Corporate Finance Review of Irish Merger and Acquisition Activity Quarter 2, 2019 Prepared by Investec Corporate Finance Review of Irish M&A activity M&A Tracker Summary, Q2 2019 Quarterly Value and Volume Trend €8.0bn €8bn 94 100 €7bn 80 74 €4.8bn 5.9bn 80 €6bn 70 64 62 58 60 €5bn 52 60 s €5.1bn l a €4bn e D €3bn 40 €2.3bn €2bn €1.3bn €1.3bn 20 €1.0bn €1bn €0.6bn - 0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Values Volumes Most Active Sectors (by volume) 23 15 10 Professional & IT & Telecoms Health & Pharmaceutical Technical Transaction Type (by volume) 34 18 12 Foreign Acquisitions Irish Deals (In-market) US Buyers Investec Commentary • Reported deals in Q2’19 rose c. 55% in comparison to the previous quarter to set a new record for this tracker of 94. This is up from 62 in Q1’19, and the previous high water mark of 87 transactions seen in Q4’07 • Deal value was €963m versus €559m in Q1’19 showing the rst two quarters of 2019 behind Q1’18 and Q2’18 • Notable transactions include Mediahuis’ acquisition of INM plc, AIB First Data JV acquisition of Payzone Ireland, Grupo Cafento’s acquisition of Java Republic, Brewin Dolphin’s acquisition of Investec Wealth & Investment, UDG Healthcare’s acquisition of Putnam Associates and Dussman Stiftung & Co’s acquisition of STS Group • Irish plc’s were much less acquisitive than normal during the quarter, perhaps unsurprisingly given their signicant activity in recent quarters • In contrast a number of privately owned, including nancial investor or private equity backed, Irish companies continued to be acquisitive during the quarter – Zeus Packaging, Beauparc (Panda), Oasis and Enva • There were a total of 18 in-market transactions and foreign acquisitions more than doubled in the quarter with a total of 34 • IT & Telecoms was the most active, recording 23 deals, followed by Health & Pharmaceutical (15) and Professional & Technical (10). Notes: Trade Sale: Acquisition of an Irish corporate by Irish / overseas corporate Financial Buyers & Investors: Acquisition of, or 20% or more investment in, an Irish corporate by Irish / overseas financial investors including private equity Overseas Transaction: Acquisition or disposal of overseas corporate by Irish corporate / private equity Investec Bank plc (Irish Branch) is authorised by the Prudential Regulation Authority in the United Kingdom and is regulated by the Central Bank of Ireland for conduct of business rules. Investec Bank plc is member of the London Stock Exchange and the Irish Stock Exchange. Registered in England Number 489604. Registered Office: 2 Gresham Street, London EC2V 7QP. Registered in Ireland Number 904428. Registered Branch Office: The Harcourt Building, Harcourt Street, Dublin 2. Investec Capital & Investments (Ireland) Limited trading as Investec Wealth & Investment and Investec is regulated by the Central Bank of Ireland. A member of the Irish Stock Exchange and the London Stock Exchange. Registered in Ireland Number 223158. Review of Irish M&A activity Investec Commentary Reported deals in Q2’19 rose c. 55% in comparison to the previous quarter’s 62 giving a new quarterly high for deal volume of 94 versus the previous high of 87 in Q4’07. Similarly, disclosed deal value increased significantly in Q2’19 to c. €1bn versus the c. €0.6bn disclosed in Q1’19. On a half yearly basis, total disclosed deal value in H1’19 of c. €1.5bn is significantly behind H1’18 of c. €2.6bn, albeit significantly ahead in terms of deal count – 156 in H1’19 versus 118 in H1’18. We have always preferred deal count as a better barometer of the market than reported deal value as the latter is more easily distorted by larger transactions. The three largest reported transactions during Q2’19 were CRH’s €300m disposal of its Shutter & Awnings business to Stella Holdings, Grafton’s €131m acquisition of Netherland’s based Polvo B.V. and Mediahuis NV’s acquisition of INM plc for a reported €102m. There has been considerable M&A activity in recent times between Irish and Benelux based corporates. Other notable transactions during the quarter included the AIB First Data JV acquisition of Payzone Ireland, Grupo Cafento’s acquisition of Java Republic, Brewin Dolphin’s acquisition of Investec Wealth & Investment, UDG Healthcare’s acquisition of Putnam Associates and Dussman Stiftung & Co.’s acquisition of STS Group. Foreign acquisition volume more than doubled in the quarter with a total of 34 transactions in Q2’19. Irish, in- market transactions were the second most prevalent deal type, increasing slightly on the number recorded in Q1’19 with a total of 18 deals. Keyword Studios continued their strategy of acquisition, acquiring Japanese Wizcorp Inc. in April and Canada based Descriptive Video Works in June. Serial acquirers CRH and DCC were active in Q2’19 with CRH, in addition to the disposal mentioned above, acquiring Romanian and Dutch targets in April and May respectively, and DCC acquiring US based Pacific Coast Energy whilst its subsidiary Exertis made two acquisitions during the quarter, COMM-TEC in Germany and Amacom in the Netherlands. A notable mention to the Health & Pharmaceutical sector which saw the greatest number of deals in terms of volume since this tracker began in 2005, with a record fifteen transactions compared to the trend average of five. UDG Healthcare acquired UK based Incisive Health and in the same month acquired US based Putnam Associates. Similarly, Donegal based Brindley Healthcare acquired two nursing homes in Tipperary and Kildare. There was a total of eighteen in-market transactions, the largest of which was the AIB & First Data joint venture acquisition of Payzone for €86m. The Leisure & Travel sector had the most Irish transactions with four occurring during the quarter, the most notable being Neville Hotels’ acquisition of Druids Glen Hotel & Golf Resort for €45m. Davy Group acquired Metis Financial Planning Ireland and, although not an in-market transaction, Investec’s Irish Wealth Management business was acquired by UK based Brewin Dolphin furthering the consolidation seen in private client wealth management and broking. A number of private equity majority owned companies continued to make acquisitions including Montagu backed OASIS acquiring three companies (two Dutch and one Irish), whilst Exponent owned Enva acquired Associate Reclaimed Oils in the UK. With a quarterly deal volume of 94 transactions it was a very busy quarter for M&A activity involving Irish companies and the total deal count of 156 deals for H1’19 compares very favourably with the H1’18 total of 118. The significant reduction in deal value is due to small number of deals exceeding €100m in value in H1’19 versus several in H1’18 such as Smurfit Kappa Group’s acquisition of Reparenco, Total Produce’s acquisition of a c. 45% interest in Dole and Nomad Foods acquiring Green Isle Foods. Quarterly deal volume will very likely be back to more normal levels for the final two quarters of 2019. About and Key Contacts at Investec Corporate Finance Investec is a leading provider of independent corporate finance advisory services in Ireland. We have a highly experienced team of professionals working in our Dublin office. With a track record spanning some of Ireland’s highest profile deals, Investec Corporate Finance has become an advisor of choice within the Irish market for leading companies, private equity funds and entrepreneurs. Liam Booth Shane Lawlor Managing Director Director, Head of Corporate Broking Tel: +353 (1) 421 0345 Tel: +353 (1) 421 0347 [email protected] [email protected] Jonathan Simmons Tommy Conway Director Director, Head of Equity Capital Markets Tel: +353 (1) 421 0351 Tel: +353 (1) 421 0358 [email protected] [email protected] Eoin Kennedy Director Tel: +353 (1) 421 0386 [email protected] Review of Irish M&A activity M&A Transaction Values and Volumes €10.0bn €8.0bn Quarterly€8.0bn Value Trends: Q2 2017 - Q2 2019 €5.9bn €6.0bn €4.8bn €5.1bn €10€4.0bn €2.3bn €8.0bn €2.0bn €1.3bn €1.3bn €8.0bn €0.6bn €1.0bn €5.9bn €6.0bn- Q2 2017 Q€34 .2018bn7 Q4 2017 Q1 2018 Q2 2018 Q€35.1 201bn8 Q4 2018 Q1 2019 Q2 2019 €4.0bn €2.3bn €2.0bn €1.3bn €1.3bn €0.6bn €1.0bn - Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Quarterly Volume Trends: Q2 2017 - Q2 2019 100 94 90 80 80 74 70 70 64 62 58 60 60 52 50 94 s 100 l ea 40 90 80 D 830 74 70 720 64 62 60 10 58 60 52 50 s l Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 ea 40 D 30 20 10 Q2 20190 Transactions Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 - > 500m - 1.1% 251m - 500m 31.2% 2.1% 101m - 250m 24.2% 2.1% 51m - 100m 19.7% 20m - 50m 3.2% 12.4% < 20m 17.0% 12.6% Non-Disclosed 74.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Volume Value Review of Irish M&A activity M&A Transaction Type Q2 2019 Activity by Counterparty Trade Sale Financial Investor Overseas Transaction Trade Sale Financial Investor Overseas Transaction Irish buyer UK buyer US buyer Other Irish seller Acquisitions Disposals Total Irish buyer UK buyer US buyer Other Irish seller Acquisitions Disposals Total Value (€ million) €154 €67 €26 €182 €23 €211 €300 €963 Value (€ million)Disclosed deals €154 6 €67 3 €26 2 €182 3 €23 3 €211 6 €300 1 €963 24 DisclosedUndisclosed deals deals 6 12 3 5 2 10 3 7 3 8 6 28 1 0 24 70 Undisclosed deals 12 5 10 7 8 28 0 70 Total number of deals 18 8 12 10 11 34 1 94 Total number of deals 18 8 12 10 11 34 1 94 Notes: Trade Sale: Acquisition of an Irish