2016 Annual. European PE Breakdown

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1 Annual European PE Breakdown

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2 POLLING CARD MERRILL NEAREST COMPETITOR PRIVATE EQUITY CORPORATES FINANCIAL AND LEGAL ADVISORS Who will get you to market with speed? 9X 9 Who will maximise your deal price? 9X 9 Who will best protect your data? 9X 9 Who will streamline your integration? 9X 9 Who will get your deals done quickly? 9X 9 Who will minimise your risk? 9X 9 If you need a simple and secure platform to store your most sensitive data, elect Merrill as your Virtual Data Room provider. MERRILL DATASITE merrillcorp.com Merrill Communications LLC. All rights reserved. FINANCIAL TRANSACTIONS & REPORTING MARKETING & COMMUNICATIONS FOR REGULATED INDUSTRY CUSTOMER CONTENT & COLLABORATION SOLUTIONS

Credits & Contact PitchBook Data, Inc. JOHN GABBERT Founder, CEO ADLEY BOWDEN Vice President, Market Development & Analysis Contents Content NIZAR TARHUNI Analysis Manager DYLAN E.

3 Credits & Contact PitchBook Data, Inc. JOHN GABBERT Founder, CEO ADLEY BOWDEN Vice President, Market Development & Analysis Contents Content NIZAR TARHUNI Analysis Manager DYLAN E. COX Analyst GARRETT JAMES BLACK Publisher BRYAN HANSON Data Analyst JENNIFER SAM Senior Graphic Designer Contact PitchBook pitchbook.com RESEARCH Introduction 4 Overview 5 US-based Investor Activity 6 EDITORIAL editorial@pitchbook.com SALES sales@pitchbook.com Deals by Sector & Size 7 Spotlight: UK & Ireland 8-9 Exits 10 Fundraising 11 League Tables 12 The PitchBook Platform The data in this report comes from the PitchBook Platform our data software for VC, PE and M&A. Contact sales@pitchbook.com to request a free trial. COPYRIGHT 2017 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment. 3 PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

Fundraising strong as deal value subsides Introduction Key takeaways»» European private equity fundraising totaled 70 billion in the most since before the financial crisis.

»» Despite the Brexit referendum, PE activity in the UK largely mirrored that of the rest of Europe.»» EV/EBITDA multiples held steady at 8.2x in Europe, compared to 10.9x in the US.

4 Fundraising strong as deal value subsides Introduction Key takeaways»» European private equity fundraising totaled 70 billion in the most since before the financial crisis. More than eight out of every 10 funds to close hit their stated targets.»» The value of PE investments fell by 24.9% last year, though that was still good enough for the second most of any year since.»» Despite the Brexit referendum, PE activity in the UK largely mirrored that of the rest of Europe.»» EV/EBITDA multiples held steady at 8.2x in Europe, compared to 10.9x in the US. was a tumultuous year for European governments and investors. The prime ministers of Britain and Italy both resigned, the region continued to grapple with sovereign debt repayments, and concerns continued around the riskiness of some money center banks not to mention the refugee crisis that has gripped the continent for some time now. PE investors expressed unease, and the value of PE investments fell sharply. In contrast, fundraising had a very strong year, which should counteract some investors fears. With major elections in France, Germany, and the Netherlands this year, as well as the continual development of Brexit proceedings, the investment landscape will continue to change, and PE investors will have to adapt along with it. Look up a company. And its cap table. And its investors. And its EBITDA multiples. And its board members. In seconds. The PitchBook Platform has the data you need to close your next deal. Learn more at pitchbook.com We hope this report is useful in your practice. As always, feel free to send any questions or comments to reports@pitchbook.com. DYLAN E. COX Analyst Merrill Corporation helps enterprises worldwide securely manage their most complex financial, regulated disclosure, and compliant communications requirements. Its offerings include Merrill DataSite, the award-winning virtual data room that facilitates with speed and security IPOs, M&A transactions, high yield placements and other financial activities; Merrill Bridge, a seamless SaaS solution supporting the creation and filing of critical disclosure documents, and Merrill Connect, the digital and print communications platform for regulated industries. With nearly 50 years of industry experience and 3,800 people in 41 locations globally, Merrill's innovative technology and expert services facilitates thousands of regulatory filings and financial transactions annually. 4 PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

