period a year ago, and up 10% by volume. It was the busiest first quarter $120 500 $100 for PE since 2007, when firms announced deals valued at 400 US$192b. $80 300 • On a regional basis, PE firms saw strong activity in both the $60 200 Americas and EMEA, while Asia-Pacific deals saw a modest $40 decline from last year. $20 100 • In the Americas, PE firms announced deals valued at $0 0 US$51b, up 68% from last year. • In EMEA, firms announced deals valued at US$40b, up 97% from last year. • In Asia-Pacific, firms announced deals valued at Deal value (US$b) Number of deals US$10b, down 18% from last year.

Top deals so far this year PE deal activity by value, Q1 2017 vs. Q1 2018 Source: Dealogic Source: Dealogic Value Target Industry Sponsor (US$b) $60 Canada Pension Plan $50 Investment Board (CPPIB); $40 GIC Special Investments $30 Thomson Reuters Financial & Pte Ltd.; Blackstone Group $20 Risk (F&R) Business Technology LP $17.5 $10 Akzo Nobel NV (specialty GIC Special Investments $0 chemicals business) Chemicals Pte Ltd.; Carlyle Group LP $12.5 Americas EMEA Asia-Pacific Macquarie Infrastructure TDC A/S Telecom & Real Assets Pty Ltd. $10.7 Q1 2017 Q1 2018 Gas Natural SDG SA Utilities CVC Capital Partners Ltd. $4.7 Blackhawk Network Holdings Inc. Technology Silver Lake Group LLC $3.3 Environment and horizon Pure Industrial Real Estate Trust Real estate Blackstone Group LP $2.9 PE firms looking to add headcount EnerVest Ltd (South Texas • A new report from Preqin and FPL Associates found that the division) Oil and gas TPG Capital LP $2.8 industry expects to continue adding headcount, especially for Clayton, Dubilier & Rice deal-related professionals, as it seeks to deploy record levels of Ply Gem Holdings Inc. Construction LLC $2.3 dry powder. The 2018 Preqin Private Capital Compensation and Leonard Green & Partners Employment Review found that 65% of firms surveyed expect to Pro Mach Inc. Machinery LP $2.2 increase the size of their workforce over the near term. Nearly LifeScan Inc. Health care Platinum Equity LLC $2.1 half expect their workforce to increase by more than 5%. By far, the function in the highest demand was deal professionals, with 72% of survey respondents stating it was their top priority. Percentage of PE firms that expect to add headcount by function Source: 2018 Preqin Private Capital Compensation and Employment Review • An analysis conducted by CEPRES published in Private Equity International challenged the view that first-time PE funds tend to Executive Fundrasing, Reporting 4% and be the riskiest and best-performing, instead finding that it’s a management, 3% marketing firm’s second fund that typically posts the highest gross returns Portfolio support, 2% and comes with the highest levels of risk. CEPRES’ analysis of operations, 4.700 investments made between 2009 and 2016 showed that 9% first–time funds returned an average of 26.1%, while second Firm funds returned an average of 27.8% on a gross pooled IRR basis. operations, 10% Deal teams, 72%

5 Private Equity Capital Briefing 1.iii. Private equity: exits

Executive summary • PE exit activity declined in the first quarter, as firms continue to focus on deployment. Firms announced exit deals valued at US$57b, down 26% from Q1 2017. • Declines in exit activity were evident in both M&A and IPOs. • According to the 2018 EY Global Private Equity Divestment Study, firms are getting more programmatic in the exit planning. Sixty-one percent now determine the right time to sell 12 months before exiting, up from 35% in the 2017 study.

Current state PE M&A exits by quarter (US$b) Exits continue to see declines as firms focus on deployment Source: Dealogic • PE exit activity declined in the first quarter, as firms continue to $120 350 focus on deployments and the PE exit supercycle, which peaked 300 in 2014, continues to wind down. Firms announced 226 PE exits $100 250 valued at US$57b, down 26% from the same period a year ago. $80 200 $60 • Exits by M&A fell 28% to 49.6b, with declines evident across all 150 major regions; activity by value was down 31% in the Americas, $40 100 down 56% in Asia-Pac, and off 6% in EMEA. $20 50 • IPOs continued to struggle, with proceeds down 17% from the $0 0 first quarter of 2017. The number of PE-backed deals declined 8%, from 26 deals in Q1 2017, to 24 deals in Q1 2018. March, however, was particular active for new deals — 11 IPOs launched, versus just 6 in February and 7 in January. Commitments Number of funds closed

Environment and horizon PE-backed IPOs by quarter PE firms getting more programmatic and less opportunistic in Source: Dealogic selling assets • PE firms are continuing to get more disciplined and programmatic in their sales processes. According to the 2018 EY $20 70 60 Global Private Equity Divestment Study, almost two-thirds (61%) $15 of PE executives now determine the right time to sell 12 months 50 40 before the exit — up from 35% in the 2017 study. The percentage $10 of PE funds relying on opportunistic buyers has fallen from 54% 30 to 21%. PE funds are spending more time positioning the $5 20 business for exit, with a sale strategy established well in 10 advance. $0 0

When do you determine the right time to sell? Commitments Number of funds closed Source: 2018 EY Global Private Equity Divestment Study

70% 60% Largest PE exit deals in Q1 2018 50% Source: Dealogic 40% 30% 20% Target Industry Value (US$b) Sponsor Type 10% 0% One year pre- Two years pre- At purchase Opportunistic sale sale Hony Capital Santos Ltd. Oil and gas $13.2 Management Ltd. M&A 2017 2018 Professional Apollo Global ADT Inc. services $10.5 Management LLC IPO • The study also noted the increasing role digital technologies are playing as a value driver that firms are realizing at exit, noting Blue Buffalo Pet Food and that: Products Inc. beverage $8.0 Invus Group LLC M&A • 94% of respondents reported creating pre-sale value through reporting and analytics. Gates Industrial Blackstone Group Corp. plc Machinery $5.5 LP IPO • 73% reported creating pre-sale value through cybersecurity initiatives. Warburg Pincus • 72% reported value creation through cloud computing Beijing Mobike LLC; initiatives. Technology Co. Ltd. Technology $3.7 TPG Capital LP M&A • 69% created value through enterprise resource planning.

6 Private Equity Capital Briefing 2. Infrastructure

Executive summary • After a record 2017, fundraising for the infrastructure space remains active, with US$16.5b raised by funds. • PE firms have nearly US$160b in dry powder available for new deals. • Deployment activity increased 25% from Q4 2017, to US$64.0b. • Fund managers are looking to get increasingly active in the coming months, despite valuation concerns. A Preqin report found 41% of managers expect to deploy significantly more capital over the next 12 months.

