Connecticut Mergers & Acquisitions
16
Presentation to Crossroads Connection Regional Network Series April 12, 2011 M&A Trends Venture and P/E Backed Companies 2001-2010
-
Upload
paige-rasid -
Category
Economy & Finance
-
view
679 -
download
1
description
Gary Mathias - Managing Director, Carter, Morse and Mathias presented this at the Crossroads Connection Breakfast - Exits & Trends, in Stamford CT on 4/12/2011. Gary Mathias brings 20+ years of experience as an entrepreneur, investment banker, and private equity investor across diverse industries including healthcare, technology, manufacturing, and business services. He was previously the co-founder and president of a software company (sold to Scansource) and the chief operating officer of a health care distribution company. In addition to his operating experience, Gary was senior vice president at GE Equity, partner of an Atlanta-based investment banking firm, and executive vice president of a private equity firm that acquired and developed a portfolio of healthcare services and information technology companies.Gary currently serves on the board of the Stamford Chapter of the Connecticut Venture Group, has been a judge for the Crossroads Venture Fair since 2000, and has been a board director for Diabetes Support Systems, DJJ Technologies, and Dome Imaging Systems
Transcript of Connecticut Mergers & Acquisitions
Presentation toCrossroads Connection Regional Network Series
April 12, 2011
M&A Trends Venture and P/E Backed Companies
2001-2010
Boutique investment bank founded in 1987
300+ clients served over 25 years
Senior banker orientation focused on building shareholder value
Services include
• Business sales & divestitures
• Buy-side advisory
• Capital raises (venture and private-equity)
• Financial and strategic advisory
2
Highlights
Exits By Companies Owned By Financial Sponsors (< $500 M)
• Exits recovered to their 2007 peak
• MA and NY companies were the most active with exits; CT is a distant 4th
• Major industries experiencing exits are Software, IT and Consumer
• Strategic buyers represent the vast majority of exits
Acquisitions by Private Equity Investors (<$500 M)
• 10% of overall M&A activity of all private companies sold in the region
• Above 2009 bottom but still 40% below 2007 peak in number of transactions
• Major industries are Consumer, Industrial and Business Services
3
Exits By Sponsored Companies
Headquartered In the Region
9576
103
131
174198 203
161
116
197
0
50
100
150
200
250
M&A Trends in the Region (2001-2010)
HQ in the Region Deals < $500M Excluding real estate 1450 reported deals
5
Number of Sponsored Company Exits
Source: Capital IQ
$3.9 $3.9$5.0
$7.9$8.9 $9.0
$11.4
$8.1
$3.5
$11.1
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0In $ Billions
M&A Trends in the Region (2001-2010)
HQ in the Region Deals < $500M Excluding real estate 700 reported deals
6
Total Value of Sponsored Company Exits
Source: Capital IQ
M&A Trends By HQ State (2006-2010)
7
Number of Sponsored Company Exits
Source: Capital IQ
83
71
57
44
81
51
62
5044
68
42 41
29
11
27
15 1712 10
14
0
10
20
30
40
50
60
70
80
90
2006 2007 2008 2009 2010
MA
NY
NJ
CT
NH-VT-ME-RI
Privately held companies Deals < $500M Excluding real estate 840 reported deals
CT Share 7.6% 8.4% 7.5% 8.6% 7.1%
M&A Trends By Industry (2001-2010)
8
Top 10: Number and % Share of Sponsored Company Exits
Source: Capital IQ
291
269
175
142
116
81
79
75
42
39
Software
IT Services
Consumer Products & Svcs
Networking & Equipment
Industrial
Business Products & Svcs
Medical Devices & Equip
