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Deal DriversAmericas

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An Acuris Company

The comprehensive review of mergers and acquisitions in the Americas region

HY 2018

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Mergermarket Deal Drivers Americas 3

Contents

Contents

The comprehensive review of mergers and acquisitions in the Americas region throughout the first half of 2018.

Foreword 04

Americas Heat Chart 05

All Sectors 06

Financial Services 18

Industrials, Manufacturing & Engineering 24

Energy, Mining, Oil & Gas 30

Consumer 36

Technology, Media & Telecom 42

Life Sciences & Healthcare 48

Canada 54

West 61

Midwest 68

South 75

Mid-Atlantic 82

New England 89

Latin America 96

About Merrill Corporation 104

mergermarket.com


Foreword

Welcome to the half-year 2018 edition of Deal Drivers Americas, published by Mergermarket in association with Merrill Corporation. This report provides an extensive review of M&A activity and trends across North America and Latin America.

The effect of megadealsThe jump in M&A value was due to an abundance of megadeals, including the top transaction of the first half: insurance company Cigna’s acquisition of pharmacy benefit manager Express Scripts for US$67.6bn. Roughly a year ago, Cigna had been considering a deal with rival Anthem, but opted this past March for a vertical merger with Express Scripts instead. The hefty price tag indicates the extent to which US-based healthcare companies will go to reduce the costs for the services they provide.

Protectionist policies seemed to have a noticeable effect on cross-border transactions, especially transatlantic deals. Compared to 1H17, the number of deals involving European companies acquiring American targets, and vice versa, declined to 502 from 616. It appears Europe’s loss could be US companies’ gain, however, as domestic M&A activity saw an increase year-on-year (YoY).

Looking at particular sectors, Energy, Mining Oil & Gas recorded the highest deal value for 1H18 at US$163.7bn, followed by Business

Services at US$147.2bn and Technology, Media & Telecom at US$146.7bn. Looking ahead, we could see more activity in healthcare following the recent wave of vertical consolidation in that space. The outlook for financial services M&A remains strong for the rest of 2018, with the appetite for asset management and fintech assets expected to be healthy.

One especially positive story to come out of 1H18 is the level of North American private equity (PE) activity, which increased from the same period a year ago. There should be little ebb in PE activity during 2H18, as firms have both the capital and the impetus to make deals happen. On the other hand, PE exits saw a significant decline in both their value and deal count in the first half of the year, possibly reflecting the fact that many PE firms are holding onto assets for longer.

In Latin America, Brazil and Chile have dominated M&A activity and seen YoY increases in value, but also fewer transactions so far this year. We could see cross-border deals continue to be a major contributor to value in the region, with foreign bidders from China and Europe involved in some of the largest transactions during 1H18.

Looking forwardDealmakers will be aiming to close out the year on a high note, emboldened by the terrific first half. According to the most recent World

Bank report, the US economy is expected to grow 2.7% in 2018 and 2.5% in 2019, better than the Eurozone and competitive with emerging markets. With all of the positive signs surrounding potential dealmaking, we expect the good news to continue.

Sincerely,

David S. Allen Vice President, Sales

David S. AllenVice President, SalesMerrill Corporation


mergermarket.com

Foreword


5Mergermarket

Heat Chart based on potential companies for sale

Hot Warm Cold

Criteria of heat chart: Mergermarket’s sector Heat Chart is based on companies tagged as potential targets in the first six months of 2018.

Sector West South Mid-Atlantic

Midwest Latin America

New England

Canada Total

Technology, Media & Telecom

276 145 143 71 42 58 25 760

Industrials, Manufacturing & Engineering

90 118 55 110 50 47 18 488

Life Sciences & Healthcare

113 107 73 81 19 55 24 472

Consumer 124 81 67 92 43 28 4 439

Energy, Mining, Oil & Gas 62 85 24 21 47 15 23 277

Business Services 74 65 55 34 30 9 9 276

Financial Services 45 33 44 22 24 14 5 187

Leisure 23 19 13 6 15 9 2 87

Transportation 11 10 5 14 11 2 1 54

Real Estate 12 7 6 4 4 2 3 38

Construction 6 5 2 9 6 1 29

Agriculture 2 2 3 9 2 1 19

Defense 3 7 3 1 1 15

Government 1 1 1 3

Total 842 685 487 467 304 242 117 3144

Our forward-looking Heat Chart classifies the “companies for sale” stories that appear on the Mergermarket intelligence tool. In the 1H18 edition, the Technology, Media & Telecom (TMT) sector and the West region of the US dominated the M&A tables, after doing so last year as well.

A total of 3,144 stories about companies for sale were written by Mergermarket’s proprietary intelligence service during 1H18. The sector with the most was Technology at 760 stories, a number of which related to proposed mergers between 21st Century Fox and either Disney or Comcast, or between CBS and Viacom. In the Industrials and Chemicals sector, there were 488 stories on companies for sale, including many pertaining to industrials products and services firms, pointing to potential M&A activity in this space during 2H18.

Life Sciences & Healthcare and Consumer sectors had the third- and fourth-most number of stories, respectively. Most of these deals were in the West, South and Midwest, although they were also concentrated in the Mid-Atlantic region for Life Sciences & Healthcare.

After the West region, which featured a total of 842 stories, the areas with the next-highest numbers were the South, Mid-Atlantic and Midwest. Both the South, which includes states such as Florida and Texas, and the Mid-Atlantic, which includes New York and Pennsylvania, are centers for Business Services and Consumer deal activity.

Canada had the fewest “companies for sale” stories of any region in 1H18 at 117, underlining the dominance of the US when it comes to dealmaking in North America.

Americas Heat Chart

130 60 30

90

70

50

40

20

10

Mergermarket Deal Drivers Americas

mergermarket.com

Heat Chart


All Sectors

Part of the Acuris reporton global M&A activity


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All Sectors


Tom Cane

Further informationGet in touch

North American M&A in 2018 is living up to expectations for robust activity, with first-half deal value on track to surpass the highs of 2015.

As of 30 June, there had been US$849.1bn worth of deals in the region, putting 2018 on course to beat 2015’s record full year value of US$1,878.9bn.

While dealmakers question how long the cycle will last, corporate bidders’ increasing firepower, especially after the Trump administration’s tax reform, appetite for riskier combinations and desire to acquire technology to stay ahead of peers are driving rampant activity.

This pursuit of technology is reshaping the traditional M&A landscape. According to Rick Climan of Hogan Lovells, blue chip acquirers in mainstay industries are seeking to enter new verticals, driven by the need to acquire technology to enhance their digital footprint. He cited the example of e-commerce, which has seen a slew of traditional retailers chase deals for technology companies.

In one notable example in May, Bentonville, Arkansas-headquartered Walmart [NYSE: WMT] agreed to acquire a majority stake in India’s Flipkart, an e-retailer, for US$16bn.

“Players … outside the Technology sector, everybody from Walmart to car companies to pharmaceuticals and others, are getting more aggressive,” said Robert Townsend of Morrison Foerster.

Meanwhile, large corporations have been emboldened by the Trump administration’s tax reform and the regulatory mood in Washington to attempt large combinations fraught with regulatory risk.

In the biggest deal of the first half, Bloomfield, Connecticut-based health insurer Cigna [NYSE: CI] announced a US$67.6bn deal to buy St. Louis-based pharmacy benefit management services provider Express Scripts [Nasdaq: ESRX].

The next two largest deals were announced at the start of a frenzied week in May, with Sprint [NYSE: S] and T-Mobile[NYSE: TMUS] announcing a long-awaited US$60.8bn tie-up and Marathon Petroleum [NYSE: MPC] agreeing to acquire Andeavor [NYSE: ANDV] in a US$31.3bn deal to create the top US refiner.

Townsend and other Media sector advisors expect vertical integration and convergence through deals to ripple across the Technology, Media & Telecom space following the US$105.2bn merger between AT&T [NYSE: T] and Time Warner, which closed 14 June, largely seen as a bellwether transaction.

As reported in sister publications PaRR and Dealreporter, the US Department of Justice’s lawsuit against the Time Warner/AT&T merger was the country’s first litigated vertical merger in several decades. The lack of recent vertical merger law guidance contributed significantly

to the court’s decision to allow the merger, which has regulators considering whether to revise the vertical merger guidelines for the first time since 1984. Moving forward, upstream and downstream acquisitions in concentrated markets are expected to see heightened antitrust scrutiny, as reported.

In the middle market, bidders, pressured to deploy capital, are grappling with record high valuations and lofty expectations from sellers.

Many bidders are pricing in expectations for a downturn next year or the year after, Mergermarket recently reported, citing private equity executives.

Still, Hogan Lovells’ Climan pointed out that historically M&A activity levels have been known to hold up for a year or more after the onset of an economic downturn.

“At some point we are going to see secular decline in valuation parameters,” said Ted Smith, president of Union Square Advisors. “But our opinion is that’s likely to come in the form of a correction, not a crash, because we still see a lot of positives in the overall economic environment particularly here in the States.”

All SectorsOverview

Thomas Zadvydas


mergermarket.com

All Sectors

mailto:tom.cane%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry

mailto:thomas.zadvydas%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


8Mergermarket

Top deals

Top 20 Announced Deals for Half Year Ending 30 June 2018 – North American Targets All Sectors

AnnouncedDate

Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)

8-Mar-18 P Cigna Corporation Express Scripts Holding Company Business Services 67,601

29-Apr-18 P T-Mobile USA Inc Sprint Corporation Technology, Media & Telecom SoftBank Group Corp 60,806

30-Apr-18 P Marathon Petroleum Corporation Andeavor Corporation Energy, Mining, Oil & Gas 31,327

26-Mar-18 P Brookfield Property Partners General Growth Properties Inc (66.2% stake) Real Estate 26,705

29-Jan-18 C Keurig Green Mountain Inc Dr Pepper Snapple Group Inc Consumer 23,131

30-Jan-18 P Blackstone Group; GIC Private Limited; and Canada Pension Plan Investment Board

Thomson Reuters Corporation (Financial & risk business) (55% stake) Business Services Thomson Reuters Corporation 17,000

3-Jan-18 P Dominion Energy Inc SCANA Corporation Energy, Mining, Oil & Gas 14,250

21-May-18 P Wabtec Corporation GE Transportation Industrials, Manufacturing & Engineering General Electric Company 11,100

22-Jan-18 C Sanofi SA Bioverativ Inc Life Sciences & Healthcare 10,887

27-Jun-18 P ConAgra Brands Inc Pinnacle Foods Inc Consumer 10,778

17-May-18 P Williams Companies Inc Williams Partners (26.71% stake) Energy, Mining, Oil & Gas 10,467

1-Mar-18 C Microchip Technology Incorporated Microsemi Corporation Technology, Media & Telecom 9,836

12-Feb-18 C General Dynamics Corporation CSRA Inc Business Services 9,679

28-Mar-18 C Concho Resources Inc RSP Permian Inc Energy, Mining, Oil & Gas 9,481

11-Jun-18 P Kohlberg Kravis Roberts & Co Envision Healthcare Corporation Life Sciences & Healthcare 9,432

22-Jan-18 C Celgene Corporation Juno Therapeutics Inc (90.37% stake) Life Sciences & Healthcare 8,845

31-Jan-18 L Fujifilm Holdings Corporation Xerox Corporation (50.1% stake) Technology, Media & Telecom 8,600

23-Apr-18 P CenterPoint Energy Inc Vectren Corporation Energy, Mining, Oil & Gas 8,089

29-Apr-18 P Prologis Inc DCT Industrial Trust Inc Real Estate 8,060

23-Feb-18 C General Mills Inc Blue Buffalo Pet Products Inc Consumer The Invus Group 7,935

C= Completed; P= Pending; L= Lapsed


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All Sectors


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Please use corresponding AIT filePlease use corresponding AIT file

41.2%

1.5%

20.6%2.4%

2.2%

7.2%

19.9%

5%

30.3%

2.8%

22.4%

3%

6%

6.4%

23.9%

5.2%

USA

Northern Europe

Asia-Pacific

USA

Northern Europe

Asia-Pacific

Canada

Central & Eastern Europe

RoW

Canada

Central & Eastern Europe

RoW

Western Europe

Southern Europe

Western Europe

Southern Europe

Mix of deals by geographic regionDeal Count

Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.

Mix of deals by geographic regionValue

Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.

Mergermarket 9

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All SectorsDeal Drivers Americas


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value


Mergermarket Deal Drivers Americas 10All Sectors

Valu

e (U

S$

bn)

0

20

40

60

80

100

120

140

160

180

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$4.2 US

0.7

US$63.6

US$5.3

US$27.5

US$39.2

US$20.9

US$69.6

US$146.7

US$163.7

US$79.2

US$147.2

US$81.4

Num

ber

of d

eals

0

100

200

300

400

500

600

700

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

27 415

8347

273

108

511

247

434

223264

674

Mix of deals by industry sectorDeal Count

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada. Industry sector is based on the dominant industry of the target.

Mix of deals by industry sectorValue

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada. Industry sector is based on the dominant industry of the target.

mergermarket.com



0

50,000

100,000

150,000

200,000

250,000

300,000

H1 2018201720162015201420132012

Valu

e (U

S$

m)

Volum

e

0

200

400

600

800

1,000

1,200

US$177,014 US$

163,197

US$296,094

US$252,386

US$251,271

US$272,064

US$113,973

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

H1 2018201720162015201420132012

Valu

e (U

S$

m)

Volum

e0

200

400

600

800

1,000

1,200

1,400

US$127,805

US$145,409

US$210,063

US$171,442 US$

156,179

US$175,967

US$123,646

Deal Count Deal CountValue Value

Buyouts

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.

Exits



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All Sectors


Please use corresponding AIT filePlease use corresponding AIT file Please use corresponding AIT file

Valu

e (U

S$

m)

US$xxx

US$xxx

US$xxx

US$xxx

US$xxx

US$xxx US$

xxx

0

30,000

60,000

90,000

120,000

150,000

Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Num

ber

of d

eals

US$xxx

US$xxx

US$xxx

US$xxx

US$xxx

US$xxx US$

xxx

0

50

100

150

200

250

300

350


European bidder acquiring a North American target

North American bidder acquiring a European target

Total North American/European deals

Transatlantic dealsDeal Count

Based on dominant location of target and bidder and excludes all buyouts.

Transatlantic dealsValue

Based on dominant location of target and bidder and excludes all buyouts.