5 Decline & fall of deal value Overview Deal value takes a drastic fall PE had a rough year on the European continent in. Deal value for PE investments fell by a staggering 24.9% year-over-year (YoY), to billion. The number of completed European PE activity 1,942 2,582 Deal Value ( B) 2,326 1,575 2,216 2,549 transactions also decreased, but by a less-conspicuous 13.5%, to 2,746 deals. Viewed another way, however, the billion deal value was the second highest total of any year since the financial crisis, behind only the billion completed in. This # of Deals Closed 2,379 2,460 2,845 3,176 2,746 speaks to just how much larger the European PE market has become in recent years deal value may have fallen drastically, but the total still represents a relatively robust sum. Spin-offs land in PE hands Seven of the top 10 LBOs in Europe last year were corporate divestitures a truly telling figure given the economic climate in which they happened. The Stoxx 600 index decreased by 1.2% in, its first annual loss in six years. Amid struggling performance, European companies could no longer justify holding on to non-core assets that may have been hurting their bottom lines, and PE investors were happy to take the carveouts at a discount. Notably, six of these seven divestitures involved investors with headquarters outside of Europe European bolt-on activity % 1, % 1, , Bolt-on Non Bolt-on Bolt-on % of Buyout 38% 42% 44% 49% , % 49% 48% 50% 49% PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN 1,155 1,057 1,225 1,241 1,113 1,069 Bolt-ons remain steady Bolt-on transactions accounted for 49% of buyouts in Europe last year, compared to about 64% in the US. The reasons we haven t seen a similar prevalence in Europe are twofold. First, prices have not grown as much in Europe as they have in the US, lessening the need to resort to add-ons as a way to blend down aggregate EBITDA multiples. The median EV/EBITDA multiple for all M&A in Europe, including buyouts, has increased just one point since (from 7.2x to 8.2x). Meanwhile, it has grown by 2.8 points (from 8.1x to 10.9x) in the US in that time. Second, despite the free movement of goods and services within the EU, there are still comparatively more challenges to implementing a single platform across multiple countries, languages and cultures.

6 US-based Investor Activity European PE activity with US-based investor participation European PE club deals with US-based investor participation Deal Value ( B) # of Deals Closed Deal Value ( B) # of Deals Closed Unknown deal values are estimated based on known figures. Club deals are defined as having two or more investors. US-based investor activity without European investor participation Deal Value ( B) # of Deals Closed European bolt-on activity with only US-based sponsors Deal Value ( B) # of Deals Closed PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

7 IT sector stands out Deals by Sector & Size Lower reaches of the market remain healthiest European PE deals (#) by size Mega-deals resume to more frequent levels European PE deals ( B) by size 3,500 3, B+ 1B- 2.5B 500M- 1B 100M- 500M 25M- 100M Under 25M B+ 1B- 2.5B 500M- 1B 100M- 500M 25M- 100M Under 25M 2, , , , IT hits a new high in deal volume European PE deals (#) by sector Traditional hubs of B2B and consumer drive value European PE deals ( B) by sector 3,500 3,000 B2B Energy Healthcare Materials & Resources B2C Financial Services IT B2B Energy Healthcare Materials & Resources B2C Financial Services IT 2, , , , PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

Spotlight: UK & Ireland Overview of PE activity in the UK & Ireland Deal Value ( B) Deal Count 892 994 845 601 607 657 667 50 664 47 783 493 83 107 84 59 48 23 50 400 68 For purposes of comparison

8 Spotlight: UK & Ireland Overview of PE activity in the UK & Ireland Deal Value ( B) Deal Count For purposes of comparison and aggregation, we convert all deal and fund information to euros in this report. However, here it is useful to look at UK deal information expressed in pounds in order to avoid any distortion due to the devaluation of the currency post-referendum billion in deal value was completed across 845 transactions in, representing 22.1% and 15.0% decreases, respectively. PE deal trends in the UK largely mirror those in the continent UK deal activity 68 With Brexit proceedings still under way, it is unclear whether Britain will end up with a soft or hard departure and to what extent those will affect its economy and PE dealmaking. That said, the economic fallout has not yet been what many expected, and PE dealmaking last year largely mirrored that of the rest of Europe. As we ve written before, the dynamic environment around Britain s departure from the EU will create opportunities for PE no matter the outcome. Fundraising volume stays flat while sums raised surge UK fundraising Capital Raised ( B) 68 # of Funds Closed Fundraising was strong last year, as it was in the rest of Europe billion was raised across 39 vehicles, compared to just 21.7 billion across 37 funds in. In fact, in terms of capital commitments, was the strongest year for UK-based fundraising since. As is the case with many funds, however, much of this capital will be deployed globally, not just within the UK. 8 P I TC H B O O K A N N UA L E U R O P E A N P E B R E A K D OW N

9 UK & Ireland PE deals (#) by size 100% 90% 80% 70% 60% 50% 40% 2.5B+ 1B- 2.5B 500M- 1B 100M- 500M Most activity remains concentrated in the lower reaches of the market, amid an expensive climate. UK & Ireland PE deals ( B) by size 30% 20% 10% 0% 25M- 100M Under 25M 100% 90% 80% 70% 60% 50% 40% 2.5B+ 1B- 2.5B 500M- 1B 100M- 500M 30% 20% 25M- 100M UK & Ireland PE deals (#) by sector 100% 90% 80% B2B B2C 10% 0% Under 25M 70% 60% Energy 50% 40% 30% 20% Financial Services Healthcare IT UK & Ireland PE deals ( B) by sector 100% 90% B2B 10% 0% Materials & Resources 80% 70% 60% B2C Energy 50% 40% 30% Financial Services Healthcare Only the IT sector saw its actual deal count grow between and, up to a decade high. 20% 10% 0% IT Materials & Resources 9 PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

