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Seale & AssociatesCreative Solutions. Trusted Advice.

ANNUAL ISSUE

2018

SUCCES IS ALL ABOUT PERSISTENCE AND DOING THE RIGHT THING FOR THE LONG TERM

BRUCE RAUNER

Seale & Associates

$8.6

$11.4

$8.6

$15.8

$23.2

2018

2017

2016

2015

2014

SUMMARY OF MERGERS & ACQUISITIONS IN MEXICO

Deal Volumein Mexico

# of Transactionsper Month

229

226

210

240

212Deal Volume and Value in Mexico

Annual Transactions(US$ billion)

Seale & AssociatesCreative Solutions. Trusted Advice.Sources: Capital IQ, Mergermarket

During 2018, 212 transactions were announced in Mexico, a decrease of 12% over last year.

Also, total reported deal value was US$8,644 million, representing a decrease in deal value of

24% versus 2017. 2018 can be considered a good year for M&A in Mexico considering the

uncertainty of the business environment in the country generated by the T-MEC negotiations

and the presidential elections.

Mexico M&A Annual 2018

14

20

27

21 20 1921

13 13

18

9

18

Jan18'

Feb18'

Mar18'

Apr18'

May18'

Jun18'

Jul18'

Aug18'

Sep18'

Oct18'

Nov18'

Dec18'

$5.2

$8.9

$9.6

$13.4

$7.3

2018

2017

2016

2015

2014

Deal Volume of Mexican CompaniesAcquiring Abroad

# of Transactions per Month

53

47

49

39

47

Deal Volume and value of Mexican CompaniesAcquiring Abroad

Annual Transactions US$ billion

Sources: Capital IQ, MergermarketSeale & Associates

Creative Solutions. Trusted Advice.Mexico M&A Annual 2018

SUMMARY OF MERGERS & ACQUISITIONS BY MEXICAN COMPANIES ABROAD

Mexican companies completed 47 acquisitions outside of Mexico with a reported value of

US$5,153 million during 2018, representing a decrease in value of 42% and an increase in volume

of 21% compared to 2017. The decrease in value can be explained by the large size of the main

transactions in 2017. The value of the first 2 transactions of 2017 (Arca acquired Southwest

Beverages and Grupo México acquired Florida East Coast) totaled US$4,800 million, almost the

same figure as all the reported value of transactions in 2018.

0

2

4

6

8

10

Jan18'

Feb18'

Mar18'

Apr18'

May18'

Jun18'

Jul18'

Aug18'

Sep18'

Oct18'

Nov18'

Dec18'

Deals in Mexico by Industry

2018 Transactions: 212

Representative International Acquisitions by Mexican Companies

2018 Transactions: 47

Sources: Capital IQ, Mergermarket

SUMMARY OF MERGERS & ACQUISITIONS BY INDUSTRY


31077 10

HEALTH

OTHERS

IT

REAL ESTATE

CONSUMERGOODS

INDUSTRIAL OIL & GAS

MININGENERGY TELECOMMU-NICATIONS

FINANCIAL

11133 1

*


Mining led M&A activity in Mexico during 2018 with 32 announced transactions,

representing 14% of total volume. Meanwhile, the industrial sector and consumer goods

sector led total acquisitions of Mexican companies abroad with 10 transactions announced

each one, out of a total of 47 transactions announced during the year.

*Telecommunications, Oil & Gas, Industrial, IT, Infrastructure and Healthcare

75

32

29

25

19

16

16

Others

Minery

Real Estate

Financial

Energy

Industrial

Consumer Goods

BUREAUCRACY IS THE DEATH OF ALL SOUND WORK

ALBERT EINSTEIN

Seale & Associates

REPRESENTATIVE TRANSACTIONS IN MEXICOBig “More than US$250 million”

Deal Summary Target Buyer

In April 2018, Atlas Renewable Energy, aChilean renewable energy company,announced the acquisition of the SolarGuajiro Project, an energy project in Mexico,for US$1,300 million