Current state Infrastructure fundraising (US$b) • Infrastructure fundraising remained active in the first quarter of 2018 Source: Preqin after a record year in 2017. Firms closed funds with commitments totaling $35 45 US$16.5b in Q1 2018. While this was down 50% from the same period a $30 40 year ago, it was up 65% from Q4. Q1 of last year was bolstered by the 35 $25 US$15.8b in commitments closed by Global Infrastructure Partners II. 30 • As a result of strong fundraising, infrastructure firms now have US$158b $20 25 in dry powder available for new deals. Of this, 44% is focused on North $15 20 America, 35% is focused on Europe, with the balance targeting 15 $10 opportunities in Asia-Pacific and other emerging markets. 10 $5 5 Top infrastructure funds raised YTD 2018 $0 0 Source: Preqin

Commitments Fund (US$b) Type Sector focus Commitments Number of funds closed

BlackRock Infrastructure Debt — Aggregated separate accounts 7.6 Debt Diversified Infrastructure dry powder by region (in US$b) Source: Preqin Macquarie Asia Infrastructure Fund II 3.3 Core Diversified GCM Grosvenor Infrastructure $80 — Separately managed $70 account 3.2 Opportunistic Diversified $60 Partners Group Direct $50 Infrastructure 2016 2.7 Core plus Diversified $40 $30 Strategic Partners Real $20 Assets II 1.8 Secondaries Diversified $10 $0 • The pace of deployment increased in the first quarter to US$64.0b across 581 assets (the majority of these deals were of undisclosed size). This represented an increase of 25% from Q4 2017, and an increase of 9% from the same period a year ago. Roughly one-half of announced activity was centered in Europe. North America Europe Asia-Pacific Rest of the world

Environment and horizon • Infrastructure managers are ramping up to get increasingly active in regards to deployment in the coming months. A recent report from Preqin, Infrastructure deals by quarter (in US$b) the H1 2018 Infrastructure Fund Manager Outlook, found that 41% of Source: Preqin managers surveyed expect to deploy significantly more capital over the next 12 months, and another 33% expect to deploy slightly more capital in the coming months. However, the report also noted that valuations remain $20 900 a fundamental concern for managers – 59% listed it as their key challenge, $18 800 ahead of regulation (36%) deal flow (33%) and pressure from LPs on fees $16 (23%). 700 $14 600 • In the US, the Trump administration moved to streamline the regulatory $12 500 approval process for infrastructure projects. In early April, the $10 400 administration issued the “One Federal Decision” memorandum of $8 300 understanding by federal agencies, which outlined a goal of having one $6 federal agency take the lead on the federal review and permitting process $4 200 for major infrastructure initiatives. Currently, projects must navigate $2 100 requirements and approvals from a number of separate agencies. Under $0 0 the plan, agencies will co-develop a single impact statement for each project and sign a single record of decision. More than a dozen agencies, including the departments of Energy, Interior, Commerce, Transportation and Environment Protection have signed on to the agreement. Deal value (US$b) Number of deals

7 Private Equity Capital Briefing 3. Private credit

Executive summary • Fundraising for private credit funds declined in the first quarter to the lowest amount since Q3 2016. Firms closed funds valued at US$14.2b. • Activity was driven by a number of large funds in the mezzanine and special situations spaces. • Credit funds have record amounts of dry powder to put to work; currently firms have US$244b in capital to deploy.

Current state Private credit fundraising (US$b) • Fundraising for private credit declined in the first quarter of the year after Source: Preqin a strong 2017, which saw firms close funds valued at more than US$100b. $60 70 Firms closed on US$14.2b in commitments in Q1 2018, down 43% from 60 the same period a year ago, and less than half the amount raised in the $50 50 fourth quarter of last year. $40 • Q1 2018 saw increased activity in the mezzanine and special situations 40 $30 spaces, which collectively accounted for 55% of aggregate fundraising, 30 compared with just 22% in 2017. Direct lending, by contrast, saw a relative $20 decline, accounting for just 36% of aggregate credit fundraising so far this 20 year after representing more than half of the asset class commitments last $10 10 year. $0 0 • On a regional basis, the Americas saw funds close with an aggregate value of US15.0b in the first quarter, while EMEA saw funds close with aggregate commitments of US$3.5b, down from US$8.9b in the first quarter of last year. • As a result of strong fundraising, credit funds have record amounts of dry Commitments Number of funds closed powder to put to work. Currently, funds have US$244b in capital to deploy, up 11% from the beginning of 2017. Of this, approximately two- thirds is focused on the US, 28% on Europe and the balance on Asia and the emerging markets. Credit fundraising by type, 2017 vs. Q1 2018 (as a percentage of total) Source: Preqin Top credit funds raised YTD 2018 Source: Preqin 60% Commitments Region Fund (US$b) Type focus 50%

Clearlake Capital Special 40% Partners V 3.6 Situations US 30% KKR Private Credit Opportunities Partners II 2.2 Mezzanine US 20% Guggenheim Private Debt Direct 10% Fund II 2.0 Lending US Alchemy Special Distressed 0% Opportunities Fund IV 1.2 Debt Europe 2017 Q1 2018 Capzanine IV (Private Direct Debt) 1.2 Lending Europe Direct lending Distressed debt Mezzanine Private debt fund of funds Environment and horizon Special situations • While fundraising figures are down from last year, momentum in the space remains strong. Funds that closed in the first quarter of 2018 spent an average of 12 months on the road, down from an average of 16 for funds Private credit fundraising by region that closed in 2017. It was the lowest average time spent fundraising since 2007-2008. Moreover, funds that have closed this year reached an Source: Preqin average of 55% of their target within the first four months after launch. Currently, there are 88 funds at various stages of the fundraising process. In total, they are seeking more than US$44b from investors. • Like other private classes, the influx of capital and competition has made deployment an increasing challenge. A recent Preqin survey found that Americas: Asia-Pacific: valuations topped managers’ lists of concerns about the pace. Forty-nine Q1 2017 – US$15.0b Q1 2017 – US$800m percent cited valuations as a primary concern for the coming year, Q1 2018– US$10.7b Q1 2018 – N/A followed by deal flow (37%) and performance (30%). The same survey noted that 45% of managers believed it is more difficult to fund attractive opportunities today than it was a year ago. EMEA: Q1 2017 – US$8.9b Q1 2018 – US$3.5b

8 Private Equity Capital Briefing 4. M&A

Executive summary • Global M&A reached near-record value levels in 1Q18, with deals worth US$1.02t. • Megadeals continued to grab headlines, with 18 deals — the highest number recorded in any quarter. • Health care is undergoing consolidation driven by sector convergence. • The outlook for 2018 remains bullish, as corporate dealmaking is expected to benefit from US tax reforms and steady economic growth. However, political and regulatory uncertainty is likely to remain a key concern. • Shareholder activism is expected to spur M&A activity as investors focus on portfolio transformation.

Current state • Global M&A had the strongest first quarter since 2000, recording 8,281 deals worth US$1.02t. This is only the second Global deal value and volume (year to date (YTD) last five years) time in deal history that M&A value surpassed the US$1t mark Source: Dealogic and EY analysis. during the first quarter.

• Notably the current month saw 2,450 deals valued at US$408b, Value (US$b) (LHS) Volume* (RHS) the highest value ever seen in March. This was on the back of 1,050 850 eight mega-deals (US$10 billion and above) accounting for half 950 800 of the total deal value. 850 • Megadeals continue to be the highlight of the year so far, with 750 750 18 in total — the highest number of mega deals ever recorded in any quarter. 650 700 • Chinese outbound appetite was subdued in the first quarter, 550 primarily on the back of ongoing political tensions and regulatory 450 650 uncertainty in overseas markets. The quarter registered only 2014 2015 2016 2017 2018 113 outbound deals worth US$13.1b — a decline of 50% and 84% *Volume based on deals greater than US$100m. in deal value compared with the similar period in 2017 and 2016 respectively. Even in terms of volume, the number was the lowest seen in any quarter over the past three years. Deal environment: by area (US$b) • Significant activity in health care highlights the growing trend of Last 12 months (LTM) to March 2018 versus LTM to March 2017 (PTM) convergence driving consolidation in the sector. Cigna Corp’s Source: Dealogic and EY analysis. offer to buy Express Scripts is the latest example of the trend, where insurers, drug distributors and retailers are combining to 2,500 tackle high health care costs, become more vertically integrated and fend off potential competition from new rivals entering the 2,000 fray, such as Amazon. Other key examples are CVS purchasing Aetna, Albertsons acquiring Rite Aid, and the mooted deal 1,500 between Walmart and Humana. 1,000 Environment and horizon • Global M&A started off strongly in 2018, particularly in terms of 500 deal value. This trend may be extended with the support of a robust corporate earnings roundup, steady economic growth, - optimism around US tax reforms and strong labor markets. Americas Asia-Pacific EMEA • PE-backed firms continue to be on the rise, providing a further LTM value PTM value boost to deal activity. PE bidders sit on abundant dry powder in a competitive dealmaking environment, valuations may be pushed higher as funds vie for top-class assets. Deal environment: by target sector and target area (% share of • Political and regulatory uncertainty is likely to remain a key global value) concern. Issues such as a potential US-China trade war and the pace of interest rate hikes in major economies have been LTM to March 2018 weighing on equity markets in 1Q18, but have yet to derail Source: Dealogic and EY analysis; excludes real estate asset sales. dealmaking. However, the regulation of dealmaking is expected Note: because of rounding, percentages may not add up to total. to remain in the spotlight, in the wake of uncertainty about Americas Asia-Pacific EMEA Total regulatory and antitrust policies. Technology 6% 7% 3% 16% • Shareholder activism is likely to propel M&A activity in 2018, as Consumer products and retail 5% 3% 4% 11% growth focus from investors is shifting from efficiency drives and Power and utilities 3% 2% 3% 8% organic investment-led growth to pursuing M&A. Companies that Diversified industrial products 3% 2% 2% 8% are under-scale, cash-strapped or struggling in consolidating Oil and gas 5% 0% 2% 8% industries are under intense pressure from activists, and there Life sciences 5% 1% 2% 7% may be a greater number of deal outcomes being defined by Media and entertainment 5% 1% 2% 7% shareholders. Insurance 6% 1% 1% 7% Automotive and transportation 1% 2% 3% 6% • A key trend for M&A activity is the use of technology by Others 8% 6% 6% 21% companies to transform business models to adapt to changing All sectors 47% 25% 28% 100% market conditions and close the innovation gap. As new

technologies power innovation, business models in almost every M&A analysis as at 1 April 2018. industry look starkly different from a just a few years ago. It is Note: data is continually updated and therefore subject to change. becoming an imperative for companies to continually review their Figures have been rounded off to nearest decimal place. business models and recycle their capital to invest in growth opportunities. 9 Capital Briefing 4.i. M&A: cross-border deal flow

Key cross-border M&A deal flow (LTM to March 2018) (Total = US$940b)

UK&I to: W Europe – $29b N America – $27b Greater China and Mongolia to: N America to: SE Asia – $3b Africa – $1b W Europe - $27b UK&I – $106b N America – $18b W Europe – $45b SE Asia – $17b Latin America – $23b W Europe to: N America – $103b Japan to: UK&I – $27b N America – $33b L America - $11b Greater China - $12b SE Asia - $7b

L America to: N America – $3b Middle East – $2b

Key

>$100b

>$50b

>$10b Note: all figures are in US$.

Cross-border M&A deal flow (LTM to March 2018) (US$m)

Target Acquiror# Africa SE Asia Greater Russia, W Europe India Japan Latin Middle North Oceania UK&I Inbound %  (including China and CIS and (excluding America East America total versus Korea) Mongolia$ CSE UK&I) PTM Africa 2,391 161 1,229 3 2,147 15 563 - 1,014 1,054 162 1,295 10,033 -61%

SE Asia (including 15 4,434 17,201 117 907 113 7,311 - 50 2,995 743 3,233 37,118 46% Korea) Greater China and 29 3,518 29,806 - 1,013 - 12,144 - 662 8,130 1,014 225 56,541 44% Mongolia $ Russia, CIS and CSE - 106 10,008 7,778 4,051 96 1,815 94 9 1,331 38 1,306 26,632 -43%

W Europe (excluding 1,654 3,623 27,057 378 140,910 390 3,949 48 3,319 44,584 1,428 29,106 256,446 -23% UK&I) India 407 2,304 4,292 19 288 25 4,961 - 416 3,274 - 156 16,142 -34%

Japan - 232 2,521 - - 515 - - 6 6,636 31 - 9,941 138%

Latin America 309 330 9,391 - 10,582 - 270 4,777 391 22,713 44 675 49,481 -19%

Middle East 226 2,572 2,518 - 3,782 930 1,068 1,519 2,541 9,402 500 960 26,019 -47%

North America 983 5,492 18,023 - 102,995 493 33,393 2,654 9,337 58,736 5,184 27,319 264,607 -46%

Oceania 247 3,058 7,598 0 7,406 13 2,588 110 593 10,507 659 178 32,957 0%

UK&I 2,189 1,951 3,195 706 26,718 97 3,602 1,131 2,022 105,600 4,732 2,479 154,424 26%

Outbound total 8,450 27,780 132,839 9,000 300,798 2,688 71,664 10,334 20,358 274,962 14,537 66,932 940,341 -25%

%  versus previous -41% -26% -30% -64% 6% -63% -29% -34% -41% -32% 26% -49% -25% 12 months (PTM)

# Acquiror refers to acquiror’s ultimate holding company. $ Greater China and Mongolia includes mainland China, Hong Kong, Macau, Mongolia and Taiwan. Key >US$100b >US$50b >US$10b M&A analysis as at 1 April 2018. Source: Dealogic. All Rights Reserved. Intra-area cross-border deals Note: data is continually updated and therefore subject to change.

10 Capital Briefing 5. IPOs

Executive summary • Global IPO activity saw mixed results in March 2018. While IPO activity registered a year on year (YOY) decrease of 29% in terms of number of deals, it increased 34% by proceeds. • March 2018 recorded the megadeal of Siemens Healthineers AG (US$4.5b) – the largest German IPO since Innogy SE in October 2016. • EMEA dominated global IPO activity by proceeds in March, for the first time since June 2017. • While US IPO activity is expected be strong in 1H18, mainland China is unlikely to reach 2017 levels due to stricter supervision and a lower listing approval rate by the local regulator.

