M&A Market Analysis December 2015 Global M&A Monthly A Middle-Market Perspective on the Global Mergers & Acquisitions Environment Global Mergers & Acquisitions European Investment Banking Asia Investment Banking Christopher C. McMahon Head of Global M&A +1.312.609.4983 cmcmahon@rwbaird.com Brian P. McDonagh Co-Head of Global M&A +1.704.553.6611 bmcdonagh@rwbaird.com Howard P. Lanser Head of Debt Advisory +1.312.609.5478 hlanser@rwbaird.com David M. Silver Head of European Investment Banking +44.207.667.8216 dsilver@rwbaird.com Anthony Siu Head of Asia Investment Banking +86.21.6182.0980 asiu@rwbaird.com.cn Owen L. Hart +1.415.627.3273 ohart@rwbaird.com J. David Cumberland, CFA, M&A Research +1.312.609.5429 dcumberland@rwbaird.com Andrew C. Eckert M&A Market Analyst +1.312.609.7065 aeckert@rwbaird.com Nicholas R. Sealy European Investment Banking +44.207.667.8370 nsealy@rwbaird.com Satoshi Matsumoto of Japan M&A +1.646.557.3201 smatsumoto@rwbaird.com
In This Issue Page Global M&A Commentary and Deal Statistics... 1 Due to increased large deal activity throughout 2015, the global M&A market has posted a new single-year record for dollar volume. Through November, reported dollar volume climbed 39.4% to $3.68 trillion, in spite of a 3.1% decrease for the deal count. U.S. M&A Commentary and Deal Statistics... 5 The U.S. M&A market established a record for dollar volume in November. Reported dollar volume jumped 97.8% to $369.4 billion, topping the previous monthly peak by almost 40%. Peak volume reflected mega-deal activity (e.g., Pfizer / Allergan), as the number of transactions declined 6.6% to 834, below the LTM average of 965. Europe M&A Commentary and Deal Statistics... 10 In November, Europe s M&A market registered higher dollar volume in spite of fewer transactions, continuing a recent trend. The deal total dropped 22.6% to 768, which lagged the LTM mean of 917. However, dollar volume rose 16.3% to $115.3 billion, exceeding the LTM average of $94.1 billion. U.K. Cross-Border M&A Activity... 14 Through November, the transaction count in the U.K. was up 5.4% to 2,885, reflecting growth in inbound and domestic M&A. Reported dollar volume soared 89.2% to $515.5 billion, mainly due to much higher inbound volume. Germany Cross-Border M&A Activity... 15 Year to date in Germany, the number of deals declined 5.5% to 1,518, due mostly to reduced domestic activity. Dollar volume contracted 27.7% to $112.1 billion, with dramatically lower outbound volume outweighing higher domestic and inbound volume. Asia Commentary and Deal Statistics... 16 The M&A market in Asia (ex. Japan) generated higher dollar volume for the ninth straight month. In November, announced dollar volume rose 11.2% to $53.0 billion, trailing the LTM mean of $63.4 billion. The transaction count dipped 2.8% to 454, which was below the LTM average of 559. China M&A Activity and Deal Statistics... 17 Through November, the transaction count for China increased 25.3% to 3,314 on significantly higher domestic and outbound activity. Dollar volume expanded 84.4% to $492.2 billion, fueled by substantial growth for domestic and outbound volume. India M&A Activity and Deal Statistics... 19 In India, the year-to-date M&A transaction total increased 32.4% to 985, reflecting more domestic and cross-border activity. Announced dollar volume decreased 10.5% to $33.3 billion due to contraction for domestic volume. Japan M&A Activity... 21 Year-to-date M&A metrics for Japan were varied. The number of deals edged down 2.7% to 2,151, with lower domestic activity outweighing increased outbound M&A. However, reported dollar volume rose 54.9% to $135.9 billion, powered by greater domestic and cross-border volume. Transaction Spotlight Sale of The Results Companies, LLC to One Equity Partners... 22 The Results Companies, LLC, a portfolio company of Clearview Capital, was recently acquired by One Equity Partners. Recent Baird M&A Transactions... 23 A summary of Baird s recently announced M&A transactions. Baird U.S. Equity Research Coverage... 25 In November, Baird added 8 companies to coverage and now covers 730 companies. These companies have a median and average market capitalization of $3.7 billion and $15.5 billion, respectively. Global Investment Banking Contact List... 30 Please refer to Appendix Disclaimers and Other Disclosures on page 31.
Global M&A Commentary Due to increased large deal activity throughout 2015, the global M&A market has posted a new single-year record for dollar volume. Through November, reported dollar volume climbed 39.4% to $3.68 trillion, in spite of a 3.1% decrease for the deal count. In the global middle market, the transaction total in the first 11 months of 2015 was up 5.6%, and dollar value rose 5.7%. In November, the global deal total was down 11.7% to 2,237, trailing the last 12 month (LTM) average of 2,670. However, reported dollar volume rose 45.9% to $503.1 billion, setting a single-month record for the second consecutive month. In the middle market, the number of transactions increased 0.6%, and dollar value was 17.6% above the year-ago figure. Although the global economy remains sluggish, forward indicators suggest stabilizing conditions. After posting a nine-month low in September, the global allindustry purchasing managers index (PMI) has increased in each of the past two months. Accelerated growth reflected a four-month high for services, an eight-month peak for manufacturing, a three-month high for new orders, and solid growth in developed markets. The latest composite leading indicator of the Organisation of Economic Co-operation and Development also benefited from stable growth momentum in advanced economies in matching the prior month s level following a series of declines. In addition, the latest quarterly Manpower survey of hiring intentions pointed to better labor market trends in revealing that employers in 39 of 42 countries anticipated workforce additions in Q1 2016, up from employers in 36 countries in the prior survey. In view of lower M&A deal counts over the past three months, further signs of firmer footing for the global economy may be needed for a broad-based pickup in M&A activity. Despite a slowdown for issuance in the global leveraged finance markets, lenders continue to search for opportunities to deploy capital to high quality credits. With credit quality increasingly important, global leveraged loan issuance in November was moderately below the LTM mean, as U.S. activity declined from recent levels while volume in Europe held up well. In both the U.S. and Europe, leverage ratios have dipped from levels seen in the first half of the year; lower leverage reflects reduced 2nd lien issuance, although strength in the unitranche market has been a mitigating factor. In the high yield market, global issuance in November was above October levels while remaining modestly under the LTM average. Near-term conditions are likely to be challenging as markets contend with lackluster economic growth, divergent monetary policies, and geopolitical instability, with the backdrop favoring issuers with stable revenue and margin profiles. The five major indices depicted below averaged a 1.1% gain in November, lifting the mean year-to-date increase to 4.1%. Greater confidence in the economic picture may be required for stock offering activity to return to robust levels. Year to date, the number of M&A transactions valued above $500 million increased 10.8%, and dollar volume for this group rose 49.3%. Large transaction activity has been supported by investor approval of the announcement of major M&A deals. The postannouncement stock moves of U.S. acquirors in $500+ million deals remained positive in the first 11 months of 2015, although increases have fallen short of the record first-day returns of 2014. Evidence of investor approval for large deals could motivate more management teams to pursue M&A targets of various sizes in 2016. Note: See pages 5, 10, and 16 for specific U.S., Europe, and Asia commentary Relative Performance of Global Market Indices 140% S&P 500 FTSE 100 DAX Hang Seng Nikkei 225 130% 120% 110% 21.2% 19.2% 12.6% 100% 90% (5.6%) (5.8%) 80% 12/31/13 2/27/14 4/26/14 6/23/14 8/21/14 10/18/14 12/15/14 2/11/15 4/11/15 6/8/15 8/5/15 10/2/15 11/30/15 Source: Capital IQ. Robert W. Baird & Co. 1
Global M&A Activity Global M&A Activity # of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value ($ in billions) # of Deals 40,000 30,000 20,000 24,513 28,780 32,875 30,187 25,948 30,673 33,769 33,404 28,638 32,971 30,255 29,329 $4,000 $3,000 $2,000 Deal Value 10,000 $1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 24,513 28,780 32,875 30,187 25,948 30,673 33,769 33,404 28,638 32,971 30,255 29,329 # of Deals >$1B 377 503 615 320 241 377 332 358 354 482 437 499 # of Deals Middle-Market 12,035 13,290 14,710 13,397 11,302 14,209 14,093 13,240 11,174 13,283 12,002 12,676 # of Deals Undisclosed 12,101 14,987 17,550 16,470 14,405 16,087 19,344 19,806 17,110 19,206 17,816 16,154 Deal Value $2,345 $3,099 $3,383 $2,002 $1,601 $2,029 $1,911 $1,852 $1,843 $2,938 $2,642 $3,682 11/14 11/15 $0 Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Global Middle-Market M&A Activity # of Transactions <$100M # of Transactions $100M $499M # of Transactions $500M $1B Deal Value ($ in billions) 15,000 12,035 13,290 14,710 13,397 11,302 14,209 14,093 13,240 11,174 13,283 12,002 12,676 $1,500 # of Deals 10,000 5,000 $1,000 $500 Deal Value 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 # of Transactions Middle-Market 12,035 13,290 14,710 13,397 11,302 14,209 14,093 13,240 11,174 13,283 12,002 12,676 # of Transactions $500M $1B 313 448 536 306 221 340 346 359 371 417 381 407 # of Transactions $100M $499M 1,856 2,152 2,406 1,694 1,242 1,721 1,874 1,754 1,817 2,196 1,972 2,090 # of Transactions <$100M 9,866 10,690 11,768 11,397 9,839 12,148 11,873 11,127 8,986 10,670 9,649 10,179 Deal Value $821 $1,006 $1,145 $779 $573 $799 $861 $822 $817 $965 $867 $917 11/14 11/15 $0 Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 2
Global M&A Deal Statistics ($ in millions) Number of Deals November Deal Value November 2014 2015 % Change 2014 2015 % Change North America 1,001 961 (4.0%) $198,085 $380,195 91.9% U.S. 893 834 (6.6%) $186,756 $369,378 97.8% Central / South America 69 81 17.4% $13,486 $10,101 (25.1%) Europe 992 768 (22.6%) $99,140 $115,346 16.3% U.K. 244 279 14.3% $37,588 $58,615 55.9% Germany 132 119 (9.8%) $16,723 $4,562 (72.7%) Africa / Middle East 67 96 43.3% $24,219 $3,619 (85.1%) Asia-Pacific (ex. Japan) 467 454 (2.8%) $47,692 $53,031 11.2% China 234 255 9.0% $36,321 $41,217 13.5% India 60 55 (8.3%) $4,725 $2,200 (53.4%) Japan 152 143 (5.9%) $7,378 $18,134 145.8% Global Total 2,533 2,237 (11.7%) $344,788 $503,094 45.9% Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the target s and acquiror s respective regions. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. ($ in millions) Number of Deals Deal Value 2014 2015 % Change 2014 2015 % Change North America 12,321 12,152 (1.4%) $1,554,169 $2,303,457 48.2% U.S. 10,981 10,769 (1.9%) $1,462,068 $2,192,810 50.0% Central / South America 1,010 976 (3.4%) $94,193 $51,183 (45.7%) Europe 11,295 10,002 (11.4%) $872,985 $1,042,336 19.4% U.K. 2,737 2,885 5.4% $272,481 $515,525 89.2% Germany 1,606 1,518 (5.5%) $155,049 $112,071 (27.7%) Africa / Middle East 790 825 4.4% $61,263 $92,367 50.8% Asia-Pacific (ex. Japan) 5,266 6,109 16.0% $408,299 $648,331 58.8% China 2,644 3,314 25.3% $266,935 $492,202 84.4% India 744 985 32.4% $37,248 $33,348 (10.5%) Japan 2,211 2,151 (2.7%) $87,700 $135,851 54.9% Global Total 30,255 29,329 (3.1%) $2,642,108 $3,682,474 39.4% as of November 30. Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the target s and acquiror s respective regions. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 3
Global Middle-Market M&A Deal Statistics ($ in millions) Number of Deals November Deal Value November 2014 2015 % Change 2014 2015 % Change North America 329 376 14.3% $36,340 $38,353 5.5% U.S. 271 308 13.7% $31,362 $36,371 16.0% Central / South America 24 36 50.0% $2,337 $3,596 53.8% Europe 323 272 (15.8%) $25,506 $30,024 17.7% U.K. 93 100 7.5% $10,749 $8,598 (20.0%) Germany 27 36 33.3% $1,415 $3,545 150.6% Africa / Middle East 36 48 33.3% $3,015 $3,619 20.0% Asia-Pacific (ex. Japan) 333 352 5.7% $23,501 $32,171 36.9% China 195 225 15.4% $15,166 $23,025 51.8% India 28 25 (10.7%) $1,689 $2,200 30.3% Japan 68 63 (7.4%) $4,410 $3,093 (29.9%) Global Total 1,054 1,060 0.6% $81,191 $95,483 17.6% Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the target s and acquiror s respective regions. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. ($ in millions) Number of Deals Deal Value 2014 2015 % Change 2014 2015 % Change North America 4,076 4,406 8.1% $399,885 $389,255 (2.7%) U.S. 3,402 3,733 9.7% $359,413 $352,794 (1.8%) Central / South America 396 321 (18.9%) $36,042 $23,520 (34.7%) Europe 3,358 3,167 (5.7%) $275,472 $271,817 (1.3%) U.K. 1,020 1,072 5.1% $91,766 $102,614 11.8% Germany 294 375 27.6% $33,558 $42,398 26.3% Africa / Middle East 415 442 6.5% $22,500 $31,060 38.0% Asia-Pacific (ex. Japan) 3,644 4,368 19.9% $210,656 $296,904 40.9% China 2,098 2,680 27.7% $126,200 $221,598 75.6% India 380 527 38.7% $14,292 $20,903 46.3% Japan 894 846 (5.4%) $47,914 $41,260 (13.9%) Global Total 12,002 12,676 5.6% $866,835 $916,512 5.7% as of November 30. Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the target s and acquiror s respective regions. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 4
U.S. M&A Commentary RECORD MONTH FOR DOLLAR VOLUME The U.S. M&A market established a record for dollar volume in November. Reported dollar volume jumped 97.8% to $369.4 billion, topping the previous monthly peak by almost 40%. Peak volume reflected mega-deal activity (e.g., Pfizer / Allergan), as the number of transactions declined 6.6% to 834, below the LTM average of 965. In the U.S. middle market, the number of deals increased 13.7%, and dollar value was up 16.0%. Recent updates were a mixed bag regarding the state of the U.S. economy. The Institute for Supply Management (ISM) manufacturing index for November contracted for the first time in three years, with manufacturers attributing weakness to the strong dollar, slower growth for overseas trading partners, and lower oil prices. The ISM services index remained solidly in growth territory but decelerated to a sixmonth low. News was more encouraging in the labor market: November payroll additions above expectations, positive revisions to September-October data, the lowest unemployment rate in seven years, and a 14-month low for planned layoffs. In its latest beige book for economic activity into November, the Federal Reserve noted a modest pace of growth, including increased consumer spending in nearly all districts. The Fed is widely expected to raise benchmark interest rates with its mid-december meeting based on greater confidence in the health of the U.S. economy. The current theme of the U.S. leveraged finance market is that credit quality matters. A flight to credit quality is underway with the market facing issues ranging from Fed rate hikes, mixed economic indicators, and geopolitical instability, as lower quality credits struggle to complete deals while high quality credits are still getting done at relatively solid spreads and terms. New issue activity in the leveraged loan market during November was 24% below the LTM mean. Cracks have appeared in the 2nd lien market, where pricing has spiked 150+ bps since the summer. With 2nd lien acting as the backbone of many LBOs over the past three years, higher rates and a disappearing institutional investor base have started to impact leverage levels; most 2nd lien deals are being clubbed. The U.S. high yield market perked up on a relative basis in November, which registered a sixmonth high for volume after weak issuance in the prior four months. After higher spreads/yields helped pull $6.8 billion into leveraged finance funds in October, funds experienced negative flows of $3.3 billion in November, bringing year-to-date net outflows to $10.4 billion and underscoring the importance of fund flows for M&A financings. Overall, the high yield market is expected to struggle to remain on firm ground through the balance of the year. The U.S. equity markets ended November slightly higher for the month, including the S&P 500 up 0.1%. With the year-to-date return (+1.0%) still near flat, IPO and follow-on offering activity in November remained below 2015 s monthly average. U.S. M&A Activity In the U.S. M&A market, the deal count for November was 834, 6.6% below the year-ago figure and under the LTM average of 965. Dollar volume of $369.4 billion registered a new monthly record, spiking 97.8% on a year-over-year basis and nearly doubling the LTM average of $191.4 billion. On a year-to-date basis, the number of deals decreased 1.9% to 10,769. Transactions valued below $100 million represented the highest-growth segment, with deal count up 15.6%. Dollar volume rose 50.0% to an all-time high of $2.19 trillion, fueled by billion-dollar-plus deal volume (+66.9%). For the LTM period, the number of announced transactions was down 1.9% to 11,581. Dollar volume expanded 48.7% to $2.30 trillion. U.S. Middle-Market Activity In the U.S. middle market, the number of transactions announced in November rose 13.7% to 308, which lagged the LTM average of 336. Dollar volume was up 16.0% to $36.4 billion, above the LTM mean of $32.4 billion. In the first 11 months of 2015, the deal count grew 9.7% to 3,733. Dollar volume edged down 1.8% to $352.8 billion. For the LTM period, the number of transactions increased 10.0% to 4,027. Dollar volume dipped 0.7% to $388.7 billion. In the middle market, the median EBITDA transaction multiple for the LTM period ended in November was 8.5x. The median valuation during the last six months (June through November) was 9.7x, above the median of 8.5x during the prior six months (December 2014 through May 2015). Robert W. Baird & Co. 5
U.S. M&A Activity U.S. M&A Activity # of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value ($ ($ in in billions) # of Deals 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 8,938 11,116 11,721 9,608 7,960 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 8,938 11,116 11,721 9,608 7,960 11,198 11,892 13,272 10,345 11,793 10,981 10,769 # of Deals >$1B 181 235 292 115 92 176 157 190 175 251 227 273 # of Deals Middle-Market 3,850 3,867 3,636 3,596 3,313 5,399 4,567 4,427 3,012 3,696 3,402 3,733 # of Deals Undisclosed 4,907 7,014 7,793 5,897 4,555 5,623 7,168 8,655 7,158 7,846 7,352 6,763 Deal Value $1,159 $1,457 $1,494 $776 $767 $947 $992 $894 $865 $1,567 $1,462 $2,193 11,198 11,892 13,272 10,345 11,793 10,981 10,769 11/14 11/15 $2,800 $2,400 $2,000 $1,600 $1,200 $800 $400 $0 Deal Value Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. U.S. Middle-Market M&A Activity # of Transactions <$100M # of Transactions $100M $499M # of Transactions $500M $1B Deal Value ($ ($ in billions) 6,000 5,399 $500 # of Deals 4,500 3,000 1,500 3,850 3,867 3,636 3,596 3,313 4,567 4,427 3,012 3,696 3,402 3,733 $400 $300 $200 $100 Deal Value 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 # of Transactions Middle-Market 3,850 3,867 3,636 3,596 3,313 5,399 4,567 4,427 3,012 3,696 3,402 3,733 # of Transactions $500M $1B 143 177 225 120 78 174 152 170 167 186 173 168 # of Transactions $100M $499M 793 864 854 596 425 690 759 720 707 894 815 774 # of Transactions <$100M 2,914 2,826 2,557 2,880 2,810 4,535 3,656 3,537 2,138 2,616 2,414 2,791 Deal Value $350 $401 $421 $277 $194 $342 $347 $346 $326 $395 $359 $353 11/14 11/15 $0 Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 6
U.S. Middle-Market M&A Deal Statistics Number of Deals Deal Value 2014 2015 % Change ($ in millions) 2014 2015 % Change November November <$100M 186 211 13.4% <$100M $4,353 $5,066 16.4% $100M-$499M 69 79 14.5% $100M-$499M $15,633 $19,188 22.7% $500M-$1,000M 16 18 12.5% $500M-$1,000M $11,376 $12,116 6.5% Total Middle Market 271 308 13.7% Total Middle Market $31,362 $36,371 16.0% Monthly Average 305 336 10.0% Monthly Average $32,590 $32,392 (0.6%) >$1,000M 19 28 47.4% >$1,000M $155,394 $333,007 114.3% Undisclosed 603 498 (17.4%) Undisclosed ** ** ** Total 893 834 (6.6%) Total $186,756 $369,378 97.8% Monthly Average 984 965 (1.9%) Monthly Average $128,733 $191,439 48.7% <$100M 2,414 2,791 15.6% <$100M $56,412 $65,490 16.1% $100M-$499M 815 774 (5.0%) $100M-$499M $182,689 $172,526 (5.6%) $500M-$1,000M 173 168 (2.9%) $500M-$1,000M $120,313 $114,778 (4.6%) Total Middle Market 3,402 3,733 9.7% Total Middle Market $359,413 $352,794 (1.8%) >$1,000M 227 273 20.3% >$1,000M $1,102,654 $1,840,016 66.9% Undisclosed 7,352 6,763 (8.0%) Undisclosed ** ** ** Total 10,981 10,769 (1.9%) Total $1,462,068 $2,192,810 50.0% LTM LTM <$100M 2,589 2,993 15.6% <$100M $61,408 $71,572 16.6% $100M-$499M 885 853 (3.6%) $100M-$499M $199,181 $191,286 (4.0%) $500M-$1,000M 188 181 (3.7%) $500M-$1,000M $130,493 $125,846 (3.6%) Total Middle Market 3,662 4,027 10.0% Total Middle Market $391,082 $388,705 (0.6%) >$1,000M 246 297 20.7% >$1,000M $1,153,709 $1,908,560 65.4% Undisclosed 7,902 7,257 (8.2%) Undisclosed ** ** ** Total 11,810 11,581 (1.9%) Total $1,544,791 $2,297,265 48.7% and LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. and LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. U.S. Middle-Market Enterprise Value to Median EBITDA, EBIT, and Revenue Multiples Transaction Size 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM 2015 EV/EBITDA <$100M 9.2x 8.1x 8.5x 7.8x 7.0x 7.0x 8.3x 7.0x 7.4x 8.1x 6.7x $100M-$499M 9.9x 9.2x 11.2x 11.1x 8.1x 10.1x 9.3x 9.3x 9.9x 9.9x 9.8x $500M-$1B 10.1x 12.0x 10.8x 10.6x 7.8x 9.0x 9.9x 10.5x 8.4x 9.9x 10.7x Middle-Market 9.7x 9.2x 9.9x 9.5x 7.6x 8.6x 9.2x 8.4x 8.7x 9.2x 8.5x EV/EBIT <$100M 10.8x 10.0x 10.8x 10.1x 7.8x 10.3x 11.3x 10.3x 12.5x 11.4x 11.1x $100M-$499M 13.5x 13.3x 14.5x 13.7x 11.0x 12.2x 12.8x 13.0x 13.7x 13.1x 12.9x $500M-$1B 13.8x 17.0x 16.1x 13.7x 13.6x 13.4x 12.9x 13.8x 13.6x 13.0x 17.1x Middle-Market 12.4x 12.5x 12.8x 11.6x 9.7x 11.3x 12.1x 11.9x 12.5x 12.5x 12.3x EV/Revenue <$100M 0.95x 0.96x 0.92x 0.91x 0.80x 0.94x 1.00x 0.81x 0.83x 0.88x 1.04x $100M-$499M 1.31x 1.24x 1.27x 1.30x 1.22x 1.24x 1.39x 1.36x 1.43x 1.40x 1.48x $500M-$1B 1.55x 1.69x 1.51x 1.42x 1.46x 1.56x 1.04x 1.23x 1.36x 1.59x 1.72x Middle-Market 1.10x 1.08x 1.01x 1.00x 0.90x 1.07x 1.14x 1.00x 1.01x 1.10x 1.18x Source: Capital IQ and Robert W. Baird & Co. Incorporated M&A Market Analysis. Median multiples are calculated using deals for which meaningful data is available. LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 7
U.S. Middle-Market M&A Deal Statistics 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% U.S. Middle-Market Median Acquisition Premiums 1-Week Premium 4-Week Premium 15.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM 2015 1-Week Premium 24.7% 25.0% 23.8% 30.6% 36.4% 32.9% 34.1% 37.2% 25.7% 29.1% 28.9% 4-Week Premium 32.3% 28.6% 25.7% 31.1% 37.1% 36.9% 34.3% 37.5% 30.3% 30.4% 29.7% LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. U.S. Middle-Market Transaction Composition Strategic vs. Sponsor Deal Value 100.0% Strategic Sponsor % of Deal Value 80.0% 60.0% 40.0% 20.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Sponsor 23.3% 23.7% 24.7% 22.5% 19.6% 20.3% 18.3% 19.8% 19.4% 20.2% 21.2% 19.5% Strategic 76.7% 76.3% 75.3% 77.5% 80.4% 79.7% 81.7% 80.2% 80.6% 79.8% 78.8% 80.5% Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. % of Deals 100.0% 80.0% 60.0% 40.0% 20.0% U.S. Middle-Market M&A Payment Method by Number of Deals Cash Stock Cash/Stock 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Cash/Stock 7.6% 5.3% 7.4% 5.0% 3.7% 2.8% 4.8% 3.9% 5.5% 6.3% 6.4% 6.3% Stock 6.7% 4.6% 4.7% 4.8% 5.4% 3.2% 3.6% 3.1% 3.7% 4.3% 4.2% 4.2% Cash 85.7% 90.1% 87.9% 90.1% 90.9% 93.9% 91.6% 92.9% 90.8% 89.4% 89.5% 89.6% Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 8
U.S. Cross-Border M&A Activity U.S. Inbound and Outbound M&A Activity Inbound M&A Outbound M&A Inbound Deal Value Outbound Deal Value ($ in billions) # of Deals 2,000 1,500 1,000 500 1,528 1,506 1,424 1,247 1,292 1,291 1,023 1,048 1,875 1,678 1,565 1,550 1,552 1,314 1,320 1,373 1,401 1,137 1,258 1,044 1,037 918 $450 $375 $300 $225 $150 $75 Deal Value 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM 2015 Inbound M&A 1,023 1,247 1,424 1,291 918 1,137 1,314 1,320 1,037 1,258 1,401 Outbound M&A 1,048 1,292 1,528 1,506 1,044 1,565 1,875 1,550 1,373 1,552 1,678 Inbound Deal Value $120 $196 $327 $177 $81 $189 $138 $168 $122 $248 $425 Outbound Deal Value $98 $109 $176 $93 $79 $113 $159 $111 $138 $183 $198 $0 LTM as of November 30. Note: Inbound M&A represents U.S. target/non-u.s. acquiror; Outbound M&A represents non-u.s. target/u.s. acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Top 10 U.S. Target Industries Acquired by Non-U.S. Companies - Top 10 Non-U.S. Acquirors of U.S. Targets - Top 10 Non-U.S. Target Industries Acquired by U.S. Companies Industry # of Deals Country # of Deals Industry # of Deals 1. Technology 348 1. Canada 383 1. Technology 444 2. Healthcare 152 2. United Kingdom 174 2. Professional Services 229 3. Professional Services 144 3. Japan 119 3. Healthcare 133 4. Real Estate/Property 52 4. China 82 4. Finance 61 5. Mining 51 5. Germany 61 5. Machinery 57 6. Food & Beverage 46 6. France 60 6. Real Estate/Property 56 7. Construction/Building 43 7. Australia 47 7. Consumer Products 52 8. Consumer Products 40 8. Switzerland 41 8. Telecommunications 51 9. Finance 39 9. India 40 9. Chemicals 44 10. Machinery 38 10. Singapore 25 10. Transportation 39 as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 9
Europe M&A Commentary In November, Europe s M&A market registered higher dollar volume in spite of fewer transactions, continuing a recent trend. The deal total dropped 22.6% to 768, which lagged the LTM mean of 917. However, dollar volume rose 16.3% to $115.3 billion, exceeding the LTM average of $94.1 billion. In Europe s middle market, the number of transactions fell 15.8%, while dollar value increased 17.7%. Year to date, the transaction total dropped 11.4%, reflecting year-over-year declines in each of the past eight months. Dollar volume climbed 19.4% through November. In the middle market, the number of deals was down 5.7% in the first 11 months of the year, and dollar value dipped 1.3%. The latest economic news demonstrated evidence of the ongoing economic recovery in Europe despite continued headwinds. The composite PMI for euro zone activity increased for the second consecutive month, with November s reading nearly the highest in the past four-plus years, reflecting growth throughout the euro zone. In the U.K. during November, the manufacturing PMI decelerated from the 17-month high of October, while the services PMI showed the fastest growth in four months. Also of note, the Economic Sentiment Indicator of the European Union for November significantly exceeded the LTM average and was just below the four-year peak attained in October. Furthermore, euro area unemployment fell for the fourth straight month in dropping to the lowest rate since January 2012. The European Central Bank noted a broader base for the economic rebound in keeping much of its monetary policy powder dry when recently announcing relatively modest stimulus measures. In Europe, the median EBITDA transaction multiple was 8.6x for the LTM period ended in November. The median valuation during the last six months (June through November) was 9.1x, above the 8.1x median figure during the preceding six months (December 2014 through May 2015). Through November, the transaction count in the U.K. was up 5.4% to 2,885, reflecting growth in inbound and domestic M&A. Reported dollar volume soared 89.2% to $515.5 billion, mainly due to much higher inbound volume. In the first 11 months of 2015, the middle-market deal count in the U.K. increased 5.1% to 1,072, and dollar volume was up 11.8% to $102.6 billion. Year to date in Germany, the number of deals declined 5.5% to 1,518, due mostly to reduced domestic activity. Dollar volume contracted 27.7% to $112.1 billion, with dramatically lower outbound volume outweighing higher domestic and inbound volume. In Germany s middle market, the transaction count for January-November was up 27.6% to 375. Dollar volume over this period increased 26.3% to $42.4 billion. Europe M&A Activity # of Deals 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 # of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value 9,803 10,719 12,170 11,966 10,330 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 9,803 10,719 12,170 11,966 10,330 10,932 12,461 11,299 9,905 12,300 11,295 10,002 # of Deals >$1B 176 203 282 172 91 135 132 121 132 169 155 148 # of Deals Middle-Market 4,195 4,566 4,744 3,976 2,862 3,144 3,521 3,043 2,634 3,737 3,358 3,167 # of Deals Undisclosed 5,432 5,950 7,144 7,818 7,377 7,653 8,808 8,135 7,139 8,394 7,782 6,687 Deal Value $954 $1,333 $1,631 $974 $489 $686 $629 $605 $619 $960 $873 $1,042 10,932 12,461 11,299 9,905 12,300 11,295 11/14 10,002 11/15 ($ in billions) $2,000 $1,500 $1,000 $500 $0 Deal Value Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 10
Europe Middle-Market M&A Deal Statistics Number of Deals Deal Value 2014 2015 % Change ($ in millions) 2014 2015 % Change November November <$100M 253 197 (22.1%) <$100M $3,789 $3,872 2.2% $100M-$499M 62 57 (8.1%) $100M-$499M $15,821 $13,546 (14.4%) $500M-$1,000M 8 18 125.0% $500M-$1,000M $5,896 $12,606 113.8% Total Middle Market 323 272 (15.8%) Total Middle Market $25,506 $30,024 17.7% Monthly Average 300 296 (1.4%) Monthly Average $25,121 $25,246 0.5% >$1,000M 17 13 (23.5%) >$1,000M $73,634 $85,322 15.9% Undisclosed 652 483 (25.9%) Undisclosed ** ** ** Total 992 768 (22.6%) Total $99,140 $115,346 16.3% Monthly Average 1,003 917 (8.6%) Monthly Average $77,502 $94,145 21.5% <$100M 2,616 2,431 (7.1%) <$100M $42,050 $42,811 1.8% $100M-$499M 612 592 (3.3%) $100M-$499M $140,406 $131,005 (6.7%) $500M-$1,000M 130 144 10.8% $500M-$1,000M $93,016 $98,000 5.4% Total Middle Market 3,358 3,167 (5.7%) Total Middle Market $275,472 $271,817 (1.3%) >$1,000M 155 148 (4.5%) >$1,000M $597,513 $770,519 29.0% Undisclosed 7,782 6,687 (14.1%) Undisclosed ** ** ** Total 11,295 10,002 (11.4%) Total $872,985 $1,042,336 19.4% LTM LTM <$100M 2,787 2,729 (2.1%) <$100M $45,540 $49,189 8.0% $100M-$499M 666 662 (0.6%) $100M-$499M $153,473 $147,952 (3.6%) $500M-$1,000M 143 155 8.4% $500M-$1,000M $102,434 $105,811 3.3% Total Middle Market 3,596 3,546 (1.4%) Total Middle Market $301,447 $302,952 0.5% >$1,000M 165 162 (1.8%) >$1,000M $628,583 $826,794 31.5% Undisclosed 8,277 7,299 (11.8%) Undisclosed ** ** ** Total 12,038 11,007 (8.6%) Total $930,030 $1,129,746 21.5% and LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. and LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Europe Middle-Market Enterprise Value to Median EBITDA, EBIT, and Revenue Multiples Transaction Size 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM 2015 EV/EBITDA <$100M 7.4x 7.4x 8.2x 6.8x 6.2x 6.6x 7.3x 6.8x 6.7x 7.8x 7.5x $100M-$499M 10.0x 10.0x 11.0x 9.6x 7.7x 8.1x 8.7x 9.2x 8.3x 9.3x 9.9x $500M-$1B 10.2x 10.2x 10.8x 9.6x 11.2x 8.9x 9.5x 8.1x 9.4x 9.6x 11.0x Middle-Market 8.5x 8.8x 9.5x 7.8x 7.4x 7.5x 8.0x 7.7x 7.5x 8.2x 8.6x EV/EBIT <$100M 9.2x 8.5x 9.2x 8.1x 7.6x 7.4x 9.0x 7.7x 7.8x 9.4x 8.6x $100M-$499M 13.4x 13.8x 13.5x 11.1x 10.2x 10.6x 11.5x 13.1x 12.0x 12.4x 13.6x $500M-$1B 15.6x 15.1x 12.4x 12.4x 15.7x 12.8x 13.3x 10.3x 12.0x 12.7x 15.6x Middle-Market 11.6x 10.7x 10.9x 9.3x 9.1x 8.6x 10.8x 9.5x 10.0x 10.6x 11.4x EV/Revenue <$100M 0.74x 0.81x 0.78x 0.78x 0.63x 0.71x 0.74x 0.73x 0.73x 0.87x 0.92x $100M-$499M 1.18x 1.29x 1.32x 1.12x 0.92x 1.09x 1.21x 1.29x 1.33x 1.34x 1.42x $500M-$1B 1.29x 1.74x 1.37x 1.63x 1.68x 1.43x 1.44x 1.33x 1.60x 1.30x 1.35x Middle-Market 0.89x 0.92x 0.87x 0.86x 0.69x 0.82x 0.85x 0.87x 0.92x 0.98x 1.00x Source: Capital IQ and Robert W. Baird & Co. Incorporated M&A Market Analysis. Median multiples are calculated using deals for which meaningful data is available. LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 11
Europe Middle-Market M&A Deal Statistics 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% Europe Middle-Market Median Acquisition Premiums 1-Week Premium 4-Week Premium 10.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM 2015 1-Week Premium 17.7% 18.4% 15.9% 23.1% 31.2% 23.7% 27.4% 30.5% 28.2% 28.3% 23.9% 26.9% 4-Week Premium 21.9% 23.5% 21.4% 27.6% 33.3% 30.9% 30.5% 33.3% 36.7% 30.6% 26.9% 30.8% LTM as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Europe Middle-Market Transaction Composition Strategic vs. Sponsor Deal Value 100.0% Strategic Sponsor % of Deal Value 80.0% 60.0% 40.0% 20.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Sponsor 21.1% 18.7% 19.4% 19.1% 13.7% 20.3% 19.6% 17.8% 23.6% 21.3% 21.6% 21.7% Strategic 78.9% 81.3% 80.6% 80.9% 86.3% 79.7% 80.4% 82.2% 76.4% 78.7% 78.4% 78.3% Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. % of Deals 100.0% 80.0% 60.0% 40.0% 20.0% Europe Middle-Market M&A Payment Method by Number of Deals Cash Stock Cash/Stock 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Cash/Stock 4.6% 3.9% 4.7% 3.6% 3.3% 3.5% 3.1% 2.7% 3.1% 2.4% 2.4% 2.5% Stock 4.3% 3.8% 3.3% 3.1% 5.6% 4.9% 3.7% 2.8% 2.8% 2.1% 2.2% 2.4% Cash 91.1% 92.3% 92.0% 93.4% 91.1% 91.5% 93.2% 94.4% 94.2% 95.5% 95.4% 95.1% Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 12
Europe Cross-Border M&A Activity Europe Inbound and Outbound M&A Inbound M&A Outbound M&A Inbound Deal Value Outbound Deal Value # of Deals 1,500 1,000 500 900 933 1,328 1,247 1,149 1,190 1,154 1,066 827 825 1,157 983 1,495 1,399 1,355 1,220 1,244 1,230 1,188 1,118 1,172 1,057 $400 $300 $200 $100 Deal Value 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM 2015 Inbound M&A 900 1,066 1,190 1,154 827 1,157 1,355 1,244 1,118 1,399 1,495 Outbound M&A 933 1,149 1,328 1,247 825 983 1,220 1,230 1,057 1,188 1,172 Inbound Deal Value $119 $160 $188 $107 $92 $110 $181 $129 $159 $200 $296 Outbound Deal Value $119 $173 $344 $176 $89 $162 $103 $136 $79 $201 $231 $0 LTM as of November 30. Note: Inbound M&A represents European target/non-european acquiror; Outbound M&A represents non-european target/european acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Top 10 European Target Countries Acquired by Non-European Companies Top 10 European Target Industries Acquired by Non-European Companies Country # of Deals Industry # of Deals 1. United Kingdom 461 1. Technology 354 2. Germany 186 2. Professional Services 157 3. France 113 3. Healthcare 120 4. Spain 85 4. Real Estate/Property 90 5. Italy 78 5. Machinery 55 6. Netherlands 75 6. Transportation 54 7. Switzerland 44 7. Finance 47 8. Sweden 40 8. Telecommunications 46 9. Ireland 34 9. Dining & Lodging 42 10. Belgium 30 10. Food & Beverage 40 Top 10 Non-European Target Countries Acquired by European Companies Top 10 Non-European Target Industries Acquired by European Companies Country # of Deals Industry # of Deals 1. United States 480 1. Technology 214 2. Canada 89 2. Professional Services 183 3. Brazil 88 3. Healthcare 106 4. Australia 82 4. Food & Beverage 62 5. India 46 5. Construction/Building 44 6. South Africa 36 6. Machinery 39 7. Israel 20 7. Chemicals 37 8. Chile 17 7. Consumer Products 37 8. Mexico 17 9. Finance 33 10. China 15 9. Mining 33 as of November 30. Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 13
U.K. Cross-Border M&A Activity U.K. Number of Deals (Domestic/Outbound/Inbound) Domestic M&A Outbound M&A Inbound M&A 4,000 3,000 3,324 3,410 3,766 3,319 2,666 2,738 2,997 2,917 2,612 2,989 2,737 2,885 # of Deals 2,000 1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Total 3,324 3,410 3,766 3,319 2,666 2,738 2,997 2,917 2,612 2,989 2,737 2,885 Inbound M&A 556 617 696 679 439 569 621 623 566 628 582 672 Outbound M&A 740 764 876 716 451 582 742 631 586 736 677 629 Domestic M&A 2,028 2,029 2,194 1,924 1,776 1,587 1,634 1,663 1,460 1,625 1,478 1,584 Note: Domestic M&A represents U.K. target/u.k. acquiror; Outbound M&A represents non-u.k. target/u.k. acquiror; Inbound M&A represents U.K. target/non-u.k. acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. U.K. Deal Value (Domestic/Outbound/Inbound) ($ in billions) Domestic M&A Outbound M&A Inbound M&A $750 $666 Deal Value $500 $250 $359 $398 $280 $126 $198 $180 $139 $166 $311 $272 $516 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Total $359 $398 $666 $280 $126 $198 $180 $139 $166 $311 $272 $516 Inbound M&A $133 $166 $178 $81 $51 $56 $74 $61 $73 $117 $108 $347 Outbound M&A $83 $70 $279 $62 $25 $69 $58 $34 $40 $98 $95 $98 Domestic M&A $143 $162 $209 $137 $50 $73 $48 $44 $53 $96 $69 $71 Note: Domestic M&A represents U.K. target/u.k. acquiror; Outbound M&A represents non-u.k. target/u.k. acquiror; Inbound M&A represents U.K. target/non-u.k. acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 14
Germany Cross-Border M&A Activity Germany Number of Deals (Domestic/Outbound/Inbound) Domestic M&A Outbound M&A Inbound M&A 2,500 # of Deals 2,000 1,500 1,000 1,135 1,351 2,020 1,647 1,269 1,284 1,767 1,560 1,398 1,749 1,606 1,518 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Total 1,135 1,351 2,020 1,647 1,269 1,284 1,767 1,560 1,398 1,749 1,606 1,518 Inbound M&A 389 449 677 470 292 368 502 410 369 464 421 413 Outbound M&A 312 353 481 465 333 304 416 440 344 409 374 373 Domestic M&A 434 549 862 712 644 612 849 710 685 876 811 732 Note: Domestic M&A represents Germany target/germany acquiror; Outbound M&A represents non-germany target/germany acquiror; Inbound M&A represents Germany target/non-germany acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Germany Deal Value (Domestic/Outbound/Inbound) ($ in billions) Domestic M&A Outbound M&A Inbound M&A $300 $250 $253 Deal Value $200 $150 $100 $50 $134 $179 $159 $66 $71 $54 $95 $108 $160 $155 $112 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Total $134 $179 $253 $159 $66 $71 $54 $95 $108 $160 $155 $112 Inbound M&A $49 $58 $65 $23 $16 $23 $21 $28 $49 $27 $24 $39 Outbound M&A $38 $57 $118 $36 $25 $33 $19 $36 $15 $89 $88 $23 Domestic M&A $47 $64 $71 $100 $24 $15 $14 $32 $43 $44 $43 $50 Note: Domestic M&A represents Germany target/germany acquiror; Outbound M&A represents non-germany target/germany acquiror; Inbound M&A represents Germany target/non-germany acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 15
Asia M&A Commentary The M&A market in Asia (ex. Japan) generated higher dollar volume for the ninth straight month. In November, announced dollar volume rose 11.2% to $53.0 billion, trailing the LTM mean of $63.4 billion. The transaction count dipped 2.8% to 454, which was below the LTM average of 559. In the middle market, the deal total increased 5.7%, and dollar value expanded 36.9%. Year to date through November, the transaction count for Asia (ex. Japan) increased 16.0%, and dollar volume climbed 58.8%. In the middle market, the year-to-date transaction total advanced 19.9%, while dollar value was up 40.9%. Anxiety about the global economy remains centered on conditions in China, which accounts for almost half of M&A deals in Asia (ex. Japan). In November, the official manufacturing PMI for China showed contraction for the fourth consecutive month in falling to the lowest reading in more than three years. The official nonmanufacturing index for November was slightly above October s seven-year low. China s trade activity continued to contract in November, when exports declined for the fifth straight month, and imports fell for a record thirteenth consecutive month. Of note, domestic demand may be stabilizing, as suggested by a lower decline for imports as well as an 11-month high for retail sales growth. Inflation remained subdued at 1.5% in November, leaving China s government the opportunity to announce additional fiscal and monetary stimulus efforts. In China s M&A market, the deal total in November was up 9.0% to 255, which trailed the LTM average of 301. Announced dollar volume increased 13.5% to $41.2 billion, below the LTM mean of $48.4 billion. Through November, the transaction count for China increased 25.3% to 3,314 on significantly higher domestic and outbound activity. Dollar volume expanded 84.4% to $492.2 billion, fueled by substantial growth for domestic and outbound volume. On a year-to-date basis, the deal count in China s middle market was up 27.7% to 2,680. Dollar volume jumped 75.6% to $221.6 billion. In India, the year-to-date M&A transaction total increased 32.4% to 985, reflecting more domestic and cross-border activity. Announced dollar volume decreased 10.5% to $33.3 billion due to contraction for domestic volume. In the first 11 months of 2015, the deal count in India s middle market rose 38.7% to 527. Dollar volume expanded 46.3% to $20.9 billion. Year-to-date M&A metrics for Japan were varied. The number of deals edged down 2.7% to 2,151, with lower domestic activity outweighing increased outbound M&A. However, reported dollar volume rose 54.9% to $135.9 billion, powered by greater domestic and cross-border volume. Asia (ex. Japan) M&A Activity # of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value ($ in billions) # of Deals 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 3,015 3,982 5,292 5,486 4,722 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 3,015 3,982 5,292 5,486 4,722 5,459 6,055 5,239 5,290 5,867 5,266 6,109 # of Deals >$1B 19 41 39 37 31 54 44 41 49 74 62 100 # of Deals Middle-Market 2,124 2,815 3,774 3,718 3,283 3,690 4,107 3,609 3,609 4,096 3,644 4,368 # of Deals Undisclosed 872 1,126 1,479 1,731 1,408 1,715 1,904 1,589 1,632 1,697 1,560 1,641 Deal Value $126 $220 $263 $248 $225 $300 $258 $286 $303 $521 $408 $648 5,459 6,055 5,239 5,290 5,867 5,266 11/14 6,109 11/15 $800 $600 $400 $200 $0 Deal Value Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 16
China M&A Activity China M&A Activity # of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value ($ in billions) # of Deals 4,000 3,000 2,000 1,278 1,709 2,370 2,488 2,336 2,725 2,946 2,418 2,631 2,940 2,644 3,314 $600 $450 $300 Deal Value 1,000 $150 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 1,278 1,709 2,370 2,488 2,336 2,725 2,946 2,418 2,631 2,940 2,644 3,314 # of Deals >$1B 9 17 12 18 15 19 25 21 32 47 39 81 # of Deals Middle-Market 957 1,341 1,897 1,951 1,867 2,147 2,343 1,954 2,090 2,351 2,098 2,680 # of Deals Undisclosed 312 351 461 519 454 559 578 443 509 542 507 553 Deal Value $56 $87 $107 $143 $139 $142 $142 $158 $183 $356 $267 $492 11/14 11/15 $0 Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. China Number of Deals (Domestic/Outbound/Inbound) Domestic M&A Outbound M&A Inbound M&A # of Deals 4,000 3,000 2,000 1,278 1,709 2,370 2,488 2,336 2,725 2,946 2,418 2,631 2,940 2,644 3,314 1,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Total 1,278 1,709 2,370 2,488 2,336 2,725 2,946 2,418 2,631 2,940 2,644 3,314 Inbound M&A 366 432 488 478 329 377 366 233 226 206 186 164 Outbound M&A 92 125 181 180 213 252 325 291 271 321 288 387 Domestic M&A 820 1,152 1,701 1,830 1,794 2,096 2,255 1,894 2,134 2,413 2,170 2,763 Note: Domestic M&A represents China target/china acquiror; Outbound M&A represents non-china target/china acquiror; Inbound M&A represents China target/non-china acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 17
China M&A Deal Statistics China Number of Deals Domestic Outbound Inbound Total 2014 2015 2014 2015 2014 2015 2014 2015 November Middle Market 165 189 21 26 9 10 195 225 >$1B 4 5 2 4 0 0 6 9 Undisclosed 22 5 10 14 1 2 33 21 Total 191 199 33 44 10 12 234 255 Middle Market 1,826 2,352 174 245 98 83 2,098 2,680 >$1B 24 61 14 20 1 0 39 81 Undisclosed 320 350 100 122 87 81 507 553 Total 2,170 2,763 288 387 186 164 2,644 3,314 LTM Middle Market 2,055 2,572 191 267 113 94 2,359 2,933 >$1B 26 68 14 21 2 0 42 89 Undisclosed 349 366 111 132 94 90 554 588 Total 2,430 3,006 316 420 209 184 2,955 3,610 and LTM as of November 30. Note: Domestic M&A represents China target/china acquiror; Outbound M&A represents non-china target/china acquiror; Inbound M&A represents China target/non-china acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. China Deal Value ($ in millions) Domestic Outbound Inbound Total 2014 2015 2014 2015 2014 2015 2014 2015 November Middle-Market $8,936 $19,701 $4,915 $1,664 $1,315 $1,660 $15,166 $23,025 >$1B $17,804 $9,501 $3,351 $8,690 $0 $0 $21,155 $18,192 Total $26,740 $29,202 $8,266 $10,355 $1,315 $1,660 $36,321 $41,217 Middle-Market $97,750 $188,175 $21,898 $27,143 $6,552 $6,279 $126,200 $221,598 >$1B $103,524 $200,493 $32,224 $70,111 $4,987 $0 $140,735 $270,604 Total $201,274 $388,668 $54,123 $97,254 $11,539 $6,279 $266,935 $492,202 LTM Middle-Market $108,739 $202,275 $25,136 $31,063 $7,982 $8,004 $141,858 $241,342 >$1B $107,001 $268,683 $32,224 $71,310 $7,878 $0 $147,103 $339,994 Total $215,740 $470,959 $57,360 $102,373 $15,860 $8,004 $288,961 $581,336 and LTM as of November 30. Note: Domestic M&A represents China target/china acquiror; Outbound M&A represents non-china target/china acquiror; Inbound M&A represents China target/non-china acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 18
India M&A Activity India M&A Activity # of Deals 1,000 750 500 # of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value 958 895 888 916 826 812 712 744 635 596 414 985 ($ in billions) $60 $45 $30 Deal Value 250 $15 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 414 635 895 958 596 888 916 826 712 812 744 985 # of Deals >$1B 1 5 5 7 0 13 4 5 1 9 9 4 # of Deals Middle-Market 223 306 430 464 276 426 491 433 340 416 380 527 # of Deals Undisclosed 190 324 460 487 320 449 421 388 371 387 355 454 Deal Value $14 $34 $47 $34 $9 $56 $22 $27 $15 $40 $37 $33 11/14 11/15 $0 Note: Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. India Number of Deals (Domestic, Outbound, Inbound) 1,000 750 635 895 Domestic M&A Outbound M&A Inbound M&A 958 888 916 826 596 712 812 744 985 # of Deals 500 414 250 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11/14 11/15 Total 414 635 895 958 596 888 916 826 712 812 744 985 Inbound M&A 94 134 173 174 101 151 233 148 167 167 152 187 Outbound M&A 118 166 207 219 98 205 148 122 86 104 95 118 Domestic M&A 202 335 515 565 397 532 535 556 459 541 497 680 Note: Domestic M&A represents India target/india acquiror; Outbound M&A represents non-india target/india acquiror; Inbound M&A represents India target/non-india acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 19
India M&A Deal Statistics India Number of Deals Domestic Outbound Inbound Total 2014 2015 2014 2015 2014 2015 2014 2015 November Middle-Market 22 19 3 3 3 3 28 25 >$1B 1 0 0 0 0 0 1 0 Undisclosed 20 18 4 5 7 7 31 30 Total 43 37 7 8 10 10 60 55 Middle-Market 270 385 31 36 79 106 380 527 >$1B 8 3 0 0 1 1 9 4 Undisclosed 219 292 64 82 72 80 355 454 Total 497 680 95 118 152 187 744 985 LTM Middle-Market 285 407 34 39 86 117 405 563 >$1B 8 3 0 0 1 1 9 4 Undisclosed 238 314 68 88 77 84 383 486 Total 531 724 102 127 164 202 797 1,053 and LTM as of November 30. Note: Domestic M&A represents India target/india acquiror; Outbound M&A represents non-india target/india acquiror; Inbound M&A represents India target/non-india acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. India Deal Value ($ in millions) Domestic Outbound Inbound Total 2014 2015 2014 2015 2014 2015 2014 2015 November Middle-Market $1,118 $1,820 $378 $59 $193 $321 $1,689 $2,200 >$1B $3,036 $0 $0 $0 $0 $0 $3,036 $0 Total $4,154 $1,820 $378 $59 $193 $321 $4,725 $2,200 Middle-Market $8,610 $9,571 $1,715 $3,113 $3,967 $8,220 $14,292 $20,903 >$1B $19,782 $10,381 $0 $0 $3,175 $2,064 $22,956 $12,445 Total $28,392 $19,952 $1,715 $3,113 $7,141 $10,283 $37,248 $33,348 LTM Middle-Market $9,122 $10,607 $1,859 $3,186 $4,290 $9,410 $15,271 $23,203 >$1B $19,782 $10,381 $0 $0 $3,175 $2,064 $22,956 $12,445 Total $28,903 $20,988 $1,859 $3,186 $7,465 $11,473 $38,227 $35,648 and LTM as of November 30. Note: Domestic M&A represents India target/india acquiror; Outbound M&A represents non-india target/india acquiror; Inbound M&A represents India target/non-india acquiror. Figures exclude transactions involving minority stakes, stock repurchases, and spin-offs. Robert W. Baird & Co. 20