QUA E D RTERLY ITION A MERGERMARKET REPORT ON GLOBAL M&A ACTIVITY MONTHLY M&A INSIDER JULY 2013 INSIDE: GLOBAL OVERVIEW LATIN AMERICA NORTH AMERICA ASIA-PACIFIC EUROPE MIDDLE EAST & AFRICA ABOUT MERRILL DATASITE AND MERRILL CORPORATION Monthly M&A Insider | July GLOBAL OVERVIEW Q2 2013 finds the global M&A climate in a state of inertia. Buyers have sought to fortify against risk at the expense of growth, which has hindered both trade sales and private equity activity. Deal volume declined 13% year-on-year (YoY) to 2,890 deals, while value dropped 15% YoY to US$480bn. Sustained activity in the Pharma, Medical & The continued importance of secondary buyouts Biotech sector A major story in Q2 2013 was the prevalence of secondary The Pharma, Medical & Biotech sector has been a fertile source buyouts. Secondary buyouts (SBOs) became increasingly of M&A throughout Q2 2013. When comparing Q2 2013 with popular in 2012, and this trend has continued into 2013. Q2 2012, the sector has decreased by a slim 5% in volume, but Exits and buyouts are down YoY in Q2 both in terms of volume by value, the sector has grown YoY by a quarter. High-value and value, but secondary buyouts’ value have increased 8% activity concentrated at the upper-end of the market took place to US$25.5bn, even as volume dropped 17% YoY to 45 deals. throughout Q2. SBOs’ increased frequency has been brought about largely by lack of better options: listing became less popular because of Much of this large-cap activity was driven by private equity instability in equity markets; and controversial valuations have players, who have been particularly active in the sector. While in resulted in a dearth of strategic buyers. Although the increased Q2 2013, private equity activity accounted for 18% of all M&A, it focus on SBOs underlines the lack of alternative exit routes in made up 27% of M&A in the Pharma, Medical & Biotech sector. the private equity space, it is currently integral in sustaining In a US$8.7bn deal, Canada-based Valeant Pharmaceuticals private equity activity. announced plans to purchase Bausch & Lomb, which is based in the US and focuses on ophthalmic pharmaceuticals, from Accordingly, some of the biggest private equity deals of the PE firm Warburg Pinctus. For the past several years Valeant quarter have been secondary buyouts. For instance, UK-based has been an aggressive acquirer, but its takeover of Bausch & BC Partners made public its plans to acquire German academic Lomb its biggest to date. The deal gives Valeant a foothold in publishing house Springer Science & Business Media from the eye care space, which is expanding due to increased rates of Swedish private equity firm EQT Partners and Singaporean diabetes and ageing populations in many developed economies. sovereign wealth fund GIC Special Investments for US$4.4bn. The transaction comes as an alternative to a public offering, as EQT Partners had previously announced that it was aiming to list Springer Science during summer 2013. Head of Research: Elias Latsis Global overview: Lana Vilner and Kristina Thompson Editor: Laura Resetar Latin America: Ashley Klepach and Fabio Lopes North America: Dan Kim and Urna Chakraborty For advertising opportunities contact: Asia-Pacific: Brandon Taylor and Samuel Wong Erik Wickman Tel: + (1) 212 686 3329 Europe: Alan Nasrat, Damien Julliard and Alicia Molina [email protected] Middle East & Africa: Nulifer Sezer, Rika Niekzad and Vinjeru Mkandawire Monthly M&A Insider | July | 01 LEAGUE TABLES top 20 global FINANCIAL ADVISERS VALUE Ranking Q2 2013 Q2 2012 Q2 2013 Q2 2012 Company name Value Deal count Value Value change (US$m) (US$m) (%) 1 1 Morgan Stanley 113,452 54 152,454 -25.6% 2 2 Goldman Sachs 111,570 56 119,031 -6.3% 3 3 JPMorgan 104,178 48 112,519 -7.4% 4 7 Bank of America Merrill Lynch 73,136 43 80,794 -9.5% 5 4 Deutsche Bank 68,649 34 112,113 -38.8% 6 6 Barclays 61,545 30 82,709 -25.6% 7 10 Citi 55,528 