Biotechnology
Retailing/Distribution
Healthcare Services
# Tx $ Volume20.3% 14.7%
18.8% 11.9%
12.2% 14.0%
9.9% 10.1%
8.1% 7.3%
5.6% 6.9%
5.5% 5.4%
5.2% 9.4%
2.9% 2.9%
2.7% 4.4%
M&A Trends By Industry & State (2006-2010)
9
Number of Sponsored Company Exits
Source: Capital IQ
HQ in the Region Privately held companies Deals < $500M Excluding real estate
Industry MA NY NJ CT Total
Software 108 42 20 8 178IT Services 51 52 18 5 126Consumer Prod & Svcs 19 56 20 11 106Networking & Equip 39 12 13 6 70Industrial 14 23 13 14 64Business Prod & Svcs 13 21 15 2 51Biotechnology 23 8 14 4 49Medical Devices & Equip 28 10 7 3 48Healthcare Services 9 5 8 4 26Financial Services 4 9 4 8 25Retailing/Distribution 7 4 9 20Hotels/Resorts/Cruise Lines 5 10 4 1 20Telecommunications 1 9 3 13Media & Entertainment 2 8 1 11Total 318 259 144 66 787
M&A Trends By Buyer Type (2001-2010)
10
% of Sponsored Companies Acquired by Strategic Buyers
Source: Capital IQ
75%
80%
85%
90%
95%
100%
HQ in the Region Privately held companies Deals < $500M Excluding real estate 1435 reported deals
Average: 87.5%
Notable CT Deals
11
Exit Year
Initial Invest Target Buyer Seller
Value($M) Industry
2010 2000 CGI Pharmaceuticals Gilead Sciences (NasdaqGS:GILD)
Flagship Ventures; Oxford Bioscience; CT Innovations; CHL Medical
120.0 Pharmaceuticals: drug development
2011 2000 triVIN DealerTrack Hldgs(NasdaqGS:TRAK)
American Capital Equity Management
131.0 Application Software:Vehicle registration and lien and title mgmt svcs
2011 2001 Allegient Systems Bottomline Tech(NasdaqGS:EPAY)
H.I.G. Capital, LLC 51.0 Business Services: Legal dept bill management
2007 2000 454 Life Sciences Roche Holding AG (SWX:ROG)
CuraGen Corporation; Soroas
154.9 Life science tools and services
2007 1998 ArchivesOne Iron Mountain Inc. (NYSE:IRM)
ABRY Partners, LLC; Housatonic Partners
202.0 Info Tech: Record management
2007 2003 Healthy Pet Corporation
VCA Antech Inc. (NasdaqGS:WOOF)
Allied Capital Corporation 152.9 Healthcare Facilities: Veterinary hospitals
2007 2005 SignStorey CBS Corporation (NYSE:CBS)
Next Generation Ventures; Golden Gate Capital; CIC Partners; NY Angels
71.5 Advertising: consumer digital media networks
Source: Capital IQ
Private Equity Investment Activity
In Regional Companies
M&A Trends in the Region (2001-2010)
5743
84
104
139146 151
107
57
86
0
20
40
60
80
100
120
140
160
HQ in the Region Deals < $500M Excluding real estate Exits by sponsored and
non-sponsored companies
13
M&A By Private Equity Buyers
Source: Capital IQ
M&A Trends in the Region (2001-2010)
HQ in the Region Deals < $500M Excluding real estate Exits by sponsored and
non-sponsored companies
14
Private Equity – Exits versus Acquisitions
Source: Capital IQ
Exits Buying
Consumer Products & Svcs 14% 25%Industrial 7% 18%Business Products & Svcs 7% 10%IT Services 12% 7%Retailing/Distribution 3% 6%Software 15% 6%Networking & Equipment 10% 5%Healthcare Services 4% 5%Financial Services 4% 5%Medical Devices & Equip 5% 3%
Share Based on $ Value
Summary
Strategic buyers will continue to drive exit cycles for financial buyers/investors• Limited organic growth• Cash on the balance sheet• Management incentivized to grow through acquisitions
Private equity buyers are more active on both sales and exits
• Fund life cycles putting pressure on managers to invest remaining funds and liquidate holdings
• Easing of senior credit is fueling leveraged transactions
• Private companies in mature industries have limited strategic buyer options
o Industrial, business services, hardware and IT services
15
