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A MERGERMARKET REPORT ON GLOBAL M&A ACTIVITY
MONTHLY M&A INSIDERMAY 2014
Monthly M&A Insider | May
INSIDE:
GLOBAL OVERVIEW
LATIN AMERICA
NORTH AMERICA
ASIA-PACIFIC
EUROPE
MIDDLE EAST & AFRICA
ABOUT MERRILL DATASITE & MERRILL CORPORATION
MERRILL CORPORATION CONTACTS
GLOBAL OVERVIEW
Monthly M&A Insider | May | 01
Jumbo deals reignFinancial Services saw three large transactions from various parts of the world totalling approximately US$49.3bn. In fact, the largest deal during the month was from the Asia-Pacific. In a move that said it will increase its capital base, China-based CITIC Pacific Limited purchased for US$35.6bn a 100% stake in CITIC Limited from CITIC Group Corporation and Beijing CITIC Enterprise Management Co. Two other large-scale financial services deals were announced in April: a US$6.3bn private equity exit involving Madison Dearborn Partners sale of Nuveen Investments to TIAA-CREF and Banco Santader’s approximate US$6.5bn acquisition of all of the shares of its Brazilian unit Banco Santander Brasil.
Europe’s Construction sector also saw Holcim’s US$28.3bn purchase of Lafarge in a landmark deal not only for its size but because the combination resulted in the world’s biggest cement manufacturer. The deal is also as controversial as it was large because it underwent heavy scrutiny from European antitrust regulators, which required the companies to divest some assets for the merger to push through.
During the month, there was a smattering of sectors that contributed to the significant rise in numbers including transactions from Business Services, Energy, Mining and Utilities, Industrial and Chemicals as well as Telecommunications.
Sizeable drug deals In contrast to the one-off large-scale deals from various industries, the Pharmaceuticals, Medical and Biotech sector grabbed headlines during the month because of the number and size of M&A deals that came one after the other. In fact, four out of April’s 13 deals with values of over US$5bn were from the sector. These transactions, which totalled almost US$35bn, were led by Zimmer Holdings’ acquisition of Biomet worth approximately US$13.4bn. The combination of the former rivals in orthopedic medical device manufacturing was a way for these medical device companies to remain dominant in a competitive marketplace.
Another mega transaction is Novartis AG’s US$10.5bn acquisition of the oncology division of GlaxoSmithKline, which was also announced in April. The transaction happened simultaneously with GlaxoSmithKline’s purchase of Novartis AG’s global vaccines business for US$5.3bn. These deals allow Novartis to focus on its more profitable businesses where it already has a global presence. GSK, on the other hand, is able to significantly expand its vaccine business by using Novartis’ extensive worldwide network. These transactions come at a time when pharmaceutical companies are rationalising their businesses to focus on core competencies as they deal with increased competition for their products.
The slew of large-scale transactions seen in April seems to suggest that that recent industry talk of a return of mega deals might be on the mark.
Deal values rose in April 2014 as certain sectors witnessed an array of mega transactions. In fact, the total value of deals announced during the month reached US$348.2bn, which is double that of April 2013 (US$168.3bn). At the same time, the beginning of Q2 2014 is slightly behind in terms of the number of transactions at 1,022 compared to 1,110 deals at the same time last year. Leading April numbers were two transactions from the Asia-Pacific’s Financial Services and Europe’s Construction sectors.
Head of Research: Elias Latsis
Editor: Laura Resetar
For advertising opportunities contact: Erik Wickman Tel: + (1) 212 686 3329 erik.wickman@mergermarket.com
Global Overview: Karen Sibayan and Demis Memedoski
Latin America: Raquel Mozzer and Fabio Lopes
North America: Urna Chakraborty and Lana Vilner
Asia-Pacific: Brandon Taylor and Hiro Mak
Europe: Alan Nasrat and Damien Julliard
Middle East & Africa: Silvia Paparello and Andrea Putaturo
TREND GRAPHS
GLOBAL OVERVIEW Monthly M&A Insider | May | 02
GLOBAL M&A QUARTERLY TREND GLOBAL M&A QUARTERLY PRIVATE EQUITY TREND
GLOBAL M&A ANNUAL TREND GLOBAL M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Num
ber of deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
Valu
e (U
S$bn
)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Num
ber of deals
0
100
200
300
400
500
600
700
800
900
YTD 2014*201320122011201020092008
Valu
e (U
S$bn
)
Buyout value Exit value Buyout volume Exit volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
300
350
400
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
100
200
300
400
500
600
700
800
900
GLOBAL OVERVIEW Monthly M&A Insider | May | 03
TREND GRAPHS
GLOBAL M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
GLOBAL M&A GEOGRAPHIC BREAKDOWN YTD 2014
VALUE VOLUME
13.0%
12.0%
19.7%
11.4%
9.3%
8.9%
7.3%
4.2%
1.9%1.1%
3.7%
3.1%3.3%
0.9%
0.2%
Industrials & Chemicals
Consumer
Technology
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Leisure
Media
Transportation
Construction
Real Estate
Telecommunications
Agriculture
Defence
10.6%
10.5%
7.7%
4.8%
8.1%
12.5%14.0%
2.9%
1.4%
5.2%
2.6%
4.2%
14.4%
1.1%
Industrials & Chemicals
Consumer
Technology
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Leisure
Media
Transportation
Construction
Real Estate
Telecommunications
Agriculture
22.5%
30.6%
41.6%
1.1%4.2%
Asia-Pacific
Europe
North America
Middle East & Africa
Central & South America
21.5%
37.8%
35.0%
2.2%3.5%
Asia-Pacific
Europe
North America
Middle East & Africa
Central & South America
GLOBAL OVERVIEW Monthly M&A Insider | May | 04
TREND GRAPHS
GLOBAL M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
Return to contents
80
82
84
86
88
90
92
94
96
98
100
YTD 2014*201320122011201020092008
Perc
enta
ge
90.1% 90.9%89.3% 89.0% 89.2%
0.9% 1.0% 1.1% 1.0% 1.0%
4.6%3.9%
4.5% 4.8% 4.6%
3.8% 3.7%4.7% 4.7% 4.8%
0.6% 0.5% 0.4% 0.5%0.7%
0.4% 0.4%
89.8%
1.0%
4.3%
4.5%
88.7%
1.2%
4.7%
4.7%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
41.9% 40.5%
27.3% 29.9% 29.3%
8.9% 7.9% 9.7% 10.1% 9.7%
15.2% 16.5%
20.4%19.0% 19.5%
19.4% 20.5%27.5% 26.3% 27.6%
14.6% 14.6% 15.1% 14.7% 13.9%
44.0%
7.7%
15.4%
21.7%
11.2%
28.7%
9.8%
18.9%
27.8%
14.8%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
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Animal (Simple)_Artwork_A4..indd 1 13/05/2014 16:47
A MERGERMARKET M&A REPORT ON
LATIN AMERICA
Monthly M&A Insider | May | 06
Even though the first quarter saw an increase in M&A activity, the first month of the second quarter witnessed a big slow down. During Q1 there were 121 deals valued at US$25.8bn, while in April 2014 there were only 28 deals, valued at US$15.4bn. There has to be a 500% increase in deal volume for the rest of the quarter in order to reach the 168 deals announced in Q2 2013.
