Overall M&A Report Q4 2018

Transcription

1 Overview Nationally recognized investment bank founded in 2000 Over 300 transactions completed, totaling more than $10 billion in transaction value Extensive relationships with leading institutional lenders, PE investors, and strategic buyers Proven ability to source quality buyers and maximize deal value Industry Expertise Overall M&A Report Q Technology Healthcare Business Services Industrial Services Financial Services Consumer Transaction Size $25MM - $500MM Investment Banking Services Mergers & acquisitions, recapitalizations, and management buyouts Capital raising of equity, mezzanine, and senior debt capital Financial advisory, analytical support, and fairness opinions Comprehensive and targeted sell-side marketing efforts Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC

2 Capital Markets Overview Commentary Select Initial Public Offerings Q During the twelve month period ended December 31, 2018, the Nasdaq decreased 5.3%, while the S&P 500 decreased 7.0%. Both major indices traded at yearly lows during the month of December, ending the quarter down 17.4% and 14.3%, respectively. Offer Date Issuer Industry Sector Transaction Type Transaction Value ($MM) 12/06/18 Moderna, Inc. Healthcare IPO $604 10/04/18 Collier Creek Holdings Financial Services IPO $400 IPO activity cooled off in the fourth quarter after a hot start to the year, with 38 initial public offerings during Q4 (versus 43 in Q3). Moderna, Inc. (NasdaqGS:MRNA), a developer of medicines based on messenger RNA, raised $604 million in the largest IPO during the quarter. There were a number of significant deals announced during Q4, including IBM s announced acquisition of Red Hat, Inc. for $35.7 billion, and Abrams Capital s purchase of iheartmedia, Inc. for $20.4 billion. 10/18/18 SolarWinds Corp. Technology IPO $375 10/10/18 Livent Corp. Industrials IPO $340 10/10/18 Allogene Therapeutics, Inc. Healthcare IPO $324 11/15/18 FinTech Acquisition Corp. III Financial Services IPO $300 10/24/18 YETI Holdings, Inc. Consumer IPO $288 10/11/18 Anaplan, Inc. Technology IPO $264 10/04/18 Elastic N.V. Technology IPO $252 12/12/18 CF Finance Acquisition Corp. Financial Services IPO $250 Public Market Performance (LTM) 120% 115% 110% 105% 100% 5.3% 95% 90% 7.0% 85% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 S&P 500 Nasdaq Select Announced U.S. M&A Transactions Q Announced Date Target Buyer Industry 10/28/18 Red Hat, Inc. International Business Machines Corp. Enterprise Value ($MM) Technology $35,691 12/17/18 iheartmedia, Inc. Abrams Capital Consumer $20,443 10/14/18 L3 Technologies, Inc. Harris Corp. Industrials $19,723 11/11/18 Qualtrics Int'l SAP America, Inc. Technology $8,000 11/08/18 ARRIS Int'l CommScope Holding Co., Inc. Technology $7,983 12/03/18 Tribune Media Co. Nexstar Media Group, Inc. Consumer $7,110 11/12/18 athenahealth, Inc. Veritas Capital/ Evergreen Coast Capital Health Care $5,942 10/18/18 OppenheimerFunds, Inc. Invesco Ltd. Financial Services $5,714 12/03/18 Tesaro, Inc. GlaxoSmithKline Health Care $5,468 11/21/18 Grifols Diagnostic Solutions, Inc. Shanghai RAAS Blood Products Co., Ltd. Health Care $5,000 Source: Capital IQ. 10/10/18 Esterline Technologies Corp. TransDigm Group Inc. Industrials $4,367 2

3 Total Transaction Volume Total Transaction Value ($ in billions) Annual M&A Activity Commentary U.S. M&A Transactions by Deal Size Deal volume continued its downward trend from a peak in 2015, as the total volume of closed transactions with disclosed values fell 11% during 2018 (YTD 2018) compared to The sharpest decline in deal flow was seen in deals sized less than $100 million and between $500 and $999 million, falling 15% and 14% respectively, with corresponding 15% decreases in value. One factor contributing to slower deal flow is a smaller pool of quality targets remaining as the current economic cycle matures; however, pricing has seen less decline as the increased competition has kept valuation multiples at near-record levels. ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 948 $ $31 (15%) (15%) $100 - $499M 451 $ $102 (1%) 0% $500 - $999M 125 $ $77 (14%) (15%) Total Middle Market 1,524 $229 1,358 $210 (11%) (8%) Greater than $1 Billion 174 $ $859 (9%) 10% Total Market 1,698 $1,008 1,517 $1,069 (11%) 6% % of Total Market % Change Less than $100M 56% 4% 53% 3% $100 - $499M 27% 10% 29% 10% $500 - $999M 7% 9% 7% 7% Total Middle Market 90% 23% 90% 20% Greater than $1 Billion 10% 77% 10% 80% Total Market 100% 100% 100% 100% U.S. M&A Activity Annual Trends: VOLUME U.S. M&A Activity Annual Trends: VALUE Less than $100M $100 - $499M $ M Greater than $1 Billion Less than $100M $100 - $499M $ M Greater than $1 Billion Source: Capital IQ. Includes deals with disclosed values greater than $10 million. Excludes Real Estate, Energy and Utilities transactions. Note: Due to rounding, numbers may not sum precisely. 3

