Global Mergers & Acquisitions Update

Transcription

1 Global Mergers & Acquisitions Update Fourth Quarter 214 Investment Banking Corporate Finance Strategy Consulting

2 United States Deal Volume Increases YoY, Slows Down From 214: With total deal value at US$424 billion, 214 saw a 32.7% decrease in deal value from 214. There were 5,447 announced transactions during 214, representing only a slight increase from 214. Compared to 213, deal value increased by 32.3% while deal volume increased 18.6%. During 214, the average deal size was approximately US$179 million. The median TEV/EBITDA multiple for disclosed deals during the quarter was 12.2x. $2,2 $2, $1,8 $1,6 $1,4 $1,2 $1, $8 $6 $4 $2 $ 14,525 U.S. M&A Transactions 16,391 18,13 19,314 $966 $1,172 $1,24 $1,37 2,98 $424 $63 $469 $ Total Value (in US$ billions) Total Volume (# of deals) 24, 21, 18, 15, 12, 9, 6, 3, 2 15.% 1 5.% -5.% S&P 5 ^SPX Dow Jones ^DJI NASDAQ ^COMP % 12.4% 8.4% Middle-Market PE M&A Trends: Middle-market private equity reported deals TEV/EBITDA multiples averaged 6.1x for TEVs between US$1-25 million. Equity contribution for reported middle-market private equity M&A deal funding decreased slightly in 214 to 41.9%, down from 49.4%% in saw a reversal in the historic relationship between the valuation of platform properties and add-on acquisitions, with add-ons now receiving higher valuations than platform acquisitions. Deals involving better performers (TTM EBITDA margins and revenue growth rates both above 1%) accounted for 55.% of reported activity in 214, down slightly from the historic average of 58.%. UBM plc, a global marketing and communications company, acquired Advanstar Communications Inc., a provider of tradeshows and publications, for US$972. million. The transaction value represents a multiple of 11.7x EBITDA and 3.3x Revenue. American Midstream, LLC, a processer and transporter of natural gas, acquired Costar Midstream, LLC, a natural gas processer, for US$5.1 million. The transaction value represents a multiple of 16.8x EBITDA and 3.1x Revenue. Kindred Healthcare, Inc., a provider of healthcare services in the United States, acquired Centerre Healthcare Corp., a developer and operator of hospitals, for US$195. million. The transaction value represents a multiple of 11.7x EBITDA and 1.4x Revenue. Private Equity-Sponsored M&A Activity Sources: GF Data Resources, Capital IQ Historical Private Equity M&A Transaction Multiples By Transaction Size 1.x 8.x 6.x 4.x 5.2x 6.7x 6.7x 7.9x 6.1x 6.2x 6.2x 5.9x 5.8x 5.x 7.5x 8.2x 8.8x 8.4x 7.x 6.6x Quarterly Equity and Debt Contributions 47.6% 44.% 49.4% 41.9% Equity 13.7% 15.7% Sub Debt 18.4% 13.4% Senior Debt 2.x % 42.3% 37.2% 42.4%.x US$1-25M US$25-5M US$5-1M US$1-25M Source: GF Data Resources Fourth Quarter

3 Latin America 214 LatAm M&A Experiences Most Active Year Since 211: There were 421 announced transaction in the Latin America region during 214 which represents a 2.2% increase from 213. These transactions amounted to approximately US$24 billion in deal value during the quarter. In comparison to 214, deal value and deal volume during 214 decreased by 47.2% and increased by 4.5%, respectively. The average deal size during the current quarter was US$122 million. 214 was overall a more active year for LatAm M&A with total deal value increasing to US$132 billion from $82 billion in 213. $2 $18 $16 $14 $12 $1 $8 1,151 Latin America M&A Transactions 1,351 1,498 1,413 1,554 $24 $46 2, 1,8 1,6 1,4 1,2 1, Brazil ^BVSP Mexico ^MXX Argentina ^MERV Chile ^IPSA 61.2% $6 $4 $2 $ $169 $173 $117 $82 $35 $ Total Value (in US$ billions) Total Volume (# of deals) % 2.3% -.7% Current M&A Trends: The most active sectors for M&A deal volume in the region were the Financial, Consumer Discretionary, and Industrial sectors. The most active buyers/investors in the region by number of transactions were Fibra UNO (5) and LatAm Autos Limited (4). The average implied TEV/EBITDA multiple for disclosed transactions during the quarter was 1.7x while the average TEV/Revenue multiple was 3.2x. The Top 3 most active buyers/investors in the region by total transaction size were Gas Natural SDG SA, AT&T, Inc., and Lundin Mining Corp. In 214, there were a total of five announced transactions with a TEV greater than US$1 billion in Latin America. Oxiquim S.A., a Chilean chemical company, acquired Sintex S.A., a Chilean chemical manufacturer, for US$115.8 million. The transaction value represents a multiple of 3.7x EBITDA and.4x Revenue. Brødrene Hartmann A/S, a manufacturer of molded-fiber packaging, acquired the operations of Greenpack in Brazil and Argentina as well as Molar S.A. for US$5.3 million. The transaction value represents a multiple of 5.5x EBITDA. Grupo Tampico, S.A. de C.V., a Mexican industrial conglomerate, acquired Ditemsa Plastics, S.A. de C.V., a provider of injection molding products. Transaction details were not disclosed. Currency and Interest Rate Performance LTM Currency Market Performance relative to U.S. Dollar 1 Short and Long-Term Interest Rates As of December 31, 214, 5.% -5.% % % Argentinian Peso (ARS) Brazilian Real (BRL) Chilean Peso (CLP) Mexican Peso (MXN) % -11.3% -13.3% -24.% Current 1 Year Ago 3-month 1-year 3-month 1-year Argentina 27.%* NA 18.9%* NA Brazil 12.% 12.% 1.% 12.8% Chile.54% 4.37%.67% 5.14% Mexico 3.31% 5.87% 3.79% 7.75% *New series Sources: Oanda and The Economist Fourth Quarter

4 Europe European M&A Caps Off Record Year with Strong : There was an increase in European M&A deal value during the current quarter when compared with 214. The total value of transactions for the period was approximately US$258 billion. This represents a 28.9% increase and a 13.% increase from 213 and 214, respectively. There were a total of 4,685 announced transactions in 214, which represents a.7% decrease from 213. The average deal value for 214 was US$187 million. $1,8 $1,6 $1,4 $1,2 $1, $8 $6 $4 $2 $ Europe M&A Transactions 18,531 2,159 19,36 $748 $79 $788 $753 17,685 17,813 $258 $228 $616 $ Total Value (in US$ billions) Total Volume (# of deals) 22, 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, England ^FTSE France ^FCHI Germany ^DAXI Russia ^RTSI % 1.1% -2.3% -45.2% Current M&A Trends: The Top 3 most active European buyers/investors in 214 by total transaction size were BT Group, Brookfield Property Partners, and Qatar Holding. In 214, the Top 3 sectors for European M&A deal volume include the Financials, Industrials, and Consumer Discretionary sectors. Average current quarter TEV/EBITDA and TEV/Revenue multiples were 1.8x and 2.7x, respectively. The most active European buyers/investors in 214 by total number of transactions were TH Real Estate (1), OAO Tulamashzavodinvest (8), Custodian REIT (7), and Hemfosa Fastigheter (7). Abris Capital Partners, a Polish private equity firm, acquired AAA Auto Group N.V., a Czech automotive retailer, for US$31. million. The transaction value represents a multiple of 6.7x EBITDA and.6x Revenue. IMI plc, a British provider of engineering solutions for fluids, acquired Bopp & Reuther Sicherheits-und Regelarmaturen GmbH, a German manufacturer of valves, for US$19.4 million. The transaction value represents a multiple of 13.6x EBITDA and 1.7x Revenue. La Doria SpA, an Italian producer of food products, acquired Pa.fi.al. Group, a producer of packaged foods, for $83.5 million. The transaction value represents a multiple of 8.x EBITDA and.9x Revenue. Currency and Interest Rate Performance LTM Currency Market Performance relative to U.S. Dollar 2 British Pound (GBP) Euro (EUR) Russian Rouble (RUB) Swiss Franc (CHF) 1 Short and Long-Term Interest Rates As of December 31, % -9.9% -12.2% -46.4% Current 1 Year Ago 3-month 1-year 3-month 1-year Britain.53% 1.95%.53% 3.1% France.8%.84%.3% 2.31% Germany.8%.55%.3% 1.82% Russia 25.% 13.% 7.24% 7.93% Sources: Oanda and The Economist Fourth Quarter

5 2% % -2% -4% -6% -8% Asia/Pacific 214 M&A Activity Highest in Several Years: The Asia/Pacific region had 4,167 announced M&A transactions in 214 representing an 1 increase from 214 and a 13.9% increase from 213. Deal value increased to approximately US$29 billion during the current quarter. The average deal value in 214 was US$72.6 million. $1, $8 $6 1,73 Asia/Pacific M&A Transactions 12,54 11,673 12,851 14,759 $29 2, 15, Hong Kong ^HSI Japan ^N225 Korea ^KS11 India ^BSESN 3.1% $4 $2 $ $691 $629 $582 $59 $157 $178 $ Total Value (In US$ billions) Total Volume (# of deals) 1, 5, % 1.1% -2.6% Current M&A Trends: The top Asia/Pacific M&A sectors during 214 included Financials, Consumer Discretionary, and Industrials. In 214, average TEV/EBITDA and TEV/Revenue multiples for disclosed transactions were 11.3x and 2.8x, respectively. The Top 3 most active regional buyers/investors in the current quarter by number of transactions were Tianjin Sunac Ao Cheng Investment Co. (13), Kenedix Real Estate Fund Management (1), and Shanghai Yanghao Building Materials (7). The Top 3 most active regional buyers/investors in 214 by total transaction size were CSR Corporation Limited, BesTV New Media Co., and APA Group. There were a total of 27 Asia/Pacific M&A deals in the current quarter that exceeded the US$1 billion TEV level. Currency and Interest Rate Performance LTM Currency Market Performance relative to U.S. Dollar 1 The Blackstone Group L.P., a global financial services and private equity firm, acquired Chemicals Trading business from Orica Ltd., for US$647.1 million. The transaction value represents a multiple of 7.6x EBITDA and.7x Revenue. Falcon Energy Group Ltd., a provider of support services for the offshore marine and oil & gas industries, acquired the remaining 7.9% stake in CH Offshore Ltd., a Singaporean provider of marine support services to the oil & gas industry, for US$164.2 million. The transaction value represents a multiple of 7.8x EBITDA and 6.x Revenue. Hap Seng Consolidated Berhad, a Malaysian industrial conglomerate, acquired a 51.% stake in Hafary Holdings Ltd., a distributor of wholesale building products, for US$112.7 million. The transaction value represents a multiple of 12.4x EBITDA and 2.x Revenue. Short and Long-Term Interest Rates As of December 31, % -5.% % Australian Dollar (AUD) Hong Kong Dollar (HKD) Indian Rupee (INR) Japanese Yen (JPY) % -8.3% -12.1% Current 1 Year Ago 3-month 1-year 3-month 1-year Hong Kong.38% 1.96%.38% 2.34% India 8.38% 7.98% 8.7% 8.92% Japan.11%.33%.15%.66% South Korea 2.15% 2.65% 2.65% 3.6% Sources: Oanda and The Economist Fourth Quarter

6 Leadership Team James A. Seale President and Founder Brett M. Carmel Senior Managing Director Adrian E. Llerena Managing Director Seale & Associates is a global investment banking firm with extensive experience in mergers and acquisitions (M&A), corporate finance advisory, and enterprise level strategy consulting. Our professionals are trusted advisors maintaining a high level of quality and integrity while presenting innovative ideas and solutions to address our clients most complex dealings. All securities related transactions are cleared through Seale Capital, Inc., an affiliate company, registered broker dealer and FINRA and SIPC member. Robert E. Whitney Managing Director rwhitney@sealeassociates.com Felipe Bueno Viesca Managing Director Latin America fbueno@sealeassociates.com Martin B. Cohen mcohen@sealeassociates.com Henry W. Levine hlevine@sealeassociates.com Paul Roessel proessel@sealeassociates.com John Schauss jschauss@sealeassociates.com Seale & Associates, Inc. 95 N. Glebe Road, Suite 95 Arlington, Virginia 2223 United States Phone: +1 (73) Fax: +1 (73) Washington, D.C. Monterrey, Mexico