Current state Top 10 IPOs by proceeds, March 2018 • Global IPO activity continued its strong start to 2018, with 121 Source: Dealogic. deals raising US$22.2b due to strong activity across certain Issuer name Issuer Sector Exchange Proceeds regions in March 2018. While IPO activity registered a YOY location (US$m) decrease of 29% in terms of number of deals, it increased 34% by Siemens Healthineers AG Germany Life sciences Deutsche Boerse 4,521 proceeds– the highest level for the month of March since 2008. Media and iQIYI Inc. China NASDAQ 2,250 • Asia-Pacific continued to lead global IPO activity in terms of entertainment DWS Group GmbH & Co. Wealth and asset number of deals, with 78 raising US$8.2b, accounting for 65% of Germany Deutsche Boerse 1,597 KGaA management global deals. Compared with March 2017, the region registered a Fibra E - Grupo Automotive and Aeroportuario de la Ciudad Mexico Mexican 1,474 39% decrease and 11% increase in terms of number of deals and transportation proceeds respectively. de Mexico • EMEA IPO activity saw mixed results in March 2018 (31 deals Dropbox Inc. US Technology NASDAQ 869 raising US$11.0b). Proceeds saw a three-fold increase, while deal number was unchanged. This can be attributed to two ELKEM ASA Norway Mining and metals Oslo Bors 833 megadeals in Germany– US$4.5b listing of Siemens Healthineers Banking and capital AG, the country’s largest IPO since Innogy SE in October 2016, Bandhan Bank Ltd. India Bombay 686 and the listing of DWS Group GmbH & Co KGaA which raised markets US$1.6b. Jiangsu Financial Leasing China Other sectors Shanghai 636 • IPO activity was steady on the US exchanges this month (15 Co. Ltd. Aerospace and deals raising US$4.8b). YOY, while the number of deals Hindustan Aeronautics Ltd. India Bombay 635 increased by 36%, proceeds declined by 18%. defense Media and Bilibili Inc. China New York 483 Environment and horizon entertainment • Global IPO outlook is positive for the coming months, driven by steady equity markets and a healthy pipeline across sectors and IPO activity by area (YOY % change) regions, underpinning strong investor confidence. (LTM to March 2018 versus LTM to March 2017) • We expect a few more active quarters for IPOs on the Hong Source: Dealogic; regional classification on the basis of issuer nationality. Kong Stock exchanges, driven by a favorable economic backdrop 100% and strong corporate earnings growth. The Hang Seng Index is back at record levels, investor appetite is solid, and reforms to HKEx’s listing requirements are expected to become effective as 80% Americas early as June 2018, which would result in an increased number (including US) of listings by technology and biotechnology companies. 60%

• By contrast, IPO activity on mainland China exchanges is US EMEA unlikely to reach 2017 levels due to stricter supervision and a 40% lower listing approval rate by the local regulator. However, the

China Securities Regulatory Commission (CSRC) is likely to 20% Global provide more policy support to the listing of high-quality Asia-Pacific

companies and industry giants. This may attract lead companies Volume 0% that are currently listed overseas to consider returning to the Value 0% 30% 60% 90% 120% 150% 180% domestic market. • Additionally, IPO activity in China and other APAC markets may IPO activity by sector and area (% share of global proceeds) be negatively impacted due to US trade barriers and the LTM to March 2018 expectation of further US interest rate rises, which would increase pressure on capital outflows. Source: Dealogic; regional classification on the basis of issuer nationality. Note: because of rounding, percentages may not add up to total. • The European IPO outlook remains positive, with a healthy Americas Asia-Pacific EMEA Total pipeline of companies looking to take advantage of attractive Technology 4% 7% 3% 14% stock market valuations. We expect a number of megadeals to Real estate 3% 4% 5% 12% come to the European public markets later this year, including the German, Swiss and Nordics capital markets. These include Banking and capital markets 1% 5% 5% 11% IPOs of carve-outs from conglomerates and by family businesses. Life sciences 3% 3% 5% 10% Automotive and transportation 2% 3% 3% 9% • With an improving macroeconomic and political environment, the Diversified industrial products 2% 4% 2% 8% Middle East should witness a surge in IPO activity. There is a strong pipeline of IPOs with government-owned assets being Consumer products and retail 2% 4% 3% 8% prepared for IPOs in Kuwait, Egypt, Saudi Arabia and the UAE. Insurance 0% 5% 0% 5% Power and utilities 1% 2% 2% 5% • US IPO activity should be strong in the first half of the year as, Others 6% 7% 5% 19% despite an increase in volatility in February, the market has stabilized and there are signs of continued investor appetite for Total 23% 45% 32% 100% IPOs. Cross-border deals are also likely to contribute to the robust pipeline as a backlog of Chinese issuers target US listings. 11 However, potential uncertainty surrounding mid-term elections in Capital Briefing 4Q18 could result in compressed IPO windows in the second half of the year. 6. Loans

Executive summary • In 1Q18, total new-issue loan volume was US$210.7b in the US and Europe — the highest total compared with the previous three quarters. However, the 1Q18 total is still 15% lower than the total new issuance volume in the same period last year. • The European leveraged loan market recorded strong growth in 2018, beating the YTD volume of 2017. • Issuance in the US leveraged loan market gained momentum in 1Q18 thanks to strong March volumes — the highest monthly total since September 2017. • Average institutional tranche sizes have increased in Europe as M&A-related financing has picked up, indicating that Europe’s more mature market can now absorb larger loans. Current state Global investment-grade loans (US$b) Source: Thomson ONE. M&A boosts loan issuance volume in 1Q18

• In March, US$68.5b of loans were issued in the US and €7.3b in 800 600 Europe. Overall, total global new-issue volume was US$77.4b in March, down 14% compared with the same period in 2017. 600 • In 1Q18, total new-issue loan volume was US$210.7b in the US 400 and Europe, the highest total compared with the previous three quarters. However, the 1Q18 total is still 15% lower than the 400 total new issuance volume in the same period last year. 200 • The European leveraged loan market recorded strong growth in 200 2018, beating the YTD volume of 2017. YTD issuance is US$43.4b, up 20% compared with the same period last year: 0 0 • An increase in new-issue volume in 1Q18 reflects growth in 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 M&A-related financings and new money supply, as more than 60% of the volume came from new deals. Proceeds (LHS) Number of issues (RHS) • YTD M&A-related financing in Europe accounted for 62% of total volume, followed by refinancing activity, which accounted for 31% of total volume. Global high-yield loans (US$b) • Issuance in the US leveraged loan market gained momentum in Source: Thomson ONE. 1Q18 on the back of a strong March volume — the highest monthly total since September 2017: 1,200 3,000 • The increase in loan issuance activity in 1Q18 was primarily due to an increase in M&A activity. 900 2,000 • YTD M&A-related financing in the US accounted for 47% of total loan volume, followed by refinancing activity, which 600 accounted for 43% of total volume. 1,000 Environment and horizon 300 Larger loans can be absorbed in the European market, and more repricing activity may be seen in the US market 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 • The average institutional tranche size has increased in Europe as M&A has picked up, indicating that Europe’s more mature market can now absorb larger loans. Proceeds (LHS) Number of issues (RHS) • The Federal Reserve raised interest rates in March and indicated that it may raise them further. Issuers continue to tap the loan market with repricings in an effort to cut spreads amid a rising Top arrangers ranking, 2018 (US$b) three-month LIBOR which has crossed the 2% mark. Source: Thomson ONE. Opportunities Proceeds Issues More room is available for M&A-related financing Bank of America Merrill Lynch 85.5 334 • There is still room available for more M&A-driven deals. Some JP Morgan Chase & Company 70.7 large buyout financing deals are expected in the second quarter 281 of 2018. Citigroup Inc. 51.7 182 Global bond issuance by industry, 2018 Mizuho Financial Group 48.0 Source: Thomson ONE. 258 Government and agencies Mitsubishi UFJ Financial Group 46.9 Retail 374 Telecommunications Media and entertainment All loans by region, 2018 (US$b) Health care Source: Thomson ONE. Consumer products and services Consumer staples Market share (%) Proceeds Issues Real estate Materials Americas 60.8 595.7 923 High technology Industrials EMEA 22.5 221.2 232 Energy and power Financials Asia-Pacific 16.6 163.6 853