The Industrial and Chemicals sector announced 29 deals worth US$1.4bn and the Consumer sector registered 19 deals worth US$2.6bn. The deal of the month was in the Financial Services sector, which by April had 12 deals worth US$9.9bn. A total of US$6.5bn came from Banco Santander’s voluntary offer to acquire 25% of Banco Santander Brasil. Banco Santander is a Spain based financial services company. The deal is still pending shareholders’ and regulatory approval and is expected to be completed in October this year.
If all minority shareholders accept the offer, Banco Santander will be issuing roughly 665 million shares. The shareholders of Santander Brasil will get 0.7 shares of Banco Santander for every Brazilian Depositary Receipts, which represents a 20% premium to Santander Brasil’s closing price on 28-Apr-14. Advisors on the deal include Goldman Sachs,UBS Investment Bank, Davis Polk & Wardwell and Santander Global Banking and Markets.
The weakening market in Brazil has made Santander Brasil shares decrease 40% in the past four and a half years. Britain now contributes as much to Santander’s earnings as Brazil –about 20%. Santander Brasil has declined more than 40% since 2009, when its initial public offering price was at R$23.5, the worst performer in the MSCI Latin America/Financials Index.
The most active sector was once again Energy, Mining and Utilities, with 34 deals announced, worth US$22.2bn. The second highest deal in April was in this sector, with MMG South America Management Company Limited’s acquisition of a 99.99% stake in Xstrata Las Bambas from Glencore Queensland Limited and Xstrata South America Limited for a cash consideration of US$5.9bn.
Brazil has been one of the most active countries in Energy deals. In the year-to-date, Brazil saw eight deals in Q1 and three additional transactions happened in April. From these 11 deals, four of them had targets operating in the alternative energy subsector: Dobreve Energia, Rio Pardo Termoeletrica, Hidroeletrica de Candonga, and CLWP Brasil III. From the same pool, eight transactions were domestic. The upward trend to domestic deals in the Energy sector, especially in Brazil, has been very clear throughout the years. During 2011, 65.5% of all Energy deals were domestic transactions (20 transactions). In 2012 the number went up to 65.7% (23 transactions) and in 2013 increased again to 72.7% (24 deals).
The heat in the Energy sector and in domestic deals has kept its steady growth so far, even with Law 12.783 that was approved on January 2013. According to Oliver Hill, Deputy Editor, Latin America and the Caribbean, at Mergermarket, the reform prompted major energy generators like Companhia Energética de Minas Gerais (Cemig) and Companhia Energética de São Paulo (CESP) to give up rather than renew generation concessions expiring between 2015 and 2017 and accept lower energy tarriffs imposed by the new law. The activity in the sector can be explained by the necessity these companies have to acquire energy assets in Brazil and regionally to compensate for their losses or just to find alternative ways to generate energy at a lower cost. As a result, the expectation is that the Energy sector will continue its upward trend throughout 2014.
Monthly M&A Insider | May | 07
TOP DEALS
LATIN AMERICA
TOP 10 LATIN AMERICAN ANNOUNCED DEALS OF THE MONTH (APR-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m) Revenue EBITDA P/E
29-Apr-14 Banco Santander SA Banco Santander Brasil SA (25% stake)
Financial Services - n/a n/a 8.3 18.7% 6,517
13-Apr-14 MMG South America Management Company Limited
Xstrata Las Bambas SA (99.99% stake)
Energy, Mining & Utilities
Glencore Queensland Limited; and Xstrata South America Limited
- - - - 5,850
4-Apr-14 Empresa de Energia de Bogota SA ESP
Transportadora de Gas Internacional SA ESP (31.92% stake)
Transportation Citi Venture Capital International
- - - - 880
01-Apr-14 Kohlberg Kravis Roberts & Co LP
Aceco TI SA Business Services General Atlantic LLC 2.8 13.5 - - 665
07-Apr-14 Banco Santander Brasil SA Getnet Tecnologia em Captura e Processamento de Transacoes HUAH SA (88.5% stake)
Business Services - - - - - 495
15-Apr-14 The Mosaic Company Archer Daniels Midland Company (Fertilizer distribution business in Brazil and Paraguay)
Business Services Archer Daniels Midland Company
- - - - 200
21-Apr-14 InterGen NV Energia Sierra Juarez (50% stake)
Energy, Mining & Utilities
Infraestructura Energetica Nova SAB de CV
- - - - 150
08-Apr-14 International Paper Company Orsa International Paper Embalagens SA (25% stake)
Industrials & Chemicals
Jari Celulose SA 1.8 - - - 141
10-Apr-14 GAEC Anima Educacao SA Universidade Sao Judas Tadeu
Business Services Mesquita family (private investor)
1.8 10.3 - - 140
30-Apr-14 Alicorp SA Global Alimentos; and Molinos Saracolca SAC
Consumer - - - - - 107
n/a=not applicable Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Latin American Data correct as of 05-May-14
Source: Mergermarket
TREND GRAPHS
LATIN AMERICA Monthly M&A Insider | May | 08
LATIN AMERICAN M&A QUARTERLY TREND LATIN AMERICAN M&A QUARTERLY PRIVATE EQUITY TREND
LATIN AMERICAN M&A ANNUAL TREND LATIN AMERICAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
10
20
30
40
50
60
70
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
50
100
150
200
250
Num
ber of deals
0
20
40
60
80
100
120
140
160
180
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
Valu
e (U
S$bn
)
0
100
200
300
400
500
600
700
800
Num
ber of deals
0
1,000
2,000
3,000
4000
5,000
6,000
7,000
8,000
YTD 2014*201320122011201020092008
Valu
e (U
S$m
)
Buyout value Exit value Buyout volume Exit volume
0
10
20
30
40
50
60
70
Valu
e (U
S$m
)
Num
ber of deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
5
10
15
20
25
30
LATIN AMERICAN M&A GEOGRAPHIC BREAKDOWN YTD 2014
LATIN AMERICAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
LATIN AMERICA Monthly M&A Insider | May | 09
TREND GRAPHS
VALUE VOLUME
53.7%
3.5%
6.3%
4.5%
24.0%
2.9%
2.8%
0.2%0.2%
1.0%0.1%
0.1%0.6%
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Business Services
Financial Services
Technology
Pharma, Medical & Biotech
Leisure
Transportation
Telecommunications
Construction
Real Estate
Agriculture
22.4%
19.1%
12.5%
9.9%
7.9%
5.9%
3.9%3.3%
2.0%
2.0%
0.7%
0.7%
4.6%
5.3%
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Business Services
Financial Services
Technology
Pharma, Medical & Biotech
Leisure
Transportation
Media
Telecommunications
Construction
Real Estate
Agriculture
19.4%
0.2%
0.1%
5.0%
40.2%
23.0%
9.0%
3.1%
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Uruguay
Venezuela
0.7%
0.7%
5.9%
0.7%
7.9%
0.7%
13.8%
0.7%0.7%
50.7%
7.9%
9.9%
Argentina
Brazil
Chile
Colombia
Costa Rica
Dominican Republic
Guatemala
Mexico
Panama
Peru
Uruguay
Venezuela
LATIN AMERICAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
Return to contentsLATIN AMERICA Monthly M&A Insider | May | 10
TREND GRAPHS
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
88.0% 85.8% 86.3% 86.7%
4.9% 6.8% 8.1%6.2% 5.8%
5.3%5.3%
6.7%5.6% 6.5%
1.2% 1.8% 2.0% 1.1% 0.7%0.6% 0.3% 1.2% 0.9%0.8% 2.0%0.3%
86.1%
6.0%
7.0% 1.3%
84.2%
5.3%
7.2%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
82.0%
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
30.3%
9.2%
39.2%28.6%
21.9%
9.9% 10.1%
7.5%
9.5%
10.3%13.6%
25.1%36.6%
24.8%
28.6%
33.8%
20.1%
29.3%
19.0%
18.2%
14.4%
14.6% 14.8% 14.3% 16.3%
16.4%
45.8%
17.4%
20.4%8.0%
21.0%
50.1%
10.3%
10.6%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Monthly M&A Insider | May | 11
A MERGERMARKET M&A REPORT ON
NORTH AMERICA
April M&A activity in North America ended with 339 deals, worth US$103.2bn. Two transactions over US$10bn in the Pharma, Medical & Biotech and Energy, Mining & Utilities sectors primarily helped boost April’s total deal value and this quarter is already poised to overtake Q2 2013’s deal value of US$187.6bn if April’s M&A activity continues to produce higher value transactions. This quarter’s private equity activity started off with 55 buyout deals worth US$12.1bn and 61 exit deals worth US$36.8bn.