European bidder acquiring a North American target

North American bidder acquiring a European target

Total North American/European deals


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All Sectors


Value Value Value Value Value Value

Please use corresponding AIT file


Please use corresponding AIT file Please use corresponding AIT file

All Sectors

0

250

500

750

1,000

1,250

1,500

1,750

2,000

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$207.8

US$268.7

US$81.2US$112.2

US$315.2

US$248.4

US$274.9

US$85.6

US$129.8

US$269.2

US$309

US$106.6

US$152.7

US$158.4

US$238.9

US$73.4US$113.7

US$394.9

US$308.5

US$270

US$99.6

US$122

US$166.1

US$138.3

US$327.3

US$89.5

US$134.1

US$251.5

US$607.2

US$59

US$46

US$439.6

US$644.6

US$1,140.2

US$765.1

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

H1 2018201720162015201420132012

Num

ber

of d

eals

1,992

281

236

276

272

312

300

2,873

245

1,869

206

2,272

274

231

1,843

2,273

245

338

50

87 80 97

80

2566

27

50 69 49

41

863

165124

4533

1,680

3,3723,159

2,405

2,205

2,087

3,568

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800


Num

ber

of d

eals

Valu

e (U

S$

m)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000


Quarterly M&A activityValue


Quarterly M&A activityDeal Count


Moving average trend lineDeal Value Moving average trend lineDeal Count


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All Sectors


15Mergermarket

League tables

H1 2018 H1 2017 Company Name Value (USD m)

Number of Deals

1 1 Skadden Arps Slate Meagher & Flom 258,561 89

2 10 Wachtell, Lipton, Rosen & Katz 209,159 45

3 2 Cravath, Swaine & Moore 202,983 30

4 5 Simpson Thacher & Bartlett 202,495 70

5 4 Davis Polk & Wardwell 176,911 60

6 7 Sullivan & Cromwell 170,315 62

7 9 Cleary Gottlieb Steen & Hamilton 158,075 26

8 8 Weil Gotshal & Manges 153,001 74

9 6 Latham & Watkins 145,195 127

10 16 White & Case 141,822 47


Number of Deals

1 1 Kirkland & Ellis 127,494 262

2 5 Jones Day 116,014 162

3 4 Goodwin Procter 118,947 152


5 3 DLA Piper 72,937 102


7 15 Cooley 24,487 78

8 8 Morgan Lewis & Bockius 62,796 77

9 11 Ropes & Gray 12,109 76



Number of Deals

1 1 Goldman Sachs & Co 413,225 146

2 2 JPMorgan 294,925 105

3 3 Morgan Stanley 411,979 97

4 6 Citi 160,890 80

5 4 Houlihan Lokey 13,693 79

6 17 Raymond James & Associates 7,867 76

7 12 Barclays 178,512 74

8 8 Credit Suisse 200,465 70

9 5 Evercore 198,392 67

10 10 Jefferies 42,243 67


Number of Deals



3 3 JPMorgan 294,925 105

4 4 Bank of America Merrill Lynch 206,106 62


6 13 Evercore 198,392 67

7 11 Centerview Partners 181,912 21

8 9 Barclays 178,512 74

9 5 Citi 160,890 80

10 6 Lazard 152,298 47

Financial advisors by deal countFinancial advisors by value

The legal advisor league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The financial advisor league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

Legal advisors by value Legal advisors by deal count


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All Sectors


16Mergermarket

Legal advisors by deal count – mid-market (US$5m–US$250m)Legal advisors by value – mid-market (US$5m–US$250m)

League tables


Number of Deals



3 4 Jones Day 2,772 35

4 35 Sidley Austin 2,548 17

5 5 DLA Piper 1,874 24



8 19 Stikeman Elliott 1,723 18

9 7 Cooley 1,722 22



Number of Deals


2 4 Jones Day 2,772 35


4 3 DLA Piper 1,874 24

5 5 Cooley 1,722 22

6 6 Blake, Cassels & Graydon 1,354 22

7 22 O'Melveny & Myers 871 21

8 107 Pillsbury Winthrop Shaw Pittman 1,045 20




Number of Deals


2 5 Sandler O'Neill & Partners 1,732 23


4 8 Piper Jaffray & Co 1,398 18

5 10 Jefferies 2,216 14

6 19 Canaccord Genuity 975 13

7 1 Stifel/KBW 969 13


9 7 JPMorgan 1,906 12

10 21 Robert W. Baird & Co 1,660 12


Number of Deals

1 7 Jefferies 2,216 14




5 5 JPMorgan 1,906 12




9 11 Piper Jaffray & Co 1,398 18

10 1 Evercore 1,398 11

Financial advisors by deal count – mid-market (US$5m–US$250m)Financial advisors by value – mid-market (US$5m–US$250m)

The legal advisor mid-market league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The financial advisor mid-market league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.


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All Sectors


17Mergermarket

The PR advisor mid-market league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

PR advisors by deal count – mid-market (US$5m–US$250m)PR advisors by value – mid-market (US$5m–US$250m)


Number of Deals

1 8 Edelman 1,698 13

2 1 Sard Verbinnen & Co 1,603 9

3 7 Kekst (Publicis/MSLGROUP) 1,097 9

4 4 ICR (Integrated Corporate Relations) 1,047 11

5 5 Brunswick Group 945 6

6 2 Joele Frank Wilkinson Brimmer Katcher 798 8

7 3 Abernathy MacGregor Group (AMO) 723 5

8 6 FTI Consulting 671 9

9 33 Citigate Dewe Rogerson 630 7

10 9 Finsbury Hering Schuppener GPG 614 9


Number of Deals

1 8 Edelman 1,698 13

2 2 ICR (Integrated Corporate Relations) 1,047 11



5 5 FTI Consulting 671 9

6 12 Finsbury Hering Schuppener GPG 614 9

7 3 Joele Frank Wilkinson Brimmer Katcher 798 8

8 36 Citigate Dewe Rogerson 630 7

9 10 Liolios Group 441 7

10 6 Brunswick Group 945 6


Number of Deals



3 2 Joele Frank Wilkinson Brimmer Katcher 152,849 65

4 7 Brunswick Group 93,129 43

5 8 Edelman 44,189 43

6 5 FTI Consulting 82,754 41

7 4 Abernathy MacGregor Group (AMO) 102,743 38

8 6 Finsbury Hering Schuppener GPG 139,893 36

9 12 Owen Blicksilver Public Relations 1,664 29

10 20 Greenbrook Communications 12,578 21


Number of Deals


2 1 Joele Frank Wilkinson Brimmer Katcher 152,849 65

3 5 Finsbury Hering Schuppener GPG 139,893 36

4 8 Abernathy MacGregor Group (AMO) 102,743 38

5 3 Brunswick Group 93,129 43

6 6 FTI Consulting 82,754 41


8 27 Tulchan Communications 46,421 6

9 11 Edelman 44,189 43

10 22 Gasthalter & Co 39,008 18

PR advisors by deal count PR advisors by value

League tables

The PR advisor league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

Mergermarket

mergermarket.com

Deal Drivers Americas All Sectors


Financial Services



mergermarket.com

Financial Services


Yizhu Wang


Financial ServicesOverview

Banks, consumer-oriented financial technology firms and regulatory and compliance support companies may lead Financial Services dealmaking in 2H18, sector advisors said.

Bank M&A picked up in the first half of the year, led by Cincinnati-based regional bank Fifth Third Bancorp’s [NASDAQ: FITB] US$4.6bn bid to acquire Chicago-based MB Financial [NASDAQ: MBFI]. A few smaller institutions also announced deals in 2Q18.

Emmett Daly, a principal in the investment banking group of Sandler O’Neill + Partners, said he expects the consolidation trend to continue driven by Congressional action to raise the asset threshold for banks to be classified as systemically important financial institutions (SIFI). The cap jumped fivefold to US$250bn.

The change expands the universe of potential M&A targets, said Lee Meyerson, a partner at Simpson Thacher. Previously, mid-sized banks tended to be cautious on mergers to avoid stricter regulations, but with the new rule, banks approaching US$50bn in assets, as well as those having over US$100bn, will be more active consolidators in order to reduce operating costs and compete with larger banks, Meyerson said.

Large banks are expected to have more capital on hand to execute deals as the Federal Reserve is expected to be less strict on conducting so-called stress tests, Daly said. “It is going to free up huge amounts of capital

from the big banks, and a fair amount of that is going to M&A,” he said.

Banks with stable retail deposits are especially attractive targets along with institutions located in areas with booming economies, such as South Florida, Meyerson added.

Mergers help established institutions, especially in property & casualty insurance, asset management and banking, spread out costs on larger platforms and afford the best technology, said Meyerson and Elizabeth Cooper, a partner at Simpson Thacher.

In fintech, institutions have shown interest in firms that work in banking, lending, insurance and asset management, as the institutions and technology vendors build stronger ties, sector advisors said.

There has been significant activity among technology and service providers for financial institutions, said Jeff Greenberg, chairman and CEO of Aquiline Capital Partners and Rich Rosenbaum, a partner at Aquiline. Companies with technology expertise in areas like data analytics, robotic process automation and lead generation are attractive across subsectors, Greenberg said.

Activities around consumer-related fintech will remain strong, as established institutions attempt to build better connections with consumers at a lower cost, said Eric Weber, CEO of Freeman & Co., a boutique investment bank that serves financial services and fintech firms.

Regulatory and compliance support services for banks, and technology for legacy asset managers are also attractive, Weber added.

Private equity firms’ large funds will continue to impact M&A including financial services, Daly said. Sandler O’Neill advised on two multi-billion financial sponsor-driven deals in 1H18 — Hellman & Friedman’s US$2.6bn acquisition of Financial Engines, and Silver Lake and P2 Capital Partners’ US$2.9bn acquisition of Blackhawk Network.

From the PE perspective, financial services and fintech used to be regarded as separate areas, but buyers generally tend to think about both these days, Aquiline’s Greenberg said. This follows the path of other industries such as between retail and e-commerce, where people think of technology as another channel of brick-and-mortar operations, he said.

Although the interest is getting stronger, financial institutions buying fintech firms has not become mainstream, the sector advisors said. Both sides are still exploring business models, ways to partner and valuation.

“There is an enthusiasm gap where some fintech firms feel they are changing the world, but it may not be measured in their P&L,” said Weber with Freeman & Co.


mergermarket.com

Financial Services

mailto:yizhu.wang%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


20Mergermarket

Top deals

AnnouncedDate

Status Bidder Company Target Company Vendor Company Deal Value(US$m)

21-May-18 P Fifth Third Bancorp MB Financial Inc 4,557

19-Jan-18 C Lincoln National Corporation Liberty Life Assurance Company of Boston Liberty Mutual Group Inc 3,300

30-Apr-18 C Hellman & Friedman Financial Engines Inc 2,619

29-May-18 P WellCare Health Plans Inc Meridian Health Plan of Michigan Inc; Meridian Health Plan of Illinois Inc; and MeridianRx Caidan Management Company 2,500

31-May-18 P The Bank of Nova Scotia MD Financial Management Inc Canadian Medical Association 1,996

4-Jan-18 C Apollo Global Management; and Varde Partners Inc OneMain Holdings Inc (40.6% stake) Fortress Investment Group 1,428

13-May-18 P Cadence Bancorporation State Bank Financial Corporation 1,372

13-Feb-18 C Kemper Corporation Infinity Property & Casualty Insurance Corporation 1,322

1-Mar-18 P Stone Point Capital Amtrust Financial Services Inc (44.97% stake) 1,301

26-Apr-18 P Two Harbors Investment Corp CYS Investments Inc 1,210

19-Mar-18 P Fidelity National Financial Inc Stewart Information Services Corporation 1,186

22-May-18 P Independent Bank Group Inc Guaranty Bancorp 1,036

18-Jun-18 P BOK Financial Corporation CoBiz Financial Inc 976

26-Feb-18 P CVB Financial Corp Community Bank 868

18-Jan-18 P GWG Holdings Inc The Beneficient Company (82% stake) 801


Top 15 Announced Deals for Half Year Ending 30 June 2018 – North American Targets Financial Services Sector


mergermarket.com

Financial Services






Financial Services

0

30

60

90

120

150

180

210

240

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$26.2

US$19.7

US$6.6

US$14.6

US$38.6

US$12.5

US$12.6

US$10.9

US$xx

US$12.2

US$18.9

US$7.4

US$16.9

US$15.8

US$12.9

US$6.5

US$11.8

US$28.7

US$25.6

US$4.8US$

11.2

US$21.1

US$32.7

US$11.2

US$16.5

US$10

US$18.4US$

26.4

US$15.9

US$13

US$15.9

US$149.6

US$73.9

US$5.4

US$4.8

Num

ber

of d

eals

0

100

200

300

400

500

600

H1 2018201720162015201420132012

1512

2016

30

1412

21

20

19

182

203

26

14

175

31

4

33

2 1

3

9

1

8 5

4

7

13

2

196

7

125

91

254

251

213220

257237

209

270

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



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mergermarket.com

Financial Services


23Mergermarket


League tables


Number of Deals

1 5 Citi 20,050 10

2 1 JPMorgan 17,409 7


4 16 Barclays 15,128 11



7 10 Evercore 6,404 9

8 117 Perella Weinberg Partners 5,564 2

9 19 Deutsche Bank 5,242 4

10 7 Stifel/KBW 5,084 26


Number of Deals


2 2 Stifel/KBW 5,084 26


4 18 Barclays 15,128 11

5 11 Hovde Financial 584 11

6 8 Citi 20,050 10


8 12 FIG Partners 1,883 10


10 13 Evercore 6,404 9


Number of Deals







7 10 Willkie Farr & Gallagher 8,122 8

8 63 Silver, Freedman, Taff & Tiernan 4,808 8

9 26 Goodwin Procter 539 8

10 9 Alston & Bird 1,021 7


Number of Deals




4 2 Willkie Farr & Gallagher 8,122 8




8 13 Debevoise & Plimpton 6,575 3

9 79 Norton Rose Fulbright 6,218 4

10 64 Clifford Chance 5,814 5


The legal advisor league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.

The financial advisor league tables by value and volume have been run from 01/01/2018 to the 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.


mergermarket.com

Financial Services




Mergermarket 24

mergermarket.com

Deal Drivers Americas Industrials, Manufacturing & Engineering



Industrials, Manufacturing & EngineeringOverview

Sam Weisberg

Industrials M&A activity is showing no signs of slowing down in the back half of 2018. Industry experts highlighted industrial technology, telematics and aerospace and defense as focal points for deal activity through the remainder of the year.

Joe Packee, managing director at Robert W. Baird, said he expected industrials dealmaking to remain robust based on the firm’s first half activity. “There’s good visibility for the second half being very strong,” he said. The sector had US$81,4bn in total value for deals in 1H18, according to Mergermarket data.

EBITDA multiples have averaged in the double digits for industrial sellside mandates, said Packee. He noted that private equity firms have been the most active sellers year-to-date. In industrial sale processes run by Baird, Packee said bidder pools have usually been split 50-50 between strategics and financial sponsors.

Fueling deal activity is the recovery in oil prices after they crashed in 2014. Packee said energy-related industrial businesses should benefit from the upswing.

Other subsectors likely to see strong M&A include automation and industrial technology, particularly assets tied to 5G infrastructure, vehicle electrification, data centers and telematics, he said. Baird completed three deals in the industrial automation space in 1H18, selling Keytech to Duravant; Nadella to ICG and VanRiet to Material Handling Systems.

Stimulus measures such as the cash repatriation holiday, tax cuts and increased government spending on Department of Defense programs have outweighed the effect of President Trump’s tariffs on major US trading partners including China. Still, Packee said the situation “is worth monitoring.”

Manan K. Shah, a managing partner at Focus Investment Banking, said in the wake of major deals this year, aerospace and defense should remain active through year-end, especially as defense budget spending keeps rising.

General Dynamics [NYSE:GD] purchased CSRA in April for US$9.7bn. In May, Boeing [NYSE: BA] agreed to acquire KLX [NASDAQ:KLXI] for US$4.2bn.

In the same month, President Trump sent Congress a proposed fiscal year 2019 defense budget request of US$716bn which was passed by the Senate in June and represented a 3.5% increase over 2018.

