Quarterly M&A Report Q1 2014

Transcription

1 John Hill (813) John McDonald (813) Keith Hodgdon Senior Vice President (813) Quarterly M&A Report Q Jeffrey Bridge Vice President (813) Michael Mariani Associate (813) Charlie Hendrick Senior Analyst (813) 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 As illustrated in the chart below, major market indices such as the Nasdaq and S&P 500 increased by 30% and 20%, respectively, over the past 12 months. Both indices increased slightly during the recently completed 1 st quarter ending March 31, 2013, with the S&P 500 and the Nasdaq index increasing 1.4% and 2.2%, respectively. During Q there were several noteworthy U.S. initial public offerings (IPOs), including the $1.8 billion offering by Santander Consumer USA Holdings, Inc. (NYSE:SC) and the $925 million offering byriceenergy,inc.(nyse:rice). Total M&A transaction value remained healthy in Q bolstered by several large deals including Comcast Corp. s proposed purchase of Time Warner Cable, Inc. for nearly $70 billion and Actavis plc s announced acquisitionof Forest Laboratories, Inc. for over $25 billion. ($ in millions) Offer Date Issuer Industry Transaction Value 01/22/14 Santander Consumer USA Holdings, Inc. Financial Services $1,800 03/27/14 CBS Outdoor Americas, Inc. Consumer $560 03/26/14 TriNet Group, Inc. Industrials $240 02/11/14 Talmer Bancorp, Inc. Financial Services $202 03/20/14 A10 Networks, Inc. Technology $188 01/30/14 Intrawest Resorts Holdings, Inc. Consumer $188 03/06/14 Coupons.com, Inc. Technology $168 01/30/14 Ultragenyx Pharmaceutical Inc. Healthcare $ % 130% 120% Public Market Performance (LTM) 29.6% 19.9% Select U.S. M&A Transactions Q ($ in millions) Announced Date Target Buyers Industry Transaction Value 02/13/14 Time Warner Cable, Inc. Comcast Corp. Consumer $69,241 02/18/14 Forest Laboratories, Inc. Actavis plc Healthcare $25,449 02/19/14 WhatsApp, Inc. Facebook, Inc. Technology $16, % 01/13/14 Beam, Inc. Suntory Holdings Ltd. Consumer $15,800 03/06/14 Safeway, Inc. Albertsons, LLC Consumer $11, % 01/08/14 Riverbed Technology, Inc. Elliott International Ltd. Technology $3,579 03/19/14 JPMorgan Chase & Co. (Physical Commodities Business) Mercuria Energy Group Ltd. Financial Services $3,500 90% Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 S&P 500 Nasdaq 01/13/14 Nest Labs, Inc. Google, Inc. Technology $3,200 01/29/14 Motorola Mobility Holdings, Inc. IBM Products United States, Inc. Technology $2,908 Source : S&P Capital IQ 2

3 M&A Market Overview As detailed in the annual charts below, overall U.S. M&A activity or deal volume declined 18% in 2013 with 1,769 closed transactions, down from 2,152 in The total value of completed M&A transactions in 2013 declined 4% to $629 billion, down from $652 billion in Commentary Middle market M&A activity (transactions less than $1 billion) dropped significantly in 2013 because many smaller deals were completed in Q in anticipation of increases in the capital gains tax rates in The total value of $1 billion+ transactions increased by 3% over the prioryearasthemarketforlargerdealswaslessimpactedbythe changes in tax legislation. ($ in billions) U.S. M&A Transactions by Deal Size % Change Deal Size Volume Value Volume Value Volume Value Less than $100M 1,433 $51 1,126 $39 (21%) (23%) $100 $499M 490 $ $91 (14%) (17%) $500 $999M 106 $ $69 (5%) (6%) Total Middle Market 2,029 $234 1,650 $199 (19%) (15%) Greater than $1 Billion 123 $ $430 (3%) 3% Total Market 2,152 $652 1,769 $629 (18%) (4%) % of Total Market Less than $100M 66% 8% 63% 7% $100 $499M 23% 17% 24% 14% $500 $999M 5% 11% 6% 11% Total Middle Market 94% 36% 93% 32% Greater than $1 Billion 6% 64% 7% 68% Total Market 100% 100% 100% 100% U.S. M&A Activity Annual Trends: VOLUME U.S. M&A Activity Annual Trends: VALUE Total Transaction Volume Total Transaction Value ($ in billions) Less than $100M $100 $499M $ M Greater than $1 Billion Less than $100M $100 $499M $ M Greater than $1 Billion Source : S&P Capital IQ (includes all closed deals with disclosed deal value greater than $10 million). *Excludes Oil & Gas, Utilities and Real Estate transactions, as defined by S&P Capital IQ.. 3