10 A slump in value Exits Exits slide while strategics provide largest sources of liquidity PE-backed exits in Europe, like deal flow overall, had quite the slump last year. Europe saw billion in sales of PE-backed companies across 1,065 deals, representing 24.6% and 14.8% decreases, respectively. With less appetite for IPOs last year, nine of the 10 largest PE-backed exits in Europe went to strategic acquirers consistent with the increased levels of competition we ve seen from corporates, particularly for larger acquisition targets. In terms of number of transactions, however, PE investors were plenty active. In fact, secondary buyouts made up 44.7% of PE-backed exits last year the highest figure we ve ever recorded. As we ve noted in previous publications, a higher proportion of secondary buyouts might spell trouble for LPs since a single LP could be invested in two funds on either side of a transaction. That LP would, in effect, be charged transaction fees in order to sell a business to itself. However, if these European PE-backed exits Exit Value ( B) companies are selling to more capable investors who can still create real value, LPs will benefit nonetheless. # of Exits , , , Corporate & PE buyers are about evenly split European PE-backed exits (#) by type Corporates account for most exit value European PE-backed exits ( B) by type 1,400 1,200 1,000 Corporate Acquisition IPO Secondary Buyout Corporate Acquisition IPO Secondary Buyout PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

11 Significant sums collected Fundraising Fundraising at its strongest since the financial crisis European PE fundraising had its strongest year, in terms of dollars records plenty raised despite lower volume European PE fundraising Capital Raised ( B) raised, since the pre-financial-crisis confidence shown in and. PE funds based in Europe garnered 70.0 billion worth of commitments 100 # of Funds Closed across 89 separate vehicles in, up from 52.0 billion across 83 funds in. In a year when nearly every PE-related indicator took a nosedive, this growth truly stands out, though it s important to note that some of this capital was raised by European investors with plans to be deployed elsewhere. What s more, 82% of funds to close hit their stated targets last year not quite the 89% we saw in the US but still the highest figure we ve recorded for European funds in the last decade. Larger funds made up a larger portion of the market last year, as LPs are returning to established managers with whom they have familiarity and trust. As such, the median buyout fund size increased by 16.8% to million Second-highest proportion of European PE funds hit their target European PE funds (#) hitting target A new high in the median buyout fund size, even after steady increases over the past few years Median European PE fund size ( M) 100% % 80% 70% 60% % % % 20% 10% 0% Hit Target Missed Target Buyout Funds All PE Funds 11 PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

12 League Tables Select largest European PE deals in Firm name Date Size (M) GE Money Bank 16/12/ $4,600 Corporate divestiture Foncia Groupe 7/5/ 1,830 Credit Suisse 3/5/ $1,270 Airbus Group Defence Electronics 30/11/ 1,100 Type Investor(s) HQ Sector Secondary buyout Asset divestiture Corporate divestiture Cerberus Capital Management Nantes, France National banks Partners Group, La Caisse, China International Capital Antony, France Real estate services TPG Zurich, Switzerland Financial services Kohlberg Kravis Roberts Ulm, Germany Aerospace & defense ION Trading 31/5/ $400 PE growth The Carlyle Group Dublin, Ireland Financial software Source: PitchBook Select largest European PE-backed exits in Firm name Date Size (M) Type Investor(s) HQ Sector Swissport International 10/2/ CHF2,730 Corporate acquisition Priory Group 4/1/ $3,560 Alliance Tire Group 25/3/ $1,200 Sisal 30/5/ 1,027 Ethypharm 22/7/ 825 Corporate acquisition Corporate acquisition Secondary buyout Secondary buyout HNA Group Zurich, Switzerland Air Acadia Healthcare Company Yokohama Rubber Company London, UK Halsteren, Netherlands Clinics/outpatient services Road CVC Capital Partners Milan, Italy Casinos & gaming PAI Partners Saint-Cloud, France Drug delivery Source: PitchBook Select largest closed European PE funds in Fund name Firm Close date Size (M) HQ Ardian LBO Fund VI Ardian Holding 14/9/ $5,040 Paris, France Charterhouse Capital Partners X Charterhouse Capital Partners 14/11/ 2,300 London, UK IK VIII Fund IK Investment Partners 28/11/ 1,850 London, UK FSN Capital V FSN Capital 19/12/ 1,000 Oslo, Norway EQT Mid Market US EQT Partners 30/9/ $726 Stockholm, Sweden Source: PitchBook 12 PITCHBOOK ANNUAL EUROPEAN PE BREAKDOWN

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The PitchBook Platform. Credits & Contact. 3 Overview. Introduction 4-6. Spotlight: Target Company Characteristics

The PitchBook Platform. Credits & Contact. 3 Overview. Introduction 4-6. Spotlight: Target Company Characteristics 2017 3Q M&A Report Credits & Contact PitchBook Data, Inc. JOHN GABBERT Founder, CEO ADLEY BOWDEN Vice President, Contents Market Development & Analysis Content DYL AN E. COX Analyst II BRYAN HANSON Data