In October 2018, GGI Inv SPV, S.A.P.I., anentity created by the same shareholders ofthe target company, announced a tenderoffer of Rassini S.A.B. de C.V., manufacturerof Mexican auto parts, for US$666 million,representing implied enterprise values of 5.2xEBITDA and 0.9x sales

In October 2018, Canada Pension PlanInvestment Board and Ontario Teachers'Pension Plan Board, Canadian investmentfunds, announced the acquisition of a 49%interest in Concessionaire AutopistaGuadalajara-Tepic S.A. de C.V., a subsidiaryof IDEAL, a Mexican infrastructure company,for US$407 million

In October 2018, Fernando Chico Pardo,Mexican investor, announced the acquisitionof the Hyatt Regency hotel in Mexico City,for US$405 million


Creative Solutions. Trusted Advice.

Guajiro Solar Project

Mexico City

Investor: Fernando Chico

Pardo

GGI Inv SPV, S.A.P.I.



In April 2018, Total S.A. and Statoil USA, oilcompanies based in France and the UnitedStates respectively, acquired the remaining60% stake of the Oil Discovery North Platte inthe Gulf of Mexico for US$359 million

In April 2018, Magenta Infraestructura S.L., acompany of the Australian investment fund IFMInvestors that provides infrastructureconstruction services, acquired the 14% stakeof OHL México, S.A.B. de C.V., constructioncompany and operator of roads and airports inMexico, for US$359 million, representingimplied enterprise values of 6.1x EBITDA and13.9x sales

In January 2018, Tenedora CL del Noroeste, S.A. de C.V., a holding company, announced the acquisition of a 49% interest in Casa Ley, S.A. de C.V., operator of self-service stores in Mexico, to Albertsons Companies for US$345 million

In March 2018, China Minsheng InvestmentGroup, a Chinese investment firm, announcedthe acquisition of Old Mutual Mexico andColombia, insurers in Mexico and Colombia, forUS$300 million

In July 2018, Perenco Oil & Gas InternationalLtd., an oil company based in the UnitedKingdom, acquired a 49% interest in theoperations in Mexico of Petrofac, an English oilcompany, for US$274 million.



Oil Discovery “North Platte”

Magenta Infraestructura

Tenedora CL del Noroeste, S.A. de C.V.

Mexico & Colombia

Mexico Operations


REPRESENTATIVE TRANSACTIONS IN MEXICOBig “More than US$250 million”

GGI INV SPV,ANNOUNCED A TENDER OFFER OF

RASSINI

In October 2018, GGI Inv SPV, S.A.P.I., an entity created by the same

shareholders of the target company, announced a tender offer of Rassini

S.A.B. de C.V., manufacturer of Mexican auto parts, for US$666 millionRassini produces and sells

suspension components and

fully integrated brake discs for

light commercial vehicles

The persons controlling

directly GGI are also

holders, jointly, directly and

indirectly, of a 45.73% of

Rassini's capital stock.

In December 2018, Rassini

announced that they

reached an acceptance of

97.84% over 100% of the

shares representing its

capital stock subject to the

OPA to be delisted from the

stock market.The transaction represented implied enterprise

values of 5.2x EBITDA and 0.9x sales

8 PLANTS IN MEXICO, USA AND BRAZIL

FOUNDED IN 1984

CLIENTS: GM, NISSAN, FORD, AMONG OTHES




BIG REPRESENTATIVE TRANSACTION IN MEXICO

BUYER TARGET

Sources: Capital IQ, Mergermarket, ForbesMexico M&A Annual 2018


TENEDORA CL DEL NOROESTE S.A. DE C.V., ANNOUNCED THE

ACQUISITION OF THE REMAINING 49% PARTICIPATION OFCASA LEY S.A. DE C.V.

