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Monthly M&A InsIderA mergermArket report on globAl m&A Activity
mArcH 2011
Monthly M&A InsIdermergermarket
GlobAl overvIew 01
AmericAs:LAtinAmericA 06
northAmericA 11
AsiA-PAcific 16
euroPe 22
middLeeAst&AfricA 28
About MerrIll corporAtIon 33
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www.mergermarket.comPart of the mergermarket group
CONTENTS
Monthly M&A Insider
globAl overvieW
01
In the Energy industry, always a bulwark sector for big-ticket transactions, the large-cap deal terrain bustled as businesses in the oil and gas space brokered tie-ups and takeovers amid surging energy prices and fresh signs that the Gulf of Mexico may be back open for business. In the month, the US government granted the first deepwater drilling permit in the Gulf since the Deepwater Horizon disaster in April 2010 and although the moratorium on drilling was lifted in October 2010, the move comes as the most promising sign that deepwater production in the region will see a gradual recovery going forward.
Interestingly, it was Ensco, the British oil and gas drilling contractor that brought suit against the US government over the drilling moratorium in 2010, was on the buy-side of the biggest Energy deal in the month. In the deal, Ensco will pay US$8.74bn to acquire Pride International, the Houston-headquartered offshore drilling company. With the acquisition the British driller will gain access to the new markets off the coast of West Africa and Brazil and become the second largest offshore drilling operator in the world after Transocean. So things are clearly looking up for the firm that saw its financial results badly affected by the drilling moratorium in the Gulf.
While a handful of other large-cap Energy deals saw the sector account for over a fifth of US$500m plus transactions announced in the month, the top global M&A transaction by value actually came to market in the Spanish banking industry. In the transaction, the Barcelona-based savings bank La Caixa transferred banking assets to its listed investment holding company Criteria in a bid to isolate its troubled assets and to create a more attractive investment company for investors. Criteria will change its name to CaixaBank post-deal completion while keeping hold of its financial, insurance and other industrial investments. It is estimated that financial assets will represent some 75% of the CaixaBank’s total value.
Post-crisis activity in the Spanish banking sector has been driven by a wave of consolidation among the ailing savings banks, known as cajas. The cajas, which have hobbled along for more than two years hamstrung by bad loan books and the depressed property market, are facing tighter capital regulations which will come into effect for the savings banks in March next year. This may well kick off further dealmaking in the space looking forward as these lenders merge and reorganise to ward off possible nationalisations.
GLOBAL OvErvIEW
head of research – Elias Latsis
editor – rory McNeil
For advertising opportunities contact:
erik wickman
tel: + (1) 212 6863329 [email protected]
Global overview: Matthew Albert
latin America: Urna Chakraborty
north America: Jason Cozza
Asia-Pacific: Douglas robinson
europe: Samuel Tedjasukmana and Damien Julliard
Middle east & Africa: Otavio Machado, Yannis Papacostas & Marie-Laure Keyrouz
GlobAl overvIew
THIS YEAr IS KICKING OFF WITH HOPEFUL SIGNS AS INCrEASING NUMBErS OF COrPOrATE BUYErS PUT AMBITIOUS TrANSFOrMATIONAL M&A DEALS BACK ON THE COrPOrATE AGENDA. IN FEBrUArY, GLOBAL LArGE-CAP DEALMAKING CONTINUED TO SEE A BrISK STrIDE IN ACTIvITY WITH THE DEAL COUNT FOr US$500M PLUS TrANSACTIONS rISING BY ALMOST 50.0% YEAr ON YEAr TO 61 DEALS COLLECTIvELY vALUED AT US$153.03BN.
Monthly M&A Insider 02
globAl overvieW
TrEND GrAPHS
GlobAl M&A quArterly trend
0
00
4,00
600
800
1,000
1,200
1,400
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Total volume Mid-market volume
0
50
100
150
200
250
300
350
400
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
100
200
300
400
500
600
700
800
900
GlobAl M&A AnnuAl trend GlobAl M&A AnnuAl PrIvAte equIty trend
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
YTD 2011*2010200920082007200620052004
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Total volume Mid-market volume
0
100
200
300
400
500
600
700
800
900
YTD 2011*2010200920082007200620052004
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
GlobAl M&A quArterly PrIvAte equIty trend
Monthly M&A Insider 03
globAl overvieW
TrEND GrAPHS
GlobAl M&A sector breAkdown ytd 2011
GlobAl GeoGrAPhIc breAkdown ytd 2011
vALUE
vALUE
vOLUME
vOLUME
30.2%
6.5%
1.3%
0.4%
6.5%
0.3%
3.3%
8.6%
15.1%7.3%
1.2%
15.5%
3.7%Industrials & Chemicals
TMT
Business Services
Consumer
Energy, Mining & Utilities
Pharma, Medical & Biotech
Financial Services
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
6.1%1.7%
52.4%
26.3%
13.5%Asia-Pacific
Europe
North America
Middle East & Africa
Latin America
9.2%
12.7%
1.0%0.5%2.8%
2.9%
1.6%
8.5%
3.5%
9.1%
Industrials & Chemicals
TMT
Business Services
Consumer
Energy, Mining & Utilities
Pharma, Medical & Biotech
Financial Services
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
19.2%
14.6%
14.3%
4.7%2.7%
36.4%
37.3%
19.0% Asia-Pacific
Europe
North America
Middle East & Africa
Latin America
Monthly M&A Insider 04
globAl overvieW
TrEND GrAPHS
GlobAl M&A deAl sIze breAkdown
vALUE vOLUME
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
28.9%
18.6%
24.5%
9.8%
18.2%
38.8%
15.5%
22.0%
8.5%
15.1%
42.1%
16.7%
21.0%
7.5%
12.7%
39.8%
16.8%
23.0%
7.9%
12.5%
42.7%
15.0%
19.1%
8.8%
14.3%
40.8%
16.3%
20.4%
7.9%
14.6%
27.8%
20.7%
27.6%
9.3%
14.5%
43.7%
19.8%
18.9%
6.8%
10.7%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Per
cent
age
80
82
84
86
88
90
92
94
96
98
100
2011*2010200920082007200620052004
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0.3%
1.0%
4.2%
4.5%
90.0%
0.7%
1.0%
4.5%
4.7%
89.2%
0.7%
1.2%
5.0%
4.7%
88.4%
0.7%
1.3%
5.5%
5.1%
87.4%
0.6%
0.9%
3.9%
4.6%
90.1%
0.5%
0.9%
3.7%
3.9%
91.0%
89.0%
4.5%
4.9%
1.2%
0.5% 1.0%
1.4%
4.8%
4.4%
88.4%
Per
cent
age
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LATIN AM
ERICA
LATIN AMERICAA MERgERMARkET M&A REpoRT oN
Monthly M&A Insider 06
The top Latin American deal for this quarter was pan American Energy’s acquisition of ESSo petrolera Argentina’s refinery and service stations, amounting to a US$650m deal, a rather low value for the energy sector. Yet another energy deal was present in the top ten of the quarter - Brazil’s Cosan SA Industria e Comercio’s acquisition of Brazilian Usina Zanin Acucar e Alcool Ltda, a sugar and ethanol plant, a transaction valued at US$198m. The Energy, Mining & Utilities sector comprised 24.8% of Latin American M&A by value and 16.4% by count with 12 deals worth US$ 5.9bn. China has been one of the top countries involved in Latin American deals in 2010. For 2011, China’s expected continuing expansion of its Latin American oil reserves can be expected to primarily fuel growth in market share for the energy sector through high value energy deals in the quarters to come.
Both Argentina and Mexico have been experiencing high deal count and deal value respectively in this quarter. Ten Argentinean deals worth US$818m have been recorded alongside Mexico’s mere four deals collectively worth a whopping US$2.3bn. owing to this large value was Mexico-based manufacturer of The Coca-Cola Company products, grupo Continental, S.A.B.’s binding merger agreement with Embotelladoras Arca SA de CV, a listed Mexico based producer, bottler, and distributor of carbonated beverages and purified water, in a US$2.1bn deal, announced early this quarter. According to mergermarket data, the new company will be renamed Arca Continental and will have estimated sales of 1.2bn unit cases. Shares of the new company will be traded on the Mexican Stock Exchange. The consolidation of these two companies will strengthen their position in the beverage market, expand client base as well as lead to significant synergies.
There were 14 deals in both the industrial & chemical sector and the consumer sector, together amounting to 38.4% of deal volume - an overwhelming majority. Looking ahead to future transactions, one of Brazil’s biggest banks, Bradesco, is looking to buy a stake in French retailer Carrefour’s finance branch, which would then fuel growth of the consumer sector. Additionally, Luxottica, a globally recognized premium eyeglass maker, is reportedly looking to buy small retail businesses in Latin America, having reported a record year for sales in 2010.
Although it has been an overall slow start to 2011, large expected deals in the Energy, Construction, and Consumer Services sector should spur Latin American M&A for the quarters to come, as well as boost economic growth in the region.
pREdICTIoNS FoR LATIN AMERICAN M&A IN 2011 hAVE CoNSISTENTLY BEEN poSITIVE IN oUTLook, wITh BRAZIL REpoRTEdLY BEINg ThE CoUNTRY ThAT wILL REACh RECoRd M&A VoLUMES ThIS YEAR, dUE To ITS pAST poSITIVE ECoNoMIC gRowTh ANd INCREASEd FoREIgN INVESTMENT. BRAZIL hAS BEEN FoRECASTEd To gRow AT A RATE oF 5.5% ThIS YEAR; So FAR IN ThE FIRST qUARTER, BRAZIL hAS dEFINITELY LEd IN TERMS oF BoTh dEAL VALUE ANd VoLUME wITh 36 dEALS woRTh US$17.3BN, CoMpRISINg ALMoST hALF oF ToTAL dEAL VoLUME IN LATIN AMERICA. IN ToTAL, ThE dEAL CoUNT FoR ThIS qUARTER IS AT 73 TRANSACTIoNS CoLLECTIVELY woRTh US$23.8BN.
07
LATIN AM
ERICA
Monthly M&A Insider
Top 10 LATIN AMERICAN ANNouNCEd dEALs of ThE MoNTh (fEb-11)Announced bidder company Target company Target dominant
sectorseller company Exit multiples (x) bid premia
1-day before
deal value
(us$m)Revenue EbITdA p/E
15-Feb-11 pan American Energy LLC ESSo petrolera Argentina Srl (Campana refinery and 720 service stations)
Energy, Mining & Utilities
Esso petrolera Argentina Srl
- 650
19-Feb-11 german Efromovich (private Investor); pC Capital partners SApI de CV; Ruben Vila garciasordo (private Investor); Alejandro Ampudia Marco (private Investor); Alejo peralta Teran (private Investor)
Compania Mexicana de Aviacion SA de CV Mexico
Transportation - 200
23-Feb-11 Cosan SA Industria e Comercio Usina Zanin Acucar e Alcool Ltda
Energy, Mining & Utilities
- 198
01-Feb-11 Vale SA Biopalma da Amazonia SA (70.00% stake)
Agriculture - 174
28-Feb-11 grupo Essentium wTorre SA (engineering unit) (50.00% stake)
Business Services wTorre S.A. - 166
15-Feb-11 Equinix Inc and Riverwood Capital Lp
Alog Solucoes de Tecnologia Ltda (90.00% stake)
Business Services - 127
02-Feb-11 daewoo Engineering and Construction Company Limited and posco Engineering & Construction Co Ltd
Consorcio Santos CMI SA (70.00% stake)
Construction 0.6 - 72
23-Feb-11 Chongqing polycomp International Co Ltd
oCV Capivari Fibras de Vidro Ltdal
Industrials & Chemicals
owens Corning 1.1 11.5 - 60
04-Feb-11 duratex SA Elizabeth Loucas Sanitarias Ltd SA
Construction - 48
20-Feb-11 grupo Nacional de Chocolates SA
helados Bon (73.11% stake)
Consumer - 39
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Latin Americadata correct as of 16-Mar-11
Source: mergermarket
Top dEALS
LATIN AM
ERICA
Monthly M&A Insider
TRENd gRAphS
LATIN AMERICAN M&A quARTERLy TRENd
0
10
20
30
40
50
60
70
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
20
40
60
80
100
120
140
160
180
Total volume Mid-market volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
2
4
6
8
10
12
14
16
LATIN AMERICAN M&A ANNuAL TRENd LATIN AMERICAN M&A ANNuAL pRIvATE EquITy TRENd
0
20
40
60
80
100
120
140
160
180
YTD 2011*2010200920082007200620052004
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
100
200
300
400
500
600
Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
YTD 2011*2010200920082007200620052004
Valu
e (U
S$m
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
5
10
15
20
25
30
35
40
45
50
LATIN AMERICAN M&A quARTERLy pRIvATE EquITy TRENd
08
LATIN AM
ERICA
Monthly M&A Insider
TRENd gRAphS
LATIN AMERICAN M&A gEogRAphIC bREAkdowN yTd 2011
VALUE VoLUME
72.7%
2.3%
0.8%
4.1%3.4%
9.8%
3.1%
3.4%
0.3%
Brazil
Chile
Colombia
Dominican Republic
El Salvador
Ecuador
Mexico
Peru
Argentina
12.3%
4.1%
2.7%
13.7%
49.3%
8.2%
5.5%
2.7%1.4%
Brazil
Chile
Colombia
Dominican Republic
El Salvador
Ecuador
Mexico
Peru
Argentina
LATIN AMERICAN M&A sECToR bREAkdowN yTd 2011
VALUE VoLUME
11.0%0.5%
21.5%
0.5% 0.6%1.3%
2.2%
33.9%
25.5%
3.0%
Consumer
Industrials & Chemicals
Energy, Mining & Utilities
Business Services
TMT
Transportation
Financial Services
Construction
Agriculture
Pharma, Medical & Biotech
19.2%
19.2%
9.6%
8.2%
2.7%2.7%
1.4% 1.4%
4.1%
6.8%
8.2%
16.4%
Consumer
Industrials & Chemicals
Energy, Mining & Utilities
Business Services
TMT
Transportation
Financial Services
Construction
Agriculture
Pharma, Medical & Biotech
Leisure
Real Estate
09
10
LATIN AM
ERICA
Monthly M&A Insider
LATIN AMERICAN M&A dEAL sIzE bREAkdowN
VALUE VoLUME
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
38.5%
21.9%
14.7%
9.6%
15.4%
17.9%
7.2%
25.8%
21.3%
27.8%
46.9%
8.3%
21.8%
10.3%
12.7%
16.2%
10.8%
31.3%
16.2%
25.5%
30.5%
20.3%
24.5%
10.0%
14.7%
9.2%
29.6%
36.8%
9.6%
14.7%9.3%
6.5%
24.7%
20.2%
39.4%30.7%
43.1%
8.6%
6.8%
10.9%
Per
cent
age
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
0.8%
3.3%
6.1%
88.6%
0.3%
4.1%
7.1%
88.1%
1.0%
5.4%
7.4%
85.1%
0.2%
5.3%
6.4%
87.4%
0.6%
4.7%
5.3%
88.2%
0.3%
7.0%
5.2%
85.8%81.9%
6.2%
8.3%
1.2% 1.4%1.2% 0.3% 1.0% 0.7% 1.2% 1.8% 2.3%
4.1%4.1%
5.4%
85.1%
Per
cent
age
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
TRENd gRAphS
NORTH
AMERICA
A mergermArket m&A report on
11Monthly M&A Insider
nortH AmerICA
EnErgy, MInIng, & UtIlItIEs And FInAncIAl sErvIcEs lEAd north AMErIcA dEAl vAlUEs
DespIte A DeCreAseD DeAl Count, tHe yeAr to DAte Q1 2011 HAD An AverAge DeAl sIze vAlue of us$337m, wHICH wAs tHe lArgest AverAge DeAl vAlue for A QuArter sInCe Q1 2009. wItH only 586 DeAls AnnounCeD so fAr In Q1 2011, nortH AmerICA HAs seen An ImpressIve wAve of lArge DeAl vAlues DrIven by ConsolIDAtIon In tHe energy, mInIng & utIlItIes AnD fInAnCIAl servICes seCtors.
