Private Equity Capital Briefing

Transcription

1 April 218 Monthly insights and intelligence on PE trends Analyzing the exits PE firms get more programmatic in their sales processes

2 The has been designed to help you remain current on capital market trends. It captures key insights from subject-matter professionals across EY and distills this intelligence into a succinct and user-friendly publication. provides perspectives on both recent developments and the longer-term outlook for private equity (PE) fundraising, acquisitions and exits, as well as trends in global M&A, crossborder deal flows, IPOs and the debt and bond markets. Please feel free to reach out to any of the subject-matter contacts listed on the back page of this document if you wish to discuss any of the topics covered.

3 Contents Section 1 Private equity: fundraising 4 Private equity: acquisitions 5 Private equity: exits 6 Section 2 Infrastructure 7 Section 3 Private credit 8 Section 4 M&A 9 Section 5 IPOs 11 Section 6 Loans 12 Section 7 Bonds 13 Appendices Appendix A PE activity by geography 15 Appendix B M&A activity monthly flash 24 Appendix C M&A multiples and bid premium 25

4 1.i. Private equity: fundraising Executive summary Fundraising activity remained strong in, though off the lofty levels of last year. PE firms closed funds valued at US$1b, down 33% from. Buyout funds continue to be heavily represented, accounting for nearly 4% of aggregate fundraising so far this year. Buyout firms now have US$637b in capital available for investment that is growing at a rate of 1.5% annually. Current state While down from last year, fundraising environment remains strong PE fundraising by quarter (US$b) Source: Preqin Fundraising activity remained strong in the first quarter of 218, with 157 funds closing on US$1b in commitments. While this represented a 33% decline from the first quarter of (a record year for PE fundraising), it was roughly in line with the first quarter of, when US$114b was raised. Buyout funds continue to be heavily represented in the totals, accounting for 39% of 218 fundraising, versus 3% over the same period last year. Buyout firms now have US$637b in capital available for investment. Dry powder is currently growing at a three-year compounded growth rate of 1.5%, significantly lower than the 36% rate at which dry powder grew between 25-27, when the industry experienced its fastest growth spurt. $25 $2 $15 $1 $5 $ Commitments Number of funds closed PE fundraising by region Source: Preqin Top funds raised so far this year Source: Preqin Americas: US$11b 218 US$62b EMEA: US$8b 218 US$44b Asia-Pacific: US$28b 218 US$11b Fund Type Value (US$b) EQT VIII Buyout $13.2 BC European Cap X Buyout $8.5 Starwood Global Opportunity Fund XI Real estate $7.6 American Securities Partners VIII Buyout $7. Blackstone Real Estate Partners Asia II Real estate $7. Broad Street Real Estate Credit Partners III Real estate $4.2 Environment and horizon Firms continue to seek stakes in PE GPs Magnetar Capital, based in Evanston, IL., joined the ranks of firms seeking to acquire minority stakes in PE GPs when it announced that it was raising US$1b for such investments. Similar vehicles have been raised by other firms, including Blackstone, Goldman Sachs Petershill, Carlyle s AlpInvest Partners and Neuberger Berman Group s Dyal Capital Partners. Blackstone co-founder Pete Peterson, one of the founders of the PE industry, died March 2 at the age of 91. Peterson cofounded Blackstone with Steven Schwarzman in In 28, Peterson stepped back from Blackstone in order to focus on the Peter G. Peterson Foundation, which is active on a number of policy issues around US federal entitlements and budget deficits. Clearlake Capital Partners V Special situations $3.6 Equistone Partners Europe Fund VI Buyout $3.4 EnCap Flatrock Midstream Fund IV Natural resources $3.3 Partners Group Direct Infrastructure Infra $2.7 Buyout dry powder three-year compounded growth rates Source: Preqin. 4% 35% 3% 25% 2% 15% 1% 5% % -5% -1% -15% 4

5 1.ii. Private equity: acquisitions Executive summary PE deal activity is up 6% by value versus a year ago. It was the most active first quarter for PE since 27. Activity remains strong in both EMEA and the Americas, while Asia-Pacific has seen declines. PE firms expect to add to their headcount in the coming months, particularly for deal-related professionals, as they seek to deploy some US$64b in dry powder. Current state PE deal activity up 6% from PE firms announced 423 acquisitions valued at US$11b in the first quarter of 218, up 6% by value from the same period a year ago, and up 1% by volume. It was the busiest first quarter for PE since 27, when firms announced deals valued at US$192b. On a regional basis, PE firms saw strong activity in both the Americas and EMEA, while Asia-Pacific deals saw a modest decline from last year. In the Americas, PE firms announced deals valued at US$51b, up 68% from last year. In EMEA, firms announced deals valued at US$4b, up 97% from last year. In Asia-Pacific, firms announced deals valued at US$1b, down 18% from last year. PE deal activity by value, vs. 218 $6 $5 $4 $3 $2 $1 $ Americas EMEA Asia-Pacific Environment and horizon 218 PE firms looking to add headcount A new report from Preqin and FPL Associates found that the industry expects to continue adding headcount, especially for deal-related professionals, as it seeks to deploy record levels of dry powder. The 218 Preqin Private Capital Compensation and Employment Review found that 65% of firms surveyed expect to increase the size of their workforce over the near term. Nearly half expect their workforce to increase by more than 5%. By far, the function in the highest demand was deal professionals, with 72% of survey respondents stating it was their top priority. An analysis conducted by CEPRES published in Private Equity International challenged the view that first-time PE funds tend to be the riskiest and best-performing, instead finding that it s a firm s second fund that typically posts the highest gross returns and comes with the highest levels of risk. CEPRES analysis of 4.7 investments made between 29 and showed that first time funds returned an average of 26.1%, while second funds returned an average of 27.8% on a gross pooled IRR basis. PE acquisition values and volumes by quarter $14 $12 $1 $8 $6 $4 $2 $ Top deals so far this year Deal value (US$b) Target Industry Sponsor Thomson Reuters Financial & Risk (F&R) Business Technology Akzo Nobel NV (specialty chemicals business) Chemicals Number of deals Percentage of PE firms that expect to add headcount by function Source: 218 Preqin Private Capital Compensation and Employment Review Value (US$b) Canada Pension Plan Investment Board (CPPIB); GIC Special Investments Pte Ltd.; Blackstone Group LP $.5 GIC Special Investments Pte Ltd.; Carlyle Group LP $12.5 Macquarie Infrastructure & Real Assets Pty Ltd. $1.7 TDC A/S Telecom Gas Natural SDG SA Utilities CVC Capital Partners Ltd. $4.7 Blackhawk Network Holdings Inc. Technology Silver Lake Group LLC $3.3 Pure Industrial Real Estate Trust Real estate Blackstone Group LP $2.9 EnerVest Ltd (South Texas division) Oil and gas TPG Capital LP $2.8 Ply Gem Holdings Inc. Clayton, Dubilier & Rice Construction LLC $2.3 Leonard Green & Partners Pro Mach Inc. Machinery LP $2.2 LifeScan Inc. Health care Platinum Equity LLC $2.1 Executive Fundrasing, management, 3% 4% Portfolio operations, 9% Firm operations, 1% Deal teams, 72% Reporting and marketing support, 2%