The Transportation space has also seen robust multiples, in part, due to record-high price rates for moving freight and accelerated demand for last-mile delivery — the final route between a transportation hub and customers, said Chip Grayson of Raymond James. E-retail giants such as Amazon [NASDAQ: AMZN] are seeing increased demand for two-day, one-day, or same-day deliveries, which has spurred deals such as Ryder System’s [NYSE: R] US$120m April purchase of e-commerce fulfillment business MXD Group.

Grayson said most Transportation deals should be valued at more than 10x EBITDA, pointing to GlobalTranz Enterprises’ acquisition by The Jordan Group, a transaction reportedly valued at US$400m or around 13x EBITDA.

One area in transport likely to see a slowdown in M&A activity is international customs brokerage, given President Trump’s recent criticism on NAFTA and decision to place high tariffs on Canadian, European and Mexican steel and aluminum imports, he noted.

XPO Logistics [NYSE:XPO], a voracious consolidator, and C.H. Robinson Worldwide [NASDAQ:CHRW] could be active in M&A in the back half of 2018, Grayson added, though he noted that the latter has historically been picky with acquisitions.

North America’s transport market could also draw international interest from companies such as Denmark-based A.P. Møller – Maersk [CPH:APM] looking to diversify beyond ocean freight into areas such as warehousing, Grayson suggested. Other logical acquirers of US businesses include Germany-based DHL, Switzerland-based Kuehne + Nagel [SWX:KNIN], French e-commerce group Geodis and Japan-based Yusen Logistics, a unit of Nippon Yusen Kabushiki Kaisha [TYO: 9101].

Richard Tekneci

Marlene Star


mergermarket.com


mailto:sam.weisberg%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry

mailto:richard.tekneci%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry

mailto:marlene.star%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


26Mergermarket

Top deals

AnnouncedDate


21-May-18 P Wabtec Corporation GE Transportation General Electric Company 11,100

10-Apr-18 P Tenneco Inc Federal-Mogul Icahn Enterprises 5,400

22-Apr-18 P BC Partners Limited; and Ontario Teachers' Pension Plan GFL Environmental Inc Macquarie Group Limited; Hawthorn Equity Partners; and HPS Investment Partners 5,125

29-Jan-18 P WestRock Company KapStone Paper and Packaging Corporation 4,945

4-Jan-18 P Brookfield Business Partners Westinghouse Electric Company 4,600

25-Jun-18 P Advent International Corporation General Electric Company (Distributed power business) General Electric Company 3,250

7-Mar-18 P Altra Industrial Motion Corp Thomson Industries Inc; Kollmorgen Corporation; Portescap; and Jacobs Vehicle Systems Inc Fortive Corporation 2,961

15-Feb-18 P LyondellBasell Industries NV A. Schulman Inc 2,884

4-May-18 C Novolex The Waddington Group Newell Brands Inc 2,300

21-Jun-18 P Gores Holdings II Inc Verra Mobility Corporation Platinum Equity 2,279

29-Jan-18 C Leonard Green & Partners Pro Mach Inc AEA Investors 2,200

25-Jun-18 C Evergrande Health Industry Group Limited Faraday & Future Inc (45% stake) 2,000

16-Jan-18 P Energizer Holdings Inc Spectrum Brands Inc (Global battery and portable lighting business) Spectrum Brands Inc 2,000

2-Apr-18 C Transcontinental Inc Coveris Holdings SA (North American packaging business) Coveris Holdings SA 1,320

18-Apr-18 P The Weir Group Plc ESCO Corporation 1,285


Top 15 Announced Deals for Half Year Ending 30 June 2018 – North American Targets Industrials, Manufacturing & Engineering Sector


mergermarket.com







0

50

100

150

200

250

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$22.4

US$38.3

US$10.5US$15.4

US$40.6

US$26.3

US$11.7

US$17.6

US$53.5

US$23.7

US$50.5

US$14.8

US$21

US$17.7

US$38.2

US$9.7

US$14.5

US$10.7

US$36.5

US$34.4

US$9.3

US$42.5

US$11.2

US$16.8

US$22.8

US$29.9

US$6.5

US$136.4

US$21.6

US$25.4

US$21.4

US$17.4

US$8.1

US$4.8

US$156.2

0

100

200

300

400

500

600

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800

900

1,000

1,100

H1 2018201720162015201420132012

Num

ber

of d

eals

508

3930

302

3134

50

41

3514126

251

3726

288

40

31

2

1

6

6

7

11

6

8

8

13

71

3

620

124

23

667

448

553 561

340

288

281

813

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


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25

50

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29Mergermarket

League tables


Number of Deals







7 36 Jones Day 19,502 40



10 108 King & Spalding 13,917 4


Number of Deals

1 2 Jones Day 19,502 40






7 18 Paul Hastings 2,225 13


9 28 McGuireWoods 446 13



Number of Deals


2 3 Lincoln International 2,204 23


4 5 Rothschild & Co 10,932 17


6 4 Lazard 27,479 14

7 9 JPMorgan 25,459 14

8 14 William Blair & Company 580 13




Number of Deals



3 10 Lazard 27,479 14

4 13 JPMorgan 25,459 14


6 7 Citi 16,088 10

7 11 HSBC 15,784 4

8 34 Dyal Co 13,984 2


10 63 Barclays 13,250 10


The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials – electronics; automation and products and services; and Manufacturing – other.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials – electronics; automation and products and services; and Manufacturing – other.



mergermarket.com



Energy, Mining, Oil & Gas



mergermarket.com




Energy, Mining, Oil & GasOverview

Chad Watt

Energy deal activity in the second half of 2018 is set to ignite following a slow, smoldering start to the year. Public oil and gas companies in the US are more motivated to sell as they face Wall Street demands to produce free cash flow and focus attention on a single region, said Jeff Gifford, an M&A attorney with Dykema.

“I think it’s going to be quite big,” Gifford said. “You’ve got an overabundance of quality assets out there ready to move.”

While many of those energy assets had been available earlier this year, oil prices only recently rallied, he noted. (West Texas Intermediate Crude has only stayed above the US$70 per barrel threshold since late June.) And indications of a tightening oil supply internationally mean higher prices long-term, Gifford said.

The energy deals in the works are led by the US$10bn divestiture by BHP Billiton [LON: BLT, ASX:BHP] of its US shale holdings. BP American Production Company, a subsidiary of BP Plc [LON:BP], has agreed to acquire 100% of the issued share capital of Petrohawk Energy Corporation, the BHP subsidiary which holds the Eagle Ford, Haynesville, and Permian assets. Meanwhile, MMGJ Hugoton III, LLC, a company owned by Merit Energy Company, has agreed to acquire 100% of the issued share capital of BHP Billiton Petroleum (Arkansas) Inc and 100% of the membership interests in BHP Billiton Petroleum (Fayetteville)

LLC, which hold the Fayetteville assets, for a total consideration of US$0.3bn. In addition, QEP Resources [NYSE: QEP] is looking to sell assets in the Bakken and Uinta formations to focus on its Permian Basin assets, and Pioneer Natural Resources [NYSE: PXD] plans to sell its Eagle Ford holdings in order to also focus on the Permian, the companies have stated.

Neal Bakare, a finance attorney in Houston with Foley Gardere noted that current oil prices have recovered well, but long-term price outlooks remain less certain. A confident four to five-year outlook will be necessary “before you see a true M&A euphoria,” he said.

Charlie Shufeldt, managing director for Dallas-based energy investment firm IOG Capital said PE-backed companies are facing a rationalization of their capital structure: sponsors are not investing additional capital, so portfolio companies need to find an additional partner to supplement the private equity commitments.

Getting creative with deal structures could be one resolution. Shufeldt said IOG aims to complete additional drillco deals this year, which involve IOG providing drilling capital in exchange for a minimum rate of return, rather than equity or debt.

IOG in July executed a sale from a drillco partnership with private operator 1836 Resources, to Sumitomo-backed Summit Discovery Resources. For its part, Summit

Discovery Resources met with 55 operators before executing the deal to buy assets from IOG and 1836, Chief Operating Officer Jamie Benard said.

International buyers may also acquire additional US energy assets this year, said Shufeldt. As an example, Osaka Gas in June signed a deal to acquire natural gas assets in East Texas from Sabine Oil and Gas.

While energy dealmakers wait for public company deals to develop, the long dormant Gulf of Mexico and energy royalty spaces have seen significant transactions and could see more, said Brian Lidsky, senior director with DrillingInfo, an energy industry information service.

Two of the largest deals in the second quarter involved the acquisitions of US Gulf of Mexico assets: privately held Cox Oil and Talos Energy [NYSE: TALO]. Similarly, two of the largest 2Q deals involved public royalty companies as buyers: Osprey Energy Acquisition [NASDAQ: OSPR] and Kimbell Royalty Partners [NYSE: KRP].

Energy royalty companies are yield-focused operations, and have the support of Wall Street, Lidsky said. That reflects the key, unfamiliar driver public investors want from oil and gas companies — producing free cash flow — which will lead to more deal activity.

“Free cash flow — that is a new paradigm among energy executives,” Lidsky said.


mergermarket.com


mailto:chad.watt%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


32Mergermarket

Top deals

AnnouncedDate


30-Apr-18 P Marathon Petroleum Corporation Andeavor Corporation 31,327

3-Jan-18 P Dominion Energy Inc SCANA Corporation 14,250

17-May-18 P Williams Companies Inc Williams Partners (26.71% stake) 10,467

28-Mar-18 C Concho Resources Inc RSP Permian Inc 9,481

23-Apr-18 P CenterPoint Energy Inc Vectren Corporation 8,089

22-Jan-18 C Enbridge Inc Spectra Energy Partners (35.68% stake) 7,347

21-May-18 P NextEra Energy Inc Gulf Power Company Southern Company 5,750

26-Mar-18 C Tallgrass Energy GP Tallgrass Energy Partners (65% stake) 3,823

29-May-18 P Government of Canada Trans Mountain Pipe Line Company Ltd Kinder Morgan Canada Ltd 3,464

6-Jun-18 P Global Infrastructure Partners EnLink Midstream Partners (23.1% stake); Enlink Midstream (63.79% stake); and Enlink Midstream Manager Devon Energy Corporation 3,125

18-Apr-18 C Dover Corporation (Shareholders) Apergy Corporation Dover Corporation 2,868

20-Mar-18 P TPG Pace Energy Holdings Corp EnerVest Ltd (South Texas division) EnerVest Ltd 2,602

26-Apr-18 C EQT Midstream Partners Rice Midstream Partners 2,392

2-Jan-18 C Archrock Inc Archrock Partners (58.59% stake) 1,923

7-Jun-18 P California Water Service Group SJW Group 1,869



mergermarket.com


Top 15 Announced Deals for Half Year Ending 30 June 2018 – North American Targets Energy, Mining, Oil & Gas Sector






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US$34.2

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US$40.2

US$64.3

US$26.5

US$21.4

US$57.6

US$71.8

US$26.8

US$30.4

US$30.3

US$51.7

US$19.1

US$22.2

US$48

US$57.5

US$25.8

US$21.1

US$15.8US$24.4

US$68.5

US$38.5

US$130.8

US$39.1

US$185.4

US$85.1

US$161.6

US$196.9

US$18.3

US$43.2

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US$7.2

US$85.6

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11

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1117

54

55

125

65

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301

160

13

74

70

148

53

57

305

72

61

275

43

143

15

74

13

41

22

72

6

7

116

10

393

271

320

12495

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

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35Mergermarket


League tables


Number of Deals


2 49 Jones Day 48,054 20



5 3 Shearman & Sterling 31,698 5

6 10 Gibson Dunn & Crutcher 31,684 14

7 2 Vinson & Elkins 30,548 24



10 7 Baker Botts 28,210 19


Number of Deals




4 26 Jones Day 48,054 20

5 5 Baker Botts 28,210 19


7 9 Locke Lord 10,453 14


9 16 Bracewell 8,334 13



Number of Deals


2 1 Evercore 28,367 23

3 6 Citi 30,559 21

4 3 RBC Capital Markets 22,983 19

5 20 CIBC World Markets 8,549 15


7 2 JPMorgan 11,886 14

8 13 Scotiabank 8,610 14


10 4 Jefferies 16,349 12


Number of Deals


2 3 Barclays 47,533 10


4 9 Citi 30,559 21

5 6 Evercore 28,367 23




9 12 Jefferies 16,349 12



The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy; Mining; and Utilities – other.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals.The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy; Mining; and Utilities – other.


mergermarket.com



Consumer



mergermarket.com

Consumer



ConsumerOverview

Dayna Fields

Innovation, natural ingredients and better-for-you alternatives continue to drive M&A in the US Consumer sector, which saw US$79.2bn of deals in the first half of the year — but this figure represented a nearly 47% drop in deal value compared to the same period last year. The number of deals also dipped by about 26%, according to Mergermarket data.

The cooled momentum could mean the end of a nearly two-year streak of massive consolidation, said Justine Mannering with Alantra, a global middle market investment banking firm, as large corporate strategics continue to see sluggish growth in their legacy brands.

News headlines have brimmed lately with remarkable billion-dollar buyouts of large independent brands, but few remain. Just in June, TPG invested in cosmetics brand Anastasia Beverly Hills, reportedly valued at US$3bn. The same month, Conagra Brands picked up a collection of frozen, refrigerated and shelf-stable products through its acquisition of Pinnacle Foods for US$10.8bn.

Activity going forward will be concentrated in the middle market and smaller deals, said Mannering, but valuations will remain strong as strategics have shown a willingness to pay a premium for younger brands that have captured the loyalty of Millennials and Gen Z.

“Small brands move very quickly,” Mannering said. “It’s a rapidly changing landscape with a lot of innovation.”

Corporate carve-outs have also fueled M&A activity recently, and Bill Shen with Encore Consumer Capital said he expects to see more throughout 2H18, as strategics — especially those saddled with debt — continue to re-evaluate portfolios and divest underperforming brands. “I think those are exciting opportunities to be looking at,” he said.

Still, what continues to drive consumer M&A more than anything, Shen said, is the influx of cash that needs to be deployed. “We see a continuation of a hot M&A market, and a large M&A bubble — one that everyone expects will deflate or, worse yet, pop at some point; but for now it seems to be holding,” said Shen.

This year, one of the most active segments in consumer M&A is beauty, where the market is seeing bullish bidding from institutional investors that are prepared to contend with strategics for the hottest brands, said Mannering, who is seeing deals average around 3.8x to 4x revenue. Additionally, private equity and venture capital buyers swept up about two-thirds of all beauty targets in 2018, she said.

Financial investors are confident that they can accelerate the growth of these brands and find

strong exit options, said Mannering, noting the strongest valuations are in skincare, followed by cosmetics and then haircare.

Food and beverage is also seeing strong valuations, said Mike Burgmaier with Whipstitch Capital, who also expects an influx of smaller deals on the horizon as consolidation wanes. Big Food will also explore new ways to diversify, such as expanding into pet, he said, noting General Mill’s [NYSE:GIS] February acquisition of Blue Buffalo for nearly US$8bn.

Healthier snacking continues to be a huge target for CPGs, with hot brands going for as much as 3x-5x sales, Burgmaier said. As in beauty, strategics see huge growth potential with smaller companies — some as small as US$30m — and are willing to “pay it forward” by offering next year’s prices, resulting in an extra 1x-2x sales, he said.

Healthier alternatives in ready-to-drink beverages and shatter-proof packaging are driving many beverage deals, of which 29 have been announced so far this year. Last year saw 75 beverage-related deals, according to Mergermarket. Innovation in spirits-based drinks like canned wine, hard seltzers and lighter pre-mixed options are in-demand and seeing median revenue multiples of 5.5x.


mergermarket.com

Consumer

mailto:dayna.fields%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


38Mergermarket

Top 15 Announced Deals for Half Year Ending 30 June 2018 – North American Targets Consumer Sector

Top deals

AnnouncedDate


29-Jan-18 C Keurig Green Mountain Inc Dr Pepper Snapple Group Inc 23,131

27-Jun-18 P ConAgra Brands Inc Pinnacle Foods Inc 10,778

23-Feb-18 C General Mills Inc Blue Buffalo Pet Products Inc The Invus Group 7,935

7-May-18 P Nestle SA Starbucks Corporation (Consumer packaged goods and foodservice distribution business) Starbucks Corporation 7,150

20-Feb-18 P Albertsons Companies Inc Rite Aid Corporation 5,537

16-Jan-18 C Ferrero SpA Nestle SA (US confectionery business) Nestle SA 2,800

19-Jun-18 P Bain Capital Varsity Brands Inc Charlesbank Capital Partners; and Partners Group Holding AG 2,500

5-Feb-18 C EG Group The Kroger Co (Convenience store business) The Kroger Co 2,150

4-Apr-18 C The J.M. Smucker Company Ainsworth Pet Nutrition L Catterton; and Lang Family 1,900

27-Jun-18 P Differential Brands Group Inc Global Brands Group Holding Limited (North American kids and accessories businesses); and Global Brands Group Holding Limited (Majority of West Coast and Canadian fashion businesses)

Global Brands Group Holding Limited 1,380

18-Jun-18 P Vintage Capital Management Rent-A-Center Inc (94.04% stake) 1,269

9-Apr-18 C Marfrig Global Foods SA National Beef Packing Company (51% stake) Leucadia National Corporation 969

26-Mar-18 P Foxconn Interconnect Technology Limited Belkin International Inc Chester J. Pipkin (Private investor) 866

15-May-18 P Tyson Foods Inc American Proteins Inc (Poultry rendering and blending assets) American Proteins Inc 850

1-Feb-18 P The Jordan Company Carlisle FoodService Products Incorporated Carlisle Companies Incorporated 750



mergermarket.com

Consumer





Consumer

0

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H1 2018201720162015201420132012

Valu

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US$7.5

US$10.3

US$14.3

US$25

US$8.9

US$28.7

US$24.6

US$27.4

US$7.7

US$10.6

US$27.9

US$25.9

US$9

US$13.3

US$10.7

US$19.5

US$7.4

US$7.9

US$9

US$30.4

US$8.1

US$7.6

US$10.4

US$8.2

US$23.8

US$84

US$44.9 US$

59.1

US$3.9

US$30.5

US$3.3

US$3.6

US$111.9

US$54.5

US$116.8

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10 9

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5

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39

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41Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer – retail, food and other.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer – retail, food and other.

League tables


Number of Deals




4 3 JPMorgan 34,530 8


6= - AFW LP 23,131 1

6= - BDT & Company 23,131 1

8 35 Rothschild & Co 21,121 4


10 13 Citi 14,459 5


Number of Deals





5 7 JPMorgan 34,530 8

6 23 Deloitte 1,794 8


8 3 Lazard 9,823 7

9 6 Piper Jaffray & Co 433 7



Number of Deals


2 4 Jones Day 23,123 15



5 7 Ropes & Gray 809 10




9 50 Akerman 977 7

10 16 Blake, Cassels & Graydon 151 7


Number of Deals


2 20 White & Case 28,668 3


4 22 McDermott Will & Emery 23,194 5

5 7 Jones Day 23,123 15

6 27 Fried Frank Harris Shriver & Jacobson 18,713 4




10= 6 Cravath, Swaine & Moore 12,047 2

10= 12 Sullivan & Cromwell 12,047 2



mergermarket.com

Consumer





mergermarket.com




Technology, Media & TelecomOverview

Thomas Zadvydas

Convergence between heavy industry and emerging technologies, as well as telecommunications and media, along with private equity’s increasing interest in software, should drive dealmaking in the second half of 2018, sector advisors say.

“I would expect [deals] in the areas of artificial intelligence, big data, Internet of Things, [and] autonomous vehicles … because they intersect so many different industries,” said Robert Townsend, a partner at Morrison & Foerster. Technology deals involving companies in industrial, automotive, retail, pharmaceutical and consumer products will become more commonplace, he noted.

Venture investments and strategic acquisitions that focus on industrial applications for computer visioning, robotics and automation will be something to watch in particular, Townsend and others said.

“There is a lot of talk right now about convergence and the impact of automation and robotics in the workplace,” said Andrew J. Sherman, a partner at Seyfarth Shaw.

Computer visioning techniques using augmented and virtual reality technologies — as well as video in industrial processes and in other spaces like packaging and consumer product distribution — should see increased investment in 2H18, a venture capitalist added.

“It’s a continued area of pioneering in the sector, in industrial automation, connecting the physical world to the digital world,” the VC said.

Consumer products-focused tech players like Amazon [NASDAQ:AMZN] should seek video and computer imaging buys as platforms to branch into areas like security, he said. The investor cited Amazon’s US$1bn acquisition of Ring in late February as an important tech play in this vein.

Meanwhile, media and telecom players should continually converge following the US$60.8bn merger of Sprint [NYSE: S] and T-Mobile [NYSE:T] announced on 17 June, and the US$105.2bn merger between AT&T [NYSE:T] and Time Warner, which closed 14 June after the Justice Department declined to seek an injunction blocking the deal.

“There is a lot of positioning here going on in the United States between the cable companies and companies like Dish,” said Townsend. “I expect to see continued activity for the rest of this year and ahead as the competitive conditions are reshuffled in those intersecting industries.”

These mega transactions drove a spike in Technology, Media & Telecom (TMT) deal value for 1H18. Mergermarket data recorded US$146.7bn in deal value for 674 North American TMT deals in 1H18, compared to US$79.6bn in deal value for 705 TMT deals in 1H17.

The Trump administration continues to scrutinize M&A transactions with foreign buyers believed to undermine US national security, Townsend cautioned. He pointed toward the government’s blockage of Broadcom Ltd.’s [NASDAQ:AVGO] US$117bn hostile bid for Qualcomm [NASDAQ:QCOM] on 12 March as the latest example, explaining that protectionism surrounding foreign access to US companies’ R&D and their knowledge of US technical infrastructure like telecommunications and power grids.

“CIFIUS will continue to be an issue with regard to certain types of deals,” said Kenneth Lefkowitz of Hughes Hubbard & Reed, referencing deals involving foreign companies from nations like China.

The software space, particularly for enterprises serving Financial Services and Healthcare, will attract private equity as safe bets with predictable revenue and steady growth, added Ted Smith, president of Union Square Advisors.

“It continues to be a tremendous magnet for capital. There are so many companies operating in so many different spaces,” Smith said. “SaaS models are continually interesting to these folks.”

Middle market companies will particularly see attention, according to Sherman. Financing conditions will remain healthy, as expected interest rate increases are gradually priced into forthcoming deals, said Smith and others.


mergermarket.com




44Mergermarket

Top 15 Announced Deals for Half Year Ending 30 June 2018 – North American Targets Technology, Media & Telecom Sector

Top deals

AnnouncedDate


29-Apr-18 P T-Mobile USA Inc Sprint Corporation SoftBank Group Corp 60,806

1-Mar-18 C Microchip Technology Incorporated Microsemi Corporation 9,836

31-Jan-18 L Fujifilm Holdings Corporation Xerox Corporation (50.1% stake) 8,600

4-Jun-18 P Microsoft Corporation GitHub Inc Sequoia Capital; Institutional Venture Partners; Andreessen Horowitz; SV Angel; and Thrive Capital

7,500

20-Mar-18 C Salesforce.com Inc MuleSoft Inc New Enterprise Associates; and Lightspeed Venture Partners 5,905

25-Jun-18 P Gray Television Inc Raycom Media Inc 3,547

1-Feb-18 P Valence Media Group Dick Clark Productions Inc; Billboard-Hollywood Reporter Media Group; and Media Rights Capital

3,000

30-Jan-18 C SAP SE Callidus Software Inc 2,276

28-Mar-18 C Plantronics Inc Polycom Inc Siris Capital Group 2,000

24-Apr-18 P Searchlight Capital Partners Mitel Networks Corporation 1,937

15-Feb-18 C Roche Holding AG Flatiron Health Inc (87.4% stake) Stripes Group; First Round Capital; Casdin Capital; GV; IA Ventures; SV Angel; Grape Arbor; Social Capital; and Great Oaks Venture Capital

1,900

21-Jun-18 P Siris Capital Group Web.com Group Inc 1,885

21-May-18 P IHS Markit Ipreo Holdings Blackstone Group; and Goldman Sachs Merchant Banking Division 1,855

21-May-18 C Adobe Systems Incorporated Magento Inc Permira Advisers; and Hillhouse Capital Management Ltd 1,680

11-Jun-18 P Workday Inc Adaptive Insights Inc Cardinal Venture Capital; RBC Venture Partners; Bessemer Venture Partners; Norwest Venture Partners; JMI Equity; Onset Ventures; Monitor Ventures; Salesforce Ventures; and Information Venture Partners

1,556



mergermarket.com







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US$31.6

US$56.5

US$36.5

US$30.7

US$90.7

US$67.3

US$25.7

US$46.1

US$48.5

US$19.6

US$29.8

US$26.4

US$37.3

US$23.4

US$34.8

US$45.8

US$21.8

US$39.1

US$19.5US$28.2

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US$107.9

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4044

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47Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer – software, hardware and semiconductors; Telecommunications – hardware; Internet/e-Commerce; Media; and Telecommunications – carriers.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer – software, hardware and semiconductors; Telecommunications – hardware; Internet/e-Commerce; Media; and Telecommunications – carriers.

League tables


Number of Deals


2 46 Morrison & Foerster 70,853 8





7 18 White & Case 67,752 10





Number of Deals



3 5 Cooley 9,890 46

4 10 O'Melveny & Myers 11,527 40

5 6 Wilson Sonsini Goodrich & Rosati 26,116 36

6 3 DLA Piper 61,250 33

7 14 Fenwick & West 12,935 31

8 12 Jones Day 9,409 29


10 9 Orrick Herrington & Sutcliffe 7,902 22


Number of Deals




4 12 Evercore 116,777 20

5 5 William Blair & Company 6,823 20

6 2 JPMorgan 99,608 16

7 3 Houlihan Lokey 950 16

8 20 Moelis & Company 8,497 13




Number of Deals


2 8 Evercore 116,777 20

3 19 PJT Partners 107,335 3


5 2 JPMorgan 99,608 16

6 13 Barclays 67,543 7



9 36 Raine Group 61,188 3




mergermarket.com






mergermarket.com


https://www.mergermarket.com/info/


Life Sciences & HealthcareOverview

Healthcare M&A activity shows no signs of slowing, with record high multiples, strong lender support and a robust economic environment driving continued dealmaking in the space, sources agreed.

The era of the healthcare mega-merger persists, with tieups like Cigna’s [NYSE: CI] US$67.6bn acquisition of Express Scripts [NASDAQ: ESRX] and Takeda’s [TYO: 4502] US$79.7bn acquisition of Shire [NASDAQ: SHPG] dominating headlines in 1H18. Smaller billion dollar-plus deals like Sanofi’s [EPA: SAN] US$10.9bn acquisition of Bioverativ [NASDAQ: BIVV], KKR’s US$9.4bn acquisition of Envision Healthcare [NYSE: EVHC] and Celgene’s [NASDAQ: CELG] US$8.8bn acquisition of Juno Therapeutics [NASDAQ: JUNO] also demonstrated that Healthcare remains a hot sector for consolidation.

Glenn Hunzinger of PricewaterhouseCoopers’ US Pharma and Life Science Deals Practice said he expects more strategic-driven activity and more megadeals to come this year, with larger players looking to hit growth objectives. Crossborder M&A in pharma and life sciences will continue, with expected inbound interest from Europe, Japan and China, he noted.

Hunzinger also expects strategics to ramp up divestitures and spin-outs to unlock value, which PE buyers are likely to scoop up.

“There’s no doubt that private equity (PE) is playing an increasing role in the [pharma and life sciences] landscape,” Hunzinger said, noting subsectors like generics, animal health, over-the-counter medication and medical devices are drawing increasing PE interest.

Mergermarket previously reported that Novartis AG [VTX: NOVN] is selling its generics portfolio in a process attended by strategic and PE bidders. This news service also reported Eli Lilly-owned [NYSE: LLY] Elanco Animal Health’s process has drawn PE interest.

With an abundance of deployable capital, PE will be instrumental in driving healthcare M&A in 2H18, said Marc Cabrera, co-head of healthcare at Oppenheimer. Richard Cowart, chair of Baker Donelson’s Health/Public Policy Department, said he expects that PE firms will continue to find “a lot of investment opportunity” in the coming months.

Other areas of heavy PE-focused activity include the physician practice management space, expected to remain active in 2H18 with sponsors eager to break into new specialties, said Adam Willis, head of Madison Capital’s healthcare team. Medicare reimbursement challenges are propelling physicians to look to PE funding for scale, he added. Oppenheimer’s Cabrera said the physician services space is still “so

behind from a consolidation standpoint” and sponsors recognize that opportunity.

Additionally, behavioral and home health will see continued sponsor activity moving into the back half of 2018, Cabrera said. In April, Blackstone [NYSE:BX] acquired autism provider The Center for Autism and Related Disorders. Mergermarket reported in March that the asset could fetch in excess of 17x EBITDA.

Strategics will remain the most active acquirers in healthcare services, predicted Madison Capital’s Willis. Subsectors expected to draw strategic suitor interest include health IT and data, Baker Donelson’s Cowart said.

In June, consumer giant Amazon [NASDAQ: AMZN] made its long-awaited entry into healthcare with a proposed US$1bn acquisition of online pharmacy startup PillPack. The potentially disruptive transaction will inform valuation expectations in specialty pharmacy moving forward, Willis said.

Overall, Willis said healthcare remains a seller’s market, with buyers paying “significant entry multiples” for assets marketed off highly adjusted EBITDAs. This dynamic may present an eventual headwind for M&A activity, Willis said.

“The ability to acquire an asset and pay a reasonable price has become very difficult,” he added.