0 30 60 90 120 150 180 12 Proceeds (US$b) Capital Briefing 7. Bonds

Executive summary • Global high-yield activity recovered in March after a slowdown in February, showing an increase of 115%. • YTD high-yield issuance was US$62.3b in the US and €19.6b in Europe, with total global issuance at US$86.3b, down 20% compared with the same period last year. • Refinancing activity is still the primary driver of issuance in both the US and European high-yield markets. • There was more balance between investors and issuers in 1Q18 in Europe, with investors winning higher yields and, in some instances, tighter covenant packages.

Current state High-yield bond market had a slower start to the year Euro bond issuances (US$b) Source: Thomson ONE. • Global high-yield activity recovered in March after a slowdown in February, showing an increase of 115%. However, March 400 600 issuance volume was still 35% short compared with the same period last year. 320 480 • YTD high-yield issuance was US$62.3b in the US and €19.6b in Europe, with total global issuance at US$86.3b, down 20% 240 360

compared with the total issuance in the same period last year. 160 240 • High-yield activity declined in both the US and European markets in 1Q18. The US market is 24% behind 1Q17 volume, 80 120 and the European market is 8% behind 1Q17 volume. 0 0 • Refinancing activity is still the primary driver of issuance in Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar both the US and European high-yield markets. However, M&A- 17 17 17 17 17 17 17 17 17 17 18 18 18 driven activity is rising in Europe: Proceeds (LHS) Number of issues (RHS) • Refinancing activity accounted for 75% of total volume in the US and 52% in Europe in 1Q18. M&A-related financing accounted for 13% of total volume in the US and 32% in Europe in 1Q18. US bond issuances (US$b) Source: Thomson ONE. • Clearing yields for B-rated bonds for the three months ending 30 March widened in the US to 7.09% from 6.57% at the end of 250 240 December. Yields also widened in Europe to 5.45% from 5.31%. 200 200 • The high-grade market has lost its pace after a year of robust 160 activity due to the rise in interest rates. High-grade volume 150 decreased in March, with US$105.4b of issuance compared with 120 US$127.3b in the same period last year. Also, YTD volume is still 100 80 16% behind the recorded 2017 volume. 50 Environment and horizon 40 0 0 More balance may be seen between investors and issuers in the Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar European market 17 17 17 17 17 17 17 17 17 17 18 18 18 • There was more balance between investors and issuers in 1Q18 Proceeds (LHS) Number of issues (RHS) in Europe, with investors getting higher yields and, in some instances, tighter covenant packages. However, borrowers are still able to lock in financing at near-record low yields. Opportunities More opportunistic transactions are expected in the coming months Top 10 corporate bond issuers, 2018 (US$b) • More opportunistic transactions are expected in the coming Source: Thomson ONE. months due to current dynamics; however, the pipeline for the Issuer Nation Industry Proceeds second quarter is dominated by leveraged buyout financings, which would be a boost for sponsor-backed issuance. CVS Health Corporation US Retail 40.0

Anheuser Busch Inbev Worldwide Belgium Consumer staples 15.1 Global bond issuance by industry, 2018 Source: Thomson ONE. China Railway Corporation China Industrials 12.6

Media and entertainment Sanofi SA France Health care 9.9 Telecommunications MPLX LP US Energy and power 5.5 Consumer products and services High technology Campbell Soup Co US Consumer staples 5.3 Materials Health care Tencent Holdings Ltd China High technology 5.0 Consumer staples Real estate Sempra Energy Inc US Energy and power 5.0 Retail Industrials Celgene Corporation US Health care 4.5 Energy and power Vonovia Finance BV Netherlands Real estate 3.8 0 20 40 60 80 Proceeds (US$b)

2 Capital Briefing Appendices Appendix A Global PE fundraising activity

Global PE fundraising (in US$b)

$700 1,200

$600 1,000

$500 800

$400 600 $300

400 $200

200 $100

$0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2018

Commitments Number of funds closed

Source: Preqin

Dry powder — buyout funds — by region (in US$b)

$700

$600

$500

$400

$300

$200

$100

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2018

North America Europe Asia-Pacific Rest of the world

Source: Preqin

12 Private Equity Capital Briefing Appendix A Global PE acquisition activity

PE acquisitions by year (in US$b)

$800 4,000

$700 3,500

$600 3,000

$500 2,500

$400 2,000

$300 1,500

$200 1,000

$100 500

$0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD 2018

Deal value Number of deals

Source: Dealogic

Global PE value and volume — quarterly trend (in US$b)

$140 700

$120 600

$100 500

$80 400

$60 300

$40 200

$20 100

$0 0 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 2012 2012 2012 201 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018

Deal value Number of deals

Source: Dealogic

13 Private Equity Capital Briefing Appendix A Global PE acquisition activity by region — Americas

Americas PE acquisitions (in US$b)

$80 350

$70 300

$60 250

$50 200

$40

150 $30

100 $20

50 $10

Deal value Number of deals

Source: Dealogic

Americas PE acquisitions — the top deals with disclosed financial terms Q1 2018

Announcement Completion Value Company Sector Acquiror date date (US$b) Canada Pension Plan Investment Board (CPPIB); GIC Special Investments Pte Thomson Reuters Financial & Ltd.; 30-Jan-18 Risk (F&R) Business Technology $17.5 Blackstone Group LP Blackhawk Network Holdings 16-Jan-18 Inc. Technology $3.3 Silver Lake Group LLC Pure Industrial Real Estate 9-Jan-18 Trust Real estate $2.9 Blackstone Group LP

20-Mar-18 EnerVest Ltd. Oil and gas $2.8 TPG Capital LP

31-Jan-18 Ply Gem Holdings Inc. Construction $2.3 Clayton, Dubilier & Rice LLC Leonard Green & Partners 29-Jan-18 7-Mar-18 Pro Mach Inc. Machinery $2.2 LP

16-Mar-18 LifeScan Inc. Health care $2.1 Platinum Equity LLC

Apollo Global Management 4-Jan-18 OneMain Holdings Inc. Finance $1.4 LLC

Amtrust Financial Services 9-Jan-18 Inc. Insurance $1.4 Stone Point Capital LLC

Wyndham Worldwide Corp. 15-Feb-18 European vacation business Dining and lodging $1.3 Platinum Equity LLC

Source: Dealogic

14 Private Equity Capital Briefing Appendix A Global PE acquisition activity by region — EMEA

EMEA PE acquisitions (in US$b)

$50 300

$45

250 $40

$35 200

$30

$25 150

$20

100 $15

$10 50

Deal value Number of deals

Source: Dealogic

EMEA PE acquisitions — the top deals with disclosed financial terms Q1 2018

Announcement Completion Value Company Sector Acquiror date date (US$b)

GIC Special Investments Pte Akzo Nobel NV (Specialty Ltd.; 27-Mar-18 chemicals business) Chemicals $12.5 Carlyle Group LP Macquarie Infrastructure & 12-Feb-18 TDC A/S Telecommunications $10.7 Real Assets Pty Ltd.

22-Feb-18 Gas Natural SDG SA Utilities $4.7 CVC Capital Partners Ltd.

1-Mar-18 Laird plc Technology $1.6 Advent International Corp. Macquarie Infrastructure & 3-Apr-18 HES International BV Transportation $1.6 Real Assets Pty Ltd.

23-Mar-18 23-Mar-18 Albea SA Forestry and paper $1.5 PAI Partners SAS

6-Feb-18 6-Feb-18 Sebia International SA Health care $1.5 CVC Capital Partners Ltd.

17-Mar-18 FCC Aqualia SA Utilities $1.3 IFM Investors Pty Ltd. Cerberus Capital 28-Feb-18 HSH Nordbank AG Finance $1.2 Management LP Primewaterview Holdings 10-Jan-18 10-Jan-18 Nigeria Ltd. Real estate $1.1 Milost Global Inc.

Source: Dealogic

15 Private Equity Capital Briefing Appendix A Global PE acquisition activity by region — Asia-Pacific

Asia-Pacific PE acquisitions (in US$b)

$50 140

$45 120 $40

$35 100

$30 80

$25

60 $20

$15 40

$10 20 $5

Deal value Number of deals Source: Dealogic

Asia-Pacific PE acquisitions — the top deals with disclosed financial terms Q1 2018

Announcement Completion Value Company Sector Acquiror date date (US$b)

National Highways Authority Macquarie Infrastructure & 1-Mar-18 1-Mar-18 of India (648km of highways) Transportation $1.5 Real Assets Pty Ltd.

24-Mar-18 29-Mar-18 Indiabulls Properties Pvt. Ltd. Construction $1.5 Blackstone Group LP

2-Jan-18 eHi Car Services Ltd. Transportation $1.4 MBK Partners Ltd. Shanghai Yunfeng Investment Management Co 26-Mar-18 iKang Healthcare Group Inc. Health care $1.2 Ltd.

Shopping Centres (20 retail Hopu Investment 5-Jan-18 malls in China) Real estate $1.1 Management Co.

I-MED Radiology Network 27-Jan-18 21-Feb-18 Ltd. Health care $1.0 Permira Ltd.

Accolade Wines Australia 5-Apr-18 Ltd. Food and beverage $0.8 Carlyle Group LP

Trimco International Holdings Affinity Equity Partners 23-Jan-18 23-Jan-18 Ltd. Textile $0.5 (HK) Ltd. Vietnam Technological & Commercial Joint Stock Bank 12-Mar-18 12-Mar-18 – Techcombank Finance $0.4 Warburg Pincus LLC Source: Dealogic Morgan Stanley Private 21-Mar-18 Microlife Corp. Technology $0.3 Equity Asia Ltd.

16 Private Equity Capital Briefing Appendix A Global PE exit activity

Global PE-backed exits by M&A — value and volume — quarterly trend (in US$b)

$120 350

300 $100

250 $80

200

$60

150

$40 100

$20 50

Source: Dealogic

Global PE-backed IPOs — value and volume — quarterly trend (in US$b)

$45 90

$40 80

$35 70

$30 60

$25 50

$20 40

$15 30

$10 20

$5 10

Deal value Number of deals

Source: Dealogic

17 Private Equity Capital Briefing Appendix A Global PE exit activity — Americas

Americas PE exits (in US$b)

$90 180

$80 160

$70 140

$60 120

$50 100

$40 80

$30 60

$20 40

$10 20

Americas PE exits — top exits with disclosed values Q1 2018

Announcement Completion or Value Company Sector Sponsor Type or filing date priced date (US$b)

21-Dec-17 18-Jan-18 ADT Inc. Professional services $10.5 Apollo Global Management LLC IPO

Blue Buffalo Pet 23-Feb-18 Products Inc. Food and beverage $8.0 Invus Group LLC M&A

Gates Industrial Corp. 27-Dec-17 24-Jan-18 plc Machinery $5.5 Blackstone Group LP IPO

31-Jan-18 Ply Gem Holdings Inc. Construction $2.3 CI Capital Partners LLC M&A

Americold Realty Goldman Sachs Capital Partners; 14-Nov-17 18-Jan-18 Trust Real estate $2.3 Yucaipa Companies LLC IPO

29-Jan-18 7-Mar-18 Pro Mach Inc. Machinery $2.2 AEA Investors LP M&A

Liberty Oilfield 14-Feb-17 11-Jan-18 Services Inc. Oil and gas $2.0 Riverstone Holdings LLC IPO

28-Mar-18 Polycom Inc. Telecommunications $2.0 Siris Capital Group LLC M&A

10-Feb-17 1-Feb-18 FTS International Inc. Oil and gas $2.0 RRJ Capital IPO

12-Jan-18 7-Feb-18 Cactus Inc. Oil and gas $1.9 Cadent Energy Partners LLC IPO

Source: Dealogic

18 Private Equity Capital Briefing 21 Appendix A Global PE exit activity — EMEA

EMEA PE exits (in US$b)

$70 180

160 $60

140 $50 120

$40 100

$30 80

60 $20 40

$10 20

EMEA PE exits — top exits with disclosed values Q1 2018

Announcement Completion or Value Company Sector Sponsor Type or filing date priced date (US$b)

Italo-Nuovo Trasporto 5-Feb-18 Viaggiatori SpA Transportation $3.0 Peninsula Capital Advisors LLP M&A

Interoute Crestview Partners LP; 26-Feb-18 Communications Ltd Telecommunications $2.3 Aleph Capital Partners LLP M&A

Scandlines 26-Mar-18 Deutschland GmbH Transportation $2.1 3i Group plc M&A

Carlyle Group LP; 3-Apr-18 HES International BV Transportation $1.6 Riverstone Holdings LLC M&A

JC Flowers & Co LLC; 26-Feb-18 23-Mar-18 NIBC Holding NV Finance $1.6 aPriori Capital Partners LP IPO

23-Mar-18 23-Mar-18 Albea SA Forestry and paper $1.5 Sun Capital Partners Inc. M&A

Sebia International SA Montagu Private Equity LLP; 6-Feb-18 6-Feb-18 (60%) Health care $1.5 Astorg Partners SA M&A

Groupe Eurotunnel SE 2-Mar-18 2-Mar-18 (15.4856%) Transportation $1.3 Goldman Sachs Capital Partners M&A

Imagina Media Leisure and 16-Feb-18 Audiovisual SL (53.5%) recreation $1.3 Torreal SA M&A

23-Mar-18 Eurogrid GmbH (20%) Utilities $1.2 IFM Investors Pty Ltd. M&A

Source: Dealogic

18 Private Equity Capital Briefing 22 Appendix A Global PE exit activity — Asia-Pacific

EMEA PE exits (in US$b)

$45 60

$40 50 $35

$30 40

$25 30 $20

$15 20

$10 10 $5

Asia-Pacific PE exits — top exits with disclosed values Q1 2018

Announcement Completion or Value Company Sector Sponsor Type or filing date priced date (US$b)

3-Apr-18 Santos Ltd. Oil and gas $13.2 Hony Capital Management Ltd. M&A Beijing Mobike Warburg Pincus LLC; 4-Apr-18 Technology Co. Ltd. Technology $3.7 TPG Capital LP M&A Greater China Intermodal 14-Mar-18 14-Mar-18 Investments LLC Transportation $1.4 Carlyle Group LP M&A Olympus Capital Holdings Asia (Hong Aster DM Healthcare Kong) Ltd.; 9-Aug-17 17-Feb-18 Ltd. Health care $1.3 True North Managers LLP IPO I-MED Radiology 27-Jan-18 21-Feb-18 Network Ltd. Health care $1.0 EQT Partners AB M&A Accolade Wines 5-Apr-18 Australia Ltd. Food and beverage $0.8 CHAMP Private Equity Pty Ltd. M&A Property Portfolio (The K Twin Towers in 9-Feb-18 9-Feb-18 Seoul) Real estate $0.7 KKR & Co. LP M&A

8-Feb-18 8-Feb-18 Qingdao Haier Co. Ltd. Consumer products $0.6 KKR & Co. LP M&A Trimco International 23-Jan-18 23-Jan-18 Holdings Ltd. Textile $0.5 Partners Group Holding AG M&A

Continental Warehousing Corp. Warburg Pincus LLC; 18-Mar-18 18-Mar-18 (Nhava Sheva) Ltd. Transportation $0.4 Abraaj Capital Ltd. M&A

Source: Dealogic

18 Private Equity Capital Briefing 23 Appendix B M&A activity monthly flash

Volume Value Volume Value

Calendar YTD % ∆ Calendar YTD % ∆ LTM LTM % ∆ LTM LTM % ∆ YTD YTD

2017 2018 2016 2017 2018

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M

2018 vs. 2017 2018 vs. 2017 LTM vs. PTM LTM vs. PTM (to March 18) (to March 17) (to March 18) (to March 17) (to March 18) (to March 17) (to March 18) (to March 17)

M&A activity by areas and regions

Global 8,281 -15% 1,015,660 48% 36,724 0% 3,461,941 -1%

Americas 3,126 -16% 591,966 50% 12,824 -6% 1,847,165 -12% Canada 485 -10% 28,483 -54% 1,923 -24% 138,964 -36% Latam North 72 -26% 4,578 -27% 330 -7% 32,015 17% Latam South 120 -34% 19,015 4% 596 -14% 91,834 16% US 2,668 -16% 559,634 68% 10,819 -2% 1,660,979 -13%

EMEA 2,972 -20% 378,795 43% 13,327 -1% 1,121,368 -10% Africa 97 -47% 1,973 -82% 546 -8% 18,875 -62% CIS 229 20% 11,758 134% 1,162 34% 33,185 -45% CSE 211 0% 7,766 -24% 962 5% 26,808 -52% GSA 645 -16% 117,925 104% 2,788 15% 281,392 -6% Israel 88 4% 6,122 -64% 358 43% 19,875 -45% Mediterranean 279 -42% 35,200 -37% 1,345 -10% 142,232 -7% MENA 54 -27% 13,610 -3% 230 -15% 39,512 -48% Nordics 392 -13% 24,947 182% 1,615 8% 152,832 132% UK&I 723 -20% 136,599 115% 3,011 -18% 317,627 -5% WEM 675 -21% 71,278 6% 3,120 -2% 245,388 -9%

Asia-Pacific 3,033 -12% 224,213 17% 14,333 3% 1,002,803 0% ASEAN 288 -39% 17,259 39% 1,621 -13% 88,518 20% Greater China 1,352 3% 125,406 10% 6,370 12% 620,055 6% India 271 -28% 17,817 -33% 1,030 -11% 53,561 -27% Japan 791 -12% 44,307 74% 3,380 5% 156,728 -6% Korea 187 7% 14,039 65% 1,187 5% 73,871 28% Oceania 284 -27% 20,511 47% 1,486 -10% 81,126 -10%

M&A activity by sectors Aerospace and defense 87 6% 16,739 52% 395 10% 86,489 94% Automotive and transportation 551 -18% 66,412 95% 2,478 -1% 252,673 28% Banking and capital markets 438 -25% 51,079 -7% 2,102 -6% 218,428 -22% Consumer products and retail 1,101 -20% 119,571 11% 5,199 -2% 517,534 27% Diversified industrial products 1,094 -16% 119,402 119% 4,885 -1% 413,141 -17% Government and public sector 160 -11% 7,588 306% 613 -2% 34,381 43% Health care 260 -15% 8,146 -60% 1,039 -2% 44,496 -32% Insurance 281 4% 131,444 490% 1,131 9% 328,061 148% Life sciences 550 -14% 80,952 10% 2,465 2% 283,831 -22% Media and entertainment 464 -28% 102,269 544% 2,232 -6% 270,245 23% Mining and metals 339 -38% 22,021 -9% 1,802 -17% 92,387 -17% Oil and gas 273 -28% 87,652 -33% 1,249 -17% 303,051 -42% Other sectors 916 -24% 25,681 2% 3,900 -5% 110,987 -2% Power and utilities 338 -14% 116,809 119% 1,560 6% 296,106 13% Real estate 733 -22% 43,667 -16% 3,446 -1% 249,520 3% Technology 2,645 -3% 171,379 75% 11,150 13% 620,569 0% Telecommunications 147 -15% 33,795 7% 704 2% 161,209 -39% Wealth and asset management 185 -22% 8,245 -51% 864 -13% 47,429 -15%

Regions’ M&A numbers represent a summation of domestic, inbound and outbound M&A activity involving the region. Sectors’ numbers represent involvement from either side, i.e., target or acquiror, except in the case of wealth and asset management, where only target-side involvement has been mapped. M&A analysis as at 1 April 2018. Source: Dealogic. All Rights Reserved. Note: data is continually updated and therefore subject to change.

24 Capital Briefing Appendix C M&A multiples and bid premium

Median deal multiple — EV / EBITDA Global Americas Asia-Pacific EMEA LTM PTM LTM PTM LTM PTM LTM PTM (to Mar 18) (to Mar 17) (to Mar 18) (to Mar 17) (to Mar 18) (to Mar 17) (to Mar 18) (to Mar 17)

Aerospace and defense 7.6x 12.8x 14.3x 10.2x 6.0x 13.9x 12.3x 15.5x

Automotive and transportation 10.6x 9.2x 9.9x 8.6x 10.9x 9.7x 11.3x 9.5x

Consumer products and retail 9.8x 10.6x 10.0x 11.1x 10.1x 12.1x 8.8x 9.6x

Diversified industrial products 10.8x 9.3x 10.8x 10.0x 12.4x 10.9x 9.4x 8.1x

Financial services 11.1x 10.5x 13.6x 12.9x 9.4x 8.8x 8.1x 8.0x

Government and public sector 9.2x 8.6x 10.6x 8.2x 10.1x 8.2x 8.3x 9.4x

Health care 14.2x 13.4x 13.1x 11.5x 16.6x 19.3x 13.9x 10.2x

Life sciences 10.4x 9.5x 9.6x 11.1x 12.3x 10.4x 10.1x 9.2x

Media and entertainment 9.0x 8.2x 11.6x 8.3x 9.4x 8.3x 6.4x 6.9x

Mining and metals 9.3x 8.3x 10.7x 10.2x 12.6x 14.2x 6.0x 5.4x

Oil and gas 10.6x 9.9x 9.4x 12.6x 12.0x 9.0x 10.2x 9.0x

Other sectors 10.0x 10.5x 10.7x 11.3x 10.0x 16.9x 9.5 8.8x

Power and utilities 10.8x 12.2x 8.5x 7.7x 10.1x 15.1x 11.9x 13.0x

Real estate 9.5x 11.1x 10.3x 12.4x 8.0x 12.9x 8.5x 9.9x

Technology 11.5x 10.9x 11.6x 12.2x 11.8x 11.8x 10.8x 9.9x

Telecommunications 7.6x 8.2x 8.6x 8.9x 6.8x 9.2x 7.6x 8.2x

Total 10.6x 10.2x 11.1x 11.0x 11.0x 10.9x 9.3x 9.1x

Median bid premium to four-week stock price Global Americas Asia-Pacific EMEA LTM PTM LTM PTM LTM PTM LTM PTM (to Mar 18) (to Mar 17) (to Mar 18) (to Mar 17) (to Mar 18) (to Mar 17) (to Mar 18) (to Mar 17)

Aerospace and defense 18% 35% 28% 50% 11% 30% - 29%

Automotive and 18% 21% 22% 37% 18% 18% 12% 31% transportation

Consumer products and retail 15% 16% 20% 27% 15% 14% 12% 14%

Diversified industrial products 22% 23% 28% 27% 22% 23% 10% 22%

Financial services 17% 21% 22% 30% 17% 13% 13% 14%

Government and public sector 16% 13% 14% - 20% 3% - 23%

Health care 22% 31% 38% 42% 13% 18% 18% 11%

Life sciences 19% 26% 16% 35% 20% 21% 19% 27%

Media and entertainment 24% 25% 28% 33% 25% 21% 15% 19%

Mining and metals 24% 18% 25% 17% 10% 18% 29% 19%

Oil and gas 19% 23% 20% 31% 16% 13% 29% 36%

Other sectors 20% 18% 20% 16% 15% 26% 22% 10%

Power and utilities 17% 25% 24% 25% 17% 35% 6% 28%

Real estate 17% 26% 14% 27% 24% 25% 12% 20%

Technology 22% 25% 28% 33% 18% 19% 17% 18%

Telecommunications 11% 12% 17% 39% 7% 10% 17% 6%

Total 20% 22% 23% 30% 18% 19% 15% 17%

Deal multiples greater than 30x and bid premium greater than 100% have been excluded from calculation of median. M&A analysis as at 1 April 2018. Source: Dealogic. All Rights Reserved. Note: data is continually updated and therefore subject to change.

25 Capital Briefing Notes

26 Private Equity Capital Briefing Notes

27 Private Equity Capital Briefing EY | Assurance | Tax | Transactions | Advisory PE editor Pete Witte About EY +312 879 4404 EY Knowledge [email protected] EY is a global leader in assurance, tax, transaction and advisory Private Equity services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the Transaction Advisory Services editor world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a Mark Temple +44 20 7951 6985 critical role in building a better working world for our people, EY Knowledge [email protected] for our clients and for our communities. Transaction Advisory Services

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst and Young Global Limited, Lead researcher each of which is a separate legal entity. Ernst and Young Global Satish Kataria Limited, a UK company limited by guarantee, does not provide + 91 124 619 2001 TAS Analyst services to clients. For more information about our organization, [email protected] please visit ey.com. EY Knowledge About EY’s Transaction Advisory Services Contacts How you manage your capital agenda today will define your competitive position tomorrow. We work with clients to create Private Equity social and economic value by helping them make better, more informed decisions about strategically managing capital and Herb W Engert Jeff Hecht transactions in fast-changing markets. Whether you're preserving, EY Global PE Leader EY Global PE Tax Leader optimizing, raising or investing capital, EY’s Transaction Advisory +1 212 773 6202 +1 212 773 2339 Services combine a unique set of skills, insight and experience to deliver focused advice. We help you drive competitive advantage Andrew Wollaston John Weisel and increased returns through improved decisions across all EY Global PE TAS Leader EY Global PE Advisory Leader aspects of your capital agenda. +44 20 7951 9944 +1 212 773 8273 © 2018 EYGM Limited. Transaction Advisory Services All Rights Reserved. Steve Krouskos Julie Hood EYG no. 02284-184GBL EY Global Vice Chair EY Global Deputy Vice Chair Transaction Advisory Services Transaction Advisory Services + 1 404 817 5090 +61 386 507 496 In line with EY’s commitment to minimize its impact on the environment, this document has been printed on paper with a high Macroeconomics recycled content. Mark Gregory Satish Kataria This material has been prepared for general informational purposes only EY Chief Economist EY Knowledge and is not intended to be relied upon as accounting, tax or other + 1 212 773 5532 + 91 124 619 2001 professional advice. Please refer to your advisors for specific advice. M&A ey.com Mark Clephan Barry Perkins EY Knowledge, Transaction Advisory EY UK&I, Transaction Advisory Services Services + 44 113 298 2397 + 44 20 7951 4528 IPOs

Eva Chan Anshul Singh EY Global IPO Center, Strategic Growth EY Knowledge, Market Performance Markets + 91 124 619 2943 + 44 20 7980 0254 Capital markets Chris Lowe Luke Reeve EY UK&I CDA EY UK&I CDA + 44 20 7951 0826 + 44 20 7951 6548 Research and insights Aditi Bakshi EY Knowledge, Transaction Advisory Services + 91 124 470 1574 Competitive intelligence Tarun Kumar EY Knowledge, Transaction Advisory Services +91 124 470 1881