March 2016, Issue 48 - Paul, Weiss
Transcript of March 2016, Issue 48 - Paul, Weiss
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and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of March 2016 unless otherwise specified. “Last 12 Months” data is for the period from March 2015 to February 2016 inclusive. Data from Dealogic and FactSet MergerMetrics may include multiple offers, as applicable, for the same target company. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
February 2016
Last 12 Months
By Number of Deals
February 2016
Last 12 Months
$0 $200 $400 $600 $800Oil & Gas
Professional Services
Healthcare
Computers & Electronics
Utility & Energy
$15.24
$14.36
$10.04
$20.81
$20.47
$0 $200 $400 $600 $800
Real Estate/Property
Oil & Gas
Telecommunications
Computers & Electronics
Healthcare
$362.28
$544.12
$154.29
$152.93
$138.90
0 1,000 2,000 3,000 4,000 5,000
Finance
Construction/Building
Healthcare
Professional Services
Computers & Electronics 246
106
85
37
33
February 2016 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 310.25 117.31 100.50 19.27
No. of deals 2,890 (309) 831 (21)
Avg. value of deals (US$mil) 213.5 91.5 293.0 28.4
Avg. deal multiple1 11.3x 0.4 13.9x 1.3
Strategic Transactions
Volume (US$B) 245.77 86.51 66.68 2.39
No. of deals 2,541 (298) 678 (3)
Avg. value of deals (US$mil) 184.5 77.4 221.5 (13.1)
Avg. deal multiple1 11.2x 0.6 13.1x 0.5
Sponsor-Related Transactions
Volume (US$B) 64.47 30.80 33.82 16.88
No. of deals 349 (11) 153 (18)
Avg. value of deals (US$mil) 532.9 174.6 805.1 292.1
Avg. deal multiple1 11.8x (0.6) 16.3x 3.8
Crossborder Transactions2
Volume (US$B) 158.50 94.95 Inbound
28.65 Outbound
23.88
Inbound
6.74 Outbound
11.82
No. of deals 728 (70) Inbound
130 Outbound
131
Inbound
(11) Outbound
(15)
Avg. value of deals (US$mil) 470.3 295.8 Inbound
421.3 Outbound
487.3
Inbound
84.3 Outbound
219.3
Avg. deal multiple1 10.8x 0.4 Inbound
8.0x Outbound
10.0x
Inbound
(2.7) Outbound
1.4
Figure 1 Figure 2 - Most Active U.S. Target Industries3
March 2016, Issue 48M&A Activity
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 1
A T A G L A N C E
1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.2 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.3 Industries categories are determined and named by Dealogic.
0 1,000 2,000 3,000 4,000 5,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics
1,232
1,205
2,902
449
595
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 2
A T A G L A N C E
Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for February 2016 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for February 2016 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $30 $60 $90 $120 $150
Ireland
Argentina
Canada
United Kingdom
Sweden $9.92
$3.80
$3.60
$1.58
$1.11
0 100 200 300 400 500
Germany andAustralia
India and Italy
France
United Kingdom
Canada
23
25
9
10
4
5 5
$0 $30 $60 $90 $120 $150
Netherlands
China
Israel
United Kingdom
Canada
$65.12
$46.48
$39.76
$36.15
$125.26
0 100 200 300 400 500
Australia
China
Japan
United Kingdom
Canada 430
205
157
78
130
$0 $30 $60 $90 $120 $150
France
Netherlands
Canada
Spain
United Kingdom
$25.88
$63.19
$20.80
$16.73
$17.88
0 100 200 300 400 500
Germany
France
Australia
United Kingdom
Canada 390
295
104
100
99
0 100 200 300 400 500
France
United Kingdom
China
Japan
Canada 30
15
13
11
9
$0 $30 $60 $90 $120 $150
France
India
Japan
China
Canada $15.26
$9.43
$1.82
$0.46
$0.43
4 Each of India and Italy was the country of destination for nine transactions in February 2016.5 Each of Germany and Australia was the country of destination for five transactions in February 2016.