Claire Rychlewski


mergermarket.com


mailto:claire.rychlewski%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


50Mergermarket

Top deals

AnnouncedDate


22-Jan-18 C Sanofi SA Bioverativ Inc 10,887

11-Jun-18 P Kohlberg Kravis Roberts & Co Envision Healthcare Corporation 9,432

22-Jan-18 C Celgene Corporation Juno Therapeutics Inc (90.37% stake) 8,845

9-Apr-18 C Novartis AG AveXis Inc 7,436

7-Jan-18 C Celgene Corporation Impact Biomedicines Inc Medicxi Ventures 2,500

19-Jun-18 P Roche Holding AG Foundation Medicine Inc (43.36% stake) 2,205

14-May-18 C Aurora Cannabis Inc MedReleaf Corp 2,194

21-Apr-18 C Summit Partners; and Optum Inc Sound Inpatient Physicians Inc Fresenius Medical Care AG & Co KGaA 2,150

12-Jun-18 P Platinum Equity LifeScan Inc Johnson & Johnson 2,100

9-Mar-18 C Danaher Corporation Integrated DNA Technologies Inc Summit Partners 2,100

16-May-18 P Zoetis Inc ABAXIS Inc 1,852

23-Apr-18 P TPG Capital; Welsh, Carson, Anderson & Stowe; and Humana Inc Curo Health Services Thomas H. Lee Partners 1,400

10-May-18 C Eli Lilly and Company ARMO BioSciences Inc Kleiner Perkins Caufield & Byers; OrbiMed Advisors; Decheng Capital; and Quan Capital 1,355

28-Jun-18 P Amazon.com Inc PillPack Inc Atlas Venture; Accel; Cherry Tree Investments; Charles River Ventures; Menlo Ventures; Founder Collective; Entree Capital; Slow Ventures; Techstars Ventures; Accomplice; Sherpa Capital; and Astral Capital

1,000

14-Feb-18 P Bristol-Myers Squibb Company Nektar Therapeutics (4.91% stake) 850



mergermarket.com


Top 15 Announced Deals for Half Year Ending 30 June 2018 – North American Targets Life Sciences & Healthcare Sector






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Deal Drivers Americas Life Sciences & Healthcare


53Mergermarket


League tables

Financial advisors by value Financial advisors by deal count


Number of Deals

1

2

3

4

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1

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4 34 Hogan Lovells International 18,936 5



7 5 Freshfields Bruckhaus Deringer 14,108 6



10 40 Debevoise & Plimpton 11,727 3


Number of Deals



3 5 McDermott Will & Emery 334 21


5 3 Jones Day 4,528 17

6 6 Ropes & Gray 1,456 13

7 18 McGuireWoods - 13

8 7 DLA Piper 286 11

9 11 Cooley 10,378 10

10 35 Greenberg Traurig 45 10


Number of Deals


2 1 Evercore 28,367 23

3 6 Citi 30,559 21




7 2 JPMorgan 11,886 14



10 4 Jefferies 16,349 12


Number of Deals


2 3 Barclays 47,533 10


4 9 Citi 30,559 21

5 6 Evercore 28,367 23




9 12 Jefferies 16,349 12


The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.


mergermarket.com



Canada


CA


mergermarket.com

Canada



CanadaOverview

Canadian M&A is expected to stay steady in 2H18 based on a strong economy, lower commodity prices and corporates that continue to actively seek growth opportunities, industry dealmakers said.

In 1H18, there were 266 deals in Canada with a total deal value of US$46.2bn, according to Mergermarket data. Technology, Media & Telecom accounted for 20.7% of the total deal volume, while Energy, Mining, Oil & Gas represented 19.5% and Business Services made up 12.8%.

Going forward, Energy, Financial Services and Consumer are among the sectors to watch.

Acquirers from the US, Australia and China will continue to explore opportunities in the Canadian Energy sector, according to Doug Jenkinson, partner at EY Canada.

At the same time, Canadian companies are also looking for buys in Africa and Asia, and South American countries like Chile and Argentina, said Ken Su, partner at PwC Canada. Commodity prices will strongly affect activity in 2H18, Su said, adding that businesses related to electric vehicles could be popular. He mentioned that deal sizes would most likely range between US$200m and US$1bn.

Financial Services is expected to continue to be a hot spot because some Canadian financial institutions are looking to invest in

user engagement, back office solutions and improve their credit positions, said Jenkinson. Many financial institutions are looking to make minority investments as well. One large deal occurred in June, with PayPal [NASDAQ: PYPL] acquiring Hyperwallet, the San Francisco and Vancouver-based payment platform provider, for US$400m, but most other deal values would fall below US$100m, Su said.

In the Consumer space, retail players are looking to reinvest while technology companies are looking to disrupt retail, said Jenkinson. Large consumer product companies and US venture capital funds are looking at the Canadian market. Stephen Timms, a partner at Borden Ladner Gervais, added that top provinces for deal activity will be Quebec, British Columbia and Ontario.

Traditional foods and beverages will be active, while food and restaurant technology companies will continue to raise large amounts of capital, according to Jenkinson. Timms added that these companies might use the large raise to develop and exit in the near term.

Cannabis is another area to watch, with potential for increasing deal sizes. Currently, valuations range widely, between 8x and 30x EBITDA, with deal sizes around US$20m to US$50m, said Timms. Canadian firms are looking for licensed producers, supply chain and cannabis retailers in Canada and the US, Timms said. Some US institutional investors

are looking as well, added David N. Feldman, a partner at Duane Morris.

The biotech and pharmaceutical subsectors will not see a lot of activity due to high risk and long development timelines, Su said. Still, pharmaceutical companies could seek acquisitions of new drugs, Timms said. Su noted companies focusing on X-ray testing and blood testing could be popular because of increasing demand.

Su also mentioned that some Chinese buyers are looking at elder care facilities. Buyers are likely to be large listed corporations and state-owned companies as well as high-net-worth individuals.

In the manufacturing and automotive space, robotics will be an area to watch, according to Su. Buyouts and technology-focused controlling interest deals are likely to happen, Su said, noting the deal size could range between US$50m to US$100m.

Some uncertainties could put a damper on M&A, such as potential changes to the North American Free Trade Agreement (NAFTA), changes in trade policy and the increasing risk of rising interest rates, they said.

Sirui Shao


mergermarket.com

Canada

mailto:sirui.shao%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


56Mergermarket

Top deals

AnnouncedDate


22-Apr-18 P BC Partners Limited; and Ontario Teachers' Pension Plan GFL Environmental Inc Industrials, Manufacturing & Engineering Macquarie Group Limited; Hawthorn Equity Partners; and HPS Investment Partners

5,125

15-Feb-18 C Choice Properties Real Estate Investment Trust Canadian Real Estate Investment Trust (CREIT) Real Estate 4,589

29-May-18 P Government of Canada Trans Mountain Pipe Line Company Ltd Energy, Mining, Oil & Gas Kinder Morgan Canada Ltd 3,464

9-Jan-18 C Blackstone Property Partners Pure Industrial Real Estate Trust Real Estate 2,863

14-May-18 C Aurora Cannabis Inc MedReleaf Corp Life Sciences & Healthcare 2,194

31-May-18 P The Bank of Nova Scotia MD Financial Management Inc Financial Services Canadian Medical Association 1,996

24-Apr-18 P Searchlight Capital Partners Mitel Networks Corporation Technology, Media & Telecom 1,937

18-Jun-18 P Baytex Energy Corp Raging River Exploration Inc Energy, Mining, Oil & Gas 1,430

9-May-18 P Canada Pension Plan Investment Board Enbridge Inc (North American onshore renewable power assets) (49% stake); and Enbridge Inc (two German offshore wind projects) (49% stake)

Energy, Mining, Oil & Gas Enbridge Inc 1,352

8-May-18 P Quebecor Inc Quebecor Media Inc (18.47% stake) Technology, Media & Telecom Caisse de Depot et Placement du Quebec 1,314

8-Feb-18 P Wolf Midstream Inc Access Pipeline Inc (50% stake); and Stonefell Terminal Energy, Mining, Oil & Gas MEG Energy Corporation 1,285

2-Apr-18 C Canada Pension Plan Investment Board NextEra Energy Partners (Four wind and two solar generation projects in Ontario)

Energy, Mining, Oil & Gas NextEra Energy Partners 1,271

18-Jun-18 P South32 Arizona Mining Inc (83% stake) Energy, Mining, Oil & Gas 1,175

16-Apr-18 C Vermilion Energy Inc Spartan Energy Corp Energy, Mining, Oil & Gas 1,051

1-Feb-18 C Motorola Solutions Inc Avigilon Corporation Industrials, Manufacturing & Engineering 1,033



mergermarket.com

Canada

Top 15 Announced Deals for Half Year Ending 30 June 2018 – Canada All Sectors (Based On Target)





Canada

0

20

40

60

80

100

120

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$24.7

US$20.7

US$12.4

US$8

US$18.4

US$7.6

US$29.4

US$9.6

US$37.3

US$9.9

US$23.2

US$13.3

US$19.6

US$24.2

US$4.6

US$19.1

US$7.4

US$18

US$35.1

US$22.2

US$30.4

US$12.6

US$14.4

US$14.5

US$15.1

US$9.6

US$22.4

US$12.8

US$5.1

US$13.1

US$6.2

US$2.8

US$26.8

US$22.2

US$18.9

0

100

200

300

400

500

600

700

H1 2018201720162015201420132012

Num

ber

of d

eals

24 32

26

301

306

335

27

2237

270

1920

294

246

31

34

197

27

29

252

288

4

3

413

1

7

1

43

7

3

174

8

1

303

303

276

133

103

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Mergermarket Deal Drivers Americas 58Canada

Valu

e (U

S$

bn)

0

2

4

6

8

10

12

14

16

18

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$0.6 US$

N/D

US$0.7US$

1.8US$0.2

US$0.2

US$0.3

US$6.7

US$2.9

US$16.5

US$3.8

US$7.6

US$4.8

Num

ber

of d

eals

0

10

20

30

40

50

60

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

20

6 5N/D

33

22

10

4 5

5552

20

34


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

25

50

75

100

125

150

175

200


Num

ber

of d

eals

Valu

e (U

S$

m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada.


Mergermarket 59

mergermarket.com

Deal Drivers Americas Canada


60Mergermarket


League tables



Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1 2 Osler, Hoskin & Harcourt 40,238 27

2 20 Torys 36,160 24










Number of Deals



3 2 Osler, Hoskin & Harcourt 40,238 27

4 4 McCarthy Tetrault 4,194 26

5 9 Torys 36,160 24

6 11 Gowling WLG 1,761 20

7 5 Davies Ward Phillips & Vineberg 7,082 17


9 14 Bennett Jones 1,276 14



Number of Deals

1 2 BMO Capital Markets 23,741 25

2 3 TD Securities 31,843 20



5 4 Deloitte 4,490 18



8 30 GMP Securities 5,599 11

9 26 Canaccord Genuity 4,640 11

10 19 Citi 28,105 10


Number of Deals


2 2 TD Securities 31,843 20


4 10 Citi 28,105 10

5 8 Lazard 27,532 6

6 14 BMO Capital Markets 23,741 25


8 1 JPMorgan 21,937 7



The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.


mergermarket.com

Canada


West


W


mergermarket.com

West



WestOverview

M&A in the West remains driven by the Technology sector, which accounted for more than a third of all deals by both volume and value in 1H18. The Life Sciences & Healthcare, Business Services and Consumer sectors were also significant in terms of deal value, while Industrials and Chemicals accounted for 15% of deal volume for the region.

Among fast-growing industries in the region is beauty care, where M&A is being driven by both strategic and private equity interest, and the continued success of independent beauty brands, said Steve Davis, head of the Beauty & Personal Care practice at Intrepid Investment Bankers in Los Angeles.

“The success of the independent beauty brand is seen nowhere better than on the West Coast – the heart of social and digital media, direct-to-consumer technology and natural personal care,” said Davis.

In a prime example of this trend, the July cover of Forbes featured Kylie Jenner, the sole owner of Southern California-based Kylie Cosmetics, who has created a US$800m business in two years with her direct-to-consumer model.

“In Q2 2018 alone, West Coast-based companies accounted for the majority of high-profile beauty deals globally, including the acquisitions of Pulp Riot, Milani Cosmetics,

Lime Crime and DERMA E along with significant minority investments in Anastasia, Rodan+Fields and The Honest Company,” noted Davis.

Meanwhile, the top 15 largest deals for the first half of the year in the West included the US$7.2bn sale of Starbucks’s consumer packaged goods business to Nestlé; the US$2.3bn sale of asset management firm Financial Engines to Hellman & Friedman; and the US$2.28bn sale of transportation technology firm Verra Mobility to Gores Holdings II, a special purpose acquisition company (SPAC).

The Starbucks/Nestlé transaction gave Nestlé a greater presence in the US, while Starbucks will use the investment to grow its presence internationally, as Nestlé distributes to about 200 countries. Nestlé will also solidify its core business in coffee, another high-growth category.

Jimmy Dunne III, a senior managing principal with Sandler O’Neill, advised on two of the largest deals in the West for 1H18: the sale of prepaid gift card provider Blackhawk Network Holdings for US$2.9bn, as well as the sale of Financial Engines. Both transactions involved companies with “bright futures” but with a need to develop their technologies, and both sold to private equity buyers.

Some companies should spend time as a private entity to be able to invest in technology, noted Dunne, as “it can be difficult to invest in the future when the focus is on quarter to quarter earnings.”

And while dealmaking on the West Coast does not differ much from the East Coast, A.J. Rohde, a partner at Thoma Bravo, said West Coast buyers do need to be cognizant of employee turnover at a target company, and the fact that employees are accustomed to getting compensated with shares.

Kunal Agarwal, former head of M&A and Investments at Mountain View-based Mozilla, cited similar challenges in talent recruitment and retention in his comments at the Mergermarket Technology Forum in May. He said Mozilla, among other tech companies, are finding artificial intelligence (AI) and other tech talent in cities with less competitive job markets, including Toronto and Berlin.

Looking forward in Tech, deals in infrastructure software and cybersecurity are both likely to be strong areas for continued M&A activity for the second half of the year, noted Rohde.

And while competition for deals continue to come from everywhere on the globe, Rohde said he has seen an uptick in European buyers circling West Coast deals.

Heather West

Chris Metinko


mergermarket.com

West

mailto:heather.west%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry

mailto:chris.metinko%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


63Mergermarket

Top deals

AnnouncedDate


1-Mar-18 C Microchip Technology Incorporated Microsemi Corporation Technology, Media & Telecom 9,836

22-Jan-18 C Celgene Corporation Juno Therapeutics Inc (90.37% stake) Life Sciences & Healthcare 8,845

29-Apr-18 P Prologis Inc DCT Industrial Trust Inc Real Estate 8,060

4-Jun-18 P Microsoft Corporation GitHub Inc Technology, Media & Telecom Sequoia Capital; Institutional Venture Partners; Andreessen Horowitz; SV Angel; and Thrive Capital

7,500

7-May-18 P Nestle SA Starbucks Corporation (Consumer packaged goods and foodservice distribution business)

Consumer Starbucks Corporation 7,150

20-Mar-18 C Salesforce.com Inc MuleSoft Inc Technology, Media & Telecom New Enterprise Associates; and Lightspeed Venture Partners 5,905

9-Apr-18 P Verifone Consortium Verifone Systems Inc Business Services 3,240

16-Apr-18 P Onex Corporation PowerSchool Group (50% stake) Business Services Vista Equity Partners 3,000

16-Jan-18 C Blackhawk Consortium Blackhawk Network Holdings Inc Business Services 2,900

16-Jan-18 C Ferrero SpA Nestle SA (US confectionery business) Consumer Nestle SA 2,800

30-Apr-18 C Hellman & Friedman Financial Engines Inc Financial Services 2,619

7-Jan-18 C Celgene Corporation Impact Biomedicines Inc Life Sciences & Healthcare Medicxi Ventures 2,500

21-Jun-18 P Gores Holdings II Inc Verra Mobility Corporation Industrials, Manufacturing & Engineering Platinum Equity 2,279

30-Jan-18 C SAP SE Callidus Software Inc Technology, Media & Telecom 2,276

21-Apr-18 C Summit Partners; and Optum Inc Sound Inpatient Physicians Inc Life Sciences & Healthcare Fresenius Medical Care AG & Co KGaA 2,150



mergermarket.com

West

Top 15 Announced Deals for Half Year Ending 30 June 2018 – West (Based On Target)





West

0

50

100

150

200

250

300

350

400

450

500

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$48

US$23.8

US$47.7

US$66.9

US$70.3

US$20.9

US$33.7

US$90.2

US$70.8

US$24.9US$29.1

US$68.8

US$68.5

US$27.5

US$39.3

US$36.9

US$53.6

US$27.7

US$38.3

US$58.6

US$26.7

US$72.4

US$22.3

US$35.2

US$41.8

US$283

US$46.9

US$15.9

US$53.5

US$171.2

US$165.3

US$95.5

US$15.3

US$16.9

US$10.3

0

200

400

600

800

1,000

1,200

1,400

1,600

H1 2018201720162015201420132012

Num

ber

of d

eals

72

5669

7376

65

15

4712

53

9

5644

62

80

4

16

14

14

7

2228

22

724808

705

567

896

12

619

479469

4729

96

522

243

557

478546

425

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Mergermarket Deal Drivers Americas 65West

Valu

e (U

S$

bn)

0

5

10

15

20

25

30

35

40

45

50

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$7.5

US$14.3

US$14.5

US$9.9

US$N/D

US$0.5

US$2.6

US$0.3

US$49.1

US$31.5

US$5.8 US$

0.007

US$10.6

Num

ber

of d

eals

0

55

110

165

220

275

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

29

7 N/D5 5

114

40

93

5848

269

66

25


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

50

100

150

200

250

300

350

400

450


Num

ber

of d

eals

Valu

e (U

S$

m)

0

25,000

50,000

75,000

100,000

125,000

150,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West.