The Pharma, Medical & Biotech sector took the lead with 151 deals in the year-to-date, collectively valued at US$76.6bn. The top deal for April, Zimmer Holdings’s acquisition of Biomet Inc. for US$13.4bn, helped bring the sector’s market share to 19% by value. The merger of the companies will position the combined entity as a leader in the musculoskeletal industry and comes on the back of increased consolidation in the sector with industry players looking to set their long term strategies.
The Energy, Mining & Utilities sector is the third largest by value with 167 deals worth US$56.6bn. Exelon Corporation’s US$12.1bn acquisition of Pepco Holdings and Yamana Gold and Agnico Eagle Mines Limited’s US$3.4bn acquisition of Osisko Mining Corporation helped boost the sector’s market share to 14% by value. The sector may be seeing increased activity as the year progresses due to a rise in investor confidence.
The Telecommunications, Media and Technology sectors have been seeing a flurry of activity with a collective 304 deals worth US$125.8bn. These sectors have been an interesting study for acquisitions as investors are more willing to pay a premium for a target that they believe demonstrates significant growth potential. A large player in the Asian TMT sector, Alibaba Group’s US listing offer could value the company at more than US$100bn, making it one of the largest stock listings in history. The company has been ramping up with acquisitions pre-IPO, with three in April alone ranging from US$250m to US$1.2bn.
The first quarter has set a positive tone for 2014 and with Q2 starting strong with April numbers, North American M&A seems to be back on the rise. The TMT, Pharma, Medical & Biotech, and Energy, Mining & Utilities sectors will be in the spotlight for the upcoming months as the outcome of optimistic predictions in these sectors remain to be seen.
Monthly M&A Insider | May | 12
TOP DEALS
NORTH AMERICA
TOP 10 NORTH AMERICAN ANNOUNCED DEALS OF THE MONTH (APR-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m) Revenue EBITDA P/E
24-Apr-14 Zimmer Holdings Inc Biomet Inc Pharma, Medical & Biotech
- 4.4 40.3 (loss) - 13,350
30-Apr-14 Exelon Corporation Pepco Holdings Inc Energy, Mining & Utilities
- 2.6 10.6 60.6 19.6% 12,138
14-Apr-14 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund
Nuveen Investments Inc Financial Services Madison Dearborn Partners LLC
n/a n/a - - 6,250
07-Apr-14 Mallinckrodt Plc Questcor Pharmaceuticals Inc Pharma, Medical & Biotech
- 6.9 12.5 18.1 26.8% 5,546
04-Apr-14 Blackstone Group LP The Gates Corporation Industrials & Chemicals
Onex Corporation; and Canada Pension Plan Investment Board
1.8 10.0 - - 5,400
22-Apr-14 GlaxoSmithKline Plc Novartis AG (Global vaccines business)
Pharma, Medical & Biotech
Novartis AG - - - - 5,250
15-Apr-14 Zebra Technologies Corporation
Motorola Solutions Inc (Enterprise division)
Technology Motorola Solutions Inc 1.4 10.9 - - 3,450
16-Apr-14 Yamana Gold Inc; and Agnico Eagle Mines Limited
Osisko Mining Corporation Energy, Mining & Utilities
- 5.4 (loss) (loss) 11.2% 3,410
09-Apr-14 Mars Incorporated Procter & Gamble Company (Iams, Eukanuba, and Natura pet-food brands)
Consumer Procter & Gamble Company
- - - - 2,900
17-Apr-14 Post Holdings Inc Michael Foods Inc Consumer Thomas H. Lee Partners LP; and GS Capital Partners
- - - - 2,450
n/a=not applicable Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being North American (US + Canada) Data correct as of 05-May-14
Source: Mergermarket
TREND GRAPHS
NORTH AMERICA Monthly M&A Insider | May | 13
NORTH AMERICAN M&A QUARTERLY TREND
NORTH AMERICAN M&A ANNUAL TREND
NORTH AMERICAN M&A QUARTERLY PRIVATE EQUITY TREND
NORTH AMERICAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
300
350
400
450
500
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
0
200
400
600
800
1,000
1,200
Valu
e (U
S$bn
)
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5,000
6,000
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
50
100
150
200
250
300
350
Valu
e (U
S$bn
)
Num
ber of deals
0
100
200
300
400
500
600
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
200
400
600
800
1,000
1,200
1,400
1,600
Monthly M&A Insider | May | 14NORTH AMERICA
NORTH AMERICAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
NORTH AMERICAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
Return to contents
75
80
85
90
95
100
YTD 2014*201320122011201020092008
Perc
enta
ge
90.5% 91.1%
87.6% 87.6% 87.1%
0.9% 1.0% 1.1% 1.4% 1.4%
4.2% 3.8%
5.2% 5.4%5.0%
3.7% 3.4%5.5% 4.9% 6.0%
0.7% 0.7% 0.6% 0.7% 0.7%0.5%
86.9%
1.3%
5.1%
6.0%
0.7%
88.4%
1.0%
4.5%
5.4%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
49.1%58.7%
31.8%37.2%
32.3%
7.3%5.5%
9.8% 9.0% 8.2%
17.4%
13.2%
27.7%20.8% 27.5%
13.9%
13.3%
17.9%
21.2%21.3%
12.3% 9.3% 12.8% 11.8% 10.7%
43.3%
7.3%
24.0%
15.0%
44.5%
14.7%
9.2%
6.9%
24.7%
10.4%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
19.1%
15.6%
12.8%10.7%
9.8%
9.7%
9.2%
3.1%
2.2%
0.8%1.9%
0.7%
0.6%
3.3%
0.3%
Industrials & Chemicals
Technology
Business Services
Energy, Mining & Utilities
Consumer
Pharma, Medical & Biotech
Financial Services
Leisure
Media
Construction
Transportation
Telecommunications
Real Estate
Agriculture
Defence
9.7%
12.0%
4.3%
14.0%
12.1%
19.0%
6.3%
1.0%
17.9%
0.7%
0.9%1.3%
0.6%0.1%
Industrials & Chemicals
Technology
Business Services
Energy, Mining & Utilities
Consumer
Pharma, Medical & Biotech
Financial Services
Leisure
Media
Construction
Transportation
Telecommunications
Real Estate
Agriculture
Monthly M&A Insider | May | 15
A MERGERMARKET M&A REPORT ON
ASIA-PACIFIC
M&A activity for April yielded 235 deals worth US$95.3bn, a 1% decrease by volume but a 38% increase in value from March figures. Of these transactions, PE buyouts produced 20 deals worth US$8.7bn, a 15% decrease in volume and a 34% decrease in value from the previous month. Highlighting deal activity for the month was the US$37bn merger of CITIC Group and its Hong-Kong-listed subsidiary CITIC Pacific, a deal that has helped make 2014 a record year for M&A in the region.
Standout sectorsAsia’s Industrials & Chemicals sector saw the bulk of deal activity (21% of volume), driven by a number of industry consolidations in China, followed by TMT (19%). Tech M&A has recently seen a number of major tech companies set their sights on small and mid-cap startups in the mobile space to add new hardware and software assets to their portfolios.
The Energy, Mining & Utilities and Consumer sectors accounted for 11% of transaction volume each for the month. Energy deals were led by China Petroleum & Chemical Corporation’s acquisition of a 50% stake in Caspian Investments Resource, based in Kazakhstan, from Russian Lukoil for US$1.2bn. Highlighting consumer deals was United Kingdom based Diageo’s 26% stake acquisition in Indian United Spirits, a transaction valued at US$3.1bn.
Alibaba continues M&A foraysChinese ecommerce giant Alibaba, in a continuation of an ongoing M&A buying spree, completed three transactions in April highlighted by the US$1.2bn acquisition of a 24% stake in Youku Tudou, the listed China-based Internet television company. The deal was made in partnership with Yunfeng Capital. The investment will help Alibaba bring new products and services to its customers while strengthening Youku Tudou’s balance sheet.
Alibaba also completed a 20% acquisition of Wasu Media Holdings through Hangzhou Yunxi Investment Partnership for US$1bn, followed by a 72% stake acquisition of navigation provider and digital map application AutoNavi for US$649m. The ecommerce giant has been acquisitive as of late as competition in the Chinese tech space escalates between Alibaba and Tencent Holdings. Each company has turned to M&A to buy potentially useful assets before the other has the opportunity to acquire.
The acquisitions also come as Alibaba prepares for a much anticipated public listing in the United States.
Japan PE upbeat on exit, buyout opportunitiesCultural shifts and economic changes could be setting the stage for a wave of opportunities involving small to mid-cap exits and buyouts in Japan. A solid pipeline comprising founder-backed exits, renewed inbound acquisition interest, and potential non-core divestitures are all contributing to an uptick in deal flow, according to Mergermarket intelligence.
While Abenomics has certainly been recognised as a catalyst for change, the current rise in mid-market deal flow can be attributed to a shift in cultural attitudes and to the rise of a new generation of entrepreneurs. This has been seen in the emergence of a younger generation of founders in their 40s looking to sell their companies. Many may not be looking to pursue an IPO and are instead considering private equity buyers as an exit strategy. According to Mergermarket intelligence, some may consider the timing perfect to exit, given higher benchmark valuations.
TOP DEALS
Monthly M&A Insider | May | 16ASIA-PACIFIC
TOP 10 ASIA-PACIFIC ANNOUNCED DEALS OF THE MONTH (APR-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m)Revenue EBITDA P/E
16-Apr-14 CITIC Pacific Limited CITIC Limited Financial Services CITIC Group Corporation 0.90 3.11 - - 36,490
23-Apr-14 Transurban Group; AustralianSuper Pty Ltd; and Tawreed Investments Ltd
Queensland Motorways Pty Limited
Business Services QIC Limited - - - - 6,195
13-Apr-14 MMG South America Management Company Limited
Xstrata Las Bambas SA (99.99% stake)
Energy, Mining & Utilities
Glencore Queensland Limited; and Xstrata South America Limited
- - - - 5,850
01-Apr-14 Oversea Chinese Banking Corporation Limited
Wing Hang Bank Limited Financial Services n/a n/a 17.43 1.6% 4,953
02-Apr-14 COFCO Corporation Noble Agri Limited (51% stake)
Agriculture Noble Group Limited 0.37 - - - 4,000
07-Apr-14 Sun Pharmaceutical Industries Limited
Ranbaxy Laboratories Limited
Pharma, Medical & Biotech
Daiichi Sankyo Company Limited
2.21 29.00 - -0.5% 3,991
15-Apr-14 Diageo Plc United Spirits Limited (26% stake)
Consumer - - - - 18.5% 3,140
14-Apr-14 CapitaLand Limited CapitaMalls Asia Limited (34.7% stake)
Real Estate - 27.03 16.49 14.62 23.2% 2,390
09-Apr-14 Woolworths Holdings Ltd David Jones Limited Consumer - 1.16 10.92 22.60 25.4% 2,010
14-Apr-14 Consortium for Hotel Properties Ltd
Hotel Properties Limited (58.1% stake)
Leisure - 3.98 10.59 9.70 0.12 1,577
n/a=not applicable Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Asia-Pacific Data correct as of 02-May-14
Source: Mergermarket
TREND GRAPHS
Monthly M&A Insider | May | 17
ASIA-PACIFIC M&A QUARTERLY TREND
ASIA-PACIFIC M&A ANNUAL TREND
ASIA-PACIFIC M&A QUARTERLY PRIVATE EQUITY TREND
ASIA-PACIFIC M&A ANNUAL PRIVATE EQUITY TREND
ASIA-PACIFIC
Valu
e (U
S$bn
)
Num
ber of deals
0
100
200
300
400
500
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Valu
e (U
S$bn
)
Num
ber of deals
0
10
20
30
40
50
60
70
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
0
50
100
150
200
250
300
350
Valu
e (U
S$bn
)
Num
ber of deals
0
5
10
15
20
25
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
0
20
40
60
80
100
120
0
20
40
60
80
100
120
Buyout value Exit value Buyout volume Exit volume
Valu
e (US$
bn)
Num
ber of deals
0
20
40
60
80
100
120
140
160
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
100
200
300
400
500
600
700
800
900
ASIA-PACIFIC M&A GEOGRAPHIC BREAKDOWN YTD 2014
VALUE VOLUME
Monthly M&A Insider | May | 18ASIA-PACIFIC
TREND GRAPHS
6.8%
8.3%
11.8%
10.9%
25.6%
4.5%
3.1%
3.1%
5.8%
10.4%
1.7%2.3%
3.0%
2.7%
Industrials & Chemicals
Technology
Consumer
Energy, Mining & Utilities
Financial Services
Business Services
Leisure
Pharma, Medical & Biotech
Transportation
Media
Real Estate
Construction
Agriculture
Telecommunications
12.9%
20.3%
12.1%
9.7%
9.1%
8.3%
6.2%
5.6%
3.9%
3.8%
2.5%
3.8%
1.1%0.7%
Industrials & Chemicals
Technology
Consumer
Energy, Mining & Utilities
Financial Services
Business Services
Leisure
Pharma, Medical & Biotech
Transportation
Media
Real Estate
Construction
Agriculture
Telecommunications
44.6%
13.0%
11.1%
8.2%
4.9%
5.9%
1.6%
4.7%
1.6% 1.1%
3.3%China
Australia
South Korea
Japan
Singapore
India
Papua New Guinea
Malaysia
Hong Kong
Taiwan
Other
34.7%
9.8%
13.1%
4.9%
4.5%
7.9%
0.3%
12.9%
2.7%
0.4%8.6%
China
Australia
South Korea
Japan
Singapore
India
Papua New Guinea
Malaysia
Hong Kong
Taiwan
Other
ASIA-PACIFIC M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
Monthly M&A Insider | May | 19ASIA-PACIFIC
ASIA-PACIFIC M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
Return to contents
75
80
85
90
95
100
YTD 2014*201320122011201020092008
Perc
enta
ge
88.5%
0.9%
5.7%
4.5%
0.4% 0.2%0.3%0.4%
87.9% 88.7%87.6%
88.6%
1.0% 1.5% 0.8% 0.9%
5.3%5.1%
5.9%5.5%
5.4% 4.4% 5.3% 4.7%
0.4% 0.3%
88.1%
5.6%
0.8%
5.3%
0.6%
86.4%
6.4%
1.5%
5.1%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
13.5%
34.2%
11.7%
17.0%
23.6%
9.9%
21.8%
33.2%
18.4%
16.7%
29.6%19.9%
13.4%24.4% 20.6%
12.0% 11.2% 11.1% 12.0% 12.1%
22.2%30.4% 26.2% 29.7% 28.9%
15.7%
17.0% 27.3%13.6%
16.6%
20.5% 22.0% 20.3% 21.8%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
21.5%
Monthly M&A Insider | May | 20
A MERGERMARKET M&A REPORT ON
EUROPE
In April 2014, Europe increased in overall value as transactions totalled US$132.1bn, up 83.3% from US$72.1bn in April 2013 though logging a 12.6% decrease in number of deals from 453 to 396. April 2013 marks the best month in value since the financial crisis, following the region’s record figure of US$197.9bn in April 2007.
April’s high performance marks a positive development as so far this year total value in the region has reached US$309.3bn, reaching 48.2% of last year’s value (US$641.1bn), with three quarters of the year remaining.
European buyout activity showed a slowdown in April 2014 with US$10.5bn worth of deals, representing a 33.4% decrease to the same period in 2013 (US$15.7bn). On the other hand, exit activity increased by 80.6% reaching US$18.7bn from US$10.4bn in 2013, however the number of deals has decreased from 64 in 2013 to 50 in 2014.
The most active sector in April was Telecommunication with US$54.3bn worth of deals accounting for an 18.2% share of the region. With two of the top ten deals announced in the region in April 2014, the sector posted a 60.6% increase on its deal value performance compared to YTD 2012 (US$33.8bn), at which time the sector accounted for 16.3% of the dealmaking landscape. The top deal in the sector was Luxembourg-based ALTICE acquisition of France-based SFR SA, for a total consideration of US$23.3bn.
With the largest deal in April, Construction followed suit, claiming a 13.8% share of the market as it logged US$41.1bn worth of deals through 2014. The figure represents a 1,138.6% increase on the US$3.3bn value logged in the same period 2013. The sector’s top deal Holcim Ltd acquisition of Lafarge SA, for a total consideration of US$38.8bn will create synergies valued at US$1.9bn and expand Holcim’s capabilities to 90 countries around the world.
Switzerland (US$55.8bn) and USA (US$51.6bn) were the most active countries by deal value with market shares ranking at 18.7% and 17.3% respectively. The United Kingdom, which was the third most active country in terms of value (US$38.4bn), led the market by share of transaction volume, logging 271 deals (15.7%).
TOP DEALS
Monthly M&A Insider | May | 21EUROPE
TOP 10 EUROPEAN ANNOUNCED DEALS OF THE MONTH (APR-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m)Revenue EBITDA P/E
07-Apr-14 Holcim Ltd Lafarge SA Construction - 1.9 9.1 29.4 4.3% 28,261
05-Apr-14 ALTICE VII SA SFR SA Telecommunications Vivendi SA - - - - 17,000
22-Apr-14 Novartis AG GlaxoSmithKline Plc (Oncology division)
Pharma, Medical & Biotech
GlaxoSmithKline Plc - - - - 10,506
22-Apr-14 Eli Lilly and Company Limited
Novartis Animal Health Inc Pharma, Medical & Biotech
Novartis AG 4.9 - - - 3,916
07-Apr-14 ALTICE VII SA Numericable (34.6% stake) Telecommunications Cinven Limited; and The Carlyle Group
4.8 11.2 53.1 12.5% 3,886
28-Apr-14 Cinven Limited Visma ASA Business Services HgCapital; Montagu Private Equity LLP; and Kohlberg Kravis Roberts & Co LP
3.3 15.9 - - 2,524
16-Apr-14 Rolls-Royce Plc Rolls-Royce Power Systems AG (50% stake)
Industrial & Chemicals
Daimler AG - - - - 2,430
10-Apr-14 Goldman Sachs; and Koch Equity Development LLC
Flint Group (Formed from the merged Flint Ink Corporation and XSYS Print Solutions)
Industrial & Chemicals
CVC Capital Partners Limited
1.0 6.3 - - 2,200
18-Apr-14 IC Ictas Enerji Yenikoy Yatagan Electrik Uretim ve Ticaret AS; and Kemerkoy Elektrik Uretim Ve Tic AS
Energy, Mining & Utilities
Government of Turkey - - - - 1,936
07-Apr-14 Alfa Laval AB Frank Mohn AS Industrial & Chemicals
Wimoh AS 3.9 - - - 1,582
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being European Data correct as of 06-May-14
Source: Mergermarket
TREND GRAPHS
Monthly M&A Insider | May | 22
EUROPEAN M&A QUARTERLY PRIVATE EQUITY TREND
EUROPEAN M&A QUARTERLY TREND
EUROPE
Num
ber of deals
0
100
200
300
400
500
600
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
Valu
e (US$bn
)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Valu
e (US$bn
)
Num
ber of deals
0
20
40
60
80
100
120
140
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
0
50
100
150
200
250
300
350
400
450
Buyout value Exit value Buyout volume Exit volume
EUROPEAN M&A ANNUAL TREND EUROPEAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (US$
bn)
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Num
ber of deals
0
50
100
150
200
250
300
350
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
Valu
e (US$
bn)
0
200
400
600
800
1,000
1,200
1,400
1,600
Monthly M&A Insider | May | 23
EUROPEAN M&A GEOGRAPHIC BREAKDOWN YTD 2014
EUROPEAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
VALUE VOLUME
EUROPE
16.0%
12.7%8.9%
8.4%
6.5%
6.4%
4.5%
4.2%
4.1%
1.3%
0.2%
0.9%
3.7%
1.7%
20.5% Industrials & Chemicals
Consumer
Business Services
Technology
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Construction
Transportation
Media
Leisure
Real Estate
Telecommunications
Agriculture
Defence
5.6%
2.1%
7.0%
6.7%
8.9%
10.5%
2.0%
13.8%
5.3%
1.2%
4.3%
18.2%
1.1%0.1%
13.3% Industrials & Chemicals
Consumer
Business Services
Technology
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Construction
Transportation
Media
Leisure
Real Estate
Telecommunications
Agriculture
Defence
18.7%
12.9%
17.3%
9.2%
10.6%
5.7%
3.6%
2.8%
2.8%
3.5%
2.2%
1.7% 7.5%1.4%
Switzerland
USA
UK
Luxembourg
France
Germany
CEE
Brazil
China
Denmark
Sweden
Finland
Canada
Others
12.3%
3.5%
15.7%
0.5%
9.3%7.9%
1.2%
27.4%
1.0%1.9%
4.5%
2.1%
0.1%12.5%
Switzerland
USA
UK
Luxembourg
France
Germany
CEE
Brazil
China
Denmark
Sweden
Finland
Canada
Others
Monthly M&A Insider | May | 24EUROPE
TREND GRAPHS
EUROPEAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
Return to contents
80
82
84
86
88
90
92
94
96
98
100
YTD 2014*201320122011201020092008
Perc
enta
ge
90.6%93.1%
92.0% 91.1% 91.6%
0.9% 0.9% 0.7% 0.9% 0.8%
4.2%
2.9%3.2%
3.6%3.7%
3.7%2.7% 3.8% 4.0% 3.5%
0.6%0.7%
92.0%
0.9%
3.2%
3.2%
0.4%0.4% 0.4%
92.4%
0.9%
3.2%
3.3%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0.3% 0.2%
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
44.3%
8.4%
19.2%
15.0%
13.1%
33.6%28.6% 26.6%
33.9%
8.5% 9.0% 9.8% 9.5%
20.9%29.1% 28.9%
25.3%
20.7%18.7% 20.4%
18.7%
16.3% 14.6% 14.3% 12.6%
22.1%
10.2%
27.5%
25.8%
14.4%
50.6%
6.6%
17.9%
15.6%
9.3%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Monthly M&A Insider | May | 25
A MERGERMARKET M&A REPORT ON
THE MIDDLE EAST & AFRICAAfter a lacklustre first quarter, deal activity in the Middle East and Africa (ME&A) offers a more refreshing picture in April, with total value well ahead of the same period last year (US$4.5bn against US$2.4bn - a 90.5% increase) but volume (25 transactions against 33) was down 24.2%. The average deal size in Q2 14 is already double the average recorded in the first quarter (US$182m against US$90m). The overall trend year-to-date (YTD) is instead on the downside, both in terms of volume (98 vs 112 deals) and value (US$11.1bn vs US$15.1bn), reflecting a more general trajectory on M&A across the world.
Deal activity YTD shows an overall rebalancing across sectors, with Telecommunications (TMT) coming up on top in terms of value (US$3.1bn spread on just 5 transactions), followed by Energy, Mining & Utilities (US$2.1bn), Financial Services (US$1.8bn), Technology (US$1.4bn), and Consumer (US$1.1bn). These five sectors together account for 84.9% of deal activity by value in the region, but hold a market share of only 57.1% in terms of number of transactions. The same period last year saw Energy, Mining & Utilities having the lion’s share (36%), with 19 transactions worth US$5.4bn. Together with Real Estate, Construction, and Pharma, these four sectors covered almost three-quarters of 2013 deal activity by value. A different picture emerges as far as deal counting is concerned: so far this year Consumer leads with 17 transactions, followed by Industrials & Chemicals (14 operations worth only US$201m, which is equivalent to less than 2% of market by value), Financial Services (13), and Energy (11). Last year Industrials & Chemicals, Financial Services and Energy each had 19 deals on record.
However, the very nature of the region’s deals has to be taken into account when running year-on-year comparisons. Given the average transaction size and the modest contributions on global M&A activity, single high-value operations in the Middle East and Africa can have a substantial impact on sector contributions and significantly skew the overall order.
As we outlined in the Q1 Insider released last month, TMT was the dominant sector when Mergermarket ran its original report in 2013, but the same sector declined to a meagre 0.7% share by value and 3 deals in total after updating the rankings this year. Last June, Cyprus-based Baskindale dropped its bid to acquire Egyptian telecommunications provider Orascom Telecom, taking out a transaction worth US$6.4bn and prompting a major re-ranking.
The TMT sector offers a similar case this year: one single high-ticket deal that is responsible for 84% of sector’s total contribution - the US$2.65bn acquisition by the Algerian Fonds National d’Investissement of a 51% stake in Orascom Telecom Algerie. Because of this operation, Algeria accounts for 24.1% of total transactions by value (top country), but just 2% in terms of volume. In geographical terms, April continues the trend outlined in recent years, with Israel, South Africa and United Arab Emirates covering most of deal activity, both by value and volume.
Following an IMF-backed overhaul of national GDP statistics, Nigeria announced in April that it has moved up to become the largest African economy, overtaking South Africa. Compared to last year, Nigeria’s deal contribution by value remained the same at around 5%.
Other noteworthy operations are the acquisition (US$500m) of National Petroleum Services by a consortium led by Fajr Capital Limited, in the United Arab Emirates; and Growthpoint Properties’ acquisition of a 34.9% stake in Acucap Properties for US$291m. Both companies are based in South Africa.
Private equity activity was negligible, with just two buyouts (against five last year) and a single US$22m exit (against four worth US$1.1bn in 2013).
TOP DEALS
Monthly M&A Insider | May | 26MIDDLE EAST & AFRICA
TOP 10 MIDDLE EASTERN & AFRICAN ANNOUNCED DEALS OF THE MONTH (APR-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m)Revenue EBITDA P/E
18-Apr-14 Fonds National d'Investissement
Orascom Telecom Algerie SPA (51% stake)
Telecommunications Global Telecom Holding SAE
2.9 4.9 - - 2,643
22-Apr-14 A consortium led by Fajr Capital Limited
National Petroleum Services Energy, Mining & Utilities
- - - - - 500
14-Apr-14 Growthpoint Properties Ltd Acucap Properties Ltd (34.9% stake)
Real Estate - - - - 7.2% 291
10-Apr-14 BNP Paribas Personal Finance
RCS Group (Pty) Ltd Financial Services Standard Bank Group Limited; and Foschini Limited
- - - - 253
06-Apr-14 Abu Dhabi Islamic Bank Barclays UAE retail assets Financial Services Barclays Plc - - - - 177
14-Apr-14 Growthpoint Properties Ltd Sycom Property Fund (31.5% stake)
Financial Services - - - 14.5% 166
16-Apr-14 Holmarcom SA Cie D'assurances Et De Reassurances Atlanta SA (30% stake)
Financial Services Caisse de Depot et de Gestion
- - - - 147
03-Apr-14 The Cullinan Hotel (Pty) Ltd Garden Court Kings Beach Hotel; Garden Court Eastgate Hotel; Garden Court Hatfield Hotel; StayEasy Eastgate Hotel; and Southern Sun Waterfront Cape Town Hotel
Leisure Liberty Group Limited; and Southern Sun Hotels (Pty) Limited
- - - - 130
01-Apr-14 Arrowhead Properties Limited
Vividend Income Fund Ltd (68.34% stake)
Real Estate - - - 0.5 4.7% 82
06-Apr-14 Avnei Shoham Rotshtein Realestate Ltd (55% stake)
Real Estate - 0.8 9.2 13.7 0.3% 25
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Middle East or Africa Data correct as of 06-May-14
Source: Mergermarket
TREND GRAPHS
Monthly M&A Insider | May | 27MIDDLE EAST & AFRICA
MIDDLE EASTERN & AFRICAN M&A QUARTERLY TREND
MIDDLE EASTERN & AFRICAN M&A QUARTERLY PRIVATE EQUITY TREND
MIDDLE EASTERN & AFRICAN M&A ANNUAL TREND
MIDDLE EASTERN & AFRICAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
2
4
6
8
10
12
14
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
0
10
20
30
40
50
60
70
Valu
e (U
S$bn
)
Num
ber of deals
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
100
200
300
400
500
600
Valu
e (U
S$m
)
Num
ber of deals
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
5
10
15
20
25
Valu
e (U
S$m
)
Num
ber of deals
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q214*
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
20
40
60
80
100
120
140
160
Monthly M&A Insider | May | 28MIDDLE EAST & AFRICA
MIDDLE EASTERN & AFRICAN M&A GEOGRAPHIC BREAKDOWN YTD 2014
VALUE
TREND GRAPHS
VOLUME
MIDDLE EASTERN & AFRICAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
16.8%
14.9%
2.7%1.2%
24.1%
6.7%
0.9% 5.9%
1.3%0.4% 0.2%
0.1%
3.5%0.3%
5.1%
14.7%
1.0%
South Africa
Israel
United Arab Emirates
Kenya
Nigeria
Saudi Arabia
Egypt
Algeria
Angola
Namibia
Botswana
Mozambique
Qatar
Morocco
Ghana
Oman
Tunisia
1.0%
24.5%
20.4%
13.3%
6.1%
5.1%
4.1%
3.1%
2.0%
South Africa
Israel
United Arab Emirates
Kenya
Nigeria
Saudi Arabia
Egypt
Algeria
Angola
Namibia
Botswana
Mozambique
Lebanon
Tanzania
Qatar
Morocco
Ghana
Oman
Tunisia
Liberia
Ethiopia
Bahrain
Jordan
14.3%
13.3%
17.3%
5.1%
11.2%
10.2%
5.1%
5.1%
4.1%
4.1%
3.1%2.0%
5.1%
Consumer
Industrials & Chemicals
Financial Services
Energy, Mining & Utilities
Technology
Telecommunications
Real Estate
Leisure
Business Services
Pharma, Medical & Biotech