Deutsche boerse and us-based nyse euronext’s proposed merger this february was north America’s largest deal of the month for an equity consideration worth us$10.1bn. the securities and commodities brokers subsector was also a highlight in Canada where an all-share merger of equals was announced between the london stock exchange and tmX group.
these mega deals could pave a path for further consolidation among equals within the securities and commodities space, and may even stir up hostility as nAsDAQ omX aims to launch a rival hostile bid for nyse euronext. overall, the financial services sector has fared well this year with 60 deals valued at us$18.4bn.
energy, mining & utilities represented 37.0% of deal values in north America, with an aggregate deal value of us$74.8bn, while accounting for only 11.0% of total deal count (66 deals). four of the top 10 largest deals in february were in this space.
tMt leads deal countIn the year to date 2011, 111 deals were announced in the tmt sector, accounting for approximately 19.0% of total deal count valued at us$12.9bn. the sector did not make a particular impression on the top deals in february. Announced in march, western Digital’s bid for Hitachi’s us-based global storage technologies business is the largest tmt deal of the year so far for an approximate cash and equity consideration of us$4.25bn.
outside of the tmt space, north America has seen a fairly even spread of deals by volume across the Industrials & Chemicals, pharma, medical & biotech, business services, energy mining & utilities, financials services, and Consumer sectors, representing 15%, 13.7%, 13.1%, 11.3, 10.2% and 8.2% of deals, respectively.
looking ahead: canadaCanada’s rich natural resources has been a key deal driver in north America, and will continue to attract competitors and investors from abroad looking to leverage global demand for raw materials. In Canada, equinox’s unsolicited bid to acquire lundin mining marks the largest hostile deal so far in 2011, for a transaction value of approximately us$4.6bn. Canada was host to last year’s largest hostile deal when bHp attempted to takeover potash, the world’s largest fertilizer provider.
whether Canada will continue to host some of the hottest deals in 2011 remains to be seen, but it will continue to be a place to keep an eye on for investors and corporate buyers looking to take over key resources and establish global dominance.
12
NORTH
AMERICA
Monthly M&A Insider
top DeAls & eXpeCteD DeAls
top 10 north AMErIcAn AnnoUncEd dEAls oF thE Month (FEb-11) Announced bidder company target company target dominated
sectorseller company Exit multiples (x) bid premia
1-day before
deal value(Us$m)revenue EbItdA p/E
15-feb-11 Deutsche boerse Ag nyse euronext financial services 2.8 11.7 17.7 -1.5% 12,267
07-feb-11 ensCo International Inc
pride International Inc energy, mining & utilities
6.0 19.1 30.4 21.0% 8,735
28-feb-11 ventas Inc nationwide Health properties Inc
real estate n/a n/a 39.1 15.5% 7,159
07-feb-11 Danaher Corporation beckman Coulter Inc pharma, medical & biotech
1.8 8.8 25.7 11.1% 6,724
21-feb-11 bHp billiton ltd Chesapeake energy Corporation (fayetteville shale assets)
energy, mining & utilities
Chesapeake energy Corporation
4,750
28-feb-11 equinox minerals limited
lundin mining Corporation
energy, mining & utilities
15.0 25.7% 4,614
24-feb-11 warburg pincus llC; vestar Capital partners
triton Container International limited
transportation pritzker family 3,500
09-feb-11 london stock exchange (lse) plc
tmX group Inc financial services n/a n/a n/a 5.9% 3,118
14-feb-11 Clayton, Dubilier & rice llC
emergency medical services Corporation
pharma, medical & biotech
1.0 9.4 21.7 -9.4% 2,897
22-feb-11 Holly Corporation frontier oil Corporation energy, mining & utilities
0.5 14.8 75.0 -4.0% 2,789
based on announced deals, including lapsed and withdrawn bids based on dominant geography of target company being north America (us + Canada) Data correct as of 16-mar-11
source: mergermarket
13
NORTH
AMERICA
Monthly M&A Insider
situation target company sector potential bidder company
Financial advisor to bidder (b); target (t); seller (s)
seller company
Market cap/ est. value (Us$m)
comments
expected Deal family Dollar stores Inc.
Consumer trian group (t)morgan stanley 5,935 trian group has offered to acquire family Dollar stores Inc for a cash consideration of us$55 to us$60 per share. the transaction is subject to the family Dollar board approval before becoming definitive. trian currently owns approximately 8% of family Dollar, and its offer represents a 25%-36% premium as of 15-feb-2011. on 3-mar-2011, the board rejected trian's bid proposal saying that the offer undervalues the company. In addition, the company adopted a shareholder rights plan to make a potential takeover more difficult. trian continues to stand by its offer.
expected Deal bJ's wholesale Club Inc.
Consumer leonard green & partners lp
(t)morgan stanley 2,620 bJ's wholesale Club Inc has hired morgan stanley in order to explore strategic alternatives, such as the potential sale of the company. so far, leonard green & partners lp is the only party that has consistently shown interest in bJ's wholesale Club in the past. At the end of 2010, it was reported that leonard green may launch a hostile takeover offer by mid-January 2011, but as of 17-mar-2011 the offer has not been launched yet.
expected Deal lawson software Inc
Computer software
Infor and golden gate Capital
1,900 lawson software Inc has received an unsolicited, non-binding proposal from Infor and golden gate Capital to acquire the company for us$11.25 per share in cash, valuing the company at us$1.8bn. Carl Icahn, who owns an 11% stake in lawson, is fully supporting the sale of the company. It has been reported, nonetheless, that lawson may see higher bids from other companies in the near future.
expected Deal mentor graphics Corp
Computer software
Icahn enterprises lp
1,633 Icahn enterprises has approached the board of mentor graphics Corp with a non-binding takeover proposal of us$17 per share. the board has not decided on the proposal yet, but Icahn is aware of the fact that mentor graphics may receive higher bids from strategic investors.
expected Deal 99 Cents only stores
Consumer leonard green & partners lp and schiffer/gold family
1,370 99 Cents only stores has received an acquisition proposal from the schiffer/gold family and leonard green & partners lp. the consideration in the proposal is us$19.09 per share in cash. the offer was received on 11-mar-2011. outside analysts have concluded, however, that 99 Cent only stores could receive a higher offer.