6 1.iii. Private equity: exits Executive summary PE exit activity declined in the first quarter, as firms continue to focus on deployment. Firms announced exit deals valued at US$57b, down 26% from. Declines in exit activity were evident in both M&A and IPOs. According to the 218 EY Global Private Equity Divestment Study, firms are getting more programmatic in the exit planning. Sixty-one percent now determine the right time to sell 12 months before exiting, up from 35% in the study. Current state Exits continue to see declines as firms focus on deployment PE M&A exits by quarter (US$b) PE exit activity declined in the first quarter, as firms continue to focus on deployments and the PE exit supercycle, which peaked in, continues to wind down. Firms announced 226 PE exits valued at US$57b, down 26% from the same period a year ago. Exits by M&A fell 28% to 49.6b, with declines evident across all major regions; activity by value was down 31% in the Americas, down 56% in Asia-Pac, and off 6% in EMEA. IPOs continued to struggle, with proceeds down % from the first quarter of. The number of PE-backed deals declined 8%, from 26 deals in, to 24 deals in 218. March, however, was particular active for new deals 11 IPOs launched, versus just 6 in February and 7 in January. $12 $1 $8 $6 $4 $2 $ Commitments Number of funds closed Environment and horizon PE firms getting more programmatic and less opportunistic in selling assets PE-backed IPOs by quarter PE firms are continuing to get more disciplined and programmatic in their sales processes. According to the 218 EY Global Private Equity Divestment Study, almost two-thirds (61%) of PE executives now determine the right time to sell 12 months before the exit up from 35% in the study. The percentage of PE funds relying on opportunistic buyers has fallen from 54% to 21%. PE funds are spending more time positioning the business for exit, with a sale strategy established well in advance. $2 $15 $1 $5 $ When do you determine the right time to sell? Source: 218 EY Global Private Equity Divestment Study Commitments Number of funds closed 7% 6% 5% 4% 3% 2% 1% % One year presale Two years presale 218 At purchase Opportunistic The study also noted the increasing role digital technologies are playing as a value driver that firms are realizing at exit, noting that: 94% of respondents reported creating pre-sale value through reporting and analytics. 73% reported creating pre-sale value through cybersecurity initiatives. 72% reported value creation through cloud computing initiatives. 69% created value through enterprise resource planning. Largest PE exit deals in 218 Target Industry Value (US$b) Sponsor Type Santos Ltd. Oil and gas $13.2 ADT Inc. Blue Buffalo Pet Products Inc. Professional services $1.5 Hony Capital Management Ltd. M&A Apollo Global Management LLC IPO Food and beverage $8. Invus Group LLC M&A Gates Industrial Corp. plc Machinery $5.5 Beijing Mobike Technology Co. Ltd. Technology $3.7 Blackstone Group LP Warburg Pincus LLC; TPG Capital LP IPO M&A 6

7 2. Infrastructure Executive summary After a record, fundraising for the infrastructure space remains active, with US$16.5b raised by funds. PE firms have nearly US$16b in dry powder available for new deals. Deployment activity increased 25% from, to US$64.b. Fund managers are looking to get increasingly active in the coming months, despite valuation concerns. A Preqin report found 41% of managers expect to deploy significantly more capital over the next 12 months. Current state Infrastructure fundraising remained active in the first quarter of 218 after a record year in. Firms closed funds with commitments totaling US$16.5b in 218. While this was down 5% from the same period a year ago, it was up 65% from. of last year was bolstered by the US$15.8b in commitments closed by Global Infrastructure Partners II. As a result of strong fundraising, infrastructure firms now have US$158b in dry powder available for new deals. Of this, 44% is focused on North America, 35% is focused on Europe, with the balance targeting opportunities in Asia-Pacific and other emerging markets. Top infrastructure funds raised YTD 218 Source: Preqin Infrastructure fundraising (US$b) Source: Preqin $35 $3 $25 $2 $15 $1 $5 $ Fund Commitments (US$b) Type Sector focus Commitments Number of funds closed BlackRock Infrastructure Debt Aggregated separate accounts 7.6 Debt Diversified Macquarie Asia Infrastructure Fund II 3.3 Core Diversified GCM Grosvenor Infrastructure Separately managed account 3.2 Opportunistic Diversified Partners Group Direct Infrastructure 2.7 Core plus Diversified Strategic Partners Real Assets II 1.8 Secondaries Diversified The pace of deployment increased in the first quarter to US$64.b across 581 assets (the majority of these deals were of undisclosed size). This represented an increase of 25% from, and an increase of 9% from the same period a year ago. Roughly one-half of announced activity was centered in Europe. Infrastructure dry powder by region (in US$b) Source: Preqin $8 $7 $6 $5 $4 $3 $2 $1 $ North America Europe Asia-Pacific Rest of the world Environment and horizon Infrastructure managers are ramping up to get increasingly active in regards to deployment in the coming months. A recent report from Preqin, the H1 218 Infrastructure Fund Manager Outlook, found that 41% of managers surveyed expect to deploy significantly more capital over the next 12 months, and another 33% expect to deploy slightly more capital in the coming months. However, the report also noted that valuations remain a fundamental concern for managers 59% listed it as their key challenge, ahead of regulation (36%) deal flow (33%) and pressure from LPs on fees (23%). In the US, the Trump administration moved to streamline the regulatory approval process for infrastructure projects. In early April, the administration issued the One Federal Decision memorandum of understanding by federal agencies, which outlined a goal of having one federal agency take the lead on the federal review and permitting process for major infrastructure initiatives. Currently, projects must navigate requirements and approvals from a number of separate agencies. Under the plan, agencies will co-develop a single impact statement for each project and sign a single record of decision. More than a dozen agencies, including the departments of Energy, Interior, Commerce, Transportation and Environment Protection have signed on to the agreement. Infrastructure deals by quarter (in US$b) Source: Preqin $2 $18 $16 $14 $12 $1 $8 $6 $4 $2 $ Deal value (US$b) Number of deals

8 3. Private credit Executive summary Fundraising for private credit funds declined in the first quarter to the lowest amount since. Firms closed funds valued at US$14.2b. Activity was driven by a number of large funds in the mezzanine and special situations spaces. Credit funds have record amounts of dry powder to put to work; currently firms have US$244b in capital to deploy. Current state Fundraising for private credit declined in the first quarter of the year after a strong, which saw firms close funds valued at more than US$1b. Firms closed on US$14.2b in commitments in 218, down 43% from the same period a year ago, and less than half the amount raised in the fourth quarter of last year. 218 saw increased activity in the mezzanine and special situations spaces, which collectively accounted for 55% of aggregate fundraising, compared with just 22% in. Direct lending, by contrast, saw a relative decline, accounting for just 36% of aggregate credit fundraising so far this year after representing more than half of the asset class commitments last year. On a regional basis, the Americas saw funds close with an aggregate value of US15.b in the first quarter, while EMEA saw funds close with aggregate commitments of US$3.5b, down from US$8.9b in the first quarter of last year. As a result of strong fundraising, credit funds have record amounts of dry powder to put to work. Currently, funds have US$244b in capital to deploy, up 11% from the beginning of. Of this, approximately twothirds is focused on the US, 28% on Europe and the balance on Asia and the emerging markets. Top credit funds raised YTD 218 Source: Preqin Fund Environment and horizon Commitments (US$b) Type Region focus Clearlake Capital Partners V Special 3.6 Situations US KKR Private Credit Opportunities Partners II 2.2 Mezzanine US Guggenheim Private Debt Fund II Direct 2. Lending US Alchemy Special Opportunities Fund IV Distressed 1.2 Debt Europe Capzanine IV (Private Debt) Direct 1.2 Lending Europe While fundraising figures are down from last year, momentum in the space remains strong. Funds that closed in the first quarter of 218 spent an average of 12 months on the road, down from an average of 16 for funds that closed in. It was the lowest average time spent fundraising since Moreover, funds that have closed this year reached an average of 55% of their target within the first four months after launch. Currently, there are 88 funds at various stages of the fundraising process. In total, they are seeking more than US$44b from investors. Like other private classes, the influx of capital and competition has made deployment an increasing challenge. A recent Preqin survey found that valuations topped managers lists of concerns about the pace. Forty-nine percent cited valuations as a primary concern for the coming year, followed by deal flow (37%) and performance (3%). The same survey noted that 45% of managers believed it is more difficult to fund attractive opportunities today than it was a year ago. Private credit fundraising (US$b) Source: Preqin $6 $5 $4 $3 $2 $1 $ Credit fundraising by type, vs. 218 (as a percentage of total) Source: Preqin 6% 5% 4% 3% 2% 1% % Commitments Direct lending Mezzanine Special situations Private credit fundraising by region Source: Preqin Americas: US$15.b 218 US$1.7b Number of funds closed 218 Distressed debt Private debt fund of funds EMEA: US$8.9b 218 US$3.5b Asia-Pacific: US$8m 218 N/A

9 4. M&A Executive summary Global M&A reached near-record value levels in 18, with deals worth US$1.2t. Megadeals continued to grab headlines, with 18 deals the highest number recorded in any quarter. Health care is undergoing consolidation driven by sector convergence. The outlook for 218 remains bullish, as corporate dealmaking is expected to benefit from US tax reforms and steady economic growth. However, political and regulatory uncertainty is likely to remain a key concern. Shareholder activism is expected to spur M&A activity as investors focus on portfolio transformation. Current state Global M&A had the strongest first quarter since 2, recording 8,281 deals worth US$1.2t. This is only the second time in deal history that M&A value surpassed the US$1t mark during the first quarter. Notably the current month saw 2,45 deals valued at US$48b, the highest value ever seen in March. This was on the back of eight mega-deals (US$1 billion and above) accounting for half of the total deal value. Megadeals continue to be the highlight of the year so far, with 18 in total the highest number of mega deals ever recorded in any quarter. Chinese outbound appetite was subdued in the first quarter, primarily on the back of ongoing political tensions and regulatory uncertainty in overseas markets. The quarter registered only 113 outbound deals worth US$13.1b a decline of 5% and 84% in deal value compared with the similar period in and respectively. Even in terms of volume, the number was the lowest seen in any quarter over the past three years. Significant activity in health care highlights the growing trend of convergence driving consolidation in the sector. Cigna Corp s offer to buy Express Scripts is the latest example of the trend, where insurers, drug distributors and retailers are combining to tackle high health care costs, become more vertically integrated and fend off potential competition from new rivals entering the fray, such as Amazon. Other key examples are CVS purchasing Aetna, Albertsons acquiring Rite Aid, and the mooted deal between Walmart and Humana. Environment and horizon Global M&A started off strongly in 218, particularly in terms of deal value. This trend may be extended with the support of a robust corporate earnings roundup, steady economic growth, optimism around US tax reforms and strong labor markets. PE-backed firms continue to be on the rise, providing a further boost to deal activity. PE bidders sit on abundant dry powder in a competitive dealmaking environment, valuations may be pushed higher as funds vie for top-class assets. Political and regulatory uncertainty is likely to remain a key concern. Issues such as a potential US-China trade war and the pace of interest rate hikes in major economies have been weighing on equity markets in 18, but have yet to derail dealmaking. However, the regulation of dealmaking is expected to remain in the spotlight, in the wake of uncertainty about regulatory and antitrust policies. Shareholder activism is likely to propel M&A activity in 218, as growth focus from investors is shifting from efficiency drives and organic investment-led growth to pursuing M&A. Companies that are under-scale, cash-strapped or struggling in consolidating industries are under intense pressure from activists, and there may be a greater number of deal outcomes being defined by shareholders. A key trend for M&A activity is the use of technology by companies to transform business models to adapt to changing market conditions and close the innovation gap. As new technologies power innovation, business models in almost every industry look starkly different from a just a few years ago. It is becoming an imperative for companies to continually review their business models and recycle their capital to invest in growth opportunities. 9 Global deal value and volume (year to date (YTD) last five years) and EY analysis. 1, Deal environment: by area (US$b) Last 12 months (LTM) to March 218 versus LTM to March (PTM) and EY analysis. 2,5 2, 1,5 1, 5 - LTM value Americas Asia-Pacific EMEA PTM value Deal environment: by target sector and target area (% share of global value) LTM to March 218 and EY analysis; excludes real estate asset sales. Note: because of rounding, percentages may not add up to total. M&A analysis as at 1 April 218. Value (US$b) (LHS) 218 *Volume based on deals greater than US$1m. Note: data is continually updated and therefore subject to change. Figures have been rounded off to nearest decimal place. Volume* (RHS) Americas Asia-Pacific EMEA Total Technology 6% 7% 3% 16% Consumer products and retail 5% 3% 4% 11% Power and utilities 3% 2% 3% 8% Diversified industrial products 3% 2% 2% 8% Oil and gas 5% % 2% 8% Life sciences 5% 1% 2% 7% Media and entertainment 5% 1% 2% 7% Insurance 6% 1% 1% 7% Automotive and transportation 1% 2% 3% 6% Others 8% 6% 6% 21% All sectors 47% 25% 28% 1% Capital Briefing

10 4.i. M&A: cross-border deal flow Key cross-border M&A deal flow (LTM to March 218) (Total = US$94b) N America to: UK&I $16b W Europe $45b Latin America $23b UK&I to: W Europe $29b N America $27b SE Asia $3b Africa $1b W Europe to: N America $13b UK&I $27b L America - $11b Greater China and Mongolia to: W Europe - $27b N America $18b SE Asia $b Japan to: N America $33b Greater China - $12b SE Asia - $7b L America to: N America $3b Middle East $2b Key >$1b >$5b >$1b Note: all figures are in US$. Cross-border M&A deal flow (LTM to March 218) (US$m) Target Acquiror # Africa SE Asia (including Korea) Greater China and Mongolia $ Russia, CIS and CSE W Europe India Japan Latin (excluding America UK&I) Middle East North America Oceania UK&I Inbound total Africa 2, , , ,14 1, ,295 1,33-61% SE Asia (including Korea) % versus PTM 15 4,434, , , ,233 37,118 46% Greater China and 29 3,518 29,86-1,13-12, ,13 1, ,541 44% Mongolia $ Russia, CIS and CSE ,8 7,778 4, , , ,36 26,632-43% W Europe (excluding UK&I) 1,654 3,623 27, , , ,319 44,584 1,428 29,16 256,446-23% India 47 2,34 4, , , ,142-34% Japan , , , % Latin America ,391-1, , , ,481-19% Middle East 226 2,572 2,518-3, ,68 1,519 2,541 9, ,19-47% North America 983 5,492 18,23-12, ,393 2,654 9,337 58,736 5,184 27, ,67-46% Oceania 247 3,58 7,598 7, , , ,957 % UK&I 2,189 1,951 3, , ,62 1,131 2,22 15,6 4,732 2, ,424 26% Outbound total 8,45 27,78 132,839 9, 3,798 2,688 71,664 1,334 2, ,962 14,537 66,932 94,341-25% % versus previous 12 months (PTM) -41% -26% -3% -64% 6% -63% -29% -34% -41% -32% 26% -49% -25% # Acquiror refers to acquiror s ultimate holding company. $ Greater China and Mongolia includes mainland China, Hong Kong, Macau, Mongolia and Taiwan. M&A analysis as at 1 April All Rights Reserved. Note: data is continually updated and therefore subject to change. Key >US$1b >US$5b >US$1b Intra-area cross-border deals 1 Capital Briefing

11 Volume 5. IPOs Executive summary Global IPO activity saw mixed results in March 218. While IPO activity registered a year on year (YOY) decrease of 29% in terms of number of deals, it increased 34% by proceeds. March 218 recorded the megadeal of Siemens Healthineers AG (US$4.5b) the largest German IPO since Innogy SE in October. EMEA dominated global IPO activity by proceeds in March, for the first time since June. While US IPO activity is expected be strong in 1H18, mainland China is unlikely to reach levels due to stricter supervision and a lower listing approval rate by the local regulator. Current state Global IPO activity continued its strong start to 218, with 121 deals raising US$22.2b due to strong activity across certain regions in March 218. While IPO activity registered a YOY decrease of 29% in terms of number of deals, it increased 34% by proceeds the highest level for the month of March since 28. Asia-Pacific continued to lead global IPO activity in terms of number of deals, with 78 raising US$8.2b, accounting for 65% of global deals. Compared with March, the region registered a 39% decrease and 11% increase in terms of number of deals and proceeds respectively. EMEA IPO activity saw mixed results in March 218 (31 deals raising US$11.b). Proceeds saw a three-fold increase, while deal number was unchanged. This can be attributed to two megadeals in Germany US$4.5b listing of Siemens Healthineers AG, the country s largest IPO since Innogy SE in October, and the listing of DWS Group GmbH & Co KGaA which raised US$1.6b. IPO activity was steady on the US exchanges this month (15 deals raising US$4.8b). YOY, while the number of deals increased by 36%, proceeds declined by 18%. Environment and horizon Global IPO outlook is positive for the coming months, driven by steady equity markets and a healthy pipeline across sectors and regions, underpinning strong investor confidence. We expect a few more active quarters for IPOs on the Hong Kong Stock exchanges, driven by a favorable economic backdrop and strong corporate earnings growth. The Hang Seng Index is back at record levels, investor appetite is solid, and reforms to HKEx s listing requirements are expected to become effective as early as June 218, which would result in an increased number of listings by technology and biotechnology companies. By contrast, IPO activity on mainland China exchanges is unlikely to reach levels due to stricter supervision and a lower listing approval rate by the local regulator. However, the China Securities Regulatory Commission (CSRC) is likely to provide more policy support to the listing of high-quality companies and industry giants. This may attract lead companies that are currently listed overseas to consider returning to the domestic market. Additionally, IPO activity in China and other APAC markets may be negatively impacted due to US trade barriers and the expectation of further US interest rate rises, which would increase pressure on capital outflows. The European IPO outlook remains positive, with a healthy pipeline of companies looking to take advantage of attractive stock market valuations. We expect a number of megadeals to come to the European public markets later this year, including the German, Swiss and Nordics capital markets. These include IPOs of carve-outs from conglomerates and by family businesses. With an improving macroeconomic and political environment, the Middle East should witness a surge in IPO activity. There is a strong pipeline of IPOs with government-owned assets being prepared for IPOs in Kuwait, Egypt, Saudi Arabia and the UAE. US IPO activity should be strong in the first half of the year as, despite an increase in volatility in February, the market has stabilized and there are signs of continued investor appetite for IPOs. Cross-border deals are also likely to contribute to the robust pipeline as a backlog of Chinese issuers target US listings. 11 However, potential uncertainty surrounding mid-term elections in 48 could result in compressed IPO windows in the second half of the year. Top 1 IPOs by proceeds, March 218. Issuer name 1% 8% 6% 4% 2% Issuer location Sector Exchange Proceeds (US$m) Siemens Healthineers AG Germany Life sciences Deutsche Boerse 4,521 iqiyi Inc. China DWS Group GmbH & Co. Germany KGaA Fibra E - Grupo Aeroportuario de la Ciudad Mexico de Mexico Media and entertainment Wealth and asset management Automotive and transportation NASDAQ 2,25 Deutsche Boerse 1,597 Mexican 1,474 Dropbox Inc. US Technology NASDAQ 869 ELKEM ASA Norway Mining and metals Oslo Bors 833 Bandhan Bank Ltd. Jiangsu Financial Leasing Co. Ltd. India Hindustan Aeronautics Ltd. India Bilibili Inc. Banking and capital markets Bombay 686 China Other sectors Shanghai 636 China Aerospace and defense Media and entertainment IPO activity by area (YOY % change) (LTM to March 218 versus LTM to March ) ; regional classification on the basis of issuer nationality. US Asia-Pacific Americas (including US) Global EMEA Bombay 635 New York 483 % Value % 3% 6% 9% 12% 15% 18% IPO activity by sector and area (% share of global proceeds) LTM to March 218 ; regional classification on the basis of issuer nationality. Note: because of rounding, percentages may not add up to total. Americas Asia-Pacific EMEA Total Technology 4% 7% 3% 14% Real estate 3% 4% 5% 12% Banking and capital markets 1% 5% 5% 11% Life sciences 3% 3% 5% 1% Automotive and transportation 2% 3% 3% 9% Diversified industrial products 2% 4% 2% 8% Consumer products and retail 2% 4% 3% 8% Insurance % 5% % 5% Power and utilities 1% 2% 2% 5% Others 6% 7% 5% 19% Total 23% 45% 32% 1% Capital Briefing

12 6. Loans Executive summary In 18, total new-issue loan volume was US$21.7b in the US and Europe the highest total compared with the previous three quarters. However, the 18 total is still 15% lower than the total new issuance volume in the same period last year. The European leveraged loan market recorded strong growth in 218, beating the YTD volume of. Issuance in the US leveraged loan market gained momentum in 18 thanks to strong March volumes the highest monthly total since September. Average institutional tranche sizes have increased in Europe as M&A-related financing has picked up, indicating that Europe s more mature market can now absorb larger loans. Current state M&A boosts loan issuance volume in 18 In March, US$68.5b of loans were issued in the US and 7.3b in Europe. Overall, total global new-issue volume was US$77.4b in March, down 14% compared with the same period in. In 18, total new-issue loan volume was US$21.7b in the US and Europe, the highest total compared with the previous three quarters. However, the 18 total is still 15% lower than the total new issuance volume in the same period last year. The European leveraged loan market recorded strong growth in 218, beating the YTD volume of. YTD issuance is US$43.4b, up 2% compared with the same period last year: 12 An increase in new-issue volume in 18 reflects growth in M&A-related financings and new money supply, as more than 6% of the volume came from new deals. YTD M&A-related financing in Europe accounted for 62% of total volume, followed by refinancing activity, which accounted for 31% of total volume. Issuance in the US leveraged loan market gained momentum in 18 on the back of a strong March volume the highest monthly total since September : The increase in loan issuance activity in 18 was primarily due to an increase in M&A activity. YTD M&A-related financing in the US accounted for 47% of total loan volume, followed by refinancing activity, which accounted for 43% of total volume. Environment and horizon Larger loans can be absorbed in the European market, and more repricing activity may be seen in the US market The average institutional tranche size has increased in Europe as M&A has picked up, indicating that Europe s more mature market can now absorb larger loans. The Federal Reserve raised interest rates in March and indicated that it may raise them further. Issuers continue to tap the loan market with repricings in an effort to cut spreads amid a rising three-month LIBOR which has crossed the 2% mark. Opportunities More room is available for M&A-related financing There is still room available for more M&A-driven deals. Some large buyout financing deals are expected in the second quarter of 218. Global bond issuance by industry, 218 Source: Thomson ONE. Government and agencies Retail Telecommunications Media and entertainment Health care Consumer products and services Consumer staples Real estate Materials High technology Industrials Energy and power Financials Proceeds (US$b) Global investment-grade loans (US$b) Source: Thomson ONE Global high-yield loans (US$b) Source: Thomson ONE. 1, Top arrangers ranking, 218 (US$b) Source: Thomson ONE. Proceeds Issues Bank of America Merrill Lynch JP Morgan Chase & Company 7.7 Citigroup Inc Mizuho Financial Group 48. Mitsubishi UFJ Financial Group 46.9 All loans by region, 218 (US$b) Source: Thomson ONE. Proceeds (LHS) Number of issues (RHS) Proceeds (LHS) Number of issues (RHS) Market share (%) Proceeds Issues Americas EMEA Asia-Pacific , 2, 1, Capital Briefing

13 7. Bonds Executive summary Global high-yield activity recovered in March after a slowdown in February, showing an increase of 115%. YTD high-yield issuance was US$62.3b in the US and 19.6b in Europe, with total global issuance at US$86.3b, down 2% compared with the same period last year. Refinancing activity is still the primary driver of issuance in both the US and European high-yield markets. There was more balance between investors and issuers in 18 in Europe, with investors winning higher yields and, in some instances, tighter covenant packages. Current state High-yield bond market had a slower start to the year Global high-yield activity recovered in March after a slowdown in February, showing an increase of 115%. However, March issuance volume was still 35% short compared with the same period last year. YTD high-yield issuance was US$62.3b in the US and 19.6b in Europe, with total global issuance at US$86.3b, down 2% compared with the total issuance in the same period last year. High-yield activity declined in both the US and European markets in 18. The US market is 24% behind volume, and the European market is 8% behind volume. Refinancing activity is still the primary driver of issuance in both the US and European high-yield markets. However, M&Adriven activity is rising in Europe: Refinancing activity accounted for 75% of total volume in the US and 52% in Europe in 18. M&A-related financing accounted for 13% of total volume in the US and 32% in Europe in 18. Clearing yields for B-rated bonds for the three months ending 3 March widened in the US to 7.9% from 6.57% at the end of December. Yields also widened in Europe to 5.45% from 5.31%. The high-grade market has lost its pace after a year of robust activity due to the rise in interest rates. High-grade volume decreased in March, with US$15.4b of issuance compared with US$127.3b in the same period last year. Also, YTD volume is still 16% behind the recorded volume. Environment and horizon More balance may be seen between investors and issuers in the European market There was more balance between investors and issuers in 18 in Europe, with investors getting higher yields and, in some instances, tighter covenant packages. However, borrowers are still able to lock in financing at near-record low yields. Opportunities More opportunistic transactions are expected in the coming months More opportunistic transactions are expected in the coming months due to current dynamics; however, the pipeline for the second quarter is dominated by leveraged buyout financings, which would be a boost for sponsor-backed issuance. Global bond issuance by industry, 218 Source: Thomson ONE. Media and entertainment Telecommunications Consumer products and services High technology Materials Health care Consumer staples Real estate Retail Industrials Energy and power Proceeds (US$b) Euro bond issuances (US$b) Source: Thomson ONE US bond issuances (US$b) Source: Thomson ONE Mar Mar Apr Apr May May Top 1 corporate bond issuers, 218 (US$b) Source: Thomson ONE. Jun Jul Aug Proceeds (LHS) Jun Jul Aug Proceeds (LHS) Sep Sep Issuer Nation Industry Proceeds CVS Health Corporation US Retail 4. Anheuser Busch Inbev Worldwide Belgium Consumer staples 15.1 China Railway Corporation China Industrials 12.6 Sanofi SA France Health care 9.9 MPLX LP US Energy and power 5.5 Campbell Soup Co US Consumer staples 5.3 Tencent Holdings Ltd China High technology 5. Sempra Energy Inc US Energy and power 5. Celgene Corporation US Health care 4.5 Vonovia Finance BV Netherlands Real estate 3.8 Oct Oct Nov Dec Jan 18 Number of issues (RHS) Nov Dec Jan 18 Number of issues (RHS) Feb 18 Feb 18 Mar 18 Mar Capital Briefing

14 Appendices

15 Appendix A Global PE fundraising activity Global PE fundraising (in US$b) $7 1,2 $6 1, $5 8 $4 6 $3 $2 4 $1 2 $ YTD 218 Commitments Number of funds closed Source: Preqin Dry powder buyout funds by region (in US$b) $7 $6 $5 $4 $3 $2 $1 $ YTD 218 North America Europe Asia-Pacific Rest of the world Source: Preqin 12

16 Appendix A Global PE acquisition activity PE acquisitions by year (in US$b) $8 4, $7 3,5 $6 3, $5 2,5 $4 2, $3 1,5 $2 1, $1 5 $ YTD 218 Deal value Number of deals Global PE value and volume quarterly trend (in US$b) $14 7 $12 6 $1 5 $8 4 $6 3 $4 2 $2 1 $ Deal value Number of deals 13

17 Appendix A Global PE acquisition activity by region Americas Americas PE acquisitions (in US$b) $8 35 $7 3 $6 25 $5 2 $4 $3 15 $2 1 $1 5 $ Deal value Number of deals Americas PE acquisitions the top deals with disclosed financial terms 218 Announcement date 3-Jan Jan-18 9-Jan-18 Completion date Company Sector Value (US$b) Acquiror Canada Pension Plan Investment Board (CPPIB); GIC Special Investments Pte Thomson Reuters Financial & Risk (F&R) Business Technology $.5 Ltd.; Blackstone Group LP Blackhawk Network Holdings Inc. Technology $3.3 Silver Lake Group LLC Pure Industrial Real Estate Trust Real estate $2.9 Blackstone Group LP 2-Mar-18 EnerVest Ltd. Oil and gas $2.8 TPG Capital LP 31-Jan-18 Ply Gem Holdings Inc. Construction $2.3 Clayton, Dubilier & Rice LLC 29-Jan-18 7-Mar-18 Pro Mach Inc. Machinery $2.2 Leonard Green & Partners LP 16-Mar-18 LifeScan Inc. Health care $2.1 Platinum Equity LLC 4-Jan-18 OneMain Holdings Inc. Finance $1.4 Apollo Global Management LLC 9-Jan Feb-18 Amtrust Financial Services Inc. Insurance $1.4 Stone Point Capital LLC Wyndham Worldwide Corp. European vacation business Dining and lodging $1.3 Platinum Equity LLC 14

18 Appendix A Global PE acquisition activity by region EMEA EMEA PE acquisitions (in US$b) $5 3 $45 $4 25 $35 2 $3 $25 15 $2 $15 1 $1 5 $5 $ Deal value Number of deals EMEA PE acquisitions the top deals with disclosed financial terms 218 Announcement date Completion date Company Sector Value (US$b) Acquiror 27-Mar-18 Akzo Nobel NV (Specialty chemicals business) Chemicals $ Feb-18 TDC A/S Telecommunications $1.7 GIC Special Investments Pte Ltd.; Carlyle Group LP Macquarie Infrastructure & Real Assets Pty Ltd. 22-Feb-18 Gas Natural SDG SA Utilities $4.7 CVC Capital Partners Ltd. 1-Mar-18 Laird plc Technology $1.6 Advent International Corp. 3-Apr-18 HES International BV Transportation $1.6 Macquarie Infrastructure & Real Assets Pty Ltd. 23-Mar Mar-18 Albea SA Forestry and paper $1.5 PAI Partners SAS 6-Feb-18 6-Feb-18 Sebia International SA Health care $1.5 CVC Capital Partners Ltd. -Mar-18 FCC Aqualia SA Utilities $1.3 IFM Investors Pty Ltd. 28-Feb-18 HSH Nordbank AG Finance $1.2 1-Jan-18 Cerberus Capital Management LP Primewaterview Holdings 1-Jan-18 Nigeria Ltd. Real estate $1.1 Milost Global Inc. 15

19 Appendix A Global PE acquisition activity by region Asia-Pacific Asia-Pacific PE acquisitions (in US$b) $5 14 $45 $4 $ $3 8 $25 $2 6 $15 4 $1 $5 2 $ Deal value Number of deals Asia-Pacific PE acquisitions the top deals with disclosed financial terms 218 Announcement date Completion date Company Sector Value (US$b) Acquiror 1-Mar-18 National Highways Authority 1-Mar-18 of India (648km of highways) Transportation $1.5 Macquarie Infrastructure & Real Assets Pty Ltd. 24-Mar Mar-18 Indiabulls Properties Pvt. Ltd. Construction $1.5 Blackstone Group LP 2-Jan-18 ehi Car Services Ltd. Transportation $1.4 MBK Partners Ltd. 26-Mar-18 ikang Healthcare Group Inc. Health care $1.2 Shanghai Yunfeng Investment Management Co Ltd. 5-Jan-18 Shopping Centres (2 retail malls in China) Real estate $1.1 Hopu Investment Management Co. 27-Jan-18 5-Apr-18 I-MED Radiology Network 21-Feb-18 Ltd. Health care $1. Permira Ltd. Accolade Wines Australia Ltd. Food and beverage $.8 Carlyle Group LP 23-Jan Mar-18 Trimco International Holdings 23-Jan-18 Ltd. Textile $.5 Vietnam Technological & Commercial Joint Stock Bank 12-Mar-18 Affinity Equity Partners (HK) Ltd. Techcombank Finance $.4 Warburg Pincus LLC 21-Mar-18 Microlife Corp. Technology $.3 Morgan Stanley Private Equity Asia Ltd. 16

20 Appendix A Global PE exit activity Global PE-backed exits by M&A value and volume quarterly trend (in US$b) $12 35 $1 3 $ $6 15 $4 1 $2 5 $ 21 Deal value Number of deals 218 Global PE-backed IPOs value and volume quarterly trend (in US$b) $45 9 $4 8 $35 7 $3 6 $25 5 $2 4 $15 3 $1 2 $5 1 $ Deal value Number of deals

21 Appendix A Global PE exit activity Americas Americas PE exits (in US$b) $9 18 $8 16 $7 14 $6 12 $5 1 $4 8 $3 6 $2 4 $1 2 $ 21 Deal value Number of deals 218 Americas PE exits top exits with disclosed values 218 Announcement or filing date Completion or priced date Company Sector Value (US$b) Sponsor Type 21-Dec- 18-Jan-18 ADT Inc. Professional services $1.5 Apollo Global Management LLC IPO 23-Feb Dec- Blue Buffalo Pet Products Inc. Food and beverage $8. Invus Group LLC M&A Gates Industrial Corp. 24-Jan-18 plc Machinery $5.5 Blackstone Group LP IPO 31-Jan-18 Ply Gem Holdings Inc. Construction $2.3 CI Capital Partners LLC M&A 14-Nov- Americold Realty 18-Jan-18 Trust Real estate $2.3 Goldman Sachs Capital Partners; Yucaipa Companies LLC IPO 29-Jan-18 7-Mar-18 Pro Mach Inc. Machinery $2.2 AEA Investors LP M&A 14-Feb- Liberty Oilfield 11-Jan-18 Services Inc. Oil and gas $2. Riverstone Holdings LLC IPO 28-Mar-18 Polycom Inc. Telecommunications $2. Siris Capital Group LLC M&A 1-Feb- 1-Feb-18 FTS International Inc. Oil and gas $2. RRJ Capital IPO 12-Jan-18 7-Feb-18 Cactus Inc. Oil and gas $1.9 Cadent Energy Partners LLC IPO 21 18

22 Appendix A Global PE exit activity EMEA EMEA PE exits (in US$b) $7 18 $ $5 $ $3 8 $2 $ $ 21 Deal value Number of deals 218 EMEA PE exits top exits with disclosed values 218 Announcement or filing date Completion or priced date Company Sector Value (US$b) Sponsor Type 5-Feb-18 Italo-Nuovo Trasporto Viaggiatori SpA Transportation $3. Peninsula Capital Advisors LLP M&A 26-Feb-18 Interoute Communications Ltd Telecommunications $2.3 Crestview Partners LP; Aleph Capital Partners LLP M&A 26-Mar-18 Scandlines Deutschland GmbH Transportation $2.1 3i Group plc M&A 3-Apr-18 HES International BV Transportation $ Feb Mar-18 NIBC Holding NV Finance $1.6 Carlyle Group LP; Riverstone Holdings LLC JC Flowers & Co LLC; apriori Capital Partners LP M&A IPO 23-Mar Mar-18Albea SA Forestry and paper $1.5 Sun Capital Partners Inc. M&A 6-Feb-18 Sebia International SA 6-Feb-18 (6%) Health care $1.5 Montagu Private Equity LLP; Astorg Partners SA M&A 2-Mar Feb-18 Groupe Eurotunnel SE 2-Mar-18 ( %) Transportation $1.3 Goldman Sachs Capital Partners M&A Imagina Media Leisure and Audiovisual SL (53.5%) recreation $1.3 Torreal SA M&A 23-Mar-18 Eurogrid GmbH (2%) Utilities $1.2 IFM Investors Pty Ltd. M&A 22 18

23 Appendix A Global PE exit activity Asia-Pacific EMEA PE exits (in US$b) $45 6 $4 $35 5 $3 4 $25 $2 3 $15 2 $1 $5 1 $ 21 Deal value Number of deals 218 Asia-Pacific PE exits top exits with disclosed values 218 Announcement or filing date Completion or priced date Company Sector Value (US$b) Sponsor Type 3-Apr-18 Santos Ltd. Oil and gas $13.2 Hony Capital Management Ltd. M&A 4-Apr Mar-18 9-Aug- 27-Jan-18 5-Apr-18 9-Feb-18 Beijing Mobike Technology Co. Ltd. Technology $3.7 Warburg Pincus LLC; TPG Capital LP M&A Greater China Intermodal 14-Mar-18 Investments LLC Transportation $1.4 Carlyle Group LP M&A Olympus Capital Holdings Asia (Hong Aster DM Healthcare Kong) Ltd.; -Feb-18 Ltd. Health care $1.3 True North Managers LLP IPO I-MED Radiology 21-Feb-18 Network Ltd. Health care $1. EQT Partners AB M&A Accolade Wines Australia Ltd. Food and beverage $.8 CHAMP Private Equity Pty Ltd. M&A Property Portfolio (The K Twin Towers in 9-Feb-18 Seoul) Real estate $.7 KKR & Co. LP M&A 8-Feb-18 8-Feb-18 Qingdao Haier Co. Ltd. Consumer products $.6 KKR & Co. LP M&A 23-Jan-18 Trimco International 23-Jan-18 Holdings Ltd. Textile $.5 Partners Group Holding AG M&A 18-Mar-18 Continental Warehousing Corp. 18-Mar-18 (Nhava Sheva) Ltd. Transportation $.4 Warburg Pincus LLC; Abraaj Capital Ltd. M&A 23 18

24 Appendix B M&A activity monthly flash Volume Value Volume Value Calendar YTD YTD % Calendar YTD YTD % LTM LTM % LTM LTM % J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M 218 (to March 18) vs. (to March ) 218 (to March 18) vs. (to March ) LTM (to March 18) vs. PTM (to March ) LTM (to March 18) vs. PTM (to March ) M&A activity by areas and regions Global 8,281-15% 1,15,66 48% 36,724 % 3,461,941-1% Americas 3,126-16% 591,966 5% 12,824-6% 1,847,165-12% Canada 485-1% 28,483-54% 1,923-24% 138,964-36% Latam North 72-26% 4,578-27% 33-7% 32,15 % Latam South 12-34% 19,15 4% % 91,834 16% US 2,668-16% 559,634 68% 1,819-2% 1,66,979-13% EMEA 2,972-2% 378,795 43% 13,327-1% 1,121,368-1% Africa 97-47% 1,973-82% 546-8% 18,875-62% CIS 229 2% 11, % 1,162 34% 33,185-45% CSE 211 % 7,766-24% 962 5% 26,88-52% GSA % 1,925 14% 2,788 15% 281,392-6% Israel 88 4% 6,122-64% % 19,875-45% Mediterranean % 35,2-37% 1,345-1% 142,232-7% MENA 54-27% 13,61-3% 23-15% 39,512-48% Nordics % 24, % 1,615 8% 152, % UK&I 723-2% 136, % 3,11-18% 3,627-5% WEM % 71,278 6% 3,12-2% 245,388-9% Asia-Pacific 3,33-12% 224,213 % 14,333 3% 1,2,83 % ASEAN %,259 39% 1,621-13% 88,518 2% Greater China 1,352 3% 125,46 1% 6,37 12% 62,55 6% India %,8-33% 1,3-11% 53,561-27% Japan % 44,37 74% 3,38 5% 156,728-6% Korea 187 7% 14,39 65% 1,187 5% 73,871 28% Oceania % 2,511 47% 1,486-1% 81,126-1% M&A activity by sectors Aerospace and defense 87 6% 16,739 52% 395 1% 86,489 94% Automotive and transportation % 66,412 95% 2,478-1% 252,673 28% Banking and capital markets % 51,79-7% 2,12-6% 218,428-22% Consumer products and retail 1,11-2% 119,571 11% 5,199-2% 5,534 27% Diversified industrial products 1,94-16% 119,42 119% 4,885-1% 413,141 -% Government and public sector 16-11% 7,588 36% 613-2% 34,381 43% Health care 26-15% 8,146-6% 1,39-2% 44,496-32% Insurance 281 4% 131,444 49% 1,131 9% 328,61 148% Life sciences 55-14% 8,952 1% 2,465 2% 283,831-22% Media and entertainment % 12, % 2,232-6% 27,245 23% Mining and metals % 22,21-9% 1,82 -% 92,387 -% Oil and gas % 87,652-33% 1,249 -% 33,51-42% Other sectors % 25,681 2% 3,9-5% 11,987-2% Power and utilities % 116,89 119% 1,56 6% 296,16 13% Real estate % 43,667-16% 3,446-1% 249,52 3% Technology 2,645-3% 1,379 75% 11,15 13% 62,569 % Telecommunications % 33,795 7% 74 2% 161,29-39% Wealth and asset management % 8,245-51% % 47,429-15% Regions M&A numbers represent a summation of domestic, inbound and outbound M&A activity involving the region. Sectors numbers represent involvement from either side, i.e., target or acquiror, except in the case of wealth and asset management, where only target-side involvement has been mapped. M&A analysis as at 1 April All Rights Reserved. Note: data is continually updated and therefore subject to change. 24 Capital Briefing

25 Appendix C M&A multiples and bid premium Median deal multiple EV / EBITDA LTM (to Mar 18) Global Americas Asia-Pacific EMEA PTM (to Mar ) LTM (to Mar 18) PTM (to Mar ) LTM (to Mar 18) PTM (to Mar ) LTM (to Mar 18) PTM (to Mar ) Aerospace and defense 7.6x 12.8x 14.3x 1.2x 6.x 13.9x 12.3x 15.5x Automotive and transportation 1.6x 9.2x 9.9x 8.6x 1.9x 9.7x 11.3x 9.5x Consumer products and retail 9.8x 1.6x 1.x 11.1x 1.1x 12.1x 8.8x 9.6x Diversified industrial products 1.8x 9.3x 1.8x 1.x 12.4x 1.9x 9.4x 8.1x Financial services 11.1x 1.5x 13.6x 12.9x 9.4x 8.8x 8.1x 8.x Government and public sector 9.2x 8.6x 1.6x 8.2x 1.1x 8.2x 8.3x 9.4x Health care 14.2x 13.4x 13.1x 11.5x 16.6x 19.3x 13.9x 1.2x Life sciences 1.4x 9.5x 9.6x 11.1x 12.3x 1.4x 1.1x 9.2x Media and entertainment 9.x 8.2x 11.6x 8.3x 9.4x 8.3x 6.4x 6.9x Mining and metals 9.3x 8.3x 1.7x 1.2x 12.6x 14.2x 6.x 5.4x Oil and gas 1.6x 9.9x 9.4x 12.6x 12.x 9.x 1.2x 9.x Other sectors 1.x 1.5x 1.7x 11.3x 1.x 16.9x x Power and utilities 1.8x 12.2x 8.5x 7.7x 1.1x 15.1x 11.9x 13.x Real estate 9.5x 11.1x 1.3x 12.4x 8.x 12.9x 8.5x 9.9x Technology 11.5x 1.9x 11.6x 12.2x 11.8x 11.8x 1.8x 9.9x Telecommunications 7.6x 8.2x 8.6x 8.9x 6.8x 9.2x 7.6x 8.2x Total 1.6x 1.2x 11.1x 11.x 11.x 1.9x 9.3x 9.1x Median bid premium to four-week stock price LTM (to Mar 18) Global Americas Asia-Pacific EMEA PTM (to Mar ) LTM (to Mar 18) PTM (to Mar ) LTM (to Mar 18) PTM (to Mar ) LTM (to Mar 18) Aerospace and defense 18% 35% 28% 5% 11% 3% - 29% PTM (to Mar ) Automotive and transportation 18% 21% 22% 37% 18% 18% 12% 31% Consumer products and retail 15% 16% 2% 27% 15% 14% 12% 14% Diversified industrial products 22% 23% 28% 27% 22% 23% 1% 22% Financial services % 21% 22% 3% % 13% 13% 14% Government and public sector 16% 13% 14% - 2% 3% - 23% Health care 22% 31% 38% 42% 13% 18% 18% 11% Life sciences 19% 26% 16% 35% 2% 21% 19% 27% Media and entertainment 24% 25% 28% 33% 25% 21% 15% 19% Mining and metals 24% 18% 25% % 1% 18% 29% 19% Oil and gas 19% 23% 2% 31% 16% 13% 29% 36% Other sectors 2% 18% 2% 16% 15% 26% 22% 1% Power and utilities % 25% 24% 25% % 35% 6% 28% Real estate % 26% 14% 27% 24% 25% 12% 2% Technology 22% 25% 28% 33% 18% 19% % 18% Telecommunications 11% 12% % 39% 7% 1% % 6% Total 2% 22% 23% 3% 18% 19% 15% % Deal multiples greater than 3x and bid premium greater than 1% have been excluded from calculation of median. M&A analysis as at 1 April All Rights Reserved. Note: data is continually updated and therefore subject to change. 25 Capital Briefing