Transportation
Media
Agriculture
9.6%7.4%
1.5%
12.0%
0.8%2.2% 1.1%
0.2%0.1%
1.8%
15.8%
19.3%
28.2%
Consumer
Industrials & Chemicals
Financial Services
Energy, Mining & Utilities
Technology
Telecommunications
Real Estate
Leisure
Business Services
Pharma, Medical & Biotech
Transportation
Media
Agriculture
Monthly M&A Insider | May | 29MIDDLE EAST & AFRICA
MIDDLE EASTERN & AFRICAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
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0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
47.5%53.1%
67.8%59.2%
65.7%
13.7% 12.9%9.0% 9.0% 8.2%
18.9%13.2%
12.6%
13.6% 13.8%
44.5%
10.5%
23.0%
20.9%18.2% 19.2%
9.6%
16.9%11.4%
1.6% 1.0% 1.3%
72.5%
6.3%
10.0%
10.4%
US$0-US$14.9m
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
1.7% 0.9% 0.8% 1.1% 0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
42.6%47.3% 45.1% 46.6% 45.5%
5.6% 4.0%5.6% 6.1% 4.7%
11.5% 13.0%10.3% 11.1% 12.5%
36.5%32.4% 33.1% 28.6% 29.7%
3.8% 3.3% 5.9% 7.6% 7.6%
54.9%
4.3%
9.4%
25.6%
5.8%
44.9%
15.3%
28.6%
4.1%7.1%
US$0-US$14.9m
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
32.4%
Merrill DataSite The No.1 VDR Choice for Dealmakers
The Market Leading VDR Solution With decades of experience in document management and due diligence services, Merrill Corporation has created a smart, simple and secure virtual data room (VDR) solution - Merrill DataSite. With Merrill DataSite you can easily execute on all of your acquisition checklist items and turn your paper and electronic files into a fully searchable, secure, and completely edit-enabled online library – no additional hardware, software, personnel or programming needed. We have worked with great success on many thousands of deals, so far uploading approximately 700,000,000 pages of data on over 30,000 projects.
Round-the-clock availabilityMerrill DataSite VDRs offer international dealmakers multiple business benefits. We offer rapid set-up and round-the-clock support, a reliable hosted service from a single source, advanced but easy to use functionality, plus – complete cost transparency.
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Unrivalled International Service Our multilingual project managers between them speak 27 languages, and a dedicatedproject management team will be assigned to your deal right from the start and then be available 24/7/365 – giving you peace of mind that the right person is always on hand to address any issue. Our structured approach to setting up every VDR applies tried and tested practices that make it easy for you to open, manage and maintain your data room, while adding value for all the parties involved in the due diligence process.
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About Merrill DataSiteMerrill DataSite is established as the market-leader for virtual data rooms (VDRs) in Europe and across the world. As first to market, we have many years of experience to bring to your transaction and have had time to develop and refine our technology, leading to a peerless Project Management and systems infrastructure that operates 24/7/365. This is why many thousands of companies trust Merrill DataSite to manage their online due diligence processes.
About Merrill CorporationMerrill Corporation is a leading provider of outsourced solutions for complex business communication and information management. Founded in 1968 and headquartered in St. Paul, Minnesota, Merrill’s services include document and data management, litigation support, language translation services, fulfilment, imaging and printing. Merrill serves the corporate, legal, financial services, insurance and real estate markets. With more than 5,000 people in over 40 domestic and 22 international locations, Merrill Corporation empowers the communications of the world’s leading organisations.
Merrill DataSite is a division of Merrill Corporation.
2013 WINNERM&A Advisor
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To find out more, or to arrange a demonstration of our VDR solution,call +44 (0)845 602 6912, email us at info@datasite.com, or visit www.datasite.com today.
DataSite_DriverDeals_DPS.indd 2-3 11/02/2014 13:43
Return to contents
The No.1 VDR Choice for Dealmakers
The Market Leading VDR Solution With decades of experience in document management and due diligence services, Merrill Corporation has created a smart, simple and secure virtual data room (VDR) solution - Merrill DataSite. With Merrill DataSite you can easily execute on all of your acquisition checklist items and turn your paper and electronic files into a fully searchable, secure, and completely edit-enabled online library – no additional hardware, software, personnel or programming needed. We have worked with great success on many thousands of deals, so far uploading approximately 700,000,000 pages of data on over 30,000 projects.
Round-the-clock availabilityMerrill DataSite VDRs offer international dealmakers multiple business benefits. We offer rapid set-up and round-the-clock support, a reliable hosted service from a single source, advanced but easy to use functionality, plus – complete cost transparency.
Our clients have effectively used our VDRs to enhance the following types of transaction: Mergers, acquisitions and divestitures Private placements Leveraged buyouts Bankruptcy and reorganisation transactions Financing restructuring IPOs and dual track processes
Unrivalled International Service Our multilingual project managers between them speak 27 languages, and a dedicatedproject management team will be assigned to your deal right from the start and then be available 24/7/365 – giving you peace of mind that the right person is always on hand to address any issue. Our structured approach to setting up every VDR applies tried and tested practices that make it easy for you to open, manage and maintain your data room, while adding value for all the parties involved in the due diligence process.
Ironclad SecurityMerrill DataSite leads the way in VDR security having become the first VDR provider to be fully accredited with ISO 27001, the industry gold-standard for security certification. Certified since 2007, we are audited annually, to maintain the highest standards. In addition, documents are 256-bit SSL encrypted, watermarks are tamperproof and can be customised, and data can be viewed, printed and downloaded only by the users you designate. Added to this, we are fully Safe Harbor certified. You’ll have peace of mind knowing your information is being shared only with the people you choose.
About Merrill DataSiteMerrill DataSite is established as the market-leader for virtual data rooms (VDRs) in Europe and across the world. As first to market, we have many years of experience to bring to your transaction and have had time to develop and refine our technology, leading to a peerless Project Management and systems infrastructure that operates 24/7/365. This is why many thousands of companies trust Merrill DataSite to manage their online due diligence processes.
imaging and printing. Merrill serves the corporate, legal, financial services, insurance and real estate markets. With more than 5,000 people in over 40 domestic
2013 WINNERM&A Advisor
Turnaround Awards
Information Management Product/Service of the Year
2013 WINNER3rd Annual ACG
New York Champion’s Awards
Product/Service of the Year
2012 WINNERGlobal M&A Advisor
M&A Awards
Product/Service of the Year
2012 WINNERAcquisitions International UK
UK VDR Provider of the Year
2011 WINNERM&A Advisor
International Awards
Product/Service of the Year
Working with Dealmakers around the world
700 million
Call Us: +44 (0)845 602 6912www.datasite.com
Monthly M&A Insider | May | 32
MERRILL CORPORATION CONTACTS
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EXECUTIVE MANAGEMENTEd BifulkPresident Tel: +1 212 229 6563
EXECUTIVE SALESWill BrownRegional Director, France Tel: +33 1 40 06 13 02
Anna ScottRegional Director, UK Tel: +44 (0) 207 422 6263
Chris BeckmannRegional Director, Germany, Switzerland & Poland Tel: +49 69 244 321 480
Martin AlamriRegional Director, Germany Tel: +49 69 244 321 471
Jérôme PottierRegional Director, France Tel: +33 (0) 1 40 06 13 12
Hakema El-HadadRegional Director, France & Northern Africa Tel: +33 (0) 1 40 06 13 10
Manuel BianchiRegional Director, Europe Tel: +44 (0) 207 422 6271
Mike HinchliffeRegional Director, Europe Tel: +44 (0) 207 422 6256
Bryan BrightonRegional Director, Europe Tel: +44 (0)207 422 6212
Adam PangRegional Director, Europe Tel: +44 (0) 207 422 6268
Merlin J. PiscitelliRegional Director, Europe Tel: +44 (0) 207 422 6266
Mary WalshRegional Director, Europe Tel: +44 (0) 207 422 6270
Jonathan HughesAccount Manager, Europe Tel: +44 (0) 207 422 6267
Malcolm NeateAccount Manager, Europe Tel: +44 (0) 207 422 6272
Alex GrossRegional Director, Eastern Europe & Middle East Tel: +49 69 7593 7148
Alvaro OrtegaRegional Director, Southern Europe Tel: +39 27 6362314 Tel: +34 91 7691022
David Haynes Regional Director, Asia-Pacific Tel: +852 2536 2288
Vincent LorkRegional Director, South East Asia Tel: +65 6248 4602
Patrick CabreraRegional Director, South East Asia Tel: +65 9834 4557
John PateRegional Director, Australia & New Zealand Tel: +61 (0) 499 992 400
Manuel BentosinosRegional Director, Mexico, Columbia & Caribbean Tel: +52 55 9171 2237
Ana Paula Macêdo Távora de CastroVice President, South America Tel: +55 11 9908 0858
Luis Felipe Salles CunhaRegional Director, Brazil Tel: +55 11 3568 2429
Brian GilbreathVice President, Midwest & Latin America Tel: +1 404 934 8085
Hank GregorySVP, Western Canada & Pacific Northwest Tel: + 604 603 4360
Todd CaveNorthern California, Pacific Northwest & Western Canada Tel: +1 651 632 4369
Ryan MacMillanRegional Director, Canada Tel: +1 416 214 2448
Michael KennedyRegional Director, New England Tel: +1 207 829 4369
Ross WhittakerRegional Director, New England Tel: +1 617.535.1516
Jon LenihanRegional Director, Boston Tel: +1 617 535 1618
Scott RedikerRegional Director, Mid Atlantic Tel: +1 443 690 3122
Forrest R. DoaneRegional Director, New York Tel: +1 212 229 6620
Bill PoleseRegional Director, New York +1 212 229 6612
John McElroneRegional Director, New York Tel: +1 212 229 6656
Joseph SolanoRegional Director, New York Tel: +1 212 229 6576
Hillary PryorRegional Director, New York Tel: +1 212 367 5924
Harry Poulos Regional Director, New York Tel: +1 212 367 5924
Meiken Castillo Regional Director, New York Tel: +1 212 229 6879 Steve PicconeVice President, New York Tel: +1 212 229 6883BJ BirtzRegional Director, Raleigh Tel: +1 919 996 9117Paul KleinkaufRegional Director, Southeast Tel: +1 404 602 3251Colin SchopbachRegional Director, Southeast Tel: +1 404 796 1478Michail SidorovRegional Director, Ohio & Michigan Tel: +1 216 333 1274Scott HaugenRegional Director, Minnesota & Wisconsin Tel: +1 651 632 4375Anthony CrosbyRegional Director, Chicago Tel: +1 312 674 6511Mark PlaehnRegional Director, Chicago Tel: +1 312 674 6527Kelly-Leigh KeefeRegional Director, Chicago Tel: +1 312 386 2229Ted SengpielRegional Director, Missouri, Kansas, Nebraska & Iowa Tel: +1 314 315 2909Nicholas RenterRegional Director, Texas Tel: +1 214 754 2100Angela PedersenAccount Executive, Greater Texas Region Tel: + 651 632 4394 Andrew BuonincontroRegional Director, Bay Area Tel: +1 650 493 1400Erik SandieRegional Director, Bay Area Tel: +1 650 493 1400
Jay LoyolaRegional Director, Bay Area Tel: +1 949 622 0663Dan PhelanRegional Director, Los Angeles Tel: +1 213 253 2139Aleshia HlivkaAccount Executive, California Tel: +1 651 632 4967David YearyVice President, DataSite Life Sciences Tel: +1 415 307 4414Jon BlueVice President, Clean Tech Tel: +1 206 696 916
The following notes pertain to data contained in this publication:
Deals are included where the deal value is greater than or equal to US$5m.
Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to US$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.
Mid-market is defined as US$10m - US$250m.
*Q2 2014 refers to the period 01-Apr-14 to 30-Apr-14. *YTD 2014 refers to the period 01-Jan-14 to 30-Apr-14.
For a full version of the mergermarket M&A deal database inclusion and league table criteria, go to http://www.mergermarket.com/pdf/deal_criteria.pdf.
Remark, the events and publications arm of The Mergermarket group, offers a range of publishing, research and events services that enable clients to enhance their own profile, and to develop new business opportunities with their target audience.
Disclaimer
This publication contains general information and is not intended to be comprehensive nor to provide financial, investment, legal, tax or other professional advice or services. This publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any investment or other decision or action that may affect you or your business. Before taking any such decision, you should consult a qualified professional adviser. While reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and neither Schulte Roth & Zabel nor Mergermarket nor any of its subsidiaries or any affiliate thereof or other related entity shall have any liability to any person or entity which relies on the information contained in this publication, including incidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk.
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