expected deals based on confirmed announcements by companies involved
pIpElInE oF north AMErIcAn ExpEctEd dEAls
top DeAls & eXpeCteD DeAls
14
NORTH
AMERICA
Monthly M&A Insider
trenD grApHs
north AMErIcAn M&A qUArtErly trEnd
0
100
200
300
400
500
600
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
Total volume Mid-market volume
0
50
100
150
200
250
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
50
100
150
200
250
300
350
north AMErIcAn M&A AnnUAl trEnd north AMErIcAn M&A AnnUAl prIvAtE EqUIty trEnd
0
200
400
600
800
1,000
1,200
1,400
1,600
YTD 2011*2010200920082007200620052004
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
1,000
2,000
3,000
4,000
5,000
6,000
Total volume Mid-market volume
0
50
100
150
200
250
300
350
400
450
500
YTD 2011*2010200920082007200620052004
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
200
400
600
800
1,000
1,200
north AMErIcAn M&A qUArtErly prIvAtE EqUIty trEnd
15
NORTH
AMERICA
Monthly M&A Insider
Trend graphs
North AMerIcAN M&A Sector BreAkdowN Ytd 2011
value volume
6.5%
16.4%
9.3%
0.2%
3.2%
1.6%
9.5%
0.5%
37.9%
12.1%
0.9%1.8% TMT
Industrials & Chemicals
Pharma, Medical & Biotech
Business Services
Energy, Mining & Utilities
Financial Services
Consumer
Construction
Leisure
Transportation
Real Estate
Defence
18.9%
15.0%
13.7%
3.6%
13.1%
8.2%
10.2%
0.2%
11.3%
1.2%1.2%
1.9%
1.5%
TMT
Industrials & Chemicals
Pharma, Medical & Biotech
Business Services
Energy, Mining & Utilities
Financial Services
Consumer
Construction
Leisure
Transportation
Real Estate
Defence
Agriculture
North AMerIcAN M&A deAl SIze BreAkdowN
value volume
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
32.9%
18.2%
23.2%
9.1%
16.6%
46.6%
15.8%
18.0%
7.0%
12.6%
51.6%
15.0%
17.3%
6.4%
9.7%
43.1%
18.8%
21.9%
6.6%
9.7%
49.3%
13.8%
17.5%
7.2%
12.2%
58.9%
13.3%
13.2%
5.4%
9.2% 12.4%
9.6%
24.1%
17.9%
33.0%
54.4%
19.6%
13.7%
4.7%
7.6%
Per
cent
age
75
80
85
90
95
100
2011*2010200920082007200620052004
1.2%
4.5%
4.9%
89.1%
0.9%1.3%
4.5%
4.9%
88.5%
1.0%
1.5%
5.4%
5.3%
86.8%
1.1%
1.8%
6.3%
5.3%
85.5%
0.9%
3.7%
4.1%
90.6%
1.0%
3.5%
3.8%
91.0%
87.3%
5.3%
5.6%
1.1% 1.5%
1.9%
5.1%
4.4%
87.0%
0.4% 0.7% 0.7% 0.6%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Per
cent
age
ASIA-PAcIfIc
A mergermArket m&A report on
Monthly M&A Insider 16
ASIA-pAcIfIc
the deal in question saw Bp, the beleaguered Uk-based petroleum and petrochemicals group, acquire a 30.0% stake in twenty three different oil & gas production sharing contracts belonging to reliance Industries, the Indian conglomerate, for a total of US$7.2bn. the transaction, by far the largest Indian inbound energy acquisition to be announced, will allow reliance to utilise the technical expertise of Bp to explore and subsequently develop the offshore exploration blocks, which cover some 270,000 square kilometres and are located in the Bay of Bengal.
the deal is transformational in many respects, with both parties standing to benefit from the transaction. for its part, reliance will undoubtedly profit from the blocks’ development as it looks to strengthen its already-vice-like grip on the rapidly-expanding Indian natural gas market - according to forecasts from the International energy Agency, Indian demand for gas is expected to triple between 2007-2030.
Bp also stands to gain from the deal as it looks to put the Deepwater Horizon disaster last year behind it. the transaction, which came just days after Bp completed a controversial US$16bn share swap with rosneft, the russian state oil company, is potentially worth around US$20bn, and will give the company access to a new and potentially lucrative market, with one industry analyst quipping that, “If Bp’s exploration in India is successful, it certainly won’t be stranded gas”.
Intriguingly, for a region known for its insatiable appetite for energy & mining assets, the Bp/reliance tie-up was the only Asian energy & mining play worth more than US$500m to be announced over the month, although more deals took place in this particular space over the period compared to the same time last year. perhaps less surprisingly, the bulk of these transactions saw foreign bidders snapping up Australian resources assets, with such deals accounting for around 40.0% of all energy & mining purchases.
Another sector which saw a comparative rise in deal flow over february was the consumer space, which accounted for over 10.0% of all Asian acquisitions over the period – over february 2010, such buys made up just 9.0% of all regional m&A. Deal flow in this regard was led by the US$526m 20.0% stake buy of Zhejiang Supor, the chinese cookery and electrical appliance manufacturer, by SeB Internationale, a subsidiary of french household goods producer groupe SeB. the transaction, which was undertaken at a modest 13.6% premium to the target’s share price one day prior to the deal announcement, means that SeB now controls a 71.0% stake holding in Zhejiang Supor.
meanwhile, february deal-making across Asia’s financial Services sector softened slightly comprising less than 10.0% of all transactions over the period - less than the 10.5% it accounted for over the same period last year. AXA’s US$1.2bn divestment of its 16.5% stake in china’s taikang Life Insurance was the most notable transaction in this regard, ultimately allowing the debt-laden french insurer to reduce its debt gearing by one percentage point over H1 2011. the stake was sold to a consortium of investors including guardian Auction, the chinese auction company, goldman Sachs and Xinzheng taida, the Singaporean investment company.
Looking forward, financial Services deals are increasingly likely to come into play, with macquarie, the Australian diversified financial Services provider, reportedly examining brokerage joint venture (JV) opportunities in china, as well as bolt-on acquisitions in Vietnam and Japan as part of its Asia expansion plan. the bank has been in talks with chinese JV partners for a long time but is finding it difficult to wrap up such discussions.
At the same time, macquarie is attempting to move into Vietnam as upcoming regulatory changes make it increasingly likely that foreign investors will be allowed to own 100% of the chartered capital of non-banking finance businesses there from 2012 onwards. Saigonbank Berjaya Securities, thang Long Securities and Ho chi minh city Securities corporation have all being cited as potential targets.
oVer feBrUAry 2011, ASIAn DeALmAkIng BroADLy mIrroreD A fIckLe AnD VoLAtILe gLoBAL economy, wItH oVerALL m&A ActIVIty Down on 2010 LeVeLS In termS of VoLUme, BUt Up In termS of VALUAtIonS – tHe LAtter of wHIcH wAS cHIefLy DrIVen By A SIngLe LArge-cAp energy & mInIng AcqUISItIon In InDIA.
17
ASIA-PAcIfIc
Monthly M&A Insider
ASIA-pAcIfIc
moving over the energy & mining space, renewable energy plays are likely to increase over the next couple of months, a trend which has only been strengthened by the recent incident at the fukushima nuclear power plant in Japan. to this end, one such company, fujian mindong electric power, is looking to spend around US$56m to acquire a northeastern china-based wind power business which it could subsequently integrate with its wind power subsidiary, yingkou wind power, which it purchased for US$11m in December 2010. At the same time, Hanwha Solarone the chinese integrated solar cell manufacturer, is reportedly examining domestic and foreign, especially korean, acquisition opportunities as it looks to beef up its core operations.
An upcoming glut of renewable energy listings will also hit the Hong kong Ipo market over the foreseeable future, with Huaneng renewables, the chinese wind power business recently announcing that it will try to raise US$1.5bn in the territory sometime this year. Beijing Jingneng clean energy is in the same boat as Huaneng renewables, lately revealing that it is looking to raise US$500m via a Hong kong listing.
prospective large-cap consumer sector transactions are also on the cards, with Indian watchmarker titan Industries, reportedly looking for watch distributor partnership opportunities in china. titan could be looking to tie-up with either Hengdeli, the chinese watch retailer, or Shenzhen Harmony world watch centre, a subsidiary of fiyta, a direct competitor of Hengdeli’s. the latter has been cited as an especially good fit due to the fact that it is continuing to open new retail outlets across the country, as well as seeking ways to increase its product portfolio.
18Monthly M&A Insider
ASIA-PAcIfIc
top DeALS
Top 10 AsIA-pAcIfIc Announced deAls of The MonTh (feb-11)Announced bidder company Target company Target dominant
sectorseller company exit multiples (x) bid premia
1-day beforedeal value
(us$m)Revenue ebITdA p/e
21-feb-11 Bp plc reliance Industries Limited (23 oil and gas production sharing contracts) (30.00% stake)
energy, mining & Utilities
reliance Industries Limited
- 7,200
25-feb-11 ptt chemical public company Limited
ptt Aromatics and refining public company Ltd
Industrials & chemicals
-1.1% 5,704
21-feb-11 west Australian newspapers Holdings Limited
Seven media group tmt kohlberg kravis roberts & co; and Seven group Holdings Limited
3.2 13.1 - 4,123
03-feb-11 mm Holdings culture convenience club co Ltd (60.20% stake)
Leisure 0.9 10.7 14.1 32.7% 1,253
24-feb-11 Sumisho computer Systems corporation
cSk corporation Business Services
0.6 8.4 (loss) -48.3% 1,009
28-feb-11 Sony corporation nagasaki Semiconductor manufacturing corporation (60.00% stake)
tmt toshiba corporation
- 641
10-feb-11 American International group Inc
fuji fire and marine Insurance co Ltd (45.34% stake)
financial Services
n/a n/a 19.0 25.9% 556
17-feb-11 groupe SeB SA Zhejiang Supor co Ltd (20.00% stake)
consumer Supor group co Ltd; and Su Zengfu (private Investor)
13.6% 526
12-feb-11 cathay Asset management company Limited
Jaya Holdings Ltd transportation Affinity equity partners
2.0 4.9 3.9 -27.4% 523
09-feb-11 Independence group nL Jabiru metals Limited energy, mining & Utilities
5.6 23.5 36.1 44.5% 510
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Asia-pacific Data correct as of 15-mar-11
Source: mergermarket
19
ASIA-PAcIfIc
Monthly M&A Insider
trenD grApHS
AsIA-pAcIfIc M&A quARTeRly TRend
0
20
40
60
80
100
120
140
160
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
100
200
300
400
500
600
700
800
900
Total volume Mid-market volume
0
5
10
15
20
25
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
10
20
30
40
50
60
70
80
90
100
AsIA-pAcIfIc M&A AnnuAl TRend AsIA pAcIfIc M&A AnnuAl pRIvATe equITy TRend
0
50
100
150
200
250
300
350
400
450
500
YTD 2011*2010200920082007200620052004
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
500
1,000
1,500
2,000
2,500
3,000
Total volume Mid-market volume
0
10
20
30
40
50
60
70
YTD 2011*2010200920082007200620052004
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
50
100
150
200
250
300
350
AsIA-pAcIfIc M&A quARTeRly pRIvATe equITy TRend
20
ASIA-PAcIfIc
Monthly M&A Insider
trenD grApHS
AsIA-pAcIfIc M&A GeoGRAphIc bReAKdoWn yTd 2011
VALUe VoLUme
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
Singapore
South Korea
Taiwan
Other
16.4%
7.5%
0.4%20.1%
4.4%
15.0%
0.4%
1.8%
4.8%
14.3%
14.7%
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
Singapore
South Korea
Taiwan
Other
16.3%
5.3%1.6% 9.4%
3.1%
20.4%
2.2%
7.8%
1.3% 7.5%
25.1%
AsIA-pAcIfIc M&A secToR bReAKdoWn yTd 2011
VALUe VoLUme
22.4%
18.0%
7.5%4.5%
18.8%
1.3%
16.9%
3.2%3.4%
1.2% 1.2%1.6%
Industrials & Chemicals
TMT
Business Services
Consumer
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Leisure
Transportation
Agriculture
Construction
Real Estate
22.9%
13.5%
11.6%11.6%
8.8%
7.8%
8.5%
3.4%
3.4%3.1%
2.8%
2.5%
Industrials & Chemicals
TMT
Business Services
Consumer
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Leisure
Transportation
Agriculture
Construction
Real Estate
21
ASIA-PAcIfIc
Monthly M&A Insider
AsIA-pAcIfIc M&A deAl sIze bReAKdoWn
VALUe VoLUme
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
5.1%
25.7%
28.1%
14.4%
26.7%
21.5%
18.9%
29.3%
9.6%
20.7%
17.2%
21.3%
28.9%
11.3%
21.3%
15.7%
16.7%
30.7%
12.5%
24.3%
29.7%
15.3%
22.5%
12.1%
20.4%
20.2%
16.3%
30.5%
11.1%
21.9% 19.9%
10.2%
27.4%
27.3%
15.3%
24.7%
12.0%
29.3%
14.6%
19.4%
Per
cent
age
75
80
85
90
95
100
2011*2010200920082007200620052004
1.2%
3.9%
4.9%
90.0%
1.0%
5.0%
4.6%
89.1%
1.0%
4.9%
4.8%
89.0%
0.9%
5.1%
5.4%
88.4%
0.9%
4.5%
5.8%
88.4%
0.9%
5.4%
5.2%
88.1% 88.2%
5.1%
4.8%
1.6% 0.6%
5.6%
6.9%
86.2%
0.1% 0.3% 0.3% 0.3%0.3% 0.6%0.4% 0.4%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Per
cent
age
trenD grApHS
22Monthly M&A Insider
europe
A mergermArket m&A report on
eUrope
Since the beginning of the year, about €97.8bn has already been invested in m&A transactions in europe, which is a 20.5% increased compared to the last year figures. energy, mining & Utilities itself accounted for 25.1% of this value.
In the same time, non-european investment in the european territory increases 25.2% compare to the same period last year, up to €30.9bn, and representing 31.6% of all european m&A transaction value. the market share of the energy, mining & Utilities in this foreign trend stands at 43.7%, for a total cumulated value of €13.5bn, representing 13.8% all european m&A value so far this year.
With disposals of companies such as galp group and Snam rete gas by Italian enI SpA for about €13bn and €4bn in the pipeline of expected deals, and groups such as petroleo Brasileiro listed as potential bidder, the non-european companies investing in the european energy, mining & Utilities sector in on the track to become the fashionable trend in 2011.