In January 2018, Tenedora CL del Noroeste, S.A. de C.V., a

holding company, announced the acquisition of the remaining

49% participation in Casa Ley, S.A. de C.V., operator of retail

stores in Mexico, to Albertsons Companies for US$345 million

BUYER

Casa Ley is a network of more

than 200 supermarkets

Albertsons acquired a

participation in Casa Ley

by acquiring Safeway in

2015

Casa Ley belonged to

Albertsons that operates in

35 states of the United

States

With this operation, the Ley family once again owns

100% of the business

TARGET

BASED IN CULIACAN, SINALOA

FOUNDED IN 1954

+22,000 EMPLOYEES

Sources: Capital IQ, Mergermarket, AlbertsonsSeale & Associates





PERENCOANNOUNCED THE ACQUISITION OF

OF THE 49% OF THE MEXICO OPERATIONS OF PETROFAC

In July 2018, Perenco Oil & Gas International Ltd., an oil

company based in the United Kingdom, acquired a 49% interest

in the Petrofac operations in Mexico, an English oil company,

for US$274 million

BUYER

BASED IN EDINBURGH

Petrofac designs, builds,

operates and maintains oil and

gas facilities

The acquisition includes the

Santuario, Magallanes and

Arenque oil fields

Petrofac estimates that it

will assume a charge for

lower asset value of about

US$100 million

Perenco will initially pay US$200 million: US$30

million at the time of signing and US$170 million

when the operation is completed

FOUNDED IN 1976

+6,000 EMPLOYEES

TARGET

BASED IN JERSEY, UK

FOUNDED IN 1981

+12,750 EMPLOYEES

Sources: Capital IQ, Mergermarket, Comunicado de prensaSeale & Associates


Mexico Operations

Mexico Operations




In September 2018, Wal-Mart Inc.,supermarkets based in the United States,announced the acquisition of DeliveryTechnologies SpA, which operates under thename of Cornershop and based in Chile andMexico, for US$225 million

In November 2018, an undisclosed buyerannounced the acquisition of 52% stake of JWMarriot Hotel, Mexico City to Host Hotels &Resort, Inc., US investment trust, for US$183million

In July 2018, Mexichem, S.A.B. de C.V.,Mexican petrochemical company, announcedthe acquisition of the remaining 44.09% stakeof Petroquímica Mexicana de Vinilo S.A. deC.V., a joint venture between Mexichem andPemex, for US$179 million

In August 2018, an undisclosed buyerannounced the acquisition of the Hilton Hotelin Los Cabos, for US $ 167 million



UndisclosedBuyer

Mexico City

PetroquímicaMexicana de Vinilo

S.A. de C.V.

Undisclosed Buyer

Los Cabos


REPRESENTATIVE TRANSACTIONS IN MEXICOMedium “Less than US$250 million”


In August 2018, Falabella, Chilean departmentstore, announced the acquisition of LinioGroup, Mexican e-commerce platform, forUS$138 million, representing an impliedenterprise value of 1.0x sales

In October 2018, BK Partners, a Mexicaninvestment firm, announced the acquisition ofCiudad Mayakoba, a tourist complex in theRiviera Maya, to OHL for US$111 million

In July 2018, Ituran Location and Control Ltd.,an Israeli location services company,announced the acquisition of an 81.3% stake inRoad Track Holding S.L., a Mexican telematicscompany, for US$92 million

In May 2018, an undisclosed buyer announcedthe acquisition of 37 industrial properties inMexico for US$87.4 million



UndisclosedBuyer

37 Industrial Properties


REPRESENTATIVE TRANSACTIONS IN MEXICOMedium “Less than US$250 million”

MEDIUM REPRESENTATIVE TRANSACTION IN MEXICO

WAL-MART INC.,ANNOUNCED THE ACQUISITON OF

DELIVERY TECHNOLOGIES (CORNERSHOP)

On September 13, 2018, Wal-Mart Inc., supermarkets based in

the United States, announced the acquisition of Delivery

Technologies SpA, which operates under the name of

Cornershop and based in Chile and Mexico, for US$225 million.

