June 2016, Issue 51 - Paul Weiss · Avg. deal multiple2 11.3x (1.1) 12.9x 0.5 Strategic...
Transcript of June 2016, Issue 51 - Paul Weiss · Avg. deal multiple2 11.3x (1.1) 12.9x 0.5 Strategic...
Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of June 8, 2016 unless otherwise specified. “Last 12 Months” data is for the period from June 2015 to May 2016 inclusive. Data from Dealogic and FactSet MergerMetrics may include multiple offers, as applicable, for the same target company. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
May 2016
Last 12 Months
By Number of Deals
May 2016
Last 12 Months
$0 $200 $400 $600 $800Real Estate/Property
Utility & Energy
Healthcare
Computers & Electronics
Agribusiness
$19.06
$12.89
$8.84
$65.19
$35.00
$0 $200 $400 $600 $800
Utility & Energy
Real Estate/Property
Oil & Gas
Computers & Electronics
Healthcare
$321.12
$376.61
$149.81
$139.36
$125.27
0 1,000 2,000 3,000 4,000 5,000
Oil & Gas
Finance
Healthcare
Professional Services
Computers & Electronics 206
90
71
47
33
May 2016 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 335.98 93.96 179.43 61.60
No. of deals 2,845 (194) 722 (19)
Avg. value of deals (US$mil) 217.2 62.3 582.6 169.1
Avg. deal multiple2 11.3x (1.1) 12.9x 0.5
Strategic Transactions
Volume (US$B) 267.67 74.24 135.05 36.55
No. of deals 2,514 (167) 578 (27)
Avg. value of deals (US$mil) 191.1 55.4 517.4 118.6
Avg. deal multiple2 11.1x (1.3) 13.3x 0.8
Sponsor-Related Transactions
Volume (US$B) 68.31 19.72 44.38 25.05
No. of.deals 331 (27) 144 8
Avg. value of deals (US$mil) 467.9 113.2 944.3 435.6
Avg. deal multiple2 11.7x (0.5) 12.2x (0.2)
Crossborder Transactions3
Volume (US$B) 129.61 56.58 Inbound
78.58 Outbound
13.07
Inbound
46.54 Outbound
7.76
No. of deals 665 (87) Inbound
127 Outbound
119
Inbound
(5) Outbound
(9)
Avg. value of deals (US$mil) 391.6 199.4 Inbound
1,106.8 Outbound
297.0
Inbound
690.7 Outbound
173.5
Avg. deal multiple2 10.0x (1.2) Inbound
12.8x Outbound
8.0x
Inbound
2.2 Outbound
(5.4)
Figure 11 Figure 2 - Most Active U.S. Target Industries4
June 2016, Issue 51M&A Activity
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 1
A T A G L A N C E
1 For more deal trends, see Annex A.2 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.3 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.4 Industries categories are determined and named by Dealogic.