Yoplaitgeneral mills Inc, the listed US manufacturer and marketer of branded consumer foods, is understood to have won the hotly contested auction for the 50% in Yoplait France SAS, the French dairy producer, sold by pAI partners, the French private equity firm.
the battle to acquire the number two yoghurt maker was tremendous, with bidders including Swiss nestle; Chinese Bright Dairy & Food; mexican grupo Lala, French groupe Lactalis and Fromageries Bel, as well as numerous private equity bidders.
the transaction, which values the French yoghurt at about €1.6bn, is higher than expected and sharply above the €1.4bn bid from dairy company Lactalis, which was rejected earlier as being too low.
the complex ownership structure meant several interests had to be taken into account: the remaining 50% stake is held by Sodiaal, the French farmers’ co-operative. pAI had to find a buyer that met the approval of Sodiaal, as the cooperative wil retain a 30% shareholding in Yoplait. not the least, the French government kept a keen eye on proceedings. An earlier effort by a US company to enter the French yogurt market, when pepsiCo was eyeing Danone, prompted France to label
yoghurt a strategic asset.
pAI had held Yoplait’s stake for about nine years, after buying into the yoghurt maker when its brand and sales were faltering, at an estimated €1bn enterprise value. general mills’ interest in the French company was stressed by the fact that Yoplait held its US franchise. Yoplait, stirred into action by the low level of royalties the business generated, had sought to renegotiate the contract, sparking a legal battle.
the deal has not been inked yet, so it is not clear whether or not general mills will also buy out its licence as part of the deal.
ForeIgn InvestMent In the energY, MInIng & UtIlItIes In eUrope LArger eUropeAn InBoUnD DeAL So FAr thIS YeAr WAS the 53% StAke ACqUISItIon oF CompAnIA eSpAnoLA De petroLeoS BY the UAe BASeD InternAtIonAL petroLeUm InveStment CompAnY, In A trAnSACtIon vALUeD €5.6Bn. the €28 per ShAre oFFer vALUeS the LISteD SpAnISh petroLeUm CompAnY, WhICh IS ALreADY 47% oWneD BY IpIC, At €9.16Bn. the DeAL reFLeCtS WhAt CoULD Be the mAIn trenD In the regIon thIS YeAr: non-eUropeAn CompAnIeS InveStIng In the eUropeAn energY, mInIng & UtILItIeS SeCtor.
23
europe
Monthly M&A Insider
top DeALS & expeCteD DeALS
top 10 eUropeAn AnnoUnced deAls oF the Month (Feb-11) Announced bidder company target company target dominated
sectorseller company exit multiples (x) bid premia
1-day before
deal value(€m)revenue ebItdA p/e
25-Feb-11 Criteria CaixaCorp, S.A. la Caixa (banking business)
Financial Services la Caixa 9,471
16-Feb-11 International petroleum Investment Company
Compania espanola de petroleos, S.A. (52.94% stake)
energy, mining & Utilities
total S.A. 22.8% 5,634
07-Feb-11 Banco Santander, S.A. Bank Zachodni WBk SA (BZ WBk)
Financial Services Allied Irish Banks plc 5.5% 4,290
24-Feb-11 Allied Irish Banks plc Anglo Irish Bank Corporation (International) pLC; and Anglo Irish Bank Corporation Limited (deposits in Ireland and Uk)
Financial Services Anglo Irish Bank Corporation Limited
3,500
22-Feb-11 vtB Bank oAo oAo Bank of moscow (46.48% stake); and oAo Capital Insurance group (25.00% stake)
Financial Services the moscow City government
2,590
13-Feb-11 general electric Company
John Wood group plc (well support division)
energy, mining & Utilities
John Wood group plc 2.9 16.7 2,066
16-Feb-11 Clariant Ag Sued-Chemie Ag (96.40% stake)
Industrials & Chemicals
one equity partners LLC; and Sued Chemie family (private individuals)
1.6 10.5 -3.2% 1,948
18-Feb-11 Anglo American/ Lafarge Joint venture
tarmac Limited; Lafarge Cement Uk; and Lafarge SA (Aggregates and Concrete Uk division)
Construction Lafarge S.A.; and Anglo American plc
1.8 15.5 1,935
21-Feb-11 Diageo plc mey Icki Sanayii ve tic AS
Consumer tpg Capital, L.p.; and Actera group
4.1 1,539
25-Feb-11 eqt partners AB Dometic International AB
Consumer DhAB I S.A. 1.5 9.1 1,363
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being europe Data correct as of 17-mar-11
Source: mergermarket
24
europe
Monthly M&A Insider
pIpelIne oF eUropeAn expected deAlssituation target
companysector potential bidder
companyFinancial adviser to bidder (b); target (t); seller (s)
seller company Market cap/est.
value (€m)
comments
potential stake acquisition
Snam rete gas
Utilities eni SpA 13,960 enI SpA could decide to sell its listed gas distribution subsidiary, Snam rete gas, if a potential buyer would receive the green light from the Italian government and if the price was topped up by a premium. With thi sale enI would go a long way to meet Italian and eU energy regulatory requirements towards unbundling and reforming of the country's energy sector and it would also relieve its pressure to separate its oil and gas businesses.
potential stake sale
galp group energy petroleo Brasileiro S.A
eni SpA 4,000 eni SpA Chief executive paolo Scaroni said its would want a premium for its 33.33% stake in liste portuguese energy group galp. eni has received interest from many parties and was very close to a deal with Brazil's petrobras.
expected deal
Fidea retail insurance business
Financial Services
Credit mutuel Arkea; and mercato
morgan Stanley (v);kBC Securities nv (t)
kBC group 200 kBC group is expecting to receive around €200m for its Fidea retail insurance business, a source close to the sales process said. Fidea was placed for sale initially as part of a package that included kBC’s Centea retail banking business. this was itself part of an eC-approved asset divestment programme formed in november 2009. the two businesses were initially offered for sale together with a target of €1bn.
note: expected deals based on confirmed announcements by companies involved Source: mergermarket
top DeALS & expeCteD DeALS
europe
Monthly M&A Insider 25
trenD grAphS
eUropeAn M&A qUArterlY trend
0
100
200
300
400
500
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (€
bn)
Total value Mid-market value
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Total volume Mid-market volume
0
10
20
30
40
50
60
70
80
90
100
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Buyout value Exit value Buyout volume Exit volume
Valu
e (€
bn)
Num
ber of deals
0
50
100
150
200
250
300
350
400
450
eUropeAn M&A AnnUAl trend eUropeAn M&A AnnUAl prIvAte eqUItY trend
0
200
400
600
800
1,000
1,200
YTD 2011*2010200920082007200620052004
Total value Mid-market value
Num
ber of deals
Valu
e (€
bn)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Total volume Mid-market volume
0
50
100
150
200
250
300
YTD 2011*2010200920082007200620052004
Valu
e (€
bn)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
200
400
600
800
1,000
1,200
1,400
1,600
eUropeAn M&A qUArterlY prIvAte eqUItY trend
europe
Monthly M&A Insider 26
trenD grAphS
eUropeAn M&A geogrAphIc breAkdown Ytd 2011
vALUe voLUme
CEE
Iberia
UK
Nordic
Germany
France
Benelux
Italy
Others
3.9%
2.6% 5.2%1.8%
24.9%
23.4%
11.3%
21.2%
5.6%
CEE
Iberia
UK
Nordic
Germany
France
Benelux
Italy
Others
11.3%
9.7%
9.8%
6.0%
11.9%
6.7%
12.4%
20.8%
11.6%
eUropeAn M&A sector breAkdown Ytd 2011
vALUe voLUme
0.2%
11.3%
0.5%
4.4%
3.3%1.7%
1.1% 1.2%
1.8%
16.5%
4.6%
30.5%
22.9%
Industrials & Chemicals
Business Services
Consumer
TMT
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Leisure
Construction
Transportation
Real Estate
Agriculture
Defence
0.6%
21.6%
0.2%
5.9%
4.1%
4.1%
1.1%
3.0%
17.6%
16.6%
12.0%
6.7%
6.5%
Industrials & Chemicals
Business Services
Consumer
TMT
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Leisure
Construction
Transportation
Real Estate
Agriculture
Defence
europe
Monthly M&A Insider 27
trenD grAphS
eUropeAn M&A deAl sIze breAkdown
vALUe voLUme
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
<€250m or undisclosed value
€251m-€500m
€501m-€2,000m
€2,001m-€5,000m
>€5,001m
26.0%
14.3%
27.6%
10.9%
21.2%
33.0%
15.1%
23.9%
10.1%
17.9%
35.1%
17.7%
23.2%
8.4%
15.7%
39.2%
16.4%
22.4%
8.3%
13.7%
40.3%
14.5%
19.9%
8.8%
16.6%
26.7%
20.3%
23.7%
9.0%
20.3% 17.2%
9.4%
30.5%
20.6%
22.3%28.2%
23.0%
24.6%
9.1%
15.1%
Per
cent
age
88
90
92
94
96
98
100
2011*2010200920082007200620052004
0.2%
3.3%
0.6%
3.5%
92.4%
3.4%
0.7%
3.9%
91.6%
3.8%
0.9%
3.5%
91.4%
4.0%
0.9%
3.9%
90.8%
2.7%
0.6%
3.2%
93.1%
2.1%
0.6%
2.2%
94.9%
92.9%
2.8%
3.4%
0.7% 0.8%
2.7%
2.9%
93.2%
0.5% 0.5%0.5% 0.4% 0.4% 0.2% 0.2%
<€250m or undisclosed value
€251m-€500m
€501m-€2,000m
€2,001m-€5,000m
>€5,001m
Per
cent
age
28
Mid
dle east &
africa
THE MIDDLE EAST & AFRICA
A MERgERMARkET M&A REpoRT on
Monthly M&A Insider
It is fair to say that business has not been as usual in the MEA region, however, there has been some recent developments in the region’s capital markets. In the period going from 1-Jan to 28-Feb of 2011, the region has seen a smaller quantity of M&A transactions, however, in terms of the value of these transactions, when compared to the same period last year the region has seen an increase in the value being moved by these fewer deals. In the period, there were 37 deals which amounted to a total of US$8.33bn, compared to 52 deals amounting to US$6.2bn in the same period in 2010. In 2011, the most active sector for M&A transaction in the region was Chemicals and Materials, while in 2010 the sector that saw the most activities was the Leisure industry.
In 2011, we expect to see M&A deals in the MEA region in the telecoms and Financial Services industries. An example is the joint venture between Bahrain’s Batelco the telecommunications company, and kingdom Holding Company, the Saudi Arabian investment holding company that made an offer, which was duly accepted, to acquire a 25% stake in the Saudi Arabian operations of kuwait based Zain kSA for US$950m. Considering this transaction does not fall through, it would paint an interesting picture for the Middle Eastern telecom industry, as it may spark an offer from the UAE operator Etisalat to buy a large stake in Zain worth up to US$12bn. Another possible deal to keep an eye out is between the Qatari Al khalij Commercial Bank QSC and the International Bank of Qatar.
2011 has been, so far, an interesting year in the MEnA region; not only due to the political changes that are occurring in the region, but also because of energy prices. In a small space of time since the disturbances in north Africa had begun, oil prices had started to stabilize around the US$100 mark until disaster struck Japan. The nuclear issues currently being tackled by Japanese authorities has set the market betting against nuclear energy, therefore pushing up prices for gas, oil and coal. As such, with the current scenario of overvalued energy assets as a consequence of the price hike of energy commodities, we can expect to see fewer energy deals in the MEA region in 2011 compared with previous years, until there is a general stabilization of prices of energy commodities.
THE MEA REgIon HAS ExpERIEnCED A LoT oF ACTIvITy In THE LAST CoUpLE oF MonTHS. EgypT’S pREvIoUS pRESIDEnT MUBARACk wAS ToppLED By pUBLIC DEMonSTRATIonS AnD, AFTER A SURgE In ACTIvITy In LIByA, IT SEEMS LIkE THE pRo-gADDAHFI ARMy IS gAInIng THE UppER HAnD ovER THE pRoTESToRS. BAHRAIn, onE oF THE kIngDoM oF SAUDI ARABIA’S STRongEST ALLIES HAS In THE LAST wEEk SEEn An InCREASE In vIoLEnCE AS THE pEopLE pRoTEST AgAInST THE CURREnT poLITICAL LEADERSHIp. AS A ConSEQUEnCE, onE woULD ExpECT THAT THE M&A ACTIvITy In THE REgIon woULD BE HALTED To A MInIMUM, BUT THIngS ARE QUITE wHAT THEy SEEM.
29
Mid
dle east &
africa
Monthly M&A Insider
Top DEALS
Top 10 MIddle eAsTern & AfrIcAn Announced deAls of The MonTh (feb-11) Announced bidder company Target company Target dominated
sectorseller company exit multiples (x) bid premia
1-day before
deal value(us$m)revenue ebITdA p/e
14-Feb-11 growthpoint properties Ltd; and public Investment Corporation Ltd
v&A waterfront Holdings (pty) Ltd
Real Estate London & Regional properties Ltd; Istithmar world Capital
1,341
19-Feb-11 vitol Holding B.v.; and Helios Investment partners LLp
Royal Dutch Shell plc (Downstream Businesses In Africa) (80.00% stake)
Energy, Mining & Utilities
Royal Dutch Shell plc 1,000
15-Feb-11 Tiger Brands Limited Davita Trading (proprietary) Limited
Consumer Corvest 6 (proprietary) Limited; RZT Zelpy 4976 (proprietary) Limited; and David Desilets (private Investor)
3.0 225
22-Feb-11 Elbit Systems Ltd Elisra Electronic Systems Ltd. (30.00% stake)
Defence Elta Electronics Industries Ltd
68
08-Feb-11 Undisclosed bidder Hayovel Lines Ltd (75.00% stake)
Business Services Danya Cebus 54
08-Feb-11 northam platinum Ltd Mvelaphanda Resources Limited
Energy, Mining & Utilities
0.1 0.3 7.4 -88.0% 46
07-Feb-11 Hosken Consolidated Investments Limited
kwv Holdings Limited (33.90% stake)
Consumer Zeder Investments Limited; and RootStock Capital (proprietary) Limited
38
10-Feb-11 DS Apex Holding Index Sal Ltd (55.00% stake)
Financial Services Brack Capital Real Estate Bv; and Uri Ben Dov (private Investor)
n/a n/a 12
14-Feb-11 keaton Energy Leeuw Mining and Explorations pty Ltd (64.00% stake)
Energy, Mining & Utilities
JpI Leeuw and Associates (pty) Limited; and Anglo American Zimele Limited
10
08-Feb-11 kentz Corporation Limited
RnE Engineering and projects (pty) Ltd
Business Services 10
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target being Middle East or Africa Data correct as of 17-Mar-11
Source: mergermarket
30
Mid
dle east &
africa
Monthly M&A Insider
TREnD gRApHS
MIddle eAsTern & AfrIcAn M&A quArTerly Trend
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
Total value Mid-market value
Num
ber of deals
0
20
40
60
80
100
120
140
Total volume Mid-market volume
0
1,000
Valu
e (U
S$m
)
2,000
3,000
4,000
5,000
6,000
7,000
Q111*
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Buyout value Exit value Buyout volume Exit volume
Num
ber of deals
0
2
4
6
8
10
12
14
16
18
20
MIddle eAsTern & AfrIcAn M&A AnnuAl Trend
MIddle eAsTern & AfrIcAn M&A AnnuAl prIvATe equITy Trend
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*2010200920082007200620052004
Total value Mid-market value
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
300
350
400
450
500
Total volume Mid-market volume
0
2
4
6
8
10
12
14
YTD 2011*2010200920082007200620052004
Buyout value Exit value Buyout volume Exit volume
Valu
e (U
S$bn
)
0
10
20
30
40
50
60
Num
ber of deals
MIddle eAsTern & AfrIcAn M&A quArTerly prIvATe equITy Trend
31
Mid
dle east &
africa
Monthly M&A Insider
Trend graphs
MIddle eAsteRN & AfRIcAN M&A GeOGRAPHIc BReAKdOWN Ytd 2011
MIddle eAsteRN & AfRIcAN M&A sectOR BReAKdOWN Ytd 2011
value
value
volume
volume
0.8%
31.4%
0.2%
1.0%
3.6%
22.5%
0.6%
25.0% 14.9%
Industrials & Chemicals
Business Services
Pharma, Medical & Biotech
Energy, Mining & Utilites
Financial Services
Consumer
TMT
Real Estate
Defence
5.4%
5.4%
5.4%
2.7%
8.1%
2.7%
2.7%
2.7%
2.7%
2.7%
29.7%
29.7%
Israel
Jordan
Kenya
Kuwait
Morocco
Nigeria
Qatar
Saudi Arabia
South Africa
Tunisia
United Arab Emirates
Egypt
4.7%4.7%
14.0%
14.0%
16.3%
9.3%
9.3%
9.3%
7.0%
11.6%
Industrials & Chemicals
Business Services
Pharma, Medical & Biotech
Energy, Mining & Utilites
Financial Services
Consumer
TMT
Real Estate
Transportation
Defence
32.0%
9.6%
0.1%
0.1%
12.0%
6.1%
25.9%
1.1%
13.1% Israel
Jordan
Kenya
Kuwait
Morocco
South Africa
Tunisia
United Arab Emirates
Egypt
32
Mid
dle east &
africa
Monthly M&A Insider
Trend graphs
MIddle eAsteRN & AfRIcAN M&A deAl sIZe BReAKdOWN
value volume
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
19.8%
12.5%
52.7%
12.1%
21.5%
54.8%
12.5%
12.2%
66.7%
13.3%
11.3%
67.2%
17.8%
17.5%
50.4%
19.1%
14.5%
53.1%
68.4%
10.3%
10.9%
6.6%13.0%10.3% 7.7% 7.3%
12.7% 11.9% 9.3% 5.3%
87.2%
2.0% 1.3% 1.0% 0.9% 1.6% 1.5% 1.1% 0.9%
<US$14.9m or undisclosed value
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
Per
cent
age
0
10
20
30
40
50
60
70
80
90
100
2011*2010200920082007200620052004
11.1%
3.4%6.0%
34.8%
10.7%
8.6%
5.6%
33.1%
14.0%
6.0%
9.3%
31.9%
15.5%
5.7%
7.2%
35.0%
11.8%
5.3%4.2%
31.3%
13.7%
4.6%3.5% 5.8%
4.5%
33.4%
11.0%8.1%
35.0%
44.4% 40.3% 37.6%39.7%
43.8% 46.8% 45.1%51.4%
24.3%
16.2%
<US$14.9m or undisclosed value
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
Per
cent
age
Monthly M&A Insider 33
ABO
UT M
ERR
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POR
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ABOUT MERRILL CORPORATION
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34Monthly M&A Insider
ABOUT MERRILL DATASITE®
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Monthly M&A Insider 35
ABoUT MERRILL CoRpoRATIon
execuTIve MAnAGeMenT
ed bifulk president Tel: +1 212 229 6563
paul hartzell Senior vice president Tel: +1 212 367 5950
execuTIve sAles
chris beckmann Regional Director, Europe Tel: +49 69 25617 110
Alex Gross Regional Director, Europe Tel: +49 69 7593 7148
Michael hinchliffe Regional Director, Europe Tel: +44 20 7422 6100
Alvaro ortega Regional Director, Europe Tel: +44 20 7422 6100
Merlin J. piscitelli Regional Director, Europe Tel: +44 20 7422 6100
Jérôme pottier Regional Director, France Tel: +33 (0) 1 40 06 13 12
colin schopbach Regional Director, Europe Tel: +44 20 7422 6100
Anna scott Regional Director, Europe Tel: +44 20 7422 6100
hakema el-hadad Regional Director, northern Africa Tel: +33 (0) 1 40 06 13 10
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vincent lork Regional Director, South Asia Tel: +65 6248 4602
Ari lee Regional Director, Asia-pacific Tel: +852 9855 3758
chris robilliard Regional Director, Australia & new Zealand Tel: +612 8667 3064
Manuel bentosinos Regional Director, Mexico Tel: +52 55 9171 2237
Ana paula Macêd Távora de castro Regional Director, South America Tel: +55 11 9908 0858
Will brown Regional Director, Canada Tel: +1 514 877 5177
hank Gregory Svp, western Canada & US Tel: + 604 603 4360
ryan MacMillan Regional Director, Canada Tel: +1 416 214 2448
Michael Kennedy Regional Director, Boston Tel: +1 207 829 4369
ross Whittaker Regional Director, new England Tel: +1 617 266 0189
forrest r. doane Regional Director, new york Tel: +1 917 934 7341
Adam Kuritzky Regional Director, new york Tel: +1 917 934 7340
shelle Martin Regional Director, new york Tel: +1 212 229 6613
John Mcelrone Regional Director, new york Tel: +1 212 229 6656
Matthew Mezzancello Regional Director, new york Tel: +1 917 934 7346
steve piccone vice president, new york Tel: +1 212 229 6883
William polese Regional Director, new york Tel: +1 212 229 6612
paul Kleinkauf Regional Director, Southeast Tel: +1 404 602 3251
Anthony crosby Regional Director, Chicago Tel: +1 312 674 6511
Mark plaehn Regional Director, Chicago Tel: +1 312 674 6527
Kelly Weisenfels Regional Director, Chicago Tel: +1 312 674 6508
scott haugen Regional Director, Minnesota Tel: +1 651 632 4375
brian Gilbreath Regional Director, omaha Tel: +1 404 934 8085
nicholas renter Regional Director, Dallas Tel: +1 214 754 2100
Mark Tully Regional Director, San Francisco Tel: +1 415 357 1400
Andrew buonincontro Regional Director, palo Alto Tel: +1 650 493 1400
erik sandie Regional Director, palo Alto Tel: +1 650 493 1400
dan phelan Regional Director, Los Angeles Tel: +1 213 253 2139
Jay loyola Regional Director, Irvine Tel: +1 949 622 0663
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The following notes pertain to data contained in this publication:
• Deals are included where the deal value is greater than or equal to €5m.
• where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to €10m.
• Deals are included in the graphs and Top Deals in each section based on the dominant geography and dominant sector of the target company. Data underlying the League Tables are based on deals where the bidder, target or parent geography of either is that of the geography in focus.
• H2 2010 refers to the period 1-Jan-11 to 28-Feb-11.