Mergermarket 66

mergermarket.com

Deal Drivers Americas West


67Mergermarket


League tables



Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals








8 8 White & Case 71,100 7




Number of Deals




4 6 Cooley 8,379 57

5 7 Jones Day 15,376 44

6 12 O'Melveny & Myers 10,887 44

7 4 DLA Piper 64,086 42

8 8 Wilson Sonsini Goodrich & Rosati 25,756 40

9 20 Fenwick & West 13,865 37



Number of Deals


2 3 JPMorgan 111,316 35




6 4 Evercore 68,253 22


8 15 Moelis & Company 10,978 22


10 7 Jefferies 9,763 21


Number of Deals



3 4 JPMorgan 111,316 35




7 5 Evercore 68,253 22


9 50 Raine Group 61,188 3

10 - Sumitomo Mitsui Financial Group 60,806 2

The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor. States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor.States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.


mergermarket.com

West


Midwest


MW


mergermarket.com

Midwest



MidwestOverview

Rosy. Healthy. Auspicious. Bullish. The superlatives are flowing along with robust deal activity in the Midwest, driven by record levels of cash in the hands of buyers, favorable interest rates and business-friendly policies emanating from Washington, regional experts say.

“In my 25 years I think it’s the best M&A environment I’ve ever seen for sellers,” said Dave D. Dunstan, president and managing director of the Cleveland-based investment bank Western Reserve Partners, a division of Citizens Capital Markets.

Rocky Pontikes, a Chicago-based managing director in the investment banking group of Mesirow Financial, added, “Our outlook for M&A in the Midwest is very rosy and we believe that middle market M&A will remain strong for the foreseeable future.”

The Midwest led all North American regions in 1H deal value (US$263.5bn), largely on the strength of two announced deals accounting for nearly half of the total: Cigna’s proposed purchase of St. Louis-based Express Scripts [NASDAQ: ESRX] for US$67.6bn, and T-Mobile’s [NASDAQ: TMUS] US$60.8bn offer for Overland Park, Kansas-based Sprint [NYSE:S].

To put things in perspective, the region’s H1 deal value outpaced the US$224.9bn the Midwest recorded in all of 2017, according to Mergermarket data.

Not surprisingly, Business Services (Express Scripts) and TMT (Sprint) were the leading sectors in the region based on deal value, while Industrials, Manufacturing & Engineering was at the top in deal volume with 136 announced deals out of a total of 492 in the Midwest. Other active sectors in terms of volume were Business Services (82), Technology, Media & Telecom (65) and Financial Services (55).

If anything is likely to hold back deal activity in the months to come, it will be the relative scarcity of quality companies to buy after nearly eight years of economic expansion and healthy M&A activity, the experts said.

Mesirow is seeing very active, competitive sale processes attracting a high number of bids at strong valuations. Particular interest is coming from cash flow-rich strategic buyers looking to diversify and supplement sluggish organic growth rates.

Meanwhile, Pontikes said that PE firms —collectively sitting on more than US$1trn in cash — are aggressively pursuing platform investments and bolt-on acquisitions to average down implied purchase price. Many financial buyers, however, are struggling to compete due to higher valuations in these competitive auctions, he added.

As buyers, strategics continue to hold the upper hand for the most part, the bankers said, with the cash balances of S&P 500

companies at record levels, and a reduced US corporate tax rate that is contributing to the repatriation of funds from overseas subsidiaries. Pontikes estimated that 80% of transactions that Mesirow sees result in a sale to a strategic.

Private equity (PE) firms are not conceding the field, however. “I think PE can be just as competitive” as strategic buyers, said Kristina Heinze, co-founder and partner with the Chicago-based PE firm ParkerGale, which closed three acquisitions in the first half of the year.

“We are able to win when the founder or management team want to stay on and continue to grow the company, and aren’t looking for a strategic to take over. We provide the opportunity for a seller to take cash off the table but keep the culture and take care of employees,” said Heinze.

Interest in the Midwest from entities outside the region or country also is driving M&A activity, the sources said. Dunstan said about 25% of Western Reserve’s recent transactions have had an international counterpart, with Brazil and China among those represented. “There’s still global demand to buy well-performing US companies,” he said.

Jeff Sheban

Kasia Patel


mergermarket.com

Midwest

mailto:jeff.sheban%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry

mailto:kasia.patel%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


70Mergermarket

Top deals

AnnouncedDate


8-Mar-18 P Cigna Corporation Express Scripts Holding Company Business Services 67,601

29-Apr-18 P T-Mobile USA Inc Sprint Corporation Technology, Media & Telecom SoftBank Group Corp 60,806

26-Mar-18 P Brookfield Property Partners General Growth Properties Inc (66.2% stake) Real Estate 26,705

21-May-18 P Wabtec Corporation GE Transportation Industrials, Manufacturing & Engineering General Electric Company 11,100

23-Apr-18 P CenterPoint Energy Inc Vectren Corporation Energy, Mining, Oil & Gas 8,089

9-Apr-18 C Novartis AG AveXis Inc Life Sciences & Healthcare 7,436

11-Jun-18 P Gebrueder Knauf Verwaltungsgesellschaft KG USG Corporation (89.42% stake) Construction 6,304

11-Jan-18 C SS&C Technologies Holdings Inc DST Systems Inc Business Services 5,483

10-Apr-18 P Tenneco Inc Federal-Mogul Industrials, Manufacturing & Engineering Icahn Enterprises 5,400

29-Jan-18 P WestRock Company KapStone Paper and Packaging Corporation Industrials, Manufacturing & Engineering 4,945

21-May-18 P Fifth Third Bancorp MB Financial Inc Financial Services 4,557

26-Mar-18 C Tallgrass Energy GP Tallgrass Energy Partners (65% stake) Energy, Mining, Oil & Gas 3,823

15-Feb-18 P LyondellBasell Industries NV A. Schulman Inc Industrials, Manufacturing & Engineering 2,884

28-Jun-18 P Synnex Corporation Convergys Corporation Business Services 2,546

29-May-18 P WellCare Health Plans Inc Meridian Health Plan of Michigan Inc; Meridian Health Plan of Illinois Inc; and MeridianRx Financial Services Caidan Management Company 2,500



mergermarket.com

Midwest

Top 15 Announced Deals for Half Year Ending 30 June 2018 – Midwest (Based On Target)





Midwest

0

50

100

150

200

250

300

350

400

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$24.6

US$23.4

US$41.4

US$49.5

US$18.6

US$53.9

US$35.6

US$18.5

US$37.6

US$52.4

US$20.2

US$23.5

US$20.3

US$32.7

US$16.8

US$27.7

US$43.9

US$17.4

US$20.6

US$41.8

US$86.9

US$11

US$11.1

US$11.6

US$140.3

US$11.7

US$9.5

US$6.5

US$253

US$9.2

US$8.7

US$197.6

US$161.9

US$101.5

US$49.4

0

100

200

300

400

500

600

700

800

900

1,000

1,100

H1 2018201720162015201420132012

Num

ber

of d

eals

7

9

2424

139

12

71

8 13

87

127

15

8

48

31

40

3156

57

506

291

3727

394

33

43

273

48

30

17

647

368

619595

292

289

416

309293

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Mergermarket Deal Drivers Americas 72Midwest

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

70

80

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

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s &

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re

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Tech

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edia

& T

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Ener

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g, O

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Con

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s S

ervi

ces

Fina

ncia

l Ser

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s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$10.8 US$

0.7US$7.5

US$27.8

US$N/D

US$1.6 US$

0.1US$5.1

US$17.7

US$9.5

US$38.7

US$79.7

US$64.3

Num

ber

of d

eals

0

20

40

60

80

100

120

140

Agr

icul

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Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

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er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

9 10

40

22

42

N/D

28

82

136

55

39

65


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

25

50

75

100

125

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175

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Valu

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m)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest.


Mergermarket 73

mergermarket.com

Deal Drivers Americas Midwest


74Mergermarket


League tables



Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals

1

2

3

4

5

6

7

8

9

10


Number of Deals




4 3 JPMorgan 92,773 15


6 24 Evercore 85,970 15

7 18 Lazard 85,302 11



10 46 Sumitomo Mitsui Financial Group 60,806 2


Number of Deals









9 11 Paul Weiss Rifkind Wharton & Garrison 84,862 21



Number of Deals


2 2 Jones Day 76,131 55






8 22 Ropes & Gray 4,916 21

9 16 Paul Hastings 2,004 21



Number of Deals




4 8 Barclays 56,421 23


6 11 Jefferies 6,952 20

7 12 Lincoln International 1,518 20




The legal advisor league tables by value and volume have been run from 01/01/2016 to the 12/31/2016, including lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018, excluding lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.


mergermarket.com

Midwest


South


S


mergermarket.com

South



Mark Druskoff

SouthOverview

Passage of the corporate tax reform eliminated uncertainty for business owners and has “unclogged M&A activity,” said Julie Silcock, managing director, Houlilhan Lokey. Combined with an economy that is “going gangbusters,” M&A activity has been brisk, she said.

A goal of tax reform was to enable corporations to have more cash to re-invest in their operations, said Silcock. Although plenty of cash has been put towards dividend increases and stock buybacks, it has also stimulated M&A, she said. Strategic buyers have been particularly active in the last six months, she noted.

Cross-sectional deals could become an industry standard, driven by strategic buyers like Amazon [NYSE: AMZN] and CVS Health [NYSE: CVS], said Silcock. In 2017, Amazon acquired Whole Foods and, on 29 June, the online retailer announced its plan to acquire medication delivery company PillPack. CVS is pursuing the US$67.8bn acquisition of Aetna [NYSE:AET].

Tony Balloon, partner at Alston & Bird in Atlanta, said he agrees that the new law removed tax uncertainty for potential dealmakers, and noted that fintech, healthcare and biotech are “hot.”

Meanwhile, in Texas and surrounding states, business-to-business companies have seen the most transactions followed by information tech, financial services and healthcare, Silcock said.

There is a question of “how long can these good times last?” Silcock said. Business owners are wondering whether waiting another year to go to market with even better numbers might result in “winning the battle, but losing the war” when it comes to the ultimate exit valuation, she said.

In contrast to the previous uncertainty over taxes, which was generally viewed as a positive change, shifting US trade policy is seen as having little potential for upside, said Balloon.

The South has attracted manufacturers from all over the world to set up operations in the region owing to its attractive business climate, including lower taxes and right-to-work laws. The Southeast has an extensive base of manufacturing plants owned by foreign automakers, noted Bird. Texas, too, has been effective in convincing companies to re-locate from other regions of the US, added Silcock.

Acknowledging protectionist trade policy could “potentially” hurt the economy over the long term, companies that are not specifically impacted are not altering M&A plans because of trade and tariff concerns, said Silcock.

Balloon noted that the trade policy risks to the South are not nearly as grave as those being created by Brexit in the UK, where manufacturers such as Airbus [EPA:AIR] and BMW [ETR: BMW] are threatening to leave, but there is“trepidation.” He highlighted Harley-Davidson [NYSE: HOG] as an example of the potential threats.

In June, Harley-Davidson announced it would move some production from plants in the US to locations overseas as Europe raised its tariffs on motorcycles in retaliation to steps taken by the Trump administration, according to media reports.

Yet both Balloon and Silcock agreed that the South’s concentration in manufacturing, as well as agriculture, could make the region more susceptible to the impact of tariffs and trade issues.

Another area to watch going forward is how tax reform will impact the timing decisions for private equity (PE).

Tax reform introduced a new wrinkle for PE related to carried interest, said Silcock. PE firms that hold an investment for less than three years will have to pay tax on their carried interest, which is playing into the calculus of when to sell, she said. PE firms that have seen strong growth in their portfolio companies in recent years are deciding whether it’s worth taking a tax hit so that they can take advantage of the positive market conditions, she said.


mergermarket.com

South

mailto:mark.druskoff%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


77Mergermarket

Top 15 Announced Deals for the Half Year Ending 30 June 2018 – South (Based On Target)

Top deals

AnnouncedDate


30-Apr-18 P Marathon Petroleum Corporation Andeavor Corporation Energy, Mining, Oil & Gas 31,327

29-Jan-18 C Keurig Green Mountain Inc Dr Pepper Snapple Group Inc Consumer 23,131

3-Jan-18 P Dominion Energy Inc SCANA Corporation Energy, Mining, Oil & Gas 14,250

17-May-18 P Williams Companies Inc Williams Partners (26.71% stake) Energy, Mining, Oil & Gas 10,467

12-Feb-18 C General Dynamics Corporation CSRA Inc Business Services 9,679

28-Mar-18 C Concho Resources Inc RSP Permian Inc Energy, Mining, Oil & Gas 9,481

11-Jun-18 P Kohlberg Kravis Roberts & Co Envision Healthcare Corporation Life Sciences & Healthcare 9,432

22-Jan-18 C Enbridge Inc Spectra Energy Partners (35.68% stake) Energy, Mining, Oil & Gas 7,347

13-Feb-18 P WMIH Corp Nationstar Mortgage Holdings Inc Business Services Fortress Investment Group 6,373

21-May-18 P NextEra Energy Inc Gulf Power Company Energy, Mining, Oil & Gas Southern Company 5,750

30-Apr-18 P Marriott Vacations Worldwide Corporation Interval Leisure Group Inc Leisure 5,266

19-Jun-18 P Verscend Technologies Inc Cotiviti Holdings Inc Business Services Advent International Corporation 4,720

25-Jun-18 P Greystar Real Estate Partners Education Realty Trust Inc Real Estate 4,293

1-May-18 P The Boeing Company KLX Inc Defense 4,175

21-May-18 P Blackstone Group LaSalle Hotel Properties Real estate 3,689



mergermarket.com

South



0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

H1 2018201720162015201420132012

Num

ber

of d

eals

86

7483

10085

108

71

79

82

114

72

3215

17 19

16

22

723 7

19

2931

3753

222

16

11

502

1,047

956920860

638686

521503

687625 535

550

84

0

50

100

150

200

250

300

350

400

450

500

550

600

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$49.9

US$65.1

US$64

US$68.5

US$81.4

US$26.3

US$37.7

US$86.2

US$36.7

US$35.7

US$91.4

US$110.4

US$29.8

US$45.3

US$63.2

US$82.2

US$25.3US$33.3

US$71.2

US$78.9

US$27.5US$35.3

US$26.1US$34.7

US$95.7US$

100.3

US$177.6

US$15.6

US$13.6

US$111.7

US$253.2 US$

222

US$130

US$50.7

US$273.4

South

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 79South

Valu

e (U

S$

bn)

0

20

40

60

80

100

120

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Real

Est

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Con

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& E

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g

US$N/D

US$13.8 US$

9.8

US$28

US$12.4

US$4US$

10.3US$8.2

US$2.3

US$4.2

US$31.6

US$111.9

US$23.2

Num

ber

of d

eals

0

30

60

90

120

150

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

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s &

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re

Tran

spor

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elec

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Con

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s S

ervi

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Fina

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l Ser

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s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

23 1911

12

148

72

136

63

111

141

81

33


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

50

100

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0

20,000

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60,000

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100,000

120,000

140,000

160,000

180,000

200,000

220,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South.