BUYER

+11,000 STORES

Cornershop has presence in

several cities in Mexico and

Chile

Wal-Mart Inc. plans to

subsequently sell

Cornershop to Walmex

Cornershop was founded by

two Chileans, Daniel

Undurraga and Juan Pablo

Cuevas, and by a Swede,

Oskar Hjertonsson

Cornershop is a home delivery platform for

supermarkets, pharmacies and specialty stores

FOUNDED IN 1962

+2.3 MILLION EMPLOYEES

TARGET

INITIAL FUNDING OF US$1 MILLION IN 2015

FOUNDED IN 2015

+1,000 DELIVERERS

Sources: Capital IQ, Mergermarket, El ComercioSeale & Associates


FALABELLA,ANNOUNCED THE ACQUISITION OF

LINIO

In August 2018, Falabella, Chilean department store, announced

the acquisition of Linio Group, Mexican e-commerce platform,

for US$138 million

BUYER

OPERATIONS IN 8 COUNTRIES

Falabella is the largest retail

operator in Chile

After the acquisition, Linio

maintained his brand and

his work teams

To finance the operation

and accelerate other

investments, Falabella

proposed a capital increase

of US $ 800 million

The transaction represented an implied Enterprise

value of 1.0x sales

FOUNDED IN 2012

+387 EMPLOYEES

TARGET

OPERATIONS IN 7 COUNTRIES

FOUNDED IN1889

+101,566 EMPLOYEES

Sources: Capital IQ, El economista, emolSeale & Associates


MEDIUM REPRESENTATIVE TRANSACTION IN MEXICO


In March 2018, Alpek, Indorama Venturesand Far Eastern Investment, headquartered inMexico, Thailand and Bermuda, respectively,have formed a joint venture called CorpusChristi Polymers, to acquire assets of M & GUSA Corp. for a value of US$1,125 million

In October 2018, Finaccess Capital, aMexican investment fund, announced theacquisition of a 75% stake in RestaurantBrands New Zealand Ltd., a New Zealandrestaurant operator, for US$578 million andrepresenting implied enterprise values of13.3x EBITDA and 1.6x sales

In October 2018, Alsea, Mexican restaurantoperator, announced the acquisition of GrupoVips, Spanish restaurant chain, for US$567million

In September 2018, Arca Continental,through its subsidiary AC Bebidas, a Mexicannon-alcoholic beverage company, announcedthe additional acquisition of a 38.52% stake inCorporación Lindley SA, Peruvian non-alcoholic beverage company, for US$507million, representing implied enterprise valuesof 11.0x EBITDA and 2.2x sales

REPRESENTATIVE INTERNATIONAL ACQUISITIONS BY MEXICAN COMPANIESBig “More than US$250 million”



Assets



In January 2018, Vista Oil & Gas, S.A.B. deC.V., a Mexican oil company, announced theacquisition of a 58.88% interest in PetroleraEntre Lomas, S.A., an oil company based inArgentina and a subsidiary of Pampa Energía,S.A., for US$399 million

In February 2018, Alpek, a Mexicanpetrochemical company, announced theacquisition of 2 petrochemical plants in Brazilfrom Petrobras, for US$385 million

In February 2018, Vista Oil & Gas, S.A.B. deC.V., a Mexican oil company, announced theacquisition of Apco Oil & Gas International,Inc., an oil company in South America, forUS$349 million



2 PetrochemicalPlants


REPRESENTATIVE INTERNATIONAL ACQUISITIONS BY MEXICAN COMPANIESBig “Less than US$250 million”