42 59,687 -7.0% 8 9 Lazard 53,754 39 68,872 -22.0% 9 11 UBS Investment Bank 50,670 44 45,867 10.5% 10 5 Credit Suisse 48,947 37 92,827 -47.3% 11 33 Moelis & Company 25,788 13 8,558 201% 12 8 Rothschild 21,893 41 77,317 -71.7% 13 28 Societe Generale 18,123 17 9,694 87.0% 14 13 HSBC 17,372 15 29,243 -40.6% 15 40 Perella Weinberg Partners 14,619 2 7,113 105.5% 16 54 Greenhill & Co 14,068 7 4,020 250% 17 14 BNP Paribas 13,777 25 23,954 -42.5% 18 23 Jefferies 13,547 31 13,147 3.0% 19 12 Nomura Holdings 13,371 25 41,973 -68.1% 20 31 Leonardo & Co 13,200 13 9,225 43.1% Source: Mergermarket top 20 global FINANCIAL ADVISERS VOLUME Ranking Q2 2013 Q2 2012 Q2 2013 Q2 2012 Company name Value Deal count Deal count Deal count (US$m) change 1 10 PwC 2,578 60 53 7 2 1 Goldman Sachs 111,570 56 87 -31 3 2 Morgan Stanley 113,452 54 73 -19 4 8 KPMG 3,908 49 60 -11 5 5 JPMorgan 104,178 48 63 -15 6 4 Deloitte 4,352 47 66 -19 7 16 UBS Investment Bank 50,670 44 41 3 8 12 Bank of America Merrill Lynch 73,136 43 45 -2 9 15 Citi 55,528 42 43 -1 10 3 Rothschild 21,893 41 70 -29 11 11 Lazard 53,754 39 47 -8 12 7 Credit Suisse 48,947 37 61 -24 13 6 Deutsche Bank 68,649 34 63 -29 14 19 Jefferies 13,547 31 34 -3 15 9 Barclays 61,545 30 59 -29 16 14 Ernst & Young 988 28 44 -16 17 24 BNP Paribas 13,777 25 21 4 18 18 Nomura Holdings 13,371 25 35 -10 19 13 RBC Capital Markets 12,789 22 44 -22 20 17 M&A International 780 22 38 -16 Source: Mergermarket The financial adviser league tables by value and volume have been run from 01-Apr-13 to 30-Jun-13 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Global. global OVERVIEW Monthly M&A Insider | July | 02 LEAGUE TABLES top 20 GLOBAL legal ADVISERS VALUE Ranking Q2 2013 Q2 2012 Q2 2013 Q2 2012 Company name Value Deal count Value Value change (US$m) (US$m) (%) 1 1 Skadden Arps Slate Meagher & Flom 60,437 35 90,655 -33.3% 2 4 Latham & Watkins 55,521 61 56,559 -1.8% 3 17 Davis Polk & Wardwell 52,778 24 31,644 66.8% 4 5 Linklaters 51,978 50 56,445 -7.9% 5 15 Allen & Overy 43,164 48 37,105 16.3% 6 12 Simpson Thacher & Bartlett 42,870 29 40,629 5.5% 7 9 White & Case 40,439 48 46,641 -13.3% 8 3 Freshfields Bruckhaus Deringer 36,602 43 70,862 -48.3% 9 2 Clifford Chance 35,814 53 86,988 -58.8% 10 43 Fried Frank Harris Shriver & Jacobson 35,729 16 13,478 165% 11 39 Herbert Smith Freehills 33,659 32 15,349 119.3% 12 24 Cravath, Swaine & Moore 31,189 12 22,927 36.0% 13 8 Sullivan & Cromwell 29,197 17 50,261 -41.9% 14 13 Wachtell, Lipton, Rosen & Katz 28,767 11 38,920 -26.1% 15 6 Cleary Gottlieb Steen & Hamilton 26,546 22 54,647 -51.4% 16 41 Hengeler Mueller 25,165 6 14,254 76.5% 17 36 Hogan Lovells 23,599 40 18,889 24.9% 18 19 Jones Day 23,133 50 29,500 -21.6% 19 7 Weil Gotshal & Manges 23,010 31 52,576 -56.2% 20 10 Blake, Cassels & Graydon 22,563 20 46,283 -51.2% Source: Mergermarket top 20 GLOBAL legal ADVISERS VOLUME Ranking Q2 2013 Q2 2012 Q2 2013 Q2 2012 Company name Value Deal count Deal count Deal count (US$m) change 1 2 DLA Piper 6,582 76 81 -5 2 1 Latham & Watkins 55,521 61 81 -20 3 7 Clifford Chance 35,814 53 66 -13 4 5 Linklaters 51,978 50 68 -18 5 4 Jones Day 23,133 50 69 -19 6 6 Allen & Overy 43,164 48 68 -20 7 13 White & Case 40,439 48 47 1 8 10 Freshfields Bruckhaus Deringer 36,602 43 57 -14 9 8 Kirkland & Ellis 20,725 41 66 -25 10 14 Hogan Lovells 23,599 40 45 -5 11 9 Skadden Arps Slate Meagher & Flom 60,437 35 62 -27 12 15 Herbert Smith Freehills 33,659 32 43 -11 13 16 CMS 3,266 32 38 -6 14 12 Weil Gotshal & Manges 23,010 31 48 -17 15 3 Baker & McKenzie 12,394 31 78 -47 16 20 Simpson Thacher & Bartlett 42,870 29 34 -5 17 29 Shearman & Sterling 10,541 29 27 2 18 37 Stikeman Elliott 19,105 27 25 2 19 11 Norton Rose Fulbright 2,518 25 57 -32 20 25 Davis Polk & Wardwell 52,778 24 29 -5 Source: Mergermarket The legal adviser league tables by value and volume have been run from 01-Apr-13 to 30-June-13 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Global.