Mergermarket 80

mergermarket.com

Deal Drivers Americas South


81Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.

League tables



Number of Deals






6 16 White & Case 54,544 18


8 8 Jones Day 51,216 63




Number of Deals


2 4 Jones Day 51,216 63


4 3 DLA Piper 7,968 45


6 39 McGuireWoods 14,706 37

7 13 Ropes & Gray 5,378 34





Number of Deals


2 2 JPMorgan 102,555 44

3 8 Jefferies 23,267 35


5 9 Citi 46,587 34



8 3 Evercore 53,640 29

9 7 Barclays 79,215 28



Number of Deals


2 2 JPMorgan 102,555 44

3 8 Barclays 79,215 28




7 9 Evercore 53,640 29

8 11 Citi 46,587 34

9 7 Lazard 29,295 16


Mergermarket

mergermarket.com

South Deal Drivers Americas


Mid-Atlantic


MA


mergermarket.com

Mid-Atlantic



Kevin McCaffrey

Mid-AtlanticOverview

The Mid-Atlantic region is expected to see a rise in 2H18 M&A activity driven by consolidation in sectors including Healthcare, particularly among pharmaceutical and healthcare services companies, dealmakers said.

That anticipated uptick comes after the region got off to a slow start in 1H18. The area saw total deal value come in at US$88bn for the first six months of the year, tracking downward from the US$228bn seen overall in FY17, according to Mergermarket data, which defines the region as encompassing New York, New Jersey, and Pennsylvania.

“You’ll see more transformational Healthcare deals,” Thomas Conaghan, partner at McDermott Will & Emery said of his expectations for 2H18, noting that some of the pharmacy benefit manager-insurer megadeals seen in 1H18 could spur more M&A activity going forward within the healthcare supply chain.

“These massive mergers are designed to create lower costs of providers of healthcare services and you’re going to see more consolidation there,” he added, noting that it could also incentivize more transactions among physician practices and hospitals.

One of these massive mergers included Bloomfield, Connecticut-based Cigna’s [NYSE:CI] March announcement that it would acquire the country’s largest national pharmacy benefit manager in Express Scripts [NASDAQ:ESRX] for US$67.6bn.

Conaghan said medical devices is also an area where many companies are in potential deal-making discussions. In fact, medical device giant Stryker [NYSE: SYK] reportedly made a takeover approach to rival Boston Scientific [NYSE: BSX] in June that would have created a company with US$21.5bn in sales. Stryker later denied that it had made the approach.

Regulation, too, will continue to be an impactful driver of activity in this region, Conaghan said, specifically pointing out that if the Affordable Care Act is allowed to “wither on the vine,” its demise could precipitate more healthcare combinations in the Mid-Atlantic.

Richard Jeanneret, Americas vice chair and northeast region managing partner at Ernst & Young, said that he sees large pharma players potentially looking for big transactions in 2H18. “Large pharma hasn’t done a lot of big deals lately; they will likely do that,” he said.

The pharma industry saw one mega-merger in 1H18, with Osaka, Japan-based Takeda [TYO: 4502] announcing its acquisition of Shire [NASDAQ: SHPG] for US$79.7bn in May.

Still, Jeanneret cautioned that pharma deal-making is also likely to come in the form of divestments. “It’s going to be an industry that contracts and expands at the same time,” he said, pointing out that big drugmakers with animal health and consumer business units could look to narrow their remit this year.

“Those companies’ business models were constructed a decade ago,” he said.

Drugmakers appear to be heeding that call to streamline their portfolios. Pfizer [NYSE: PFE] announced on 11 July that it would reorganize its business into three units: consumer healthcare, established medicines, and innovative medicines. The New York-based drugmaker has been reviewing strategic options for the consumer healthcare business since October 2017.

Eli Lilly [NYSE: LLY], too, announced in 2017 that it would evaluate its options for its animal health business, Elanco, with an update expected on its 2Q18 earnings call. This news service previously reported that private equity suitors were circling the process, but that the company may still elect to spin off the business.

Drugmakers looking to increase their presence in rare diseases, along with the further adoption of biosimilars, could also lead to increased M&A activity going forward, Jeanneret noted. “There’s a chance for that market to get significantly larger; pricing pressures often create consolidation opportunities,” he said. “Transactions are driven by capacity and market share.”


mergermarket.com

Mid-Atlantic

mailto:kevin.mccaffrey%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry


84Mergermarket

Top 15 Announced Deals for the Half Year Ending 30 June 2018 – Mid-Atlantic (Based On Target)

Top deals

AnnouncedDate


30-Jan-18 P Blackstone Group; GIC Private Limited; and Canada Pension Plan Investment Board

Thomson Reuters Corporation (Financial & risk business) (55% stake) Business Services Thomson Reuters Corporation 17,000

27-Jun-18 P ConAgra Brands Inc Pinnacle Foods Inc Consumer 10,778

9-May-18 C Wyndham Worldwide Corporation (Shareholders) Wyndham Hotels & Resorts Inc Leisure Wyndham Destinations Inc 6,594

20-Feb-18 P Albertsons Companies Inc Rite Aid Corporation Consumer 5,537

4-Jan-18 P Brookfield Business Partners Westinghouse Electric Company Industrials, Manufacturing & Engineering 4,600

7-May-18 P Blackstone Group Gramercy Property Trust Inc Real Estate 4,422

1-Feb-18 P Valence Media Group Dick Clark Productions Inc; Billboard-Hollywood Reporter Media Group; and Media Rights Capital

Technology, Media & Telecom 3,000

12-Apr-18 C Hearst Communications Inc Fitch Group Inc (20% stake) Business Services Fimalac SA 2,800

26-Apr-18 P EQT Midstream Partners Rice Midstream Partners Energy, Mining, Oil & Gas 2,392

12-Jun-18 P Platinum Equity LifeScan Inc Life Sciences & Healthcare Johnson & Johnson 2,100

4-Apr-18 C The J.M. Smucker Company Ainsworth Pet Nutrition Consumer L Catterton; and Lang Family 1,900

15-Feb-18 C Roche Holding AG Flatiron Health Inc (87.4% stake) Technology, Media & Telecom Stripes Group; First Round Capital; Casdin Capital; GV; IA Ventures; SV Angel; Grape Arbor; Social Capital; and Great Oaks Venture Capital

1,900

21-May-18 P IHS Markit Ipreo Holdings Technology, Media & Telecom Blackstone Group; and Goldman Sachs Merchant Banking Division 1,855

7-Feb-18 P Global Infrastructure Partners NRG Yield Inc (46% stake); and NRG Energy Inc (Renewable energy development and operations platform)

Energy, Mining, Oil & Gas NRG Energy Inc 1,375

01-Mar-18 P Stone Point Capital Amtrust Financial Services Inc (44.97% stake) Financial Services 1,301



mergermarket.com

Mid-Atlantic




Mid-Atlantic

Valu

e (U

S$

bn)

0

50

100

150

200

250

300

350

400

H1 2018201720162015201420132012

US$11.2

US$12.4

US$13.3

US$62.6

US$29

US$8.8

US$13

US$10

US$12.1

US$50.2

US$45.9

US$16.9

US$37.9

US$35.6

US$16.5

US$45.7

US$36.4

US$16.4

US$30.9

US$37.8

US$42.5

US$39.6

US$33.4

US$43.1

US$17.3

US$19.3

US$39.9

US$16.6

US$11.2

US$203.6

US$260.5

US$137.9

US$121.8

US$6.8

US$6.3

0

100

200

300

400

500

600

700

800

900

H1 2018201720162015201420132012

Num

ber

of d

eals

43

30

37

34

243

39

33

247

39

27

205

43

26

208

35

39

3 7

6

145

10

12 11

4

14

15

16

339292295

97

1515 64

232

287252

423465 452

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 86Mid-Atlantic

Valu

e (U

S$

bn)

0

5

10

15

20

25

Agr

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Real

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ate

Con

stru

ctio

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US$N/D

US$N/D

US$6.3

US$6

US$N/D

US$4.4

US$1.6

US$4.2US$

2.8

US$23.1

US$19.4

US$12.2

US$9

Num

ber

of d

eals

0

10

20

30

40

50

60

70

80

90

100

110

Agr

icul

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Def

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Real

Est

ate

Con

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Life

Sci

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s &

Hea

lthca

re

Tran

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n

Leis

ure

Tech

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edia

& T

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Ener

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inin

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Con

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Bus

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s S

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ces

Fina

ncia

l Ser

vice

s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

10 213

32 2

18

51

43

59

31

101

34


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

20

40

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Valu

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0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region.


Mergermarket 87

mergermarket.com

Deal Drivers Americas Mid-Atlantic


88Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a US (Mid-Atlantic) bidder, target or vendor. States: New Jersey, New York, Pennsylvania.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (Mid-Atlantic) bidder, target or vendor. States: New Jersey, New York, Pennsylvania.

League tables



Number of Deals







7 81 Herbert Smith Freehills 46,648 8

8 53 Torys 46,568 4

9 435 Travers Smith 46,229 2

10 25 Jones Day 43,278 65


Number of Deals


2 2 Jones Day 43,278 65




6 15 Ropes & Gray 2,943 35


8 5 DLA Piper 4,340 31




Number of Deals



3 5 Citi 98,675 38

4 3 JPMorgan 81,662 38

5 10 Barclays 82,629 36



8 11 Evercore 77,118 29

9 9 Jefferies 16,758 28



Number of Deals




4 1 Citi 98,675 38

5 8 Barclays 82,629 36

6 6 JPMorgan 81,662 38

7 17 Evercore 77,118 29



10 - Robey Warshaw 46,229 1


mergermarket.com

Mid-Atlantic


New England


NE


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New England



Hana Askren

New EnglandOverview

New England M&A activity has remained robust with a strong macro outlook and few headwinds, said regional dealmakers. They expected the region to keep up the pace through the second half of 2018 and beyond.

In the first half, dominant sectors Life Sciences & Healthcare and Technology, Media & Telecom (TMT) stayed strong, with Life Sciences & Healthcare making up US$16.5bn out of a total US$44bn in deal value, and TMT making up 43 out of 183 total deals. Other sectors such as Consumer and Industrials provided a diverse mix.

Two large deals could signal upcoming activity. Drugstore company CVS Health, headquartered in Woonsocket, Rhode Island, has said it will close its US$67.8bn acquisition of insurer Aetna in the second half of the year. It is hard to say whether that could spur copycat deals, said Jay Remington, Managing Director at Business Capital Exchange, although the healthcare space is expected to remain extremely active.

Ian Pugh, principal in KPMG’s Deal Advisory practice, agreed, calling Healthcare a “white hot” sector in New England deal activity. Boston continues to enjoy high employment numbers and has become “biotech central,” with a concentration of venture capital and private equity firms focused on the sector, added Remington.

GE’s late 2017 announcement that it would restructure and sell divisions could have an impact, as the company recently moved to Boston, said Pugh. GE more recently announced in June that it would focus on aviation, power and renewable energy, and that it planned to separate its healthcare and energy services businesses GE Healthcare and Baker Hughes.

Divestitures from public companies as well as private equity holdings are on the increase, said Remington. Firms are seeing a chance to sell underperforming platform investments or divisions in order to strengthen and focus companies ahead of a potential downturn, he said. Public companies are becoming more willing to let go of non-core segments, he added.

Jarrad Zalkin, Managing Director at TM Capital, agreed. Private equity firms are seeing opportunities for add-ons, often approaching strategics to acquire a non-core segment.

Valuations have increased in all sectors, particularly TMT, a dominant New England sector, all three advisors said. Easy credit markets, dry powder in private equity, and cash on strategics’ balance sheets have driven multiples up to “nosebleed levels,” Pugh said. That does not seem to be deterring activity, they agreed.

In fact, an old category of buyer is transforming into a serious middle market player: the family office. These groups have not traditionally been able to move quickly enough to participate in competitive processes, but have begun to bring in experienced people, said Zalkin. These well-capitalized buyers are proving to be sophisticated and able to buy companies with as much as US$15m to US$25m EBITDA, and can often afford to think longer term than private equity, he said. New England is home to many of these firms and they have “staying power,” agreed Remington.

Some macroeconomic factors could slow deal activity, although dealmakers downplayed the likelihood that this could happen in the near term. Rising interest rates are unlikely to be an obstacle because the market expects them to go up, Zalkin said. Inflation and foreign currency movements are other possible risks, added Pugh, but the largest issue is the potential for a trade war.

There hasn’t been a global trade war in recent memory, so “no one has really thought about macro trade war risk,” Zalkin explained. Remington added that the effects could be a long way out, so market participants are waiting to see what happens.

In the meantime, market dynamics will continue to produce “all the ingredients for a hyperactive M&A environment,” Zalkin said.


mergermarket.com

New England

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91Mergermarket

Top 15 Announced Deals for the Half Year Ending 30 June 2018 – New England (Based On Target)

Top deals

AnnouncedDate


22-Jan-18 C Sanofi SA Bioverativ Inc Life Sciences & Healthcare 10,887

31-Jan-18 L Fujifilm Holdings Corporation Xerox Corporation Technology, Media & Telecom 8,600

23-Feb-18 C General Mills Inc Blue Buffalo Pet Products Inc Consumer The Invus Group 7,935

19-Jan-18 C Lincoln National Corporation Liberty Life Assurance Company of Boston Financial Services Liberty Mutual Group Inc 3,300

25-Jun-18 P Advent International Corporation General Electric Company (Distributed power business) Industrials, Manufacturing & Engineering General Electric Company 3,250

19-Jun-18 P Roche Holding AG Foundation Medicine Inc (43.36% stake) Life Sciences & Healthcare 2,205

26-Apr-18 P Two Harbors Investment Corp CYS Investments Inc Financial Services 1,210

15-Mar-18 P SJW Group Connecticut Water Service Inc Energy, Mining, Oil & Gas 1,009

28-Jun-18 P Amazon.com Inc PillPack Inc Life Sciences & Healthcare Atlas Venture; Accel; Cherry Tree Investments; Charles River Ventures; Menlo Ventures; Founder Collective; Entree Capital; Slow Ventures; Techstars Ventures; Accomplice; Sherpa Capital; and Astral Capital

1,000

11-Jun-18 P Rockwell Automation Inc PTC Inc (8.38% stake) Technology, Media & Telecom 1,000

10-Apr-18 C Altaris Capital Partners Analogic Corporation Industrials, Manufacturing & Engineering 948

25-Apr-18 C McKesson Corporation Medical Specialties Distributors Business Services New Mountain Capital 800

8-May-18 P Cohu Inc Xcerra Corporation Industrials, Manufacturing & Engineering 649

6-Mar-18 C S&P Global Inc Kensho Technologies Inc Technology, Media & Telecom Accel; New Enterprise Associates; General Catalyst Partners; F-Prime Capital Partners; GV; Breyer Capital; Experiment Fund; and Promus Ventures

550

19-Jun-18 P People's United Financial Inc First Connecticut Bancorp Inc Financial Services 517



mergermarket.com

New England




New England

0

20

40

60

80

100

120

140

160

180

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$8.8

US$7.7

US$19US$

9

US$8.2

US$8.4

US$18.7

US$12.4

US$9.5

US$15.9

US$18.1

US$8.6

US$13.4

US$17.2

US$11.2

US$28.5

US$16.4

US$13.2

US$7.1

US$2.6

US$6

US$4.8

US$6.6US$

4.7

US$5.2

US$5.5

US$5.2

US$5.7

US$4.2

US$4.3

US$141.5

US$28.5

US$81.6

0

50

100

150

200

250

300

350

400

450

500

H1 2018201720162015201420132012

Num

ber

of d

eals

88

135

23

142

149

160

218193

238

1211

1316

1413

19

15

19

28

2

23

3

4

25

6

1

134157

97

120

911

23

194

59

99

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 93New England

Valu

e (U

S$

bn)

0

2

4

6

8

10

12

14

16

18

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

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n

Leis

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Tech

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edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

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Bus

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s S

ervi

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Fina

ncia

l Ser

vice

s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$1.9

US$1.6

US$3.7

US$N/D

US$0.4

US$0.6 US$

N/DUS$N/D

US$0.4

US$5.4

US$5.2

US$16.6

US$8.1

Num

ber

of d

eals

0

5

10

15

20

25

30

35

40

45

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

12

6 5

N/DN/D N/D

29 30

7

4

43

30

17


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England. Industry sector is based on the dominant industry of the target.

mergermarket.com


Valu

e (U

S$

m)

0

20

40

60

80

100

120

140


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000


Num

ber

of d

eals


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England.


Mergermarket 94

mergermarket.com

Deal Drivers Americas New England


95Mergermarket


League tables



Number of Deals






6 22 White & Case 24,085 8






Number of Deals





5 5 Ropes & Gray 4,057 22

6 7 Jones Day 12,733 17




10 9 DLA Piper 2,365 14


Number of Deals



3 4 JPMorgan 53,604 20


5 6 Houlihan Lokey 948 14


7 29 Raymond James & Associates 624 13


9 16 Barclays 10,090 12

10 12 Citi 9,537 12


Number of Deals


2 13 Lazard 80,013 6



5 8 JPMorgan 53,604 20



8= - AFW 23,131 1

8= - BDT & Company 23,131 1

10 - Dyal Co 11,100 1

The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a US (New England) bidder, target or vendor.States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (New England) bidder, target or vendor.States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont


mergermarket.com

New England


Latin America


LA


mergermarket.com

Latin America



Latin AmericaOverview

Despite uncertainty caused by presidential elections in Brazil, Colombia and Mexico in 2018, M&A activity in Latin America had a strong start to the year, with total deal value reaching US$46.3bn in 1H18, up 61% on the same period in 2017, according to Mergermarket data (since 2001).

Dealmaking is expected to maintain a steady momentum in 2H18, driven by intra-regional investment into sectors like Technology and Consumer Goods.

BrazilUncertainty surrounding Brazil’s upcoming presidential election, scheduled for October, has made investors cautious but should not impede deal closures, said Luis Gelinski, managing partner at A3 Capital. In July, a poll released by the Datafolha institute revealed an estimated 46% of voters remain undecided.

The Brazilian Real has fallen to roughly BRL 3.8 to US$1 from BRL 3.2 to US$1 in January, and investors see the devaluation as an opportunity to make buys, said Gelinski. Technology, consumer goods, healthcare, and K-12 education are expected to drive dealmaking, while distribution is also expected to consolidate as financial investors look to form companies with large client bases, he added.

Retail will go through a transformation similar to the one that took place in the US, with consumers migrating toward e-commerce, said Northstone Managing Partner Samuel Oliveira.

Investors are taking that into consideration when scouting targets, he added.

MexicoDealmaking in 2H18 is expected to drop off slightly as investors await clarity on president elect Andres Manuel Lopez Obrador’s (AMLO) economic policy, although Mexico’s steady economic growth and low interest rates should continue to drive both domestic and inbound deals, according to Rion M&A Founding Partner Pablo Rion.

While foreign investors remain concerned about parts of AMLO’s election rhetoric, including his pledge to review more than 100 oil and gas contracts awarded since 2015, most are open-minded about the incoming government’s policies and are encouraged by the early signals, particularly the promise to respect the autonomy of Mexico’s central bank, said Deloitte’s Mexico Head of Financial Advisory Guillermo Olguin.

National consumer goods companies are expected to drive domestic M&A deals, while larger conglomerates will seek to expand their footprint in Latin America by seeking acquisitions in Chile, Peru, Colombia and Brazil, Olguin said. Transport and logistics, which saw a number of deals in 1H18, is expected to consolidate further, the executives agreed.

ChileThe pro-market approach of Chile’s new president, Sebastian Piñera, in his second

term, is increasing investor confidence, said Banmerchant Director Rafael Wilhelm. The new administration’s proposal to simplify the tax system, among other modifications, could attract more international investment and M&A activity in 2018, which is expected to increase by at least 15% on the previous year, he said.

Chile’s stable macro-economics, solid institutions, multiple free trade agreements and open economic principles help to further encourage both inbound and domestic consolidation, he added. Energy, mining services, industrial, retail/consumer, and food are among the areas expected to generate more M&A deals until year-end, Wilhelm said.

ColombiaM&A is expected to heat up in 2H18 as Colombia’s new president, Ivan Duque, takes office and the nation’s finances continue to improve, said Lorenzo Garavito, Scotiabank’s head of investment banking in Colombia.

Elected on 17 June, Duque — a former official at the Inter-American Development Bank — has pledged to loosen regulations for businesses and his victory should help unlock several M&A deals that were on standby, Garavito said.

Lower interest rates, increasing exports and growing consumer confidence could help local companies bolster balance sheets and turn to M&A, the executive said, adding that dealmaking will focus mostly on the Infrastructure and Energy sectors.

Dominic Pasteiner

Carlos Martinez

Ana Toral

Bruna Maia


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Latin America

mailto:dominic.pasteiner%40acuris.com?subject=Deal%20Drivers%20Americas%20HY%202018%20Inquiry

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98Mergermarket

Top 15 Announced Deals for the Half Year Ending 30 June 2018 – Latin America (Based On Target)

Top deals

AnnouncedDate


16-Mar-18 P Suzano Papel e Celulose SA Fibria Celulose SA Industrials, Manufacturing & Engineering Banco Nacional de Desenvolvimento Economico e Social; and Votorantim SA

15,326

17-May-18 P Tianqi Lithium Industries Inc Sociedad Quimica y Minera SA (23.77% stake) Industrials, Manufacturing & Engineering Nutrien Ltd 4,066

16-Feb-18 P Enel Chile SA Enel Generación Chile (40.02% stake) Energy, Mining, Oil & Gas 3,266

17-Apr-18 P Enel SpA AES Eletropaulo Energy, Mining, Oil & Gas 3,064

12-Jun-18 C Louis Dreyfus Company BV Biosev SA (78.47% stake) Consumer 2,075

23-Apr-18 P Kroton Educacional SA SOMOS Educacao SA (73.35% stake) Business Services Tarpon Investimentos SA 1,710

24-Apr-18 P Nidec Corporation Whirlpool Corporation (Embraco compressor business) Industrials, Manufacturing & Engineering Whirlpool Corporation 1,080

24-Apr-18 P Raizen Energia SA Shell Compania Argentina De Petroleo SA; and Energia Compania Argentina de Petroleo SA

Energy, Mining, Oil & Gas Royal Dutch Shell Plc 950

3-Jan-18 C Didi Chuxing Technology Co Ltd 99 Taxis Desenvolvimento de Softwares Ltda (70% stake) Technology, Media & Telecom Qualcomm Ventures; Tiger Global Management; Riverwood Capital; Monashees Capital; Urizen Ventures; and StartCaps Ventures

900

26-Jun-18 P Mapfre SA Brasilveiculos Companhia de Seguros SA; Mapfre Vida SA; and Mares – Mapfre Riscos Especiais

Financial Services BB Mapfre Seguros 636

26-Jan-18 C InRetail Peru Corp Quicorp SA Life Sciences & Healthcare 583

14-Jun-18 P Mitsubishi Corporation Anglo American Quellaveco SA (21.9% stake) Energy, Mining, Oil & Gas Anglo American Plc 500

29-Jan-18 P M. Dias Branco SA Ind Com De Alimentos Industria de Produtos Alimentos Piraque SA Consumer 492

9-Apr-18 P Magenta Infraestructura SL OHL Mexico SAB de CV (14.15% stake) Construction 445

25-May-18 P Brookfield Infrastructure Partners Gas Natural SA ESP (41.89% stake) Energy, Mining, Oil & Gas Naturgy 409



mergermarket.com

Latin America




Latin America

0

20

40

60

80

100

120

140

H1 2018201720162015201420132012

Valu

e (U

S$

bn)

US$17.1

US$14.1

US$25.3

US$7.1

US$27.1

US$8.9

US$14

US$10.5

US$14.3

US$28.2

US$29.2

US$13.3

US$13.2

US$41.4

US$13.6

US$16.6

US$38.9

US$16

US$11

US$20

US$22.4

US$30.8

US$20.1

US$15.3

US$6.7

US$12.5

US$6.6

US$5.2

US$20

US$19

US$16.7

US$16.1

US$15.4

US$40.8

0

100

200

300

400

500

600

700

800

H1 2018201720162015201420132012

Num

ber

of d

eals

54

6

25

53

2

2

3

5

530

2724

28

37

38

46

37

39

4531

32

237274 254

289 285 299

1

131

118

20

9

289

334331

248 241

269

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 100Latin America

Valu

e (U

S$

bn)

0

5

10

15

20

25

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

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tatio

n

Leis

ure

Tech

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& T

elec

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Ener

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Con

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Fina

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& E

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US$1.6

US$2.3

US$0.4

US$0.9

US$0.9 US$

0.4US$0.1

US$N/D

US$1.6

US$0.8

US$21.4

US$10.6

US$5.5

Num

ber

of d

eals

0

10

20

30

40

50

Agr

icul

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Def

ense

Real

Est

ate

Con

stru

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n

Life

Sci

ence

s &

Hea

lthca

re

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& T

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Con

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& E

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g

10

4

10

N/D

26

45

22

27

48

21

41

1213


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America. Industry sector is based on the dominant industry of the target.

mergermarket.com


Valu

e (U

S$

m)

0

20

40

60

80

100

120

140

160

180

200

220


Valu

e (U

S$

m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America.


Mergermarket 101

mergermarket.com

Deal Drivers Americas Latin America


102Mergermarket


League tables



Number of Deals

1 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 20,565 17

2 47 Cescon, Barrieu, Flesch & Barreto Advogados 18,640 12


4 25 White & Case 16,276 5

5 5 Tozzini Freire Teixeira e Silva Advogados 16,102 8


7 95 Carey y Cia 7,577 6

8 14 Barbosa, Mussnich & Aragao 6,849 14

9 2 Machado Meyer Sendacz e Opice 4,684 13

10 32 Jones Day 4,607 7


Number of Deals

1 4 Pinheiro Neto Advogados 2,853 21

2 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 20,565 17

3 5 Philippi Prietocarrizosa, Ferrero DU & Uria 1,055 16

4 11 Barbosa, Mussnich & Aragao 6,849 14

5 2 Machado Meyer Sendacz e Opice 4,684 13

6 14 Cescon, Barrieu, Flesch & Barreto Advogados 18,640 12

7 21 Brigard & Urrutia 660 12

8 12 Lefosse Advogados 3,319 11

9 20 DLA Piper 1,086 11

10 3 Baker McKenzie 687 11


Number of Deals

1 1 Banco Itau BBA 21,469 11



4 2 Banco BTG Pactual 6,138 9


6 3 Banco Bradesco BBI 4,487 7

7 15 Citi 2,937 7


9 25 JPMorgan 2,577 6

10 4 Lazard 1,727 6


Number of Deals


2 5 Banco Itau BBA 21,469 11


4 2 Banco BTG Pactual 6,138 9


6 17 Banco Bradesco BBI 4,487 7

7 - Sinolink Securities 4,066 1

8 - Mediobanca 3,266 1

9 4 Citi 2,937 7

10 12 JPMorgan 2,577 6

The financial advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.

The legal advisor league tables by value and volume have been run from 01/01/2018 to 06/30/2018 and include lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.


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Latin America


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Deal Drivers Americas 104Mergermarket

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Criteria Contacts

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.

North America = US & Canada.

Industry section charts, top deals, and graphs are based on the dominant geography being North America or Latin America.

Geographic section charts and graphs are based on the dominant target geography.

Transactions exclude property transactions and restructurings where the ultimate shareholders’ interests are not changed.

Mid-market is defined as US$5m - US$250m.

All data included is correct as of 30 June, 2018.

League Tables correct as of 30 June, 2018

Top deals correct as of 30 June, 2018.

For a full version of the Mergermarket M&A deal database inclusion and league table criteria, go to: www.mergermarket.com/pdf/deal_criteria.pdf

Advertising Opportunities Erik [email protected]+ (1) 212 686 3329

Life Sciences & HealthcareClaire Rychlewski

CanadaSirui Shao

WestHeather West, Chris Metinko

MidwestJeff Sheban, Kasia Patel

SouthMark Druskoff

Mid-AtlanticKevin McCaffrey

New EnglandHana Askren

Latin AmericaDominic Pasteiner, Bruna Maia, Carlos Martinez, Ana Toral

Head of Research Giovanni Amodeo

AmericasLana Vilner

All SectorsTom Cane, Thomas Zadvydas

Financial ServicesYizhu Wang

Industrials, Manufacturing & EngineeringRichard Tekneci, Marlene Star, Sam Weisberg

Energy, Mining, Oil & Gas Chad Watt

ConsumerDayna Fields

Technology, Media & Telecom Thomas Zadvydas


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http://www.mergermarket.com/pdf/deal_criteria.pdf

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In M&A, information is the most valuable currency. Mergermarket reports on deals 6-24 months before they become public knowledge, giving our subscribers a powerful competitive advantage. With the largest network of dedicated M&A journalists and analysts, Mergermarket offers the most comprehensive M&A intelligence service available today. Our reporters are based in 67 locations across the Americas, Europe, Asia-Pacific, the Middle East and Africa.

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