February 2016
Equity Value (US$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
$19,045.4
$5,997.6
$3,180.9
$18,675.7
$5,979.6
$2,472.3
$1,257.0
$19,181.9
$21,315.0
$13,433.6
$6,322.3
$3,352.5
$5,759.2$5,757.0
$6,276.6
$24,302.6
$5,761.5
$7,506.0$7,527.6
$2,441.6
$16,859.9
$2,165.7
July
2015
June
2015
May 20
15
April 2
015
March 2
015
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
$7,020.4
$22,529.2
$0 $20 $40 $60 $80 $100
Kraft Foods Group, Inc. ~ H.J. Heinz Company(March 25, 2015)
Cigna Corporation ~ Anthem, Inc.(June 20, 2015)
Time Warner Cable Inc. ~ Charter Communications, Inc.(May 26, 2015)
E.I. du Pont de Nemours and Company ~ The Dow Chemical Company(December 11, 2015)
EMC Corporation ~ Investment Group(October 12, 2015)
$46.07
$64.30
$61.72
$55.18
$47.23
6
$0 $20 $40 $60 $80 $100
Questar Corporation ~ Dominion Resources, Inc.(February 1, 2016)
Alere, Inc. ~ Abbott Laboratories(February 1, 2016)
Ingram Micro, Inc. ~ Tianjin Tianhai Investment Co., Ltd.(February 17, 2016)
ITC Holdings Corp. ~ Fortis Inc.(February 9, 2016)
The ADT Corporation ~ Apollo Global Management, LLC(February 16, 2016) $6.94
$4.85
$4.37
$6.85
$5.77
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$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
6 Members of the investment group reported by FactSet MergerMetrics are Silver Lake Partners, MSD Partners LP and Dell Inc.
7 Based on the highest target break fees and reverse break fees payable in a particular deal.8 One transaction in February 2016 had a go-shop provision.9 One transaction in February 2016 involving a financial buyer had a go-shop provision.10 No transactions in February 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
$10,000
Average Value of All U.S. Public Mergers with Definitive Agreements
(US$mil)
3.4%
3.7%
5.2%
3.8%4.2%
5.1%
5.8%
3.1%3.5%
4.1%
5.4%
10.5%
4.6%
5.3%5.7%
$6,322.3
$6,955.9
$5,393.2
$6,836.7
$1,257.0
$6,611.0
3.8%3.2%
$8,514.4
$2,370.6
3.6%
4.8%
3.5%
3.4% 3.5%
$3,676.4
May 20
15
June
2015
April 2
015
March 2
015
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
$2,348.0
6%
12%
$5,000
$7,940.2
5.7%
4.6%
$2,441.6
Figure 6 - Average Break Fees as % of Equity Value7
Figure 7 - Average Break Fees as % of Equity Value7
February 2016
Last 12 Months
Target Break Fee for All Mergers 3.2 3.6
February 2016
Last 12 Months
Reverse Break Fee for All Mergers 4.8 5.4
Reverse Break Fee for Mergers Involving Financial Buyers
5.2 7.1
Reverse Break Fee for Mergers Involving Strategic Buyers
4.6 4.8
February 2016
Last 12 Months
% of Mergers with Go-Shops 7.1 11.4
% of Mergers Involving Financial Buyers with Go-Shops
25.0 38.5
% of Mergers Involving Strategic Buyers with Go-Shops
0.0 7.2
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops8
41.0 34.9
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops9
41.0 38.9
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops10
N/A 31.2
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 There were only three partial or all stock transactions in February 2016.13 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)
Other10.9%
53.4%
14.5%
20.7%
78.6%
7.1%
14.3%
0.5%
Last 12 Months
February 2016
February 201612 100.0
Last 12 Months 92.6
February 2016 0.0
Last 12 Months 19.7
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers13
February 2016 0.0
Last 12 Months 15.2
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 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 60 partners and more than 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, hedge funds, 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 (pending); representing Automatic Data Processing in its $5 billion spin-off of ADP Dealer Services, now called CDK Global; advising Encana in its $7.1 billion acquisition of Athlon Energy; advising EXOR in its $6.9 billion unsolicited cash bid for PartnerRe (pending); 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
Angelo Bonvino
Jeanette K. Chan
Yvonne Y. F. 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
Tarun M. Stewart
Steven J. Williams
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 and Alison E. Gurr and law clerks N. Arie Abramov and Edy Glozman contributed to this publication.
A T A G L A N C E
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