BIG REPRESENTATIVE INTERNATIONAL TRANSACTION

ALSEA,ANNOUNCED THE ACQUISITION OF

GRUPO VIPS

On October 31, Alsea, Mexican restaurant operator, through its

subsidiary Food Service Project announced the acquisition of

Grupo Vips, Spanish restaurant chain, for US$567 million

BUYER

+3,500 RESTAURANTS

The new group will have 10

brands: Hollywood Fosters,

Vips, Domino's Pizza, Starbucks,

Ginos, Burger King, TGI Fridays,

LAVACA, Cañas y Tapas, and

Wagamama

With the acquisition, it

becomes the main operator

of restaurants in the Iberian

Peninsula

The new group will have

approximate sales of more

than EUR$800 million

The Arango family, current owner of Grupo Vips,

would reinvest EUR$75 million in the Food Service

Project, thus obtaining an 8% stake

PRESENCE IN LATAM AND SPAIN

SALES EUR$2,000 MILLION

TARGET

+450 RESTAURANTS

FOUNDED IN 1964

Sources: Capital IQ, Mergermarket, El ComercioSeale & Associates


SALES EUR$415 MILLION


ARCA CONTINENTAL,ANNOUNCED THE ACQUISITION OF

CORPORACIÓN LINDLEY

In September 2018, Arca Continental, through its subsidiary AC Bebidas,

a Mexican non-alcoholic beverage company, announced the additional

acquisition of a 38.52% stake in Corporación Lindley S.A., Peruvian non-

alcoholic beverage company, for US$507 million.

BUYER

BASED IN MONTERREY

Arca Continental, is the second

largest Coca-Cola bottler in

Latin America and the third

largest globally

With the acquisition, Arca

Continental has a 99.78%

stake in Lindley's voting

shares

Arca Continental paid

US$2.26 per share

The transaction represented implied enterprise

values of 11.0x EBITDA and 2.2x sales

3º BIGGEST BOTTLER

+63,108 EMPLOYEES

TARGET

BASED IN LIMA

FOUNDED IN 1910

Sources: Capital IQ, Arca ContinentalSeale & Associates


BIGGEST BOTTLER IN PERU


BIG REPRESENTATIVE INTERNATIONAL TRANSACTION

SEALE & ASSOCIATES REPRESENTATIVE TRANSACTION

BUYER

The partnership was through the educational platform

Merited of Discovery Americas, which invests in

schools throughout the Mexican Republic

Merited currently has 3,200

students spread across 3

schools and continues to

seek investment

opportunities

TARGET

Source: Own information Seale & AssociatesCreative Solutions. Trusted Advice.

In June 2018, Seale & Associates, Inc. acted as exclusive financial

advisor to the shareholders of Anne Sullivan, in their partnership

with Discovery Americas

"We are pleased to have advised the shareholders of Anne Sullivan in such

an important transaction for their company and their heritage, we wish

them the best of luck in their partnership with Discovery Americas"

-Sergio García,

Managing Director of

Seale & Associates

Discovery Americas is a

private equity fund with

15 years of experience

The Anne Sullivan School was

founded more than 35 years ago

and is characterized by offering a

comprehensive program 360

degrees of transversal application

with a high degree of

personalization



DISCOVERY AMERICAS,ANNOUNCED ITS PARTNERSHIP WITH

ANNE SULLIVAN, THROUGH ITS EDUCATIONAL PLATFORM MERITED

BUYER

Valence is a leading aerospace product finishing

company and Aerospace Systems and Structures is a

California specialty aerospace investment frim

Triumph Group, Inc is

headquartered in Berwyn

Pennsylvania, and it is

focused on the aeronautical

industry

TARGET


Triumph Group, Inc.

Metal Finishing Business

Seale & Associates, Inc. acted as exclusive financial advisor to Triumph

Group, Inc. on the sale of its Triumph Processing, Inc. metal finishing

business to Valence Surface Technologies LLC, and the sale of its Triumph

Structures aerospace structures machining business to Aerospace Systems

and Structures LLC

Aerospace Systems and

Structures LLC

“We are pleased to have had the opportunity to advise Triumph Group on

aother important transaction. We appreciate the trust that Triumph

continues to place in our organization to successfully execute on their

transformational plan”

-Robert Whitney,


Seale & Associates

Triumph Processing and

Triumph Structures

together employ 400

people in Los Angeles

area



VALENCE AND AEROSPACE SYSTEMS,

ANNOUNCED THE ACQUISITION OF2 BUSINESSES OF TRIUMPH

GROUP


BUYER

Fulflex Inc., with operations in

Vermont and Luxembourg, is a

leading branded manufacturer of

thin-gauge specialty elastics for

many industries

Garware Bestretch Limited is a premier global

manufacturer of latex and latex-free elastic rubber

products, headquartered in Pune, India and exports its

products to over 75 countries

Fulflex, Inc. belonged to

The Moore Company, a

diverse group of

manufacturing companies

with leading names in

healthcare disposables,

apparel, sporting goods, and

marine products

TARGET


Seale & Associates, Inc. acted as exclusive financial advisor to Garflex,

Inc., on the acquisition of Fulflex, Inc.

Garflex, Inc.

“We are pleased to have had the opportunity to assist Garflex on this

strategic cross-border acquisition”

-Robert Whitney,


Seale & Associates

Garflex, Inc. is owned by

the same shareholders of

Garware Bestretch

Limited



GARFLEX, INC.,ANNOUNCED THE ACQUISITION OF

FULFLEX, INC.


DEALS IN MEXICO DURING 2018



Telecommunications IT Oil & Gas

Mining Real Estate Others Financial EnergyConsumer

GoodsIndustrial Infrastructure Healthcare

Seale & AssociatesCreative Solutions. Trusted Advice.Mexico M&A Annual 2018






INTERNATIONAL ACQUISITIONS BY MEXICAN COMPANIES DURING 2018






REPRESENTATIVE MEXICO ENGAGEMENTS

Washington, D.C. | Miami | Mexico City | Monterrey

to

Holding company of

merged its

beverage division

with

has merged with

a business of

has partnered with

a subsidiary of

has sold

to

its sanitaryware business

and

a business unit of

has sold

Cosmocel Química

to

intelectiva®

has acquired

KFC Costa Rica

from

sold

to

sold

to

Grupo Galaz, S.A de C.V.

dealers of

has partnered with

workshop and store in

Mexico City from

Acquisition

Advisory

Services

Corporate

Finance

Advisory

Services

has formed a partnership in

the casting tools business

between

and

has acquired

has acquired

has been acquired by


has acquired

has acquired

has partnered with



merged its

beverage division

with

Acquisition

Advisory

Services

has carved out and sold

its concrete pumping

assets in Mexico

has formed a

partnership to market

and develop oil storage

and distribution in

Mexico with

Corporate

Finance

Advisory

Services

Corporate

Finance

Advisory

Services

acquired a 61% stake on

Acquisition

Advisory

Services

Corporate

Finance

Advisory

Services

Since 1999, Seale & Associates has been the trusted advisor to

highly respected public and private companies from around the

world, with a track record of success in a diverse range of

industries. Seale is an elite boutique global investment banking

firm with extensive experience in mergers and acquisitions

(M&A), corporate finance advisory, and enterprise level

strategy consulting. Our experienced team of professionals are

committed to serving clients with excellence and integrity,

while offering innovative ideas and solutions to address

complex dealings. All securities related transactions are cleared

through Seale Capital, Inc., a registered broker dealer and

member of FINRA and SIPC.

ADVISOR TO LEADING COMPANIES WORLDWIDE

CONTACT INFORMATION

950 N. Glebe RoadSuite 950Arlington, Virginia 22203Phone: +1 (703) 294 6770

37, Moliere GranadaMexico City, 11520Phone: +52 (55) 8000 7463

Please contact us if you would like further information about M&A trends and/or specific transaction multiples for your industry.

Mexico ContactInformation

Established presence in

Monterrey , Mexico

*

*

*

*

**

**

* Multiple engagements

*

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

* *

1999

Founded

2016 2017 2018

James A. Seale

President

[email protected]

Brett M. Carmel

Senior Managing Director & Co-founder

[email protected]

Felipe Bueno Viesca

Senior Director

[email protected]

Sergio Garcia del Bosque

Managing Director

[email protected]

Adan Sierra

Vice President

[email protected]

Carlos Hernandez

Vice President

[email protected]

Alejandro Montemayor

Associate

[email protected]

Sofia Felix

Business Development

[email protected]

Armando RiosAnalyst

[email protected]

Diego PerezcanoAnalyst

[email protected]

Miguel LealJunior Analyst

[email protected]

Diego HernandezJunior Analyst

[email protected]

Alberto LopezJunior Analyst

[email protected]


Washington, D.C. | Miami | Mexico City | Monterrey

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