0 1,000 2,000 3,000 4,000 5,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics
1,202
1,193
2,781
460
573
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 2
A T A G L A N C E
Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for May 2016 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for May 2016 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $30 $60 $90 $120 $150
Italy
Canada
United Kingdom
China
France $6.91
$2.00
$1.41
$0.84
$0.58
$0 $50 $100 $150 $200 $250
China
Israel
United Kingdom
Germany
Canada
$83.72
$67.74
$43.37
$40.82
$106.83
0 100 200 300 400 500
Australia
China
Japan
United Kingdom
Canada 433
217
166
79
161
$0 $30 $60 $90 $120 $150
Germany
Canada
France
Spain
United Kingdom
$17.95
$58.62
$16.80
$14.15
$14.46
0 100 200 300 400 500
France
Germany
Australia
United Kingdom
Canada 356
291
103
96
86
0 100 200 300 400 500
Australia
China
Japan
United Kingdom
Canada 38
15
12
11
6
$0 $50 $100 $150 $200 $250
Finland
China
Luxembourg
Canada
Germany $65.97
$2.83
$1.48
$1.43
$1.28
0 100 200 300 400 500
Italy
Germany
France
United Kingdom
Canada
24
29
7
6
9
May 2016
Equity Value (US$B)
Last 12 Months
Equity Value (US$B)
$0
$5000
$10000
$15000
$20000
$25000
Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers
July
2015
June
2015
May 20
16
April 2
016
March 2
016
Febr
uary
2016
Janu
ary 20
16
Decem
ber 2
015
Novem
ber 2
015
Octobe
r 201
5
Septem
ber 2
015
Augus
t 201
5
$7,146.0
$7,510.7
$6,334.2
$2,170.9
$5,993.1
$3,246.7
$5,764.1
$3,379.1$2,315.0
$3,637.7
$3,287.4
$4,255.0
$22,496.0
$16,868.9
$19,226.6
$5,997.0
$21,398.9
$13,813.6
$18,691.2
$7,036.4
$5,759.5
$7,259.7$8,592.5
$15,890.3
$0 $20 $40 $60 $80 $100
Humana Inc. ~ Aetna Inc.(May 28, 2015)
Cigna Corporation ~ Anthem, Inc.(June 20, 2015)
Monsanto Company ~ Bayer AG(May 18, 2016)
E. I. du Pont de Nemours and Company ~ The Dow Chemical Company(December 11, 2015)
EMC Corporation ~ Investment Group(October 12, 2015)
$34.13
$64.80
$61.72
$53.30
$47.04
5
$0 $20 $40 $60 $80 $100
FEI Company ~ Thermo Fisher Scientific Inc. (May 27, 2016)
Anacor Pharmaceuticals, Inc. ~ Pfizer Inc.(May 14, 2016)
Westar Energy, Inc. ~ Great Plains Energy Incorporated(May 31, 2016)
IMS Health Holdings, Inc. ~ Quintiles Transnational Holdings, Inc.(May 3, 2016)
Monsanto Company ~ Bayer AG(May 18, 2016)
$53.30
$4.50
$4.40
$8.75
$8.50
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)
Figure 5 - Five Largest Announced U.S. Public Mergers
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 3
A T A G L A N C E
5 The investment group included Dell Inc., Silber Lake Partners and MSD Partners LP.
6 Based on the highest target break fees and reverse break fees payable in a particular deal.7 One transaction in May 2016 involving a financial buyer had a reverse break fee.8 Two transactions in May 2016 had a go-shop provision.9 Two transactions in May 2016 involving a financial buyer had a go-shop provision.10 No transactions in May 2016 involving a strategic buyer had a go-shop provision.
M&A Terms
Avg. Reverse Break Fee as % of Equity ValueAvg. Target Break Fee as % of Equity Value
Average Value of All U.S. Public Mergers with Definitive Agreements
May 20
16
June
2015
March 2
016
Febr
uary
2016
Janu
ary 20
16
Decem
ber 2
015
Novem
ber 2
015
Octobe
r 201
5
Septem
ber 2
015
Augus
t 201
5
July
2015
April 2
016
$5,000
(US$mil)
6%
12% $10,000
4.2
3.53.1
3.5
3.4
3.6 3.6
3.83.2
3.2 3.3
3.8
4.6
5.3 5.2
5.0
5.7
4.5
5.8
4.1
5.0 5.0
4.2
5.5
$7,559.6
$7,945.3
$6,334.2
$2,353.7
$6,626.5
$2,359.4
$6,961.8
$3,672.7
$2,315.0
$3,061.6 $3,062.7
$2,130.1
Figure 6 - Average Break Fees as % of Equity Value6
Figure 7 - Average Break Fees as % of Equity Value
May 2016
Last 12 Months
Target Break Fee for All Mergers 3.8 3.5
May 2016
Last 12 Months
Reverse Break Fee for All Mergers 5.5 5.0
Reverse Break Fee for Mergers Involving Financial Buyers7
6.2 6.4
Reverse Break Fee for Mergers Involving Strategic Buyers
5.4 4.7
May 2016
Last 12 Months
% of Mergers with Go-Shops 10.5 10.4
% of Mergers Involving Financial Buyers with Go-Shops
33.3 38.5
% of Mergers Involving Strategic Buyers with Go-Shops
0.0 6.0
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops8
35.0 34.6
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops9
35.0 35.5
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops10
N/A 33.6
Figure 8 - U.S. Public Merger Go-Shop Provisions
Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at $100 million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 4
A T A G L A N C E
11 Due to rounding, percentages may not add up to 100%.12 This data includes both announced transactions for which a definitive merger agreement was reached and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions).
Cash Only
Stock Only
Cash & Stock Only
Choice (Cash Election)
Other
Last 12 Months
May 2016
7.3%
57.5%
14.0%
20.7%
68.4%
15.8%
15.8%
0.5%
May 2016 83.3
Last 12 Months 91.0
May 2016 21.1
Last 12 Months 17.1
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers12
May 2016 13.0
Last 12 Months 16.4
M&A Terms (Continued)
Figure 9 - Form of Consideration as % of U.S. Public Mergers11 Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio
A T A G L A N C E
Our Mergers & Acquisitions PracticeThe Paul, Weiss M&A Group consists of more than 30 partners and over 100 counsel and associates based in New York, Washington, Wilmington, London, Toronto, Tokyo, Hong Kong and Beijing. The firm’s Corporate Department consists of more than 60 partners and over 200 counsel and associates.
Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions.
Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions.
Recent highlights include: advising Time Warner Cable in its $78.7 billion merger with Charter Communications; representing funds affiliated with Apollo Global Management and Protection 1 in its approximately $15 billion agreement to acquire ADT Corporation; advising Automatic Data Processing in its $5 billion spin-off of ADP Dealer Services, now called CDK Global; representing Encana in its $7.1 billion acquisition of Athlon Energy; advising EXOR in its successful $6.9 billion unsolicited cash bid for PartnerRe; representing NorthStar Realty Finance in its $4 billion acquisition of Griffin-American Healthcare REIT II; advising Platform Specialty Products in its $2.3 billion acquisition of Alent; and representing Grupo Salinas in its $2.5 billion sale of Iusacell to AT&T.
Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients’ short- and long-term goals.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 5
Matthew W. Abbott
Edward T. Ackerman
Scott A. Barshay
Angelo Bonvino
Jeanette K. Chan
Ellen N. Ching
Ariel J. Deckelbaum
Ross A. Fieldston
Brian P. Finnegan
Adam M. Givertz
Robert D. Goldbaum
Neil Goldman
Bruce A. Gutenplan
Justin G. Hamill
David K. Lakhdhir
Stephen P. Lamb
John E. Lange
Xiaoyu Greg Liu
Jeffrey D. Marell
Toby S. Myerson
Kelley D. Parker
Marc E. Perlmutter
Carl L. Reisner
Kenneth M. Schneider
Robert B. Schumer
John M. Scott
Judie Ng Shortell
Tarun M. Stewart
Steven J. Williams
Betty Yap
Kaye N. Yoshino
Tong Yu
Taurie M. Zeitzer
This publication is not intended to provide legal advice, and no legal or business decisions should be based on its content. Questions concerning issues addressed in this memorandum should be directed to:
Our M&A Partners
Ariel J. Deckelbaum Partner New York 212-373-3546 [email protected]
Matthew W. Abbott Partner New York 212-373-3402 [email protected]
Angelo Bonvino Partner New York 212-373-3570 [email protected]
Jeffrey D. Marell Partner New York 212-373-3105 [email protected]
Counsel Frances F. Mi, associates Joseph S. Friedman, Yashreeka Z. Huq, Samuel J. Welt, Ryan D. Blicher, David S. Lightstone and Edy Glozman and law clerk N. Arie Abramov contributed to this publication.
A T A G L A N C E
6© 2016 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication may be considered attorney advertising. Past representations are no guarantee of future outcomes.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P P A U L W E I S S . C O M
NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON
Figure 1A - US Deal Volume (US$B)
Figure 2A - Global Deal Volume (US$B)
M&A Activity – 12-Month Trends
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 7
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar 20
16
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Aug 20
15
Strategic TotalSponsor
$0
$50
$100
$150
$200
$250
$300
$46.62 $33.05
$45.63
$26.80
$125.55
$29.33$17.53 $17.21
$34.20
$19.60 $19.33
$44.38
$193.52
$214.24
$153.19
$85.24$111.46
$112.14
$159.93
$70.22
$65.39
$51.54
$98.46
$135.05
$240.14$247.29
$198.82
$112.04
$237.01
$141.47
$177.47
$87.43$99.59
$71.15
$117.79
$179.43
Aug 20
15
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar
201
6
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Strategic TotalSponsor
$0
$100
$200
$300
$400
$500
$600
$91.90
$80.89
$111.79
$63.41
$153.82
$61.90$50.14
$34.63$63.33
$44.06 $48.26$68.31
$370.85
$356.46
$261.17
$206.90
$389.31
$293.86
$363.22
$162.29
$241.24$198.83 $193.51
$267.67
$462.74$437.35
$372.96
$270.31
$543.13
$355.77
$413.36
$196.92
$304.57
$242.89 $241.77
$335.98
A T A G L A N C E
A N N E X
Figure 3A - US Number of Deals
Figure 4A - Global Number of Deals
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 8
A T A G L A N C E
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar 20
16
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Aug 20
15
Strategic TotalSponsor
0
200
400
600
800
1,000
1,200
722 732704 718
675608
575
708 722
633 605574
249213 212
185 196 168 162 176 158 137 135 143
971 945916 903 871
776737
884 880
770740 717
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar 20
16
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Aug 20
15
Strategic TotalSponsor
0500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
3,267 3,364
2,798 2,755 2,714 2,633 2,7382,941
2,789 2,8952,678
2,497
503 480 371 397 383 367 358 375 368 315 357 330
3,770 3,844
3,1693,152 3,097 3,000 3,096
3,3163,157 3,210
3,0352,827
A N N E X
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 9
A T A G L A N C E
Figure 5A - Crossborder Inbound Transactions
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar 20
16
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Aug 2
015
By Volume (US$B) By Number of Deals
$0
$20
$40
$60
$80
$100
100
150
200
250
140
154
138 150
140 143
123
143
143 139 132 125
$43.84 $86.32 $49.12 $51.30 $14.25 $36.94 $42.62 $27.37 $29.40 $24.40 $32.04 $78.58
Figure 6A - Crossborder Outbound Transactions
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar 20
16
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Aug 2
015
By Volume (US$B) By Number of Deals
$0
$20
$40
$60
$80
$100
100
150
200
250
170
207
131150
159 161
127
148 146
109
127118
$11.46 $34.72 $16.35 $15.09 $13.30 $36.34 $13.58 $7.93 $24.26 $15.00 $5.31 $13.07
Figure 7A - Global Cross-Border Transactions
Jul 2
015
Jun 2
015
May 20
16
Apr 20
16
Mar 20
16
Feb
2016
Jan 2
016
Dec 20
15
Nov 20
15
Oct 20
15
Sep 20
15
Aug 2
015
By Volume (US$B) By Number of Deals
$0
$40
$80
$120
$160
$200
100
800
1500
857988
720 785 789 814 763 825 813 767 750660
$112.17 $175.75 $107.23 $103.81 $178.75 $132.10 $118.53 $64.31 $154.00 $84.94 $73.03 $129.61
A N N E X