4 Total Transaction Volume Total Transaction Value ($ in billions) Quarterly M&A Activity Commentary As detailed in the table on the right, M&A transaction volume fell during Q compared to the prior year period. Deal flow decreased 5% to 430 completed deals down from 452 in Q The total volume of transactions completed in the middle market fell 7% during the fourth quarter, and transaction value in this range declined 7% compared with the prior year period. The significant increase in total market deal value was impacted by the 107% increase in billion plus dollar deals. Prevalence of these deals is often indicative of perceived lack of ability to grow organically, which is driven in part by companies first looks at normalized earnings after the artificial boost created by tax reform a year prior ($ in billions) U.S. M&A Transactions by Deal Size Deal Size Volume Value Volume Value Volume Value Less than $100M 248 $ $9 (10%) (10%) $100 - $499M 124 $ $30 5% 10% $500 - $999M 39 $29 31 $22 (21%) (24%) Total Middle Market 411 $ $61 (7%) (7%) Greater than $1 Billion 41 $ $343 12% 107% Total Market 452 $ $404 (5%) 74% % of Total Market Q Q % Change Less than $100M 55% 4% 52% 2% $100 - $499M 27% 12% 30% 7% $500 - $999M 9% 12% 7% 5% Total Middle Market 91% 29% 89% 15% Greater than $1 Billion 9% 71% 11% 85% Total Market 100% 100% 100% 100% U.S. M&A Activity Quarterly Trends: VOLUME U.S. M&A Activity Quarterly Trends: VALUE 700 $ $400 $350 $300 $250 $282 $286 $359 $292 $231 $213 $214 $349 $232 $348 $ $200 $ $150 $139 $ $50 0 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 $0 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Less than $100M $100 - $499M $ M Greater than $1 Billion Less than $100M $100 - $499M $ M Greater than $1 Billion Source: Capital IQ. Includes deals with disclosed values greater than $10 million. Excludes Real Estate, Energy and Utilities transactions. Note: Due to rounding, numbers may not sum precisely. 4

5 Middle-Market M&A Activity by Industry U.S. Deal Flow by Industry ($ in billions) % Change Consumer % Financials % Healthcare % Industrials % Technology % U.S. Middle Market* M&A Deal Flow by Industry Q Q % Change 2% 22% 19% 0% 9% Source: Capital IQ. *Includes all closed deals with disclosed deal value between $10 million and $1 billion. 5

6 Number of Announced Transactions Recent Private Equity Activity Commentary Select Announced Private Equity Transactions Q Financial sponsors remained active during Q4 2018, announcing a number of large deals, shown in the table to the right, as funds continue to attempt to deploy a record amount of dry powder and face increased competition for quality companies as the current economic cycle approaches maturity. Notable transactions included Sycamore Partners acquisition of Pure Fishing, Inc. for $1.3 billion, KKR s announced purchase of Geostabilization Intl., and Thoma Bravo s acquisition of Veracode, Inc. for $950 million. Notably, investment in the Industrials industry edged Consumer for most active this quarter, with 99 announced sponsor-led transactions. Announced Date Target Buyer Industry Enterprise Value ($MM) 12/31/2018 EarthLink, Inc. Trive Capital Technology $330 12/19/2018 Coach USA Administration, Inc. Variant Equity Industrials $271 12/18/2018 StandardAero, Inc. The Carlyle Group Industrials NA 12/18/2018 Nolan Transportation Group, Inc. Gryphon Investors Industrials NA 12/17/2018 Artisan Design Group, Inc. The Sterling Group Industrials NA 12/13/2018 ServiceMax, Inc. Silver Lake Technology NA 12/12/2018 Sparton Corp. Cerberus Capital Industrials $255 12/10/2018 Payrix Holdings, LLC Providence Growth Capital/ Blue Star Innovation Partners Technology 11/30/2018 Tier One Relocation, LLC Sun Capital Partners Industrials NA NA Financial Sponsors Industry Transactions 11/19/2018 GeoStabilization Intl. KKR Industrials NA /15/2018 Armstrong Wood Products, Inc. American Industrial Partners Industrials $100 11/12/2018 athenahealth, Inc. Veritas Capital/ Evergreen Coast Capital Health Care $5,639 11/11/2018 Apptio, Inc. Vista Equity Partners Technology $1, /7/2018 Pure Fishing, Inc. Sycamore Partners Consumer $1, /6/2018 ConvergeOne Holdings, Inc. CVC Capital Technology $1,640 11/5/2018 Veracode, Inc. Thoma Bravo Technology $950 10/23/2018 Vendor Credentialing Service, LLC Clearlake Capital Health Care NA 20 10/9/2018 LivHOME, Inc./Arosa, LLC Bain Capital Health Care NA 0 Consumer Financials Healthcare Technology Industrials 10/4/2018 Eruptr, LLC H.I.G. Communication Services 10/1/2018 ksaria Corp. Behrman Capital Industrials NA NA Source: Capital IQ; PitchBook. Graphic includes transactions with undisclosed transaction values. Industrials industry includes Materials. 6

7 Integrity Expertise Results Overview Nationally recognized investment bank founded in 2000 Over 300 transactions completed, totaling more than $10 billion in transaction value Recent Transactions Extensive relationships with leading institutional lenders, PE investors, and strategic buyers Proven ability to source quality buyers and maximize deal value Industry Expertise Technology Healthcare Business Services Industrial Services Financial Services Consumer Transaction Size $25MM - $500MM Investment Banking Services Mergers & acquisitions, recapitalizations, and management buyouts Capital raising of equity, mezzanine, and senior debt capital Financial advisory, analytical support, and fairness opinions Comprehensive and targeted sell-side marketing efforts Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC