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The comprehensive review of mergers and acquisitions in the Americas region
Deal DriversAmericas
FY 2017
mergermarket.com
An Acuris Company
F I N A N C I A L T R A N S A C T I O N S & R E P O R T I N G | M A R K E T I N G & C O M M U N I C A T I O N S F O R R E G U L A T E D I N D U S T R Y | C U S T O M E R C O N T E N T & C O L L A B O R A T I O N S O L U T I O N S
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Mergermarket Deal Drivers Americas
Contents
3
Foreword 4
Americas Heat Chart 5
All Sectors 6
Financial Services 18
Industrials, Manufacturing & Engineering 24
Energy, Mining, Oil & Gas 30
Consumer 36
Technology, Media & Telecom 42
Life Sciences & Healthcare 48
Canada 54
West 61
Midwest 68
South 75
Mid-Atlantic 82
New England 89
Latin America 96
About Merrill Corporation 104
Merrill Corporation Contacts 104
Contents
mergermarket.com
Foreword
Welcome to the full-year 2017 edition of Deal Drivers Americas, published by Mergermarket in association with Merrill Corporation. In this report, we take an in-depth look at M&A data in North America and Latin America, as well as examine key trends that dealmakers expect to see in 2018.
Despite heightened expectations at the beginning of the year, dealmaking in 2017 was never likely to hit the heights of the two previous years. Many dealmakers appeared to be taking a wait-and-see approach to promises from the Trump administration, particularly on corporate tax cuts, and this led to a year-on-year drop in deal value.
However, this decline needs to be put into context. While activity appears uninspiring in comparison to recent years, there were numerous deals that not only made headlines but also pointed to the nature of transactions that could be coming down the pipeline in 2018. It is likely we will see more disruptive megadeals in 2018 as the uncertainty around tax reforms was lifted with the signing of the US government’s tax bill on December 22. This reform, the largest overhaul of the US tax code for 31 years—allied with a benign economy and record corporate cash balances—has dealmakers and financial forecasters predicting that 2018 could see numbers back to 2015-16 levels.
Top sectors In terms of sectors in 2017, the Technology, Media & Telecom (TMT) sector saw the highest volume of activity in North America with 1,357 deals, eclipsing the sector’s 2016 tally of 1,255 deals. And the appetite for technology targets is only likely to strengthen in 2018 as corporates from outside the Technology sector and deal-hungry buyout firms look to compete with big-spending tech giants for companies in a variety of subsectors, including software and cybersecurity.
Beyond TMT, the Energy, Financial Services and Consumer sectors will also be sectors to watch throughout 2018, as they look to carry over positive dealmaking momentum from last year.
Full of promise Canada continues to be a strong contributor to the region’s dealmaking activity, with an uptick in deal value in 2017 based on rising confidence in the Canadian economy and positive forecasts for the year ahead. On the other hand, the pace and strength of Latin American dealmaking is expected to be hindered by upcoming elections in Mexico, Colombia and Brazil.
After a strong start to 2018, which has seen a number of megadeals announced, dealmakers are anticipating a busy year for M&A activity, with the uncertainty that was present last year now behind us.
The US economy is more stable than it has been for a long time with an expectation of 2.5% growth in 2018, according to the World Bank; both private equity and corporate bidders are sitting on excess cash; the stock market continues to break records and confidence is understandably high. All these factors combined means 2018 could be a very interesting year indeed.
Sincerely,
Mark Williams Chief Revenue Officer, Americas
Mark Williams Chief Revenue Officer, AmericasMerrill Corporation
Mergermarket Deal Drivers Americas 4
mergermarket.com
Foreword
5Mergermarket
Heat Chart based on potential companies for sale
Hot Warm Cold
Criteria of heat chart: Mergermarket’s sector heat chart is based on companies tagged as potential targets in 2017.
Sector West South Mid-Atlantic
Midwest LatAm New England
Canada Total
TMT 553 243 225 122 75 104 75 1397
Industrials/Chemicals 189 248 96 248 88 84 37 990
Consumer 199 163 146 151 147 56 28 890
Pharma/Med/Biotech
150 176 126 147 50 83 39 771
Energy/Mining/Utilities
145 198 66 58 118 22 46 653
Business Services 146 151 108 79 81 49 10 624
Financial Services 82 87 101 40 49 32 29 420
Leisure 41 50 29 23 31 9 3 186
Construction 15 18 10 12 23 5 4 87
Transportation 12 20 6 8 36 1 4 87
Real Estate 12 12 13 10 7 1 7 62
Agriculture 5 9 3 10 9 0 3 39
Defense 9 10 3 5 0 5 1 33
Government 0 6 3 0 2 0 0 11
Total 1558 1391 935 913 716 451 286 6250
Our heat chart of “companies for sale” stories in 2017 shows that Technology, Media & Telecoms (TMT) remains the dominant sector in terms of M&A targets in the Americas, while the West is top of the heap when it comes to regions. The Industrials & Chemicals and Consumer segments rounded out the top three sectors, and the South and Mid-Atlantic followed the West when it came to regional targeting.
Many regions lived up to their reputations for having a dominant position in certain sectors. For instance, the Midwest was the top region for stories about Industrials & Chemicals companies on the market, with 25% of the total number of articles related to businesses in the sector.
Meanwhile, the South had by far the most articles related to Energy, Mining & Utilities (EMU) targets, with 30% of the total, thanks to the huge number of commodity-focused businesses in Texas, Oklahoma, and neighboring states. The West and Latin America also had significant percentages of EMU “companies for sale” stories in 2017.
Examining the overall position of different sectors, the consumer industry’s position in third place with 890 stories suggests that deal activity may rise in the sector, given that there were only 588 deals in 2017 for consumer businesses in the Americas.
At the same time, a decline may be in store for Business Services dealmaking—there were just 624 “companies for sale” articles for companies in the sector in 2017, while there were 862 Business Services deals last year, according to Mergermarket data.
Overall, one thing remains certain for 2018: the Americas are set for another busy year in M&A.
90 60 30
80
70
50
40
20
10
Americas Heat Chart
Mergermarket Deal Drivers Americas
mergermarket.com
Heat Chart
All Sectors
Part of the Acuris reporton global M&A activity
Mergermarket Deal Drivers Americas 6
mergermarket.com
All Sectors
Tom Cane
Further informationGet in touch
Tax reform, digital disruption and pent-up demand for deals have set the stage for an expected uptick in North American M&A activity this year after a relatively lackluster 2017, dealmakers told this news service.
Unless there is a major geopolitical destabilization, M&A should flourish this year, said Bill Curtin, global head of M&A at Hogan Lovells.
There were US$1.4tn worth of deals in North America last year, down 12.2% from 2016, according to Mergermarket data, falling short of high expectations at the start of the year. One factor explaining the slowdown was that many companies wanted more clarity on where the Trump administration was heading, one M&A lawyer said.
A year on, however, the administration’s softening of regulations coupled with the reform of the US tax code will likely facilitate more deal flow, advisors said.
In particular, the tax overhaul presents US companies with a “once in a lifetime opportunity,” the lawyer said, singling out pharmaceutical companies as key beneficiaries whose significant offshore cash piles could now be used to fund M&A. Real Estate and Energy are other sectors that should see an overall benefit from the bill, leading to increased activity, he said.
Overall, deals involving strategic acquirers—including stock deals—look set to dominate in
2018, against the background of record-high valuations, said another M&A lawyer.
When presenting these deals to shareholders, there will likely be “a huge focus” on putting synergies “front and center because of sky-high valuations,” this M&A lawyer said.
A media industry executive confirmed that tax reform weighed on his decisions toward the end of 2017, and that the new legislation, combined with the Trump administration’s general deregulatory push, will lead to a spike in deal flow.
This executive also expected that, on the sell-side, smaller, private, family-owned businesses will be brought off the sidelines and consider cashing out now that they have clarity on the tax regime.
For private equity buyers, not only do they face competition from strategic acquirers, they also face pressure from the proliferation of new market entrants, including family offices, SPACs and sovereign wealth funds, advisors said.
“It’s very competitive and people are challenged to deploy their funds,” said Matt Sondag of West Monroe Partners.
Disruption While total 2017 M&A value was down, the year was noteworthy for the “Amazon effect.” The Seattle, Washington-based tech giant sent shockwaves through the market with
its US$13.5bn acquisition of Whole Foods in the summer. Then, in December, CVS Health [NYSE:CVS] and Aetna [NYSE:AET] announced a US$67.8bn merger agreement, seen by many as partly a response to Amazon’s expected entry into—and disruption of—the prescription drug market.
Technology is set to be at the forefront of companies’ M&A plans in 2018, allowing companies to transform their customer experience or add more automation via acquisitions. Many companies are questioning how they can “mimic the Amazon-like experience,” said Tom Bolger of West Monroe Partners.
“There’s only one industry and that’s technology,” said Hogan Lovells’ Curtin. “When we look at what our clients want to do whether they’re a healthcare or automotive company, it’s about technology.”
Cross-border Another factor behind the drop in deal value last year was declining inbound cross-border M&A, which fell 23.6% to US$263.1bn, according to Mergermarket data.
Advisors said demand for US assets from both Europe and Asia Pacific remains high. Yet the increasing scope of deal reviews by the Committee on Foreign Investment in the United States (CFIUS) means the hurdles are getting higher—especially for Chinese buyers.
All SectorsOverview
Jonathan Guilford
Mergermarket Deal Drivers Americas 7
mergermarket.com
All Sectors
8Mergermarket
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
14-Dec-17 P The Walt Disney Company Twenty-First Century Fox Inc Technology, Media & Telecom 68,422
3-Dec-17 P CVS Health Corporation Aetna Inc Financial Services 67,823
17-Jan-17 C British American Tobacco Plc Reynolds American Inc (57.83% stake) Consumer 60,567
4-Sep-17 P United Technologies Corporation Rockwell Collins Inc Industrials, Chemicals & Engineering 29,948
23-Apr-17 C Becton, Dickinson and Company C.R. Bard Inc Life Sciences & Healthcare 23,609
21-Aug-17 P Sempra Energy Energy Future Holdings Corporation Energy, Mining, Oil & Gas 18,800
10-Feb-17 C Reckitt Benckiser Group Plc Mead Johnson & Company Consumer 17,835
15-Dec-17 C Marathon Petroleum Corporation MPLX LP (40.32% stake) Energy, Mining, Oil & Gas 17,279
1-Feb-17 C ONEOK Inc ONEOK Partners LP (60% stake) Energy, Mining, Oil & Gas 17,118
18-Aug-17 P Calpine Consortium Calpine Corporation Energy, Mining, Oil & Gas 17,023
7-Jul-17 L Berkshire Hathaway Energy Oncor Electric Delivery Company LLC (80.03% stake) Energy, Mining, Oil & Gas Energy Future Holdings Corporation 16,720
31-Jul-17 P Discovery Communications Inc Scripps Networks Interactive Inc Technology, Media & Telecom 14,383
16-Jun-17 C Amazon.com Inc Whole Foods Market Inc Consumer 13,464
29-Mar-17 C Cenovus Energy Inc ConocoPhillips (Canadian conventional natural gas assets); and Foster Creek Christina Lake Oil Sands Partnership (50% stake)
Energy, Mining, Oil & Gas ConocoPhillips Company 13,240
9-Jan-17 C Williams Companies Inc Williams Partners LP (32.24% stake) Energy, Mining, Oil & Gas 11,358
30-Oct-17 P Vistra Energy Corp Dynegy Inc Energy, Mining, Oil & Gas Energy Capital Partners LLC 10,609
22-May-17 L Clariant AG Huntsman Corporation Industrials, Chemicals & Engineering 10,355
28-Aug-17 C Gilead Sciences Inc Kite Pharma Inc Life Sciences & Healthcare 10,161
30-Oct-17 P Lennar Corporation CalAtlantic Group Inc Construction MatlinPatterson Global Advisers LLC 9,256
18-Sep-17 P Northrop Grumman Corporation Orbital ATK Inc Defense 9,170
C= Completed; P= Pending; L= Lapsed
Top 20 Announced Deals for the Year Ending 31 December 2017 (any North American Involvement)
Mergermarket Deal Drivers Americas
mergermarket.com
All Sectors
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Please use corresponding AIT filePlease use corresponding AIT file
39.9%
1.6%
17.6%
3%
3.7%
6.5%
22.7%
5%
29%
3.4%
23.8%
3.2%
5.8%
6.4%
22.8%
5.6%
USA
Northern Europe
Asia-Pacific
USA
Northern Europe
Asia-Pacific
Canada
Central & Eastern Europe
RoW
Canada
Central & Eastern Europe
RoW
Western Europe
Southern Europe
Western Europe
Southern Europe
Mix of deals by geographic regionDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.
Mix of deals by geographic regionValue
Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.
Mergermarket 9
mergermarket.com
All SectorsDeal Drivers Americas
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Please use corresponding AIT filePlease use corresponding AIT file
Mergermarket Deal Drivers Americas 10All Sectors
Valu
e (U
S$
bn)
0
50
100
150
200
250
300
350
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
US$117.1
US$154.7
US$71.7
US$180.7
US$307.9
US$161.1
US$248.8
US$9.3 US$
3.3
US$35US$
17.3
US$34.7
US$30.3
Num
ber
of d
eals
0
200
400
600
800
1,000
1,200
1,400
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
46
596
1,357
12 29
173115
218
990
518
862
588 581
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada. Industry sector is based on the dominant industry of the target.
mergermarket.com
Please use corresponding AIT filePlease use corresponding AIT file
0
50,000
100,000
150,000
200,000
250,000
300,000
2017201620152014201320122011
Valu
e (U
S$
m)
Volum
e
0
200
400
600
800
1,000
1,200
US$176,954US$
159,944US$
162,496
US$249,647 US$
242,268
US$295,990
US$271,305
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000
2017201620152014201320122011
Valu
e (U
S$
m)
Volum
e0
200
400
600
800
1,000
1,200
1,400
US$171,000
US$145,217
US$127,612US$
114,724
US$175,692
US$157,844
US$204,390
Deal Count Deal CountValue Value
Buyouts
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Exits
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Mergermarket Deal Drivers Americas 11
mergermarket.com
All Sectors
Please use corresponding AIT filePlease use corresponding AIT file Please use corresponding AIT file
Valu
e (U
S$
m)
0
30,000
60,000
90,000
120,000
150,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Num
ber
of d
eals
0
50
100
150
200
250
300
350
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
European bidder acquiring a North American target
North American bidder acquiring a European target
Total North American/European deals
Transatlantic dealsDeal Count
Based on dominant location of target and bidder and excludes all buyouts.
Transatlantic dealsValue
Based on dominant location of target and bidder and excludes all buyouts.
European bidder acquiring a North American target
North American bidder acquiring a European target
Total North American/European deals
Mergermarket Deal Drivers Americas 12
mergermarket.com
All Sectors
Value Value Value Value Value Value
Please use corresponding AIT file
Mergermarket Deal Drivers Americas 13
Please use corresponding AIT file Please use corresponding AIT file
All Sectors
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2017201620152014201320122011
Valu
e (U
S$
bn)
US$248.4
US$272.9
US$85.6
US$129.6
US$308.5
US$268.8
US$99.3
US$119.8
US$269.2
US$309
US$106.3
US$152.4
US$158.4
US$238.9
US$73
US$113.4
US$207.8
US$268.7
US$81.2US$112
US$192.2
US$191.9
US$84.4US$115
US$327.1
US$88.7US$123.6
US$241.2
US$394.9
US$315.2
US$341.2
US$1,140.2
US$765.1US$
644.6US$591.3
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2017201620152014201320122011
Num
ber
of d
eals
280
236
2,197
3,1543,357 3,528
275
271
1,946
312
299
2,399
2,872
245
1,860
205
2,259
274
231
1,845
2,2602,010
1,859
243
337
1,828
210
237
29
60
50
87 80 9777
2566
27
50 69 49 41
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Please use corresponding AIT file Please use corresponding AIT file
0
200
400
600
800
1,000
1,200
1,400
1,600
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket Deal Drivers Americas 14
mergermarket.com
All Sectors
15Mergermarket
Legal advisors by value Legal advisors by deal count
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 5 Skadden Arps Slate Meagher & Flom 474,995 211
2 13 Kirkland & Ellis 395,257 455
3 12 Simpson Thacher & Bartlett 375,934 147
4 1 Sullivan & Cromwell 360,481 118
5 6 Davis Polk & Wardwell 359,120 109
6 3 Cravath, Swaine & Moore 354,835 73
7 2 White & Case 336,254 154
8 14 Cleary Gottlieb Steen & Hamilton 330,612 79
9 11 Latham & Watkins 224,717 306
10 10 Shearman & Sterling 211,600 93
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 395,257 455
2 3 Jones Day 172,578 308
3 2 Latham & Watkins 224,717 306
4 4 DLA Piper 41,491 291
5 14 Goodwin Procter 61,675 262
6 6 Skadden Arps Slate Meagher & Flom 474,995 211
7 7 Morgan Lewis & Bockius 44,108 198
8 5 Weil Gotshal & Manges 188,545 189
9 8 White & Case 336,254 154
10 9 Paul Weiss Rifkind Wharton & Garrison 130,397 148
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Goldman Sachs & Co 674,080 233
2 1 JPMorgan 499,305 222
3 3 Morgan Stanley 437,495 180
4 4 Houlihan Lokey 35,266 167
5 11 Citi 321,125 145
6 7 Jefferies 114,998 137
7 6 Barclays 291,241 136
8 10 Credit Suisse 233,719 132
9 12 Lazard 300,508 131
10 5 Bank of America Merrill Lynch 300,119 129
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Goldman Sachs & Co 674,080 233
2 4 JPMorgan 499,305 222
3 1 Morgan Stanley 437,495 180
4 5 Citi 321,125 145
5 12 Lazard 300,508 131
6 3 Bank of America Merrill Lynch 300,119 129
7 6 Barclays 291,241 136
8 10 Centerview Partners 262,916 42
9 9 Deutsche Bank 234,229 80
10 7 Credit Suisse 233,719 132
Financial advisors by deal countFinancial advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.
Mergermarket Deal Drivers Americas
mergermarket.com
All Sectors
16Mergermarket
Legal advisors by deal count – mid-market (US$5M–US$250M)Legal advisors by value – mid-market (US$5M–US$250M)
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 3 Kirkland & Ellis 6,713 54
2 5 Goodwin Procter 6,589 110
3 1 Latham & Watkins 6,473 65
4 2 DLA Piper 5,085 67
5 4 Jones Day 4,939 72
6 8 Skadden Arps Slate Meagher & Flom 4,839 41
7 15 Cooley 4,407 54
8 16 Blake, Cassels & Graydon 4,328 59
9 9 Morgan Lewis & Bockius 4,156 43
10 24 Vinson & Elkins 4,109 34
2017 2016 Company name Value (USD m)
Number of Deals
1 7 Goodwin Procter 6,589 110
2 4 Jones Day 4,939 72
3 1 DLA Piper 5,085 67
4 2 Latham & Watkins 6,473 65
5 11 Blake, Cassels & Graydon 4,328 59
6 5 Kirkland & Ellis 6,713 54
7 9 Cooley 4,407 54
8 8 Stikeman Elliott 3,889 44
9 6 Morgan Lewis & Bockius 4,156 43
10 3 Norton Rose Fulbright 3,060 43
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Stifel/KBW 4,909 59
2 2 Houlihan Lokey 4,353 40
3 5 Raymond James & Associates 3,390 39
4 6 KPMG 3,053 39
5 3 Sandler O'Neill & Partners 3,537 38
6 11 Evercore 4,423 35
7 4 Piper Jaffray & Co 3,305 34
8 7 JPMorgan 4,172 32
9 12 Deloitte 2,138 30
10 14 Goldman Sachs & Co 3,646 28
2017 2016 Company name Value (USD m)
Number of Deals
1 3 Stifel/KBW 4,909 59
2 5 Evercore 4,423 35
3 1 Houlihan Lokey 4,353 40
4 2 JPMorgan 4,172 32
5 4 RBC Capital Markets 3,868 27
6 9 Goldman Sachs & Co 3,646 28
7 12 Jefferies 3,551 25
8 10 Sandler O'Neill & Partners 3,537 38
9 15 Citi 3,522 22
10 8 Raymond James & Associates 3,390 39
Financial advisors by deal count – mid-market (US$5M–US$250M)Financial advisors by value – mid-market (US$5M–US$250M)
The legal advisor mid-market league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.
The financial advisor mid-market league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.
Mergermarket Deal Drivers Americas
mergermarket.com
All Sectors
17Mergermarket
The PR advisor mid-market league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.
PR advisors by deal count – mid-market (US$5M–US$250M)PR advisors by value – mid-market (US$5M–US$250M)
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Sard Verbinnen & Co 5,158 39
2 2 Joele Frank Wilkinson Brimmer Katcher 3,132 27
3 5 Edelman 2,980 23
4 3 FTI Consulting 2,927 30
5 4 ICR (Integrated Corporate Relations) 2,915 33
6 16 Abernathy MacGregor Group (AMO) 2,869 24
7 7 Finsbury Hering Schuppener GPG 2,159 15
8 8 Kekst (Publicis/MSLGROUP) 2,047 20
9 6 Brunswick Group 1,401 13
10 24 Blueshirt Group 1,174 12
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Sard Verbinnen & Co 5,158 39
2 4 ICR (Integrated Corporate Relations) 2,915 33
3 1 FTI Consulting 2,927 30
4 3 Joele Frank Wilkinson Brimmer Katcher 3,132 27
5 15 Abernathy MacGregor Group (AMO) 2,869 24
6 5 Edelman 2,980 23
7 7 Kekst (Publicis/MSLGROUP) 2,047 20
8 10 Finsbury Hering Schuppener GPG 2,159 15
9 6 Brunswick Group 1,401 13
10 23 Blueshirt Group 1,174 12
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Sard Verbinnen & Co 356,509 222
2 2 Joele Frank Wilkinson Brimmer Katcher 292,535 151
3 3 Kekst (Publicis/MSLGROUP) 207,243 151
4 5 Abernathy MacGregor Group (AMO) 92,989 117
5 10 Finsbury Hering Schuppener GPG 250,614 99
6 6 FTI Consulting 110,568 98
7 4 Brunswick Group 152,910 87
8 9 Edelman 51,839 74
9 8 ICR (Integrated Corporate Relations) 30,201 62
10 14 BackBay Communications 2,895 52
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Sard Verbinnen & Co 356,509 222
2 1 Joele Frank Wilkinson Brimmer Katcher 292,535 151
3 5 Finsbury Hering Schuppener GPG 250,614 99
4 8 Kekst (Publicis/MSLGROUP) 207,243 151
5 3 Brunswick Group 152,910 87
6 4 FTI Consulting 110,568 98
7 7 Abernathy MacGregor Group (AMO) 92,989 117
8 14 Sloane & Company 81,776 15
9 - Gladstone Place Partners 68,422 1
10 21 Ashton Consulting (AMO) 64,201 5
PR advisors by deal count PR advisors by value
League tables
The PR advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.
Mergermarket
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Deal Drivers Americas All Sectors
Financial Services
Part of the Acuris reporton global M&A activity
Mergermarket Deal Drivers Americas 18
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Financial Services
Yizhu Wang
Further informationGet in touch
Financial ServicesOverview
Dealmaking among Financial Services firms is expected to increase this year, driven by the consolidation of community and regional banks, demands on diversifying revenue, as well as the emerging shareholder activism in Financial Services, sector advisors said.
Bank deals increased in 2017 to 197 transactions worth US$28bn compared to 186 deals worth US$25bn in 2016, according to Mergermarket data. Overall deal counts among Financial Services companies declined by seven to 518, though value surged thanks to pharmacy chain CVS Heath’s [NYSE:CVS] US$67.8bn proposed acquisition of health insurer Aetna [NYSE:AET].
In 1H18, community banks in the US$1bn to US$15bn asset size range will be one notable area for consolidation, said Ben Chung, of counsel at Morrison & Foerster.
M&A among banks in this size range will be more impacted if lawmakers ease regulations by modifying the Dodd-Frank Act, Chung said. Currently, banks with more than US$50bn in assets face a heavier regulatory burden. A pending bill in the Senate would increase the asset threshold to US$250bn.
If Dodd-Frank is revised, mid-sized banks will be able to more easily expand without triggering additional Dodd-Frank oversight, and there will be a push for mergers, said Jones Day partner Peter Izanec.
Along with the robust credit and public markets, bank deal values have gone up “significantly”
over the past few years since the financial crisis, Chung said. Banks can now fetch valuations at over 2x book value, he noted.
Analysts at Keefe, Bruyette & Woods, a financial services investment bank, said in a recent report that banks’ stronger stock currencies, the demand for deposits and deregulation will drive bank deals in 2018. The report identified as prime takeover candidates Associated Banc-Corp [NYSE:ASB], BankUnited [NYSE:BKU], Investors Bancorp[NASDAQ:ISBC], Signature Bank [NASDAQ:SBNY] and TCF Financial [NYSE:TCF].
Bank regulators have picked up the pace of deal reviews, from an average of 140 days in 2014 to 130 days last year, according to KBW. Shortened closing periods could enable banks to pursue more deals, said Christopher McGratty, managing director of equity research at KBW.
Driven by a strong sellers’ market, buyers in the wider Financial Services space beyond banks are willing to take more risk and moving more quickly to win deals, said panelists at the Mergermarket Financial Services M&A Forum in November in New York.
Deal processes have been more atypical and less predictable, said Danny Rodriguez, partner at Lee Equity Partners, at the panel. Rodriguez has seen bidders start bidding a few weeks early. Bidders are also accepting more aggressive terms and valuations for top-notch companies in order to secure the property, said Rodriguez and Jeb Doggett, managing director at Deloitte.
Going forward, other issues driving bank deal talks include institutions’ expansion into wealth management, the rise of financial technology and shareholder activism, advisors said.
Banks have continued to expand their wealth management businesses, Izanec said. Particularly for regional banks, a common model nowadays is to work with wealth management firms through contracts and get referral fees, Chung said.
Because the advisory service is complementary and tends to have higher profitability than the interest margin in banking, banks could seek buys to bring the capacity in-house, Chung said.
On the technology side, financial data is a large opportunity for institutions, who collect considerable amounts of data but haven’t yet figured out how to extract the data and make good use of it, said Brad Armstrong, principal at Lovell Minnick Partners, a Pennsylvania-based private equity firm.
Banks are more likely to partner with technology firms in the near-term rather than make acquisitions because the valuation gap between institutions and fintech firms is still too wide, Armstrong said.
Shareholder activism is also emerging to drive more actions in Financial Services, said Jones Day’s Izanec.
Mergermarket Deal Drivers Americas 19
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Financial Services
20Mergermarket
Top deals
Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Financial Services Sector
AnnouncedDate
Status Bidder Company Target Company Vendor Company Deal Value(US$m)
3-Dec-17 P CVS Health Corporation Aetna Inc 67,823
29-Jun-17 C MetLife Inc (Shareholders) Brighthouse Financial Inc MetLife Inc 6,073
17-Mar-17 C Kohlberg Kravis Roberts & Co LP; and Caisse de Depot et Placement du Quebec USI Holdings Corporation Onex Corporation 4,300
12-Sep-17 P Centene Corporation The New York State Catholic Health Plan Inc 3,750
14-Feb-17 C SoftBank Group Corp Fortress Investment Group LLC 3,300
2-Oct-17 C Sprott Inc Central Fund of Canada Limited 3,298
4-May-17 C First Horizon National Corporation Capital Bank Financial Corp 2,225
7-Mar-17 C Sterling Bancorp Astoria Financial Corporation 2,219
4-Dec-17 P Bank J. Safra Sarasin AG; Pine Brook Road Partners LLC; Global Atlantic Financial Group Limited; Atlas Merchant Capital; Cornell Capital LLC; and TRB Advisors LP
Talcott Resolution Inc The Hartford Financial Services Group Inc 2,050
18-Oct-17 P Assurant Inc The Warranty Group Inc 1,906
24-May-17 C CF Corporation Fidelity & Guaranty Life Insurance Company HRG Group Inc 1,835
23-Jan-17 C Pinnacle Financial Partners Inc BNC Bancorp 1,761
1-Nov-17 P Permira Advisers LLP Duff & Phelps LLC The Carlyle Group; Pictet & Cie; NB Private Equity Partners Limited; and University of California's Office of the Chief Investment Officer of the Regents
1,750
21-Feb-17 C PNC Financial Services Group Inc ECN Capital Corp (US commercial and vendor finance business) ECN Capital Corp 1,559
5-Jan-17 L IEG Holdings Corporation OneMain Holdings Inc 1,469
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Financial Services
Value Value Value Value Value Value
Please use corresponding AIT file
Mergermarket Deal Drivers Americas 21
Please use corresponding AIT file
Financial Services
0
30
60
90
120
150
180
210
240
2017201620152014201320122011
Valu
e (U
S$
bn)
US$4.8
US$6.5
US$7.4 US$
6.6US$5.7
US$26.2
US$17.9
US$14.7
US$38.6
US$11.2
US$12.4
US$10.9
US$xx
US$12.2
US$18.9
US$16.8
US$15.8
US$12.9
US$11.8
US$28.7
US$25.6
US$11.2
US$28.6
US$13.2
US$9.7
US$21.1
US$32.7
US$11.1
US$15.8
US$10
US$18.4US$
26.4
US$15.9
US$9
US$149.6
US$73.9
0
100
200
300
400
500
600
2017201620152014201320122011
Num
ber
of d
eals
253
1916
272
30
1312
259
210
21
20
210
253
19
182
202
26
14
176
229
160
1416
206
31
33
2 1
3
9
1
98 5
4
7
1
13
27
195
239
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Please use corresponding AIT file Please use corresponding AIT file
0
20
40
60
80
100
120
140
160
180
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket Deal Drivers Americas 22
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Financial Services
23Mergermarket
Legal advisors by value Legal advisors by deal count
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 22 White & Case 82,567 20
2 3 Simpson Thacher & Bartlett 79,177 24
3 1 Sullivan & Cromwell 77,681 19
4 59 Kirkland & Ellis 77,362 22
5 11 Davis Polk & Wardwell 75,834 8
6 9 Shearman & Sterling 74,181 15
7 60 Dechert 71,770 15
8 259 McDermott Will & Emery 67,849 2
9 4 Skadden Arps Slate Meagher & Flom 26,212 35
10 7 Willkie Farr & Gallagher 14,959 16
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Skadden Arps Slate Meagher & Flom 26,212 35
2 7 Simpson Thacher & Bartlett 79,177 24
3 3 Wachtell, Lipton, Rosen & Katz 14,713 23
4 16 Kirkland & Ellis 77,362 22
5 17 Weil Gotshal & Manges 13,345 22
6 44 White & Case 82,567 20
7 26 Alston & Bird 6,884 20
8 1 Sullivan & Cromwell 77,681 19
9 12 Sidley Austin 5,843 19
10 13 Debevoise & Plimpton 12,714 18
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Sandler O'Neill & Partners 25,489 63
2 2 Stifel/KBW 13,779 61
3 3 JPMorgan 26,959 27
4 8 Morgan Stanley 21,518 22
5 7 Goldman Sachs & Co 86,540 20
6 11 Citi 23,100 20
7 23 Stephens 2,989 18
8 21 FIG Partners 862 17
9 5 Raymond James & Associates 1,698 16
10 17 Evercore 77,578 15
2017 2016 Company name Value (USD m)
Number of Deals
1 4 Goldman Sachs & Co 86,540 20
2 16 Evercore 77,578 15
3 12 Lazard 74,704 8
4 7 Barclays 73,859 14
5 - Allen & Company 72,156 3
6 17 Centerview Partners 70,272 5
7 1 JPMorgan 26,959 27
8 6 Sandler O'Neill & Partners 25,489 63
9 8 Citi 23,100 20
10 5 Morgan Stanley 21,518 22
Financial advisors by deal countFinancial advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.
Mergermarket Deal Drivers Americas
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Financial Services
Industrials, Manufacturing & Engineering
Part of the Acuris reporton global M&A activity
Mergermarket 24
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Deal Drivers Americas Industrials, Manufacturing & Engineering
Further informationGet in touch
Industrials, Manufacturing & EngineeringOverview
Marlene Givant Star
Sam Weisberg
Richard Tekneci
One of the biggest drivers of consolidation in 2018 will be the need for traditional industrials components groups to broaden their technology offerings, according to several sector advisors interviewed by this news service.
Paul Scrivano, partner and global head of the M&A practice at the law firm Ropes & Gray, noted that Siemens’ [ETR:SIE] US$4bn acquisition, in late March, of Mentor Graphics signifies a trend of industrial giants wanting to diversify beyond industrial components.
These companies do not want to be “disintermediated in the value chain,” Scrivano noted. Acquirers are looking at exerting control over the entire value chain, including collecting and harvesting information so they can sell more products and services and make more repairs.
In particular, artificial intelligence, machine learning, the Internet of things (IoT) and 3D printing tied with manufacturing are likely to draw players such as General Electric [NYSE:GE] and Boeing [NYSE:BA], Scrivano projected. Dan Shea, a managing director at BDO Capital Advisors, agreed that the IoT space should see heavy activity, as should any sector involving upgrading equipment to incorporate robotics and sensors. Building products, aerospace, machine automation and specialty chemicals are especially attractive subsectors right now, Shea added.
Manan K. Shah, a managing partner at Focus Investment Banking, said one aerospace area that could see consolidation is missile defense, in light of continuing tensions with North Korea. One major deal in this sector was defense giant Northrop Grumman’s [NYSE:NOC] recent acquisition of Orbital ATK for around US$9.2bn, a 20% premium. Shah added that the aerospace maintenance, repair and overhaul (MRO) sector is likely to see continued M&A activity, as the sector remains fragmented.
In the transport sector, direct-to-consumer and e-commerce logistics services continue to thrive, as Amazon [NASDAQ:AMZN] and other retailers’ volume of same-day or express delivery freight is hastily growing, said Chip Grayson, a managing director at Raymond James.
International air freight is seeing a similar uptick as customers are demanding faster service on imported goods such as apparel and footwear, Grayson added. He pointed to private equity firm Quad-C Management’s October acquisition of AIT Worldwide Logistics, which provides air and marine freight services. Freight rates are strong in that sector as well as in asset-based trucking, Grayson noted.
Meanwhile, private equity will continue to invest in third-party logistics groups, Grayson said, citing TPG Capital’s October acquisition of Transplace, a transportation management
firm. Valuations are high in the non-asset-based transport services sector, well into double-digit multiples.
EBITDA multiples throughout industrials are strong, with most middle-market industrials companies valued at around 9x EBITDA, according to BDO’s Shea.
Grayson with Raymond James said that the mandatory electronic logging devices now placed on trucks could hurt smaller transport groups unable to comply with new regulations, leading to consolidation by large players such as Knight-Swift Transportation Holdings [NYSE:SWFT], CRST International and J.B. Hunt Transport Services [NASDAQ:JBHT]. He noted that in July, Hunt announced its first acquisition in several years, of Special Logistics Dedicated for US$136m.
Taking smaller drivers out of the industry will reduce capacity and increase rates, which will benefit everyone, Grayson said.
Finally, succession planning—or the lack of it—will figure into consolidation for smaller companies next year, said Shea. The youngest baby boomers are 53 and will need to sell their businesses in order to retire, as well as to avoid making the necessary investments in technology. This trend could lead to a 10% pick up in volume from 2017, he added.
Mergermarket Deal Drivers Americas 25
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Industrials, Manufacturing & Engineering
26Mergermarket
Top deals
Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Industrials, Manufacturing & Engineering Sector
AnnouncedDate
Status Bidder Company Target Company Vendor Company Deal Value(US$m)
4-Sep-17 P United Technologies Corporation Rockwell Collins Inc 29,948
22-May-17 L Clariant AG Huntsman Corporation 10,355
19-Dec-17 P Crown Holdings Inc Signode Industrial Group The Carlyle Group 3,910
18-Dec-17 P Platinum Equity LLC Husky Injection Molding Systems Ltd Berkshire Partners LLC; and OMERS Private Equity Inc 3,850
8-Mar-17 C Caisse de Depot et Placement du Quebec; and Suez Suez Water Technologies & Solutions General Electric Company 3,379
4-Dec-17 P Prysmian SpA General Cable Corporation 2,521
24-Jan-17 C WestRock Company Multi Packaging Solutions Inc 2,248
17-Apr-17 C NOVA Chemicals Corporation Williams Olefins LLC Williams Partners LP 2,100
16-Mar-17 C 3M Company Scott Safety Johnson Controls Inc 2,000
19-Jun-17 C CCMP Capital Advisors LLC; Alberta Investment Management Corporation; and MSD Partners LP Hayward Industries Inc Davis Family 1,920
18-Aug-17 C Equity Group Investments LLC; HPS Investment Partners LLC; PointNorth Capital Inc; and Poole family Waste Industries USA Inc Macquarie Infrastructure Partners Inc 1,900
24-Oct-17 C Graphic Packaging Holding Company International Paper Company (North America consumer packaging business)
International Paper Company 1,800
12-Dec-17 P Unimin Corporation Fairmount Santrol 1,736
4-Sep-17 C H.B. Fuller Company Royal Adhesives & Sealants LLC American Securities LLC 1,575
2-May-17 C Leonard Green & Partners LP; and Oak Hill Advisors LP Charter NEX Films Inc Pamplona Capital Management LLP 1,500
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Industrials, Manufacturing & Engineering
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 27
Please use corresponding AIT file
Industrials, Manufacturing & Engineering
0
50
100
150
200
250
2017201620152014201320122011
Valu
e (U
S$
bn)
US$22.4
US$38.3
US$10.5US$15.3
US$40.6
US$26.3
US$11.7
US$16.7
US$53.5
US$23.7
US$50.5
US$14.8
US$20.9
US$17.7
US$38.2
US$9.7
US$14.4
US$10.7
US$36.5
US$34.4
US$9.3
US$17.4
US$72.8
US$26.4
US$21.3
US$12.7
US$16.5
US$43.2
US$11.5US$14.4
US$18
US$29.9US$
6.5
US$156.2
US$136.4
0
100
200
300
400
500
600
700
800
900
1,000
1,100
2017201620152014201320122011
Num
ber
of d
eals
3930
301
563
3134
273
50
41
349
552
4126
249
447
3726
288
499
2535
298
392
7
41
32
2
1
6
67
11
6
8
813
6
7
1
657
253
619
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
0
25
50
75
100
125
150
175
200
225
250
275
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket Deal Drivers Americas 28
mergermarket.com
Industrials, Manufacturing & Engineering
29Mergermarket
Legal advisors by value Legal advisors by deal count
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials – electronics; automation and products and services; and Manufacturing – other.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials – electronics; automation and products and services; and Manufacturing – other.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Sullivan & Cromwell 106,143 16
2 25 Davis Polk & Wardwell 85,330 14
3 20 Latham & Watkins 59,764 38
4 7 Cravath, Swaine & Moore 57,954 12
5 38 Hengeler Mueller 57,285 10
6 17 Skadden Arps Slate Meagher & Flom 55,790 29
7 13 Linklaters 54,529 11
8 35 Freshfields Bruckhaus Deringer 54,232 15
9 90 Willkie Farr & Gallagher 53,586 16
10 23 Cleary Gottlieb Steen & Hamilton 49,792 14
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Jones Day 20,487 83
2 2 Kirkland & Ellis 27,638 77
3 4 Latham & Watkins 59,764 38
4 6 Baker McKenzie 17,788 36
5 3 DLA Piper 2,095 35
6 11 Skadden Arps Slate Meagher & Flom 55,790 29
7 5 Weil Gotshal & Manges 17,690 25
8 32 Gibson Dunn & Crutcher 6,267 25
9 21 Morgan Lewis & Bockius 3,070 23
10 50 Winston & Strawn 2,805 23
2017 2016 Company name Value (USD m)
Number of Deals
1 10 Lincoln International 1,630 47
2 3 Goldman Sachs & Co 102,578 43
3 1 Houlihan Lokey 4,528 34
4 6 PwC 3,505 30
5 2 Rothschild 25,472 29
6 7 Lazard 12,912 28
7 17 Deloitte 3,815 28
8 4 JPMorgan 45,671 26
9 8 Robert W. Baird & Co 8,713 26
10 5 KPMG 2,928 25
2017 2016 Company name Value (USD m)
Number of Deals
1 3 Goldman Sachs & Co 102,578 43
2 1 Morgan Stanley 92,941 18
3 8 Citi 72,154 21
4 2 Bank of America Merrill Lynch 62,473 17
5 5 Credit Suisse 56,577 18
6 29 Macquarie Group 48,778 8
7 42 Perella Weinberg Partners 45,960 2
8 9 JPMorgan 45,671 26
9 4 Rothschild 25,472 29
10 20 UBS Investment Bank 15,910 12
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
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Industrials, Manufacturing & Engineering
Energy, Mining, Oil & Gas
Part of the Acuris reporton global M&A activity
Mergermarket Deal Drivers Americas 30
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Energy, Mining, Oil & Gas
Further informationGet in touch
Energy, Mining, Oil & GasOverview
Chad Watt
Nate Trela
Energy companies have plenty of fuel for a healthy M&A environment in 2018. But coming off a lackluster close to 2017, the sector needs a spark to ignite dealmaking, industry sources say.
Fear of making a bad deal is holding transactions back, said David Kirkland, corporate practice chair for Baker Botts. Private equity-backed teams don’t want to overpay, though they could face losing their committed capital. And equity holders in restructured companies don’t want to make a deal just to end up with equity from a similarly sized company afterward.
Mike O’Leary, partner at Andrews Kurth Kenyon, said companies that took assets to market late in the year saw prices coming in significantly below what they expected. And further, he said bidders who have expressed interest in buying have actually revised their offers downward after making it through a first-round bidding.
Commodity prices are expected to remain range-bound and fresh capital is in short supply. Energy companies face the new reality of having to live within cash flow, O’Leary said. And in 2018, many companies without access to capital may have to look to sell or joint venture with a financially stronger strategic partner.
Another impetus for deals could be fatigue: “Some of it may come from people who may not know what is going to happen, but they are sick and tired of waiting to make deals,” Kirkland said.
As banks and institutional investors shun energy companies, activist investors are seizing an opportunity, O’Leary said. Low trading prices mean they can acquire meaningful stakes in companies and “be an instrument for short-term change.”
O’Leary said the best defense is, of course, to get your stock price up and operate within your means. A strategic business combination can improve a company’s stock price if the investment community and analysts believe the combination is favorable.
SandRidge Energy [NYSE:SD] attempted that in signing a deal to acquire Bonanza Creek Energy [NYSE:BCEI] in November only to have shareholder groups take a stand against it. The merger was called off on 28 December.
Energy-focused private equity firms also have great opportunities now, O’Leary said. There are few other sources of capital available, similar to the market after the 2014 oil price crash.
According to Mergermarket data, deal activity in 2017 has been slower than 2016. The 616 deals valued at US$349.1bn in 2016 approached the levels of 2014—when oil spent part of the year near US$100 a barrel.
O’Leary said the midstream business is in a better position today than it was 8 to 12 months ago. Prices have firmed up somewhat, and in certain plays, producers are increasing the
wells being drilled, which benefits midstream service providers. The challenge for midstream is that outside the Permian and the Eagle Ford, there hasn’t been much drilling going on, and they have not yet seen much growth in their volumes gathered or processed.
On the power side, utilities will see continuing consolidation and some divestitures in the year ahead, said Brian Boufarah, a partner in Deloitte Advisory’s transactions business.
Companies are increasingly likely to sell off utility assets if they’re not their core focus. That’s in part because there’s a ready universe of buyers now. Canadian buyers will continue to be active because they have a lower cost of capital than US counterparts and are looking for opportunities, Boufarah said.
Marlene Motyka, US and Global Renewable Energy Leader at Deloitte, predicted that M&A activity for renewables will continue around generation portfolios. Tax law changes could mean less available tax equity, which could put pressure on smaller renewable developers to sign joint ventures or execute partnerships to get their pipelines flowing, Motyka said. Likely buyers include infrastructure buyers and utilities.
Mergermarket Deal Drivers Americas 31
mergermarket.com
Energy, Mining, Oil & Gas
32Mergermarket
Top deals
AnnouncedDate
Status Bidder Company Target Company Vendor Company Deal Value(US$m)
21-Aug-17 P Sempra Energy Energy Future Holdings Corporation 18,800
15-Dec-17 C Marathon Petroleum Corporation MPLX LP (40.32% stake) 17,279
1-Feb-17 C ONEOK Inc ONEOK Partners LP (60% stake) 17,118
18-Aug-17 P Calpine Consortium Calpine Corporation 17,023
7-Jul-17 L Berkshire Hathaway Energy Oncor Electric Delivery Company LLC (80.03% stake) Energy Future Holdings Corporation 16,720
29-Mar-17 C Cenovus Energy Inc ConocoPhillips (Canadian conventional natural gas assets); and Foster Creek Christina Lake Oil Sands Partnership (50% stake)
ConocoPhillips Company 13,240
9-Jan-17 C Williams Companies Inc Williams Partners LP (32.24% stake) 11,358
30-Oct-17 P Vistra Energy Corp Dynegy Inc Energy Capital Partners LLC 10,609
9-Mar-17 C Canadian Natural Resources Limited The Athabasca Oil Sands Project (60% stake); and Royal Dutch Shell plc (Peace River Complex in-situ assets, including Carmon Creek, and a number of undeveloped oil sands leases in Alberta)
Royal Dutch Shell Plc 8,500
10-Jul-17 P Westar Energy Inc Great Plains Energy Inc 8,240
13-Nov-17 C MPLX LP MPLX Refining Logistics LLC; and MPLX Fuels Distribution LLC Marathon Petroleum Corporation 8,100
19-Jun-17 C EQT Corporation Rice Energy Inc 7,689
25-Jan-17 P AltaGas Ltd WGL Holdings Inc 6,685
17-Jan-17 C Exxon Mobil Corporation BOPCO LP; and the Bass Family (Permian Basin oil companies) The Bass Family 6,620
19-Jul-17 P Hydro One Limited Avista Corporation 5,226
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Energy, Mining, Oil & Gas
Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Energy, Mining, Oil & Gas Sector
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 33
Please use corresponding AIT file
Energy, Mining, Oil & Gas
0
50
100
150
200
250
300
350
400
2017201620152014201320122011
Valu
e (U
S$
bn)
US$34.2
US$49.9
US$19.4US$19.8
US$40.2
US$64.3
US$26.5
US$21.3
US$57.6
US$71.8
US$26.8
US$30.3
US$30.3
US$51.7
US$19.1
US$22.2
US$48
US$57.5
US$25.5
US$21.1
US$57.1
US$50.6
US$18.9US$19.9
US$15.9US$23.4
US$68.6
US$38.5
US$130.8
US$39.1
US$150.4
US$185.4
US$85.1
US$161.6
US$196.9
0
100
200
300
400
500
600
700
800
2017201620152014201320122011
17
Num
ber
of d
eals
54
53
273
125
65
71
296
159
13
74
70
395
148
53
57
304
123
71
61
277
95
60
54
235
64
43
297
139
15
74
13
17
11
14
18
95
10
11
8
11
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
0
20
40
60
80
100
120
140
160
180
200
220
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket Deal Drivers Americas 34
mergermarket.com
Energy, Mining, Oil & Gas
35Mergermarket
Legal advisors by value Legal advisors by deal count
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy, Mining, and Utilities – other.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy, Mining, and Utilities – other.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 1 White & Case 82,587 29
2 3 Vinson & Elkins 77,263 72
3 4 Skadden Arps Slate Meagher & Flom 72,544 28
4 6 Kirkland & Ellis 63,904 37
5 44 Andrews Kurth Kenyon 61,872 25
6 5 Latham & Watkins 52,084 55
7 25 Cravath, Swaine & Moore 48,578 7
8 2 Sullivan & Cromwell 46,728 13
9 15 Shearman & Sterling 43,057 14
10 35 Gibson Dunn & Crutcher 42,789 22
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Vinson & Elkins 77,263 72
2 2 Latham & Watkins 52,084 55
3 3 Kirkland & Ellis 63,904 37
4 6 Blake, Cassels & Graydon 29,794 36
5 4 Norton Rose Fulbright 10,090 33
6 7 Baker Botts 40,622 31
7 11 White & Case 82,587 29
8 13 Locke Lord 8,888 29
9 12 Skadden Arps Slate Meagher & Flom 72,544 28
10 10 Bracewell 40,420 28
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Evercore 37,359 38
2 3 Jefferies 46,034 32
3 1 RBC Capital Markets 25,938 31
4 10 Citi 62,423 30
5 5 JPMorgan 69,130 29
6 15 Tudor, Pickering, Holt & Co 21,548 27
7 6 Barclays 74,305 24
8 8 Goldman Sachs & Co 55,156 24
9 11 Scotiabank 24,388 24
10 13 Bank of America Merrill Lynch 30,560 23
2017 2016 Company name Value (USD m)
Number of Deals
1 4 Morgan Stanley 81,528 18
2 1 Barclays 74,305 24
3 6 JPMorgan 69,130 29
4 11 Lazard 66,562 16
5 3 Citi 62,423 30
6 2 Goldman Sachs & Co 55,156 24
7 13 Jefferies 46,034 32
8 10 Evercore 37,359 38
9 29 TD Securities 34,603 19
10 8 Bank of America Merrill Lynch 30,560 23
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
mergermarket.com
Energy, Mining, Oil & Gas
Consumer
Part of the Acuris reporton global M&A activity
Mergermarket Deal Drivers Americas 36
mergermarket.com
Consumer
Further informationGet in touch
ConsumerOverview
Dayna Fields
Emily Fasold
While 2017 will be remembered as the year Amazon [NASDAQ:AMZN] bought Whole Foods, 2018 will continue to see food-related deals dominate headlines, dealmakers said. The upcoming federal reductions in corporate taxes will yield greater cash flow, and there will be stiff competition among consumer packaged goods (CPG) giants in finding quality, innovative private companies to buy.
But will more free cash for private business owners increase or decrease their interest in selling? “If there will be more money available and less willingness to sell, then prices will go up yet again—I didn’t think I’d ever say that,” said Gian Ricco with Stout Advisory, noting already astonishing multiples seen for on-trend F&B companies throughout 2017.
But offers this year may be too good to refuse, said Mel Deane, partner at Insignia Capital, who is seeing F&B companies sold for 10x-11x EBITDA, and better-for-you foodstuffs reaching 15x-20x EBITDA. According to Mergermarket data, the US saw 174 food and beverage deals worth a total of US$50.9bn in 2017, up significantly in value from 2016, which saw 111 deals worth US$25.6bn.
The food industry is undergoing a fundamental shift as young consumers shun the three-meals-a-day concept and move instead toward healthy snacking options. Millennials are also buying fresh foods over processed, causing the center aisles to shrink, said Jeff Robards
with Alantra, a global middle market investment banking firm. This leaves juggernauts ConAgra [NYSE:CAG], Campbell’s [NYSE:CPB] and General Mills [NYSE:GIS] to scramble for growth.
Huge food companies will continue the race to diversify portfolios—and divest off-trend products—by focusing on mid-size and even lower middle market targets, as low as US$20m in revenue, said Deane with Insignia.
The truly innovative ones will continue to fetch inflated prices as CPG’s invest in M&A in lieu of R&D, said Ricco with Stout. Hot areas for M&A will be in-store bakery, refrigerated meals, private label innovation, and of course healthy snacking, said Robards.
Nestle [VTX:NESN] has been active in divesting parts of its confectionary portfolio and acquiring healthier brands, such as Chameleon Cold Brew Coffee and Atrium Innovations supplements and vitamins, said a sector advisor. Ricco also noted Kellogg’s [NYSE:K] acquisition of two-year-old Chicago, Illinois-based RXbar in October for US$600m—a valuation of 12x-14x times EBITDA.
In 2018, Deane anticipates continued cross-border interest in the snacking space, too, particularly from buyers in Mexico and Asia. Deane pointed to the Mexico-based Coca Cola bottler and Wise Snacks parent company—Arca Continental—which acquired Connecticut-based Deep River Snacks in November, as an example of Mexican interest in US snacking
companies. He added that his firm is aware of at least two Asian investors that are actively pursuing US snack acquisitions.
Meanwhile, activity in the restaurant space has been partially driven by the trend of financial sponsors acquiring “fallen angels,” according to a consumer-focused sector advisor, who explained that “dramatically lower” valuations have made these viable takeover targets, a trend that he sees continuing in 2018. The advisor pointed to Darden Restaurant’s US$780m acquisition of Cheddar’s Scratch Kitchen, and JAB Holding’s US$7.4bn acquisition of Panera Bread last spring as examples.
Fast-casual franchised concepts are fetching multiples of 13x-15x EBITDA, while quick service restaurants (QSR) concepts are garnering closer to 8-9x EBITDA, the advisor said.
The better-for-you trend spills into beauty, laundry and even car cleaners, said Deane. “The multiples in natural hard goods are lower, but we think that will change in the first half of [2018], and we’re already seeing that,” he said.
Beauty products generate high margins, which yield high multiples, added Deane. Traditional retailers—many of which are struggling—are equally invested in these on-trend natural beauty brands because they lure inside much-needed foot traffic from a coveted consumer demographic.
Mergermarket Deal Drivers Americas 37
mergermarket.com
Consumer
38Mergermarket
Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Consumer Sector
Top deals
AnnouncedDate
Status Bidder Company Target Company Vendor Company Deal Value(US$m)
17-Jan-17 C British American Tobacco Plc Reynolds American Inc (57.83% stake) 60,567
10-Feb-17 C Reckitt Benckiser Group Plc Mead Johnson & Company 17,835
16-Jun-17 C Amazon.com Inc Whole Foods Market Inc 13,464
5-Apr-17 C JAB Holdings BV Panera Bread Company 7,404
28-Jun-17 C Sycamore Partners Staples Incorporated 6,657
18-Dec-17 P Campbell Soup Company Snyder's-Lance Inc 5,958
29-Jun-17 P Walgreens Boots Alliance Inc Rite Aid Corporation (1,932 stores) Rite Aid Corporation 4,375
25-Apr-17 C Tyson Foods Inc AdvancePierre Foods Holdings Inc Oaktree Capital Management LP 4,121
31-Mar-17 C CK Asset Holdings Limited Reliance Home Comfort Limited Partnership Alinda Capital Partners LLC 3,561
2-Oct-17 P Metro Inc Jean Coutu Group Inc The Coutu family 3,472
18-Apr-17 C PetSmart Inc Chewy Inc Volition Capital; Verlinvest SA; and Greenspring Associates Inc 3,350
6-Apr-17 C 7-Eleven Inc Sunoco LP (1,112 gas stand/convenience stores in Texas and eastern US) Sunoco LP 3,306
27-Mar-17 C Bain Capital LLC Diversey Inc Sealed Air Corporation 3,200
8-May-17 C Coach Inc Kate Spade & Company 2,349
17-Jan-17 C L Catterton; and GIC Private Limited Leslie's Holdings Inc CVC Capital Partners Limited 1,800
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Consumer
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 39
Please use corresponding AIT file
Consumer
0
25
50
75
100
125
150
175
2017201620152014201320122011
Valu
e (U
S$
bn)
US$14.3
US$25
US$8.9
US$28.7
US$24.6
US$27.4
US$7.4
US$10.2
US$27.9
US$25.9
US$9
US$13.3
US$10.7
US$19.5
US$7.4
US$7.8
US$9
US$30.4
US$8.1
US$7.6
US$15.5
US$8.2
US$9.2
US$8.1
US$23.8
US$2.6
US$116.8
US$84
US$44.9 US$
59.1
US$3.9
US$111.9
US$27.7
US$5.4
0
100
200
300
400
500
600
700
2017201620152014201320122011
Num
ber
of d
eals
3
5
7
6
4
3
4
9
5
8
1
624
166
420
25
21
152
25
24
1731921
256
121
29
23
126
272
1516
145
247
142
20
25
108
337
393 387
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
0
20
40
60
80
100
120
140
160
180
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket Deal Drivers Americas 40
mergermarket.com
Consumer
41Mergermarket
Legal advisors by value Legal advisors by deal count
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer – retail, food and other.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer – retail, food and other.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 21 Kirkland & Ellis 96,635 52
2 5 Davis Polk & Wardwell 95,241 18
3 2 Skadden Arps Slate Meagher & Flom 93,409 17
4 22 Weil Gotshal & Manges 83,764 22
5 20 Simpson Thacher & Bartlett 81,627 14
6 3 Cravath, Swaine & Moore 69,890 6
7 10 Jones Day 69,334 32
8 63 Herbert Smith Freehills 61,671 5
9 106 Moore & Van Allen 60,567 1
10 16 Cleary Gottlieb Steen & Hamilton 34,292 10
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 96,635 52
2 3 Jones Day 69,334 32
3 4 DLA Piper 4,678 28
4 2 Latham & Watkins 21,302 23
5 6 Weil Gotshal & Manges 83,764 22
6 21 Davis Polk & Wardwell 95,241 18
7 9 Ropes & Gray 4,011 18
8 20 Goodwin Procter 2,089 18
9 10 Skadden Arps Slate Meagher & Flom 93,409 17
10 5 King & Spalding 4,004 17
2017 2016 Company name Value (USD m)
Number of Deals
1 3 Houlihan Lokey 3,259 28
2 1 Goldman Sachs & Co 132,245 25
3 2 Lazard 64,836 19
4 8 Barclays 26,101 18
5 7 JPMorgan 79,456 17
6 9 Morgan Stanley 52,546 16
7 5 Rothschild 8,096 16
8 4 Robert W. Baird & Co 1,478 16
9 13 Piper Jaffray & Co 3,417 15
10 17 Credit Suisse 26,919 14
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Goldman Sachs & Co 132,245 25
2 18 Deutsche Bank 95,352 12
3 3 JPMorgan 79,456 17
4 5 UBS Investment Bank 69,445 10
5 4 Lazard 64,836 19
6 13 Centerview Partners 64,266 9
7 2 Morgan Stanley 52,546 16
8 7 Bank of America Merrill Lynch 42,788 13
9 9 Credit Suisse 26,919 14
10 8 Barclays 26,101 18
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
mergermarket.com
Consumer
Technology, Media & Telecom
Part of the Acuris reporton global M&A activity
Mergermarket Deal Drivers Americas 42
mergermarket.com
Technology, Media & Telecom
Further informationGet in touch
Technology, Media & TelecomOverview
Thomas Zadvydas
The universe of technology buyers will keep expanding in 2018, with old-line industrial companies looking to add advanced capabilities through M&A, said sources. Private equity firms—flush with record levels of cash—will also be better able to compete with strategics for software assets, and are finding subscription-based models particularly attractive, they said.
“There is this emergence of the non-traditional technology buyers buying into the technology ecosystem,” said Jace Kowalzyk, partner at Union Square Advisors. “It’s a reasonable balance between three different constituencies in terms of strategics, financial-led sponsors doing deals and then some of the non-traditional buyers coming in,” he added.
More deals such as Emerson Electric’s [NYSE: EMR] October purchase of Paradigm for US$510m are expected, said Kowalzyk. Emerson, a diversified manufacturing conglomerate, will add Paradigm, a seismic data processing and analytics software company, to its Roxar business, whose software helps oil and gas companies manage their reservoirs. General Electric [NYSE: GE] and other industrial giants have also created such technology-focused business units, Kowalzyk and others noted.
Software for automotive applications, as well as security and cyber defense, will be a particular target, added Rob Townsend, partner at Morrison & Foerster.
The spotlight will also fall on private equity firms, whose dry powder is at all-time highs, noted Jason Flegel, a partner at Deloitte. PE firms held a record US$954bn in cash at the end of September, according to research firm Preqin.
Cybersecurity plays are of particular interest, especially with the proliferation of Internet of Things (IoT) devices, Flegel said. “If you take every widget on the planet and connect them to the Internet, it leaves [them open] to be hacked,” he said.
But financial sponsors face competition for IoT assets from strategic-backed venture funds, such as Intel Capital, who can provide strategic expertise, noted Helen Croke, PE partner at Ropes & Gray.
In addition to private equity’s continued focus on cybersecurity, sponsors will also focus on sectors such as voice recognition technology and artificial intelligence, Croke said.
PE will be particularly interested in acquiring software companies they can expand through bolt-on acquisitions, added Thomas Vaughn, a corporate finance attorney at Dykema Gossett PLLC.
“In the tech industry, PE firms are becoming increasingly competitive with the strategics,” Vaughn said. “They are upping their prices to take these opportunities.”
Enterprise software-as-a-service (SaaS) companies should continue as areas for
private equity to place bets in 2018, said Joe Morgan, managing director at D.A. Davidson &Co.
“SaaS continues to be a disruptive model. Private equity has gotten comfortable [because] there is 13 years of SaaS publicly traded valuation data available,” he said.
Software bets should give PE inroads in all types of sectors, including media, retail, fintech and industrial services, adds Brad Gevurtz, managing director at D.A. Davidson.
“Software is eating the world,” he said.
In one such example, Synchronoss Technologies [NASDAQ:SNCR] agreed to sell cloud software company Intralinks Holdings, to Siris Capital Group for US$1bn on 17 October. Intralinks serves banks and other regulated industries.
Debt remains inexpensive and increased strategic activity in TMT may hinge on whether the recently passed tax reform will incentivize the repatriation of international profits, said Kowalzyk.
“More of the large strategics’ cash balances are off-shore versus on-shore,” he noted.
Corporates likely won’t return this to shareholders, said Deloitte’s Flegel.
But one concern for TMT dealflow in 2018 is on the regulatory front, specifically on international deals in sensitive industries such as defense technology.
Mergermarket Deal Drivers Americas 43
mergermarket.com
Technology, Media & Telecom
44Mergermarket
Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Technology, Media & Telecom Sector
Top deals
AnnouncedDate
Status Bidder Company Target Company Vendor Company Deal Value(US$m)
14-Dec-17 P The Walt Disney Company Twenty-First Century Fox Inc 68,422
31-Jul-17 P Discovery Communications Inc Scripps Networks Interactive Inc 14,383
28-Dec-17 C TPG Capital LP; SoftBank Group Corp; General Atlantic LLC; Sequoia Capital; Tencent Holdings Ltd; Dragoneer Investment Group LLC; and Didi Chuxing Technology Co Ltd
Uber Technologies Inc (17.5% stake) Benchmark Capital; and Menlo Ventures 8,983
18-Jul-17 C Crown Castle International Corporation Lightower Fiber Networks Berkshire Partners LLC; and Pamlico Capital 7,100
8-May-17 P Sinclair Broadcast Group Inc Tribune Media Company Oaktree Capital Management LP; and Angelo, Gordon & Co 6,597
20-Nov-17 P Marvell Technology Group Ltd Cavium Inc 6,306
9-May-17 C Apollo Global Management LLC West Corporation Quadrangle Group LLC; and Thomas H. Lee Partners LP 4,963
24-Jan-17 C Cisco Systems Inc AppDynamics Inc General Atlantic LLC; Greylock Partners; Battery Ventures; Kleiner Perkins Caufield & Byers; Lightspeed Venture Partners; Institutional Venture Partners; and Cross Creek Capital LP
3,700
24-Jul-17 C Internet Brands Inc WebMD LLC 3,472
13-Mar-17 C Vista Equity Partners DH Corporation 3,428
11-May-17 P Verizon Communications Inc Straight Path Communications Inc 3,100
26-Nov-17 P Meredith Corporation Time Inc 2,743
25-Sep-17 P ABB Ltd General Electric Industrial Solutions Inc General Electric Company 2,600
4-Apr-17 P Liberty Interactive Corporation General Communication Inc Searchlight Capital Partners LP 2,543
5-Sep-17 P Aveva Group Plc Schneider Electric Software LLC Schneider Electric SA 2,426
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Technology, Media & Telecom
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 45
Please use corresponding AIT file
Technology, Media & Telecom
0
50
100
150
200
250
300
350
400
450
2017201620152014201320122011
Valu
e (U
S$
bn)
US$56.5
US$36.5
US$30.4
US$90.7
US$68.7
US$25.4
US$46.1
US$48.5
US$19.6
US$29.8
US$26.4
US$37.3
US$23.4
US$34.8
US$45.8
US$21.9
US$42.3
US$31.9
US$21.2
US$35.8
US$19
US$26.1
US$56.1
US$16.7US$
13.8US$12.6
US$16.2
US$107.9
US$62.4US$
15.2
US$190.4
US$262.6
US$170
US$17.3
US$111.8
0
200
400
600
800
1,000
1,200
1,400
2017201620152014201320122011
Num
ber
of d
eals
487
45
585
41 44
68
713
397
521
57
47
592
3435
461
413
4044
414
383
4831
381
364
804
62
53
4
7
6
13
11
9
15
2
13
5
18
12
6
28
420
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
0
50
100
150
200
250
300
350
400
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket Deal Drivers Americas 46
mergermarket.com
Technology, Media & Telecom
47Mergermarket
Legal advisors by value Legal advisors by deal count
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer – software, hardware and semiconductors; Telecommunications – hardware; Internet/e-Commerce; Media; and Telecommunications – carriers.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer – software, hardware and semiconductors; Telecommunications – hardware; Internet/e-Commerce; Media; and Telecommunications – carriers.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 16 Cleary Gottlieb Steen & Hamilton 143,612 13
2 6 Skadden Arps Slate Meagher & Flom 99,972 35
3 31 Debevoise & Plimpton 95,245 8
4 4 White & Case 94,227 23
5 22 Simpson Thacher & Bartlett 90,752 28
6 3 Cravath, Swaine & Moore 90,218 16
7 43 Covington & Burling 80,671 16
8 11 Allen & Overy 78,165 16
9 54 Hogan Lovells International 78,046 37
10 39 Fried Frank Harris Shriver & Jacobson 76,149 9
2017 2016 Company name Value (USD m)
Number of Deals
1 14 Goodwin Procter 10,360 135
2 1 Kirkland & Ellis 40,581 116
3 2 DLA Piper 10,261 94
4 3 Cooley 19,656 85
5 5 Latham & Watkins 32,744 71
6 10 Morgan Lewis & Bockius 19,886 65
7 6 Jones Day 13,234 60
8 9 Orrick Herrington & Sutcliffe 6,486 60
9 4 Wilson Sonsini Goodrich & Rosati 12,488 55
10 11 O'Melveny & Myers 9,837 54
2017 2016 Company name Value (USD m)
Number of Deals
1 3 JPMorgan 138,657 44
2 2 Goldman Sachs & Co 131,634 43
3 1 Morgan Stanley 49,075 40
4 10 Credit Suisse 35,168 29
5 16 Jefferies 12,943 29
6 8 William Blair & Company 8,955 29
7 18 Citi 25,708 26
8 4 Evercore 35,284 25
9 12 Houlihan Lokey 1,589 23
10 32 EY 6,929 22
2017 2016 Company name Value (USD m)
Number of Deals
1 3 JPMorgan 138,657 44
2 5 Goldman Sachs & Co 131,634 43
3 21 Guggenheim Partners 91,805 9
4 11 Centerview Partners 80,727 8
5 15 Deutsche Bank 80,256 14
6 1 Morgan Stanley 49,075 40
7 8 Evercore 35,284 25
8 10 Credit Suisse 35,168 29
9 17 UBS Investment Bank 28,437 13
10 4 Citi 25,708 26
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
mergermarket.com
Technology, Media & Telecom
Life Sciences & Healthcare
Part of the Acuris reporton global M&A activity
Mergermarket Deal Drivers Americas 48
mergermarket.com
Life Sciences & Healthcare
Further informationGet in touch
Life Sciences & HealthcareOverview
Favorable equity markets and low interest rates will drive continued robust healthcare M&A activity in the first half of 2018, dealmakers agreed. The marketplace can expect more megadeals among insurers, hospitals and physician groups, particularly as pressure to scale and vertically integrate continues, they noted.
Two landmark deals of 2H17, CVS Health’s [NYSE:CVS] proposed US$67.8bn acquisition of Aetna [NYSE:AET] and UnitedHealth-owned [NYSE:UNH] Optum’s US$4.9bn acquisition of DaVita Medical Group, can be seen as an indication of the shape of things to come in the new year, according to Mark Tomaino, operating partner at Welsh, Carson, Anderson & Stowe.
Tomaino said CVS-Aetna exemplifies the increasing consumerism of healthcare and a growing focus on vertical integration, while Optum-DaVita is “evidence that consolidation is here to stay and will continue to manifest itself in additional payors acquiring providers.”
With just over two weeks left in the year, Tomaino’s firm, along with Humana [NYSE:HUM] and TPG Capital, entered into an agreement to acquire Kindred Healthcare [NYSE:KND] for about US$4.1bn. William Eck, partner at law firm Seyfarth Shaw, said the move represents the further integration of insurers and healthcare providers.
“Organizations aren’t just one thing,” said Roger Strode, partner and healthcare business lawyer with Foley & Lardner. “Hospitals aren’t just hospitals, they’re integrated delivery networks and sometimes they’re insurance companies. CVS is not just a drug store chain and an infusion business, it’s going to be basically a health management company.”
Seyfarth Shaw’s Eck, who represents clients in healthcare transactions, said he expects more deals wherein pharmacy players like CVS look to broaden their services over the next six months. Tomaino said he could see Walmart [NYSE:WMT] re-evaluating its position in the Pharma sector and partnering with a payor like Humana or Cigna [NYSE: CI].
Hospitals also saw significant consolidation in 2H17, with Ascension and Providence St. Joseph Health reportedly in merger talks, and planned mergers between Catholic Health Initiatives and Dignity, and Advocate Health Care and Aurora Health Care. Activity within the sector is unlikely to slow in 2018, the experts said.
“It’s almost like somebody opened up a spigot,” said Strode of Foley & Lardner. “Providers are realizing you’ve got to have scale. I don’t see hospital M&A slowing down any time soon,” he added. Eb LeMaster, managing director at Ponder & Co., said the shift to outpatient care, lack of volume growth and persistent payor consolidation will propel continued hospital M&A.
The life sciences space saw significant deals like Gilead Sciences’ [NASDAQ:GILD] US$10.2bn acquisition of Kite Pharma in 2H17, and Ropes & Gray’s Christopher Comeau said oncology will continue to be an area of interest in 2018. Large pharma companies seeking to expand their pipelines will drive dealmaking, with the pending Republican tax bill expected to “loosen the reins” when it comes to pharma M&A, Comeau noted.
The experts agreed life sciences will see cross-border activity in 2018. Comeau named China as an attractive region, while Eck noted he expects increased inbound interest from Western Europe in the US and Asia-Pacific.
Though both strategic and private equity buyers are putting capital to work, the experts agreed that strategics are more likely to drive healthcare M&A over the next six months, due to synergies and cost-containment pressures. Calling the CVS deal “seismic,” Eck said the transaction will drive a lot of strategic activity in the marketplace.
Tomaino noted, however, that private equity investors are taking advantage of secular tailwinds, including a growing aging population and the evolution of health benefits provisions. In Pharma, Comeau said he expects an uptick of private equity activity in the middle market over the next six months.
Claire Rychlewski
Kevin McCaffrey
Mergermarket Deal Drivers Americas 49
mergermarket.com
Life Sciences & Healthcare
50Mergermarket
Top deals
AnnouncedDate
Status Bidder Company Target Company Vendor Company Deal Value(US$m)
23-Apr-17 C Becton, Dickinson and Company C.R. Bard Inc 23,609
28-Aug-17 C Gilead Sciences Inc Kite Pharma Inc 10,161
26-Apr-17 C Abu Dhabi Investment Authority; and GIC Private Limited Pharmaceutical Product Development LLC The Carlyle Group; and Hellman & Friedman LLC 9,050
9-Jan-17 C Mars Incorporated VCA Inc 8,792
18-Apr-17 C Cardinal Health Inc Medtronic Inc (Patient care, deep vein thrombosis and nutritional insufficiency businesses)
Medtronic Inc 6,100
20-Jun-17 C Pamplona Capital Management LLP PAREXEL International Corporation 4,913
6-Dec-17 P Optum Inc DaVita Medical Group DaVita Inc 4,900
9-Jan-17 C Takeda Pharmaceutical Company Limited Ariad Pharmaceuticals 4,893
24-Apr-17 P Fresenius Kabi AG Akorn Inc 4,843
10-May-17 C INC Research LLC Syneos Health Advent International Corporation; and Thomas H. Lee Partners LP 4,582
19-Dec-17 P Kindred Consortium Kindred Healthcare Inc 3,973
10-Oct-17 C Express Scripts Holding Company eviCore healthcare General Atlantic LLC; TA Associates Management LP; and Ridgemont Equity Partners 3,600
9-Jan-17 C UnitedHealth Group Inc Surgical Care Affiliates Inc TPG Capital LP 3,260
14-Mar-17 C American Securities LLC Air Methods Corporation 2,452
8-Aug-17 P Air Medical Group Holdings Inc American Medical Response Inc Envision Healthcare Corporation 2,400
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Life Sciences & Healthcare
Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Life Sciences & Healthcare Sector
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 51
Please use corresponding AIT file
Life Sciences & Healthcare
0
50
100
150
200
250
2017201620152014201320122011
Valu
e (U
S$
bn)
US$31.3
US$35
US$15
US$9.8
US$25.2
US$28
US$12.9
US$10.2
US$23.1
US$33
US$10.4US$14
US$52.2
US$14.9
US$19.1
US$11.2
US$60.7
US$25.9
US$19.2
US$12.8
US$62.4
US$20.3
US$22
US$10.4US$15.3
US$40.3
US$11.4
US$44.2
US$158.8
US$109.2
US$152.4
US$7.7
US$8.4
US$7.6
US$57.7
0
100
200
300
400
500
600
700
2017201620152014201320122011
Num
ber
of d
eals
32
302
28
254
28
27
36
246
30
230
1922
181
20
230
25
209
25
28
215
214
23
42
2
5
7 8
5
5
9
12
7
11
7 12
58
291
243
336
178
204
Mergermarket.com
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
0
20
40
60
80
100
120
140
160
180
200
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 52
mergermarket.com
Deal Drivers Americas Life Sciences & Healthcare
53Mergermarket
Legal advisors by value Legal advisors by deal count
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 30 Skadden Arps Slate Meagher & Flom 77,510 22
2 10 Wachtell, Lipton, Rosen & Katz 69,905 8
3 8 Fried Frank Harris Shriver & Jacobson 61,491 14
4 5 Cravath, Swaine & Moore 55,955 11
5 11 Freshfields Bruckhaus Deringer 47,722 13
6 31 Sullivan & Cromwell 47,279 17
7 12 Gibson Dunn & Crutcher 39,945 12
8 24 Simpson Thacher & Bartlett 32,932 17
9 34 Goodwin Procter 31,805 47
10 7 Ropes & Gray 31,545 29
2017 2016 Company name Value (USD m)
Number of Deals
1 5 Goodwin Procter 31,805 47
2 2 Kirkland & Ellis 22,436 43
3 1 Latham & Watkins 26,733 41
4 4 Jones Day 16,641 39
5 7 McDermott Will & Emery 10,806 32
6 3 Ropes & Gray 31,545 29
7 6 DLA Piper 3,506 29
8 10 Cooley 13,968 26
9 11 Morgan Lewis & Bockius 8,856 25
10 13 Skadden Arps Slate Meagher & Flom 77,510 22
2017 2016 Company name Value (USD m)
Number of Deals
1 2 JPMorgan 63,448 35
2 5 Goldman Sachs & Co 76,480 25
3 1 Jefferies 23,994 24
4 4 Piper Jaffray & Co 10,898 21
5 8 Bank of America Merrill Lynch 66,331 18
6 9 Morgan Stanley 41,537 18
7 24 Credit Suisse 45,707 16
8 29 Moelis & Company 6,971 14
9 19 Lazard 52,398 13
10 6 Barclays 36,375 13
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Goldman Sachs & Co 76,480 25
2 6 Bank of America Merrill Lynch 66,331 18
3 8 JPMorgan 63,448 35
4 7 Citi 62,911 10
5 17 Lazard 52,398 13
6 18 Credit Suisse 45,707 16
7 28 Perella Weinberg Partners 42,369 8
8 4 Morgan Stanley 41,537 18
9 3 Barclays 36,375 13
10 - ALANTRA 29,592 3
Financial advisors by deal countFinancial advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.
Mergermarket Deal Drivers Americas
mergermarket.com
Life Sciences & Healthcare
Canada
Part of the Acuris reporton global M&A activity
CA
Mergermarket Deal Drivers Americas 54
mergermarket.com
Canada
Further informationGet in touch
CanadaOverview
After an uptick in deal value last year, Canadian M&A activity is expected to remain robust in 2018, on the back of strong underlying conditions, dealmakers said.
Energy, Financial Services and Consumer are among the sectors to watch. While the total volume of deals fell from 665 in 2016 to 563 in 2017, Canadian M&A recorded a 22% year-on-year surge in deal value from US$77.5bn to US$97.2bn, according to Mergermarket data.
Looking ahead, growing confidence in the Canadian economy, readily available debt financing and a hunger for deals from both global and domestic private equity and pension funds augurs well for continued activity, the dealmakers said.
Moreover, a strong Canadian dollar could favor more outbound M&A. Top M&A destinations for Canadian companies in 2018 could include the US, Switzerland, Germany and the UK, according to Doug Jenkinson, a partner at EY Canada. He noted that Canadian companies will be interested in any non-core assets being divested by larger companies in these markets.
Despite the broadly rosy outlook, potential clouds of uncertainty for Canadian M&A include tax reform in the US, which could have fundamental implications for US-Canada M&A, said Stephen Pincus, a partner at Goodmans.
Lower tax rates mean there is less incentive for US multinationals to hold cash offshore and
more incentive to do business in the US, he said, though he noted that the full implications won’t be fully clear for a long time.
Other potential dark clouds on the horizon for Canadian M&A include political uncertainty in Europe, the Middle East and Asia, as well as the future of the North American Free Trade Agreement (NAFTA).
Sector-wise, oil and gas will be a key driver for more M&A activity, according to Jenkinson, who said he expects more deals in both the middle market, involving exploration companies in deals up to C$100m, and at C$1bn-plus end of the market.
“There are exploration companies that are continuing to find opportunities missed by the larger players,” he said, “but the larger transactions will involve more established players with meaningful production.”
Energy, Mining & Utilities was the most active sector in 2017, recording 129 deals with an aggregate deal value of US$46.6bn, followed by Consumer, Financial Services, and Technology sectors, according to Mergermarket data.
Financial Services is expected to be another hotspot in 2018, with some Canadian financial institutions looking for global expansion opportunities, as well as opportunities to acquire more digitization, said Jenkinson.
TD Bank, for instance, has set up several partnerships with fintech companies,
including the Toronto-based AI-driven receipt management platform Sensibill and personalized mobile banking service provider Flybits.
Fintech deals will range from a couple of million to around C$100m, said EY’s Jenkinson. Goodmans’ Pincus said early-stage companies specializing in block chain and cryptocurrency will likely grow quickly.
Real Estate is another area to watch, amid high property valuations, low interest rates, as well as the potential for shareholder activism, Pincus said. Commercial, residential and specialty REITs, for instance hospitality, will likely be active in both domestic and cross-border M&A in 2018, he said.
In Consumer, Cameron Belsher, a partner at McCarthy, said buyers are willing to pay for significant brands, both for consumer packaged goods and for restaurant assets.
Premium Brands Holdings [TSX: PBH] is one of the most active acquirers in Canada, he noted. Its recent deals include the November acquisitions of Burnsville, Minnesota-based frozen food producer Buddy’s Kitchen and San Ramon, California-based sandwich maker Raybern Foods.
Elsewhere, Canada’s upcoming legalization of cannabis, slated for July 2018, is expected to trigger consolidation, said Stefan Timms, partner at Borden Ladner Gervais.
Sirui Shao
Elizabeth Lim
Mergermarket Deal Drivers Americas 55
mergermarket.com
Canada
56Mergermarket
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
29-Mar-17 C Cenovus Energy Inc ConocoPhillips (Canadian conventional natural gas assets); and Foster Creek Christina Lake Oil Sands Partnership (50% stake)
Energy, Mining, Oil & Gas ConocoPhillips Company 13,240
9-Mar-17 C Canadian Natural Resources Limited The Athabasca Oil Sands Project (60% stake); and Royal Dutch Shell plc (Peace River Complex in-situ assets, including Carmon Creek, and a number of undeveloped oil sands leases in Alberta)
Energy, Mining, Oil & Gas Royal Dutch Shell Plc 8,500
1-May-17 C Pembina Pipeline Corp Veresen Inc Energy, Mining, Oil & Gas 5,105
18-Dec-17 P Platinum Equity LLC Husky Injection Molding Systems Ltd Industrials, Chemicals & Engineering Berkshire Partners LLC; and OMERS Private Equity Inc 3,850
31-Mar-17 C CK Asset Holdings Limited Reliance Home Comfort Limited Partnership Consumer Alinda Capital Partners LLC 3,561
2-Oct-17 P Metro Inc Jean Coutu Group Inc Consumer The Coutu family 3,472
13-Mar-17 C Vista Equity Partners DH Corporation Technology, Media & Telecom 3,428
2-Oct-17 C Sprott Inc Central Fund of Canada Limited Financial Services 3,298
9-Mar-17 C Royal Dutch Shell Plc; and Canadian Natural Resources Limited The Athabasca Oil Sands Project (20% stake) Energy, Mining, Oil & Gas Marathon Oil Corporation 2,500
5-Dec-17 P Nestle SA Atrium Innovations Inc Life Sciences & Healthcare Permira Advisers LLP; Caisse de Depot et Placement du Quebec; and Fonds de Solidarite FTQ
2,300
25-Jul-17 C Refresco Gerber BV Cott Corporation (bottling activities) Consumer Cott Corporation 1,250
26-Oct-17 P China Communications Construction Company Limited Aecon Group Inc Construction 1,186
18-Apr-17 C Parkland Fuel Corp Chevron Canada R&M ULC Energy, Mining, Oil & Gas Chevron Canada Limited 1,098
19-Oct-17 P Schlumberger Limited; and Torxen Resources Ltd Cenovus Energy Inc (Palliser oil and natural assets in southeastern Alberta)
Energy, Mining, Oil & Gas Cenovus Energy Inc 1,041
17-Jul-17 C Washington Corporations Dominion Diamond Corporation Energy, Mining, Oil & Gas 999
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Canada
Top 15 Announced Deals for the Year Ending 31 December 2017 – Canada All Sectors (Based On Target)
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 57
Please use corresponding AIT file
Canada
0
20
40
60
80
100
120
2017201620152014201320122011
Valu
e (U
S$
bn)
US$24.7
US$20.7
US$12.5
US$8
US$18.4
US$7.6
US$29.4
US$9.6
US$37.3
US$9.9
US$23.2
US$13.3
US$19.6
US$24.2
US$4.6
US$19.1
US$7.4
US$18
US$35.1
US$22.2
US$30.4
US$12.3
US$14.4
US$14.5
US$13.4
US$24.7
US$20.5
US$9.3
US$17.9 US$
14.9
US$9.7
US$23.2
US$22.4
US$26.8
US$12.5
0
100
200
300
400
500
600
700
2017201620152014201320122011
Num
ber
of d
eals
4
3
413
2
1
97
1
4 3
7
324
306
32
26
298
305
335
27
2237
270
1920
294
246
31
33
196
24
26
181
27
30
262254
285
260
301
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Mergermarket Deal Drivers Americas 58Canada
Valu
e (U
S$
bn)
0
10
20
30
40
50
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
US$9.6
US$12.9
US$6.8
US$0
US$1.4US$
2.6
US$5.3
US$0.8
US$7
US$2.7
US$0.8
US$0.7
US$46.6
Num
ber
of d
eals
0
25
50
75
100
125
150
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
4351
2517
43
27
490
8374
128
108
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada. Industry sector is based on the dominant industry of the target.
mergermarket.com
0
25
50
75
100
125
150
175
200
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 59
mergermarket.com
Deal Drivers Americas Canada
60Mergermarket
Legal advisors by value Legal advisors by deal count
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 3 Osler, Hoskin & Harcourt 51,784 84
2 6 Blake, Cassels & Graydon 48,760 111
3 7 Stikeman Elliott 44,904 118
4 1 Skadden Arps Slate Meagher & Flom 40,170 19
5 18 Paul Weiss Rifkind Wharton & Garrison 37,511 27
6 26 Kirkland & Ellis 30,807 27
7 19 Bennett Jones 28,831 23
8 4 McCarthy Tetrault 23,944 63
9 90 Cravath, Swaine & Moore 18,411 8
10 60 Vinson & Elkins 18,010 12
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Stikeman Elliott 44,904 118
2 2 Blake, Cassels & Graydon 48,760 111
3 4 Osler, Hoskin & Harcourt 51,784 84
4 3 McCarthy Tetrault 23,944 63
5 7 Davies Ward Phillips & Vineberg 10,891 58
6 17 Borden Ladner Gervais 3,979 47
7 6 Torys 16,806 43
8 5 Norton Rose Fulbright 16,302 42
9 9 Fasken Martineau Dumoulin 10,552 41
10 14 Goodmans 12,487 34
2017 2016 Company name Value (USD m)
Number of Deals
1 1 RBC Capital Markets 44,499 43
2 2 Deloitte 2,856 40
3 5 TD Securities 45,193 37
4 3 BMO Capital Markets 19,049 36
5 9 JPMorgan 52,665 30
6 4 CIBC World Markets 25,784 27
7 8 National Bank Financial 11,256 26
8 17 KPMG 674 25
9 7 Goldman Sachs & Co 47,289 24
10 15 Scotiabank 22,678 22
2017 2016 Company name Value (USD m)
Number of Deals
1 5 JPMorgan 52,665 30
2 3 Goldman Sachs & Co 47,289 24
3 14 TD Securities 45,193 37
4 4 RBC Capital Markets 44,499 43
5 2 Bank of America Merrill Lynch 36,145 19
6 6 Barclays 30,649 16
7 10 CIBC World Markets 25,784 27
8 11 Lazard 22,837 14
9 1 Morgan Stanley 22,752 20
10 13 Scotiabank 22,678 22
Financial advisors by deal countFinancial advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.
Mergermarket Deal Drivers Americas
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Canada
West
Part of the Acuris reporton global M&A activity
W
Mergermarket Deal Drivers Americas 61
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West
Further informationGet in touch
WestOverview
Low interest rates and even lower corporate tax rates will make more cash available for mergers and acquisitions next year, but high valuations could constrain the pace of West Coast M&A, dealmakers say.
With positive GDP growth now completing its eighth year, the US economic expansion may literally or figuratively be approaching the ninth inning, or its conclusion, said Blaine Riley, president of the merchant bank International Monetary, based in Newport Beach, California. The long-running expansion has pushed valuations high across all sectors, said Riley. When you add relatively low interest rates to the mix, bidders have more capital for acquisitions but desirable targets likewise perceive they are more valuable than the last competitor bought. Stalemates ensue.
The standoff could last longer next year, thanks to the new tax bill signed in December, said attorney Eric McCrath, co-chair of the Morrison & Foerster’s Mergers & Acquisitions and Private Equity Investment & Buyouts Groups. Larger companies anticipate paying lower corporate tax rates next year, potentially freeing up more cash for acquisitions or buying back shares, said McCrath.
McCrath noted the M&A market, particularly in the Technology sector, started off slowly in the first quarter of 2017. Now that the market has a good understanding of how the Trump administration will work, McCrath
does not expect caution in the first half of 2018. Consolidation will continue for attractive businesses, both small and large, in the Consumer and Technology sectors, said McCrath.
In two of the largest deals of 2017, Marvell Technology [NASDAQ:MRVL] paid US$6.3bn to acquire the semiconductor company Cavium while Synchrony [NYSE:SYF] bought the receivables portfolio of PayPal Holdings [NASDAQ:PYPL].
Both deals reflect how the current market will continue to “melt up”—or encourage larger and larger deals—given the conditions of low interest rates and a Trump economy that appears to favor larger companies, said Riley, noting consolidators want more scale. The Synchrony acquisition increased Synchrony’s scale in financial services while Marvell broadened its reach in semiconductors through the purchase of Cavium.
The proposed US$130bn combination between Broadcom [NASDAQ:AVGO] and Qualcomm [NASDAQ:QCOM] likewise would be a consummate example of consolidation in technology. While Qualcomm has rejected the bid, Broadcom looks set to pursue a deal in 2018, according to various reports.
While the participants in the US$67.8bn merger between CVS [NYSE:CVS] and Aetna [NYSE:AET] were not California based, Riley said
the combination of an insurer and prescription drug provider made perfect sense as big companies seek to consolidate. The deal will influence the delivery of healthcare services in the West, said Riley, and smaller insurers and healthcare companies may face more pressure to consolidate.
The threat of Amazon [NASDAQ:AMZN] entering the prescription drug delivery market frequently was cited as a motivator for the Aetna/CVS deal. Amazon already has demonstrated it can disrupt industries once it moves into a vertical, said an industry executive, pointing to Amazon’s US$13.5bn bid this year for Whole Foods. Amazon likely will remain an active buyer next year, said two dealmakers.
The dynamics driving M&A in the Technology, Consumer, Healthcare and Industrial sectors are established, said Riley, laying the foundation for deals to be completed in mature markets. One sector of the economy that should emerge in 2018 as a high-growth segment is cannabis-related businesses, said Riley. Recreational use of marijuana, legal in California from 1 January, follows similar moves in Oregon and Washington.
William Langbein
Mergermarket Deal Drivers Americas 62
mergermarket.com
West
63Mergermarket
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
28-Aug-17 C Gilead Sciences Inc Kite Pharma Inc Life Sciences & Healthcare 10,161
28-Dec-17 C TPG Capital LP; SoftBank Group Corp; General Atlantic LLC; Sequoia Capital; Tencent Holdings Ltd; Dragoneer Investment Group LLC; and Didi Chuxing Technology Co Ltd
Uber Technologies Inc (17.5% stake) Technology, Media & Telecom Benchmark Capital; and Menlo Ventures 8,983
9-Jan-17 C Mars Incorporated VCA Inc Life Sciences & Healthcare 8,792
10-Aug-17 C Invitation Homes Inc Starwood Waypoint Homes Real Estate Starwood Capital Group 7,884
20-Nov-17 P Marvell Technology Group Ltd Cavium Inc Technology, Media & Telecom 6,306
18-Dec-17 P Penn National Gaming Inc Pinnacle Entertainment Inc Leisure 5,885
19-Jul-17 P Hydro One Limited Avista Corporation Energy, Mining, Oil & Gas 5,226
6-Dec-17 P Optum Inc DaVita Medical Group Life Sciences & Healthcare DaVita Inc 4,900
4-Jan-17 C DCP Midstream Partners LP DCP Midstream LLC Energy, Mining, Oil & Gas Spectra Energy Corp; and Phillips 66 Company 3,851
24-Jan-17 C Cisco Systems Inc AppDynamics Inc Technology, Media & Telecom General Atlantic LLC; Greylock Partners; Battery Ventures; Kleiner Perkins Caufield & Byers; Lightspeed Venture Partners; Institutional Venture Partners; and Cross Creek Capital LP
3,700
10-Apr-17 C Knight Transportation Inc Swift Transportation Co Transportation Jerry Moyes family 3,656
2-Aug-17 P Jacobs Engineering Group Inc CH2M Business Services Apollo Global Management LLC 3,266
24-Feb-17 C Maxar Technologies Ltd DigitalGlobe Inc Business Services 3,115
13-Apr-17 C Hilcorp San Juan LP ConocoPhillips Company (San Juan Basin assets) (50% stake)
Energy, Mining, Oil & Gas ConocoPhillips Company 3,000
4-Apr-17 P Liberty Interactive Corporation General Communication Inc Technology, Media & Telecom Searchlight Capital Partners LP 2,543
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
West
Top 15 Announced Deals for the Year Ending 31 December 2017 – West (Based On Target)
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 64
Please use corresponding AIT file
West
0
100
200
300
400
500
2017201620152014201320122011
Valu
e (U
S$
bn)
US$66.9
US$70.8
US$20.9
US$33.6
US$90.2
US$72.2
US$24.9US$28.8
US$68.8
US$68.5
US$27.5
US$39.3
US$36.9
US$53.6
US$27.6
US$38.3
US$58.6
US$26.7
US$35.6
US$37.5
US$19.5US$27.5
US$71.4
US$21.7
US$32.3
US$41.8
US$283
US$46.9
US$35
US$15.3
US$15.9
US$53.2
US$171.2
US$165.3
US$95.5
0
200
400
600
800
1,000
1,200
1,400
1,600
2017201620152014201320122011
Num
ber
of d
eals
73
56 69
7476
65
15
4712 53
9
5644
43
4
54
61
79
4
16
14
11
14
7
2228
22
725803
704
560521501
885
12
616 541466
499
473469471
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Mergermarket Deal Drivers Americas 65West
Valu
e (U
S$
bn)
0
10
20
30
40
50
60
70
80
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
US$7.9
US$8.3
US$17.3 US$
10.7US$9.5 US$
5.7US$N/D
US$8.6
US$1.5 US$
0.3
US$30.8
US$69.3
US$50.5
Num
ber
of d
eals
0
100
200
300
400
500
600
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
102
170
5318
162
55414 5
97
159 196
510
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West. Industry sector is based on the dominant industry of the target.
mergermarket.com
0
50
100
150
200
250
300
350
400
450
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
25,000
50,000
75,000
100,000
125,000
150,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 66
mergermarket.com
Deal Drivers Americas West
67Mergermarket
Legal advisors by value Legal advisors by deal count
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 15 Cleary Gottlieb Steen & Hamilton 169,102 20
2 2 Skadden Arps Slate Meagher & Flom 149,457 65
3 17 Simpson Thacher & Bartlett 118,781 47
4 13 White & Case 117,402 34
5 25 Fried Frank Harris Shriver & Jacobson 113,293 24
6 7 Cravath, Swaine & Moore 112,854 22
7 41 Hogan Lovells International 93,615 64
8 28 Debevoise & Plimpton 87,893 13
9 6 Sullivan & Cromwell 82,227 40
10 34 Covington & Burling 81,410 17
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 69,030 174
2 15 Goodwin Procter 25,825 142
3 2 Latham & Watkins 80,246 126
4 3 DLA Piper 18,258 106
5 10 Cooley 29,817 91
6 13 Morgan Lewis & Bockius 9,555 88
7 8 Jones Day 30,946 87
8 5 O'Melveny & Myers 14,464 78
9 4 Wilson Sonsini Goodrich & Rosati 14,848 70
10 7 Skadden Arps Slate Meagher & Flom 149,457 65
2017 2016 Company name Value (USD m)
Number of Deals
1 3 Goldman Sachs & Co 186,693 76
2 1 JPMorgan 151,538 66
3 4 Houlihan Lokey 5,502 59
4 10 Jefferies 33,617 53
5 2 Morgan Stanley 80,728 49
6 5 Evercore 49,402 46
7 13 Citi 49,571 41
8 9 Lazard 45,770 40
9 6 Credit Suisse 35,806 40
10 21 William Blair & Company 11,509 40
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Goldman Sachs & Co 186,693 76
2 4 JPMorgan 151,538 66
3 9 Centerview Partners 101,176 15
4 12 Deutsche Bank 88,605 21
5 2 Morgan Stanley 80,728 49
6 15 Guggenheim Partners 79,221 10
7 6 Bank of America Merrill Lynch 63,195 34
8 10 Citi 49,571 41
9 3 Evercore 49,402 46
10 8 Barclays 46,357 37
Financial advisors by deal countFinancial advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor. States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor.States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.
Mergermarket Deal Drivers Americas
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West
Midwest
Part of the Acuris reporton global M&A activity
MW
Mergermarket Deal Drivers Americas 68
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Midwest
Further informationGet in touch
MidwestOverview
The Midwest’s bread-and-butter sectors of Industrials and Consumer—especially tech-enabled and “better-for-you” offerings—will continue to whet the appetite of strategic and financial buyers in 1H18, dealmakers say. Overall sentiment in the region remains upbeat heading into a new year, with long-promised federal tax reform a reality, the economy steadily rising and loads of cash waiting to be deployed.
“M&A activity in the second half of 2017 has been strong and will continue to be strong in the first half,” said Steven M. Dresner, president of the Chicago-based investment bank Dresner Partners. “There is still more money than deals, and with the tax law changes prices are going to continue to go up.”
The Industrials sector, perennially the region’s leader in terms of deal volume and value, continues to be transformed by—what else—technology.
“The future lies with companies that are developing highly engineered products and introducing new technology because that adds value,” said Steven Rosen, co-CEO of the Cleveland, Ohio-based private equity firm Resilience Capital Partners.
“In our portfolio we’ve applied for 20-plus patents for highly-engineered defensible products in areas including robotics and automation,” he said. Smaller enterprises must either differentiate through technology or find themselves “pushed out of the market,” he added.
The region’s blockbuster deal of the year, United Technologies’ [NYSE:UTX] pending US$29.9bn acquisition of Cedar Rapids, Iowa-based Rockwell Collins [NYSE:COL], will combine two companies in the technology-heavy Aerospace and Defense sector.
Tech-enabled companies in a variety of sectors including manufacturing, third-party logistics and healthcare will command some of the highest multiples in the region going forward, said Muhammad Azfar, managing partner and CEO of the Chicago-based investment bank Auctus Group.
“Technology acquisition is such a big driver of M&A,” he said. “Anybody in a tech-enabled industry or segment is in a higher-multiple area.”
Meanwhile, companies delivering the perceived “better-for-you” food, snacks and drinks that consumers and investors crave are also in demand. One of the larger transactions in the region saw Michigan-based Kellogg [NYSE:K] acquire Illinois-based Chicago Bar Company, producer of protein snacks RXBAR, for US$600m.
“Larger companies are continuing to try and compete with small, innovative brands that they can’t create organically,” said Andrew Dickow, director at the Birmingham, Michigan-based investment bank Greenwich Capital Group.
Dickow said he expects to see large consumer goods companies step up their divestment
of non-core or slow-growth brands to free up capital to invest in brands and companies that have products and services that address changing consumer tastes and habits.
Though not quite in the healthy category, Arby’s owner Roark Capital’s proposed acquisition of Minnesota-based Buffalo Wild Wings for US$2.8bn is a reminder that PE firms are sitting on buckets of cash and are willing and able to compete with strategics in the current low-interest rate environment, the sources said.
Competition between strategic and financial buyers, both groups heavily armed with cash, will be as fierce as ever in the Midwest, dealmakers said. The scales might tip one way or another based on borrowing costs, they agreed.
“If there is any risk to the current slow, steady pace of growth it will come from the credit markets, and that risk is on everyone’s mind,” Rosen said.
Rising interest rates could actually be a good thing for strategic buyers, so long as stock valuations do not fall accordingly, Azfar noted.
“Most financial sponsors still use high leverage, so the cost of debt is huge,” he said. “A half-a-point rise in interest rates could shock the financial system, and if that happened you might see strategic buyers finding assets more affordable,” he said.
Jeff Sheban
Mergermarket Deal Drivers Americas 69
mergermarket.com
Midwest
70Mergermarket
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
4-Sep-17 P United Technologies Corporation Rockwell Collins Inc Industrials, Chemicals & Engineering 29,948
10-Feb-17 C Reckitt Benckiser Group Plc Mead Johnson & Company Consumer 17,835
15-Dec-17 C Marathon Petroleum Corporation MPLX LP (40.32% stake) Energy, Mining, Oil & Gas 17,279
10-Jul-17 P Westar Energy Inc Great Plains Energy Inc Energy, Mining, Oil & Gas 8,240
13-Nov-17 C MPLX LP MPLX Refining Logistics LLC; and MPLX Fuels Distribution LLC Energy, Mining, Oil & Gas Marathon Petroleum Corporation 8,100
5-Apr-17 C JAB Holdings BV Panera Bread Company Consumer 7,404
8-May-17 P Sinclair Broadcast Group Inc Tribune Media Company Technology, Media & Telecom Oaktree Capital Management LP; and Angelo, Gordon & Co 6,597
18-Apr-17 C Cardinal Health Inc Medtronic Inc (Patient care, deep vein thrombosis and nutritional insufficiency businesses)
Life Sciences & Healthcare Medtronic Inc 6,100
9-May-17 C Apollo Global Management LLC West Corporation Technology, Media & Telecom Quadrangle Group LLC; and Thomas H. Lee Partners LP 4,963
24-Apr-17 P Fresenius Kabi AG Akorn Inc Life Sciences & Healthcare 4,843
25-Apr-17 C Tyson Foods Inc AdvancePierre Foods Holdings Inc Consumer Oaktree Capital Management LP 4,121
7-May-17 C Sabra Health Care REIT Inc Care Capital Properties Inc Real Estate 3,914
19-Dec-17 P Crown Holdings Inc Signode Industrial Group Industrials, Chemicals & Engineering The Carlyle Group 3,910
20-Sep-17 P CRH Plc Ash Grove Cement Company Construction 3,500
9-Jan-17 C UnitedHealth Group Inc Surgical Care Affiliates Inc Life Sciences & Healthcare TPG Capital LP 3,260
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Midwest
Top 15 Announced Deals for the Year Ending 31 December 2017 – Midwest (Based On Target)
Value Value Value Value Value Value
Mergermarket Deal Drivers Americas 71
Please use corresponding AIT file
Midwest
0
50
100
150
200
250
300
350
400
2017201620152014201320122011
Valu
e (U
S$
bn)
US$41.4
US$49.5
US$18.6
US$53.9
US$35.6
US$17.9
US$37.6
US$52.4
US$20.2
US$23.4
US$20.3
US$32.7
US$16.9
US$27.7
US$43.9
US$17.3
US$22.5
US$32
US$16.3
US$18.1
US$49.4
US$40.7
US$86.9
US$11
US$11.1
US$12.2
US$140.3
US$64.8
US$11.7
US$9.5
US$6.5
US$11.3
US$101.5
US$253
US$161.9
0
100
200
300
400
500
600
700
800
900
1,000
1,100
2017201620152014201320122011
Num
ber
of d
eals
12
71
8 13
87
12
66
7
15
8
48
31
40
3156
57
507
291
3727
391
33
43
414
272
3136
264
347
48
32
17
589 616 644
309287
368
252
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Value
Mergermarket Deal Drivers Americas 72Midwest
Valu
e (U
S$
bn)
0
10
20
30
40
50
60
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
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& E
ngin
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g
US$12
US$12.1
US$3.2
US$7.2 US$
5.6 US$0.1
US$3.4
US$0.1
US$54.6
US$40.2
US$39.9
US$22.7 US$
21
Num
ber
of d
eals
0
50
100
150
200
250
300
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
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tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
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ls, M
anuf
actu
ring
& E
ngin
eerin
g
1631
78
44
6
45
131
33
164
287
92 96
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest. Industry sector is based on the dominant industry of the target.
mergermarket.com
0
25
50
75
100
125
150
175
200
225
250
275
300
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 73
mergermarket.com
Deal Drivers Americas Midwest
74Mergermarket
Legal advisors by value Legal advisors by deal count
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 16 Skadden Arps Slate Meagher & Flom 95,742 53
2 2 Sullivan & Cromwell 79,800 25
3 3 Davis Polk & Wardwell 77,267 24
4 6 Kirkland & Ellis 76,761 155
5 18 Cleary Gottlieb Steen & Hamilton 71,688 23
6 4 Cravath, Swaine & Moore 60,154 25
7 7 White & Case 47,432 36
8 1 Wachtell, Lipton, Rosen & Katz 47,292 15
9 5 Jones Day 45,567 117
10 8 Shearman & Sterling 36,208 15
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 76,761 155
2 2 Jones Day 45,567 117
3 3 DLA Piper 5,583 61
4 4 Latham & Watkins 29,906 56
5 6 Skadden Arps Slate Meagher & Flom 95,742 53
6 5 Sidley Austin 20,351 51
7 18 Goodwin Procter 3,247 46
8 11 McDermott Will & Emery 10,571 43
9 7 Weil Gotshal & Manges 27,427 41
10 8 Morgan Lewis & Bockius 5,120 40
2017 2016 Company name Value (USD m)
Number of Deals
1 3 JPMorgan 104,542 57
2 1 Houlihan Lokey 17,102 56
3 2 Goldman Sachs & Co 89,663 46
4 11 Morgan Stanley 114,511 44
5 25 Credit Suisse 52,582 36
6 12 Lazard 25,329 35
7 10 William Blair & Company 5,451 35
8 4 Jefferies 43,222 34
9 8 Robert W. Baird & Co 4,200 33
10 6 Lincoln International 1,861 33
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Morgan Stanley 114,511 44
2 9 JPMorgan 104,542 57
3 1 Goldman Sachs & Co 89,663 46
4 4 Citi 83,808 27
5 8 Credit Suisse 52,582 36
6 3 Bank of America Merrill Lynch 52,334 21
7 6 Barclays 47,276 29
8 17 Jefferies 43,222 34
9 11 Deutsche Bank 34,488 18
10 14 Lazard 25,329 35
Financial advisors by deal countFinancial advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2016 to the 12/31/2016, including lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017, excluding lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.
Mergermarket Deal Drivers Americas
mergermarket.com
Midwest
South
Part of the Acuris reporton global M&A activity
S
Mergermarket Deal Drivers Americas 75
mergermarket.com
South
Further informationGet in touch
Mark Druskoff
SouthOverview
Despite reduced dealmaking at the tail-end of 2017, positive influences set the stage for a return of more robust activity in the year ahead, dealmakers said.
Chief among those forces is a business environment that is attracting large companies to relocate or establish headquarters in the region, said Julie Silcock, managing director at Houlihan Lokey in Dallas. That’s evidenced by reported potential interest from Amazon [NYSE:AMZN] in cities in Texas, North Carolina, Georgia or Virginia for its Headquarters 2 project. In June, Amazon acquired Austin-based Whole Foods [NYSE:WFM] for US$13.5bn.
In addition to its business-friendly reputation, Bryan Frederickson, managing director, GulfStar Group in Houston, noted that the region is benefitting from large-scale trends such as the bounceback of the energy industry and even the widening of the Panama Canal, which is driving an expansion of ports across the Gulf Coast and Southeast.
Indeed, energy M&A improved through the middle of the year to make it the single most active sector among deals tracked by Mergermarket in the region between Virginia, Florida and Texas.
To be sure, dealflow slowed at the end of the year, according to Mergermarket data.
Silcock said the “unusually” light activity in 4Q17 might be blamed on uncertainty over tax law
changes. While the ability to deduct interest payments has been significantly decreased in the new law, reductions in corporate taxes in most cases can offset much or all of this.
Large strategic buyers could reap substantial benefit from the changes. The law not only lowers the tax rate for corