QUARTERLY EDITION A MERGERMARKET REPORT ON GLOBAL M&A ACTIVITY MONTHLY M&A INSIDER APRIL 2017 CONTENTS 03 WELCOME FROM MERRILL CORPORATION 04 GLOBAL OVERVIEW 13 NORTH AMERICA 21 C&S AMERICA 29 EUROPE 37 MIDDLE EAST & AFRICA 45 ASIA-PACIFIC (excluding Japan) 53 JAPAN 61 LEAGUE TABLES 62 MERRILL DATASITE 63 MERRILL CORPORATION: ABOUT AND SALES DIRECTORY WELCOME FROM MERRILL CORPORATION Welcome to the April issue of the Monthly M&A Insider, brought to you by Merrill Corporation and Mergermarket. The Monthly M&A Insider explores the global M&A market Strong finish Looking ahead, it is likely that we will see a continuation of with respect to the numbers, movements and trends, as well cautious resilience from global dealmakers. Buyers in China as revealing the top financial and legal advisers – globally and Despite a first quarter of mixed activity, final Q1 figures were and Europe in particular will continue to tread carefully as across six regions (North America, Central and South America, boosted by strong dealmaking in January and March. Among dealmakers come to terms with new regulations and the Europe, Middle East and Africa, Asia-Pacific and Japan). the highlights were: impact of Brexit negotiations. Meanwhile, in North America, the impact of the Trump administration seems to have done Looking back at the first quarter of 2017, we have seen a • Energy, Mining & Utilities posted the strongest little to deter activity. spike in global M&A deal value when compared to Q1 2016, performance, with M&A transactions in this sector making but a sharp decline in volume. This continues the trend of up 24.1% of all value for the quarter. Two of the three an increasing number of megadeals that started in Q4 2016 largest deals for the quarter involved pipeline operators, Sincerely, and finishes off Q1 on a high. After a strong January, and a helping to launch the sector to the top spot. slightly faltering February, market performance in March regained momentum. • The number of announced Consumer megadeals reached record heights, with three deals valued over US$10bn, Adam Pang Total deal value rose 8.9% versus Q1 2016 to reach US$678.5bn, resulting in the highest valued Q1 for this sector since Vice President, DataSite yet the number of deals dropped from 4,326 to 3,554. We still 2008 (395 deals, US$136.1bn). Merrill Corporation see many companies taking a wait-and-see approach to M&A due to regulatory swings in the US, Europe, and Asia. Chinese • Private equity buyout activity mirrored overall deal buyers in particular have slowed activity, thanks to increased trends with a rise in value over volume, while exits regulatory scrutiny from the Chinese government, while decreased overall. inbound European M&A has also backed off. • Three of the quarter’s top 10 deals were announced Political uncertainty in Europe appears to have affected activity in March, the largest of which was Intel Corporation’s from international dealmakers pursuing deals in the region, US$14.7m bid for Mobileye, a technology designer for while North American dealmakers have actually increased their driverless cars. activity across the pond, increasing their Q1 deal value by 16% in 2017 compared to Q1 2016. MERRILL 3 GLOBAL NORTH C&S MIDDLE EAST ASIA- LEAGUE MERRILL CONTACT WELCOME EUROPE JAPAN OVERVIEW AMERICA AMERICA & AFRICA PACIFIC TABLES DATASITE MERRILL GLOBAL OVERVIEW QUARTERLY EDITION GLOBAL OVERVIEW In the first quarter of 2017, an intriguing shift occurred in global M&A. Total deal value rose 8.9% Key Stats from the same period last year to reach US$678.5bn – but the number of deals dropped sharply, from 4,326 to 3,554. These two figures reflect a continued increase in megadeals worldwide, combined with a greater sense of uncertainty among smaller buyers in the face of geopolitical 3,554 deals valued at US$678.5bn, up 8.9% by value with 772 fewer instability. Many companies are taking a wait-and-see approach to M&A due to regulatory swings deals compared to 4,326 deals worth in the US, Europe, and Asia. US$622.9bn in Q1 ‘16 Top sector Looking at activity by region, North America were 484 exits compared to 522 a year ago, it did not already own in Reynolds American. Energy, Mining & Utilities maintained its position as the leading and value stood at US$78bn, an 11.4% decline. In the Pharma, Medical & Biotech space, saw 293 deals worth destination for acquirers with 1,258 deals deals in an array of segments contributed US$163.8bn, up 90% by worth US$333.3bn. This represented 49.1% The Energy, Mining & Utilities sector saw the to the value figure, including American value compared to 338 of all value globally for the quarter. Europe most activity of any industry in Q1, with 293 Securities’ US$2.4bn acquisition of medical deals worth US$78.5bn also sustained its traditional advantage deals worth US$163.8bn. Reorganisation services provider Air Methods Corporation. in Q1 ‘16 in deal volume with 1,350 deals valued at by midstream companies continued to US$170bn. M&A value declined everywhere drive activity. Two of the three largest deals Cross-border activity kept up its unstoppable but in North America and Africa & the involved pipeline operators, ONEOK and rise, as deals between companies in different Top Financial Adviser Middle East, where there were 84 deals Williams Companies, which each bought countries increased 4% to US$336.6bn. Goldman Sachs ranked worth US$28.3bn. affiliated master limited partnerships (MLPs) This represented 49.6% of all global value. first with 70 deals worth for more than US$11bn. Overall, deals in the Four of the top five deals in the quarter were US$194.5bn, compared The trend in private equity buyouts mirrored energy sector represented 24.1% of all value cross-border in nature, including French to 50 deals worth that of overall M&A: value increased, by 9.2% in the quarter. lens-maker Essilor International’s US$25.4bn US$224.2bn in Q1 ‘16 to US$78.7bn, while volume declined, from purchase of Italy’s Luxottica Group. 680 to 576 deals. Major deals in the insurance The Consumer and Pharma, Medical and financial services sector drove value & Biotech sectors had the second- and Comparing the first quarter to previous years, Top Legal Adviser in particular. Two examples from March third-highest value totals, respectively. the value of US$678.5bn marked something Cravath, Swaine & Moore include KKR teaming with CDPQ to buy Three deals each worth more than US$17bn of a decline. Except for Q1 2016, it was the ranked first with 22 deals insurer USI Holdings for US$4.3bn and Vista contributed heavily to the Consumer total of weakest quarter in terms of value since Q1 worth US$163.1bn, Equity Partners acquiring fintech firm DH US$136bn. These included the largest deal 2014. At the same time, the volume of 3,554 compared to 17 deals Corporation for US$3.4bn. PE exits decreased of the quarter, British American Tobacco’s deals was the lowest since Q2 2013. worth US$107.7bn in somewhat both in volume and value: there US$60.7bn purchase of the remaining 57.83% Q1 ‘16 GLOBAL 5 MERRILL NORTH C&S MIDDLE EAST ASIA- LEAGUE MERRILL CONTACT OVERVIEW EUROPE JAPAN WELCOME AMERICA AMERICA & AFRICA PACIFIC TABLES DATASITE MERRILL TREND GRAPHS GLOBAL M&A TREND GLOBAL PRIVATE EQUITY TREND 4,500,000 20,000 600,000 3,000 18,000 4,000,000 500,000 2,500 16,000 3,500,000 US$ 1,202,932 14,000 3,000,000 400,000 2,000 US$ US$ 822,899 12,000 1,013,315 Number of deals Number of deals 2,500,000 US$ 10,000 1,500 927,272 300,000 US$ US$ Value (US$m) Value Value (US$m) Value 2,000,000 US$ US$ 858,317 529,767 757,055 572,058 US$ 8,000 US$ 886,331 485,625 US$ 448,579 1,500,000 200,000 1,000 US$ US$ US$ US$ 6,000 US$ US$ 404,625 395,742 523,305 657,439 395,341 1,035,620 US$ US$ US$ US$ US$ 320,997 US$ 1,000,000 964,056 293,927 754,119 4,000 274,029 292,328 US$ US$ 100,000 500 565,581 560,237 500,000 2,000 US$ US$ US$ US$ US$ US$ 760,096 US$ US$ 566,829 622,902 678,486 465,690 447,077 78,763 78,094 0 0 0 0 2012 2013 2014 2015 2016 YTD 2017 2012 2013 2014 2015 2016 YTD 2017 Q1 Q2 Q3 Q4 Volume Buyout value Exit value Buyout volume Exit Volume GLOBAL 6 MERRILL NORTH C&S MIDDLE EAST ASIA- LEAGUE MERRILL CONTACT OVERVIEW EUROPE JAPAN WELCOME AMERICA AMERICA & AFRICA PACIFIC TABLES DATASITE MERRILL TREND GRAPHS REGIONAL BREAKDOWN AS A PROPORTION OF GLOBAL TOTAL M&A VALUE GLOBAL M&A SECTOR BREAKDOWN Q1 2017 Energy, Mining & Utilities Value: US$163.8bn Number of deals: 293 Market share: 24.1% Europe North America US$170bn US$333.3bn 1,350 deals 1,258 deals 25.1% Consumer 49.1% Value: US$136.1bn Asia-Pacific Number of deals: 395 (excluding Japan) US$124.8bn Japan Market share: 20.1% 727 deals US$8.6bn 18.4% 10 deals 1.3% Pharma, Medical & Biotech Africa & Value: US$76.5bn Middle East Number of deals: 304 US$28.3bn C&S America Market share: 11.3% 84 deals US$13.1bn 4.2% 119 deals 1.9% Industrials & Chemicals Value: US$73.9bn Number of deals: 681 Market share: 10.9% Key Financial Services Region Value: US$56.6bn Value Value % Value Up/Down Number of deals: 267 (US$bn) change Volume Value market share Market share: 8.3% Cross-border $336.6 4% Domestic $341.9 14.3% GLOBAL 7 MERRILL NORTH C&S MIDDLE EAST ASIA- LEAGUE MERRILL CONTACT OVERVIEW EUROPE JAPAN WELCOME AMERICA AMERICA & AFRICA PACIFIC TABLES DATASITE MERRILL TOP DEALS TOP 10 ANNOUNCED DEALS FOR 2017 Deal value Deal value Deal value Deal value Deal value US$60,734m US$29,592m US$25,423m US$17,835m US$17,147m Announced Announced Announced Announced Announced 17-Jan-17 26-Jan-17 19-Jan-17 10-Feb-17 01-Feb-17 Bidder company Bidder