4 Quarterly M&A Activity Commentary As detailed in the table on the right, M&A transaction volume and value increased in Q compared with Q Total M&A market transaction value increased 9% during the first quarter to $139 billion, up from $128 billion in the prior year period. There were 380 completed deals during Q1 2014, a 6% increase over Q Middle market M&A activity saw similar increases in the number of completed deals and transaction volume as the overall M&A market. The number of middle market transactions increased 4% over Q1 2013, with the largest increase in deals valued between $100 to $499 million. The total value of completed middle market transactions increased 10%. ($ in billions) U.S. M&A Transactions by Deal Size Q Q % Change Deal Size Volume Value Volume Value Volume Value Less than $100M 219 $7 228 $8 4% 17% $100 $499M 89 $18 99 $24 11% 30% $500 $999M 23 $15 18 $12 (22%) (18%) Total Middle Market 331 $ $44 4% 10% Greater than $1 Billion 28 $88 35 $95 25% 8% Total Market 359 $ $139 6% 9% % of Total Market Less than $100M 61% 5% 60% 6% $100 $499M 25% 14% 26% 17% $500 $999M 6% 12% 5% 9% Total Middle Market 92% 32% 91% 32% Greater than $1 Billion 8% 68% 9% 68% Total Market 100% 100% 100% 100% U.S. M&A Activity Quarterly Trends: VOLUME U.S. M&A Activity Quarterly Trends: VALUE Total Transaction Volume Total Transaction Value ($ in billions) Less than $100M $100 $499M $ M Greater than $1 Billion Less than $100M $100 $499M $ M Greater than $1 Billion Source : S&P Capital IQ (includes all closed deals with disclosed deal value greater than $10 million). *Excludes Oil & Gas, Utilities and Real Estate transactions, as defined by S&P Capital IQ.. 4

5 Q4 M&A Activity by Industry U.S. M&A Activity by Industry Sector: VALUE % Change ($ in billions) Consumer $3 $6 120% Financial Services $2 $5 51% Healthcare $7 $8 8% Industrials $10 $11 11% Technology / Telecom $6 $9 50% $0 $2 $4 $6 $8 $10 $12 Q Q U.S. M&A Activity by Industry Sector: VOLUME % Change Consumer % Financial Services % Healthcare % Industrials % Technology / Telecom % Q Q Source : S&P Capital IQ (includes all closed deals with disclosed deal value between $10 million and $1 billion). 5

6 Recent Private Equity Activity Commentary Select Private Equity Transactions Q Financial sponsors continue to look for growing companies and new investment opportunities to put capital to work. During the 1 st quarter of 2014 financial sponsors were especially active across the Industrials industry, announcing a number of significant buyouts, as shown in the table on the right. In total, financial sponsors accounted for approximately 17% of the completed deals and 13% of total transaction value during Q Several notable sponsor led transactions were announced during Q1 2014, including The Carlyle Group, LP s announced acquisition of Ortho Clinical Diagnostics, Inc. for $4.2 billion; Kohlberg Kravis Roberts & Co. s proposed purchase of Sedgewick Claims Management Services, Inc. for $2.4 billion; and Sentinel Capital Partners, LLC s acquisition of Checkers Drive In Restaurants, Inc. Financial Sponsors vs. Strategic Buyers ($ in millions) Announced Date Target Buyer Industry Transaction Value 03/31/14 Nobles Worldwide, Inc. Levine Leichtman Capital Partners Industrial NA 03/31/14 Harvey Tool Company, LLC The Riverside Co. Industrial NA 03/26/14 Pride Engineering, Inc. May River Capital, LLC Industrial NA 03/25/14 LiveVox, Inc. Golden Gate Capital Technology NA 03/18/14 Institutional Shareholder Services, Inc. 03/16/14 Grand Transformers, Inc. Vestar Capital Partners Blackford Capital / Michigan Prosperity Fund Financial Services Industrial 03/10/14 Central Environmental Services, LLC Harbert Private Equity Industrial NA 03/05/14 CURT Manufacturing, LLC Audax Group, Inc. Industrial NA 02/13/14 TrueCar, Inc. Anthem Venture Partners / Vulcan Capital $364 NA Technology $87 02/07/14 Fox & Hound Restaurant Group Cerberus Capital Management Consumer $130 02/07/14 National Vision, Inc. Kohlberg Kravis Roberts & Co. Consumer NA 01/28/14 Turbine Generator Maintenance, Inc. Azalea Capital, LLC Industrial NA Total Transaction Volume Total Transaction Value ($ in billions) 01/27/14 Sedgwick Claims Management Services, Inc. Kohlberg Kravis Roberts & Co. Financial Services 01/24/14 Checkers Drive In Restaurants, Inc. Sentinel Capital Partners, LLC Consumer NA 01/16/14 Ortho Clinical Diagnostics, Inc. The Carlyle Group, LP Healthcare $4,150 01/10/14 American Pacific Corp. H.I.G. Capital, LLC Industrial $446 01/09/14 HealthTronics, Inc. Altaris Capital Partners, LLC Healthcare $140 $2,400 01/08/14 Compuware Corp. (Changepoint, Professional Services and Uniface Business Units) Marlin Equity Partners, LLC Technology $160 Financial Sponsor Strategic Buyer Financial Sponsor Strategic Buyer Source : S&P Capital IQ (includes all closed deals with disclosed deal value greater than $10 million). *Excludes Oil & Gas, Utilities and Real Estate transactions, as defined by S&P Capital IQ.. 01/07/ CONTACTS, Inc. Thomas H. Lee Partners, LP Healthcare NA 6

7 Integrity Expertise Results John Hill (813) Recent Transactions John McDonald (813) Keith Hodgdon Senior Vice President (813) Jeffrey Bridge Vice President (813) Michael Mariani Associate (813) Charlie Hendrick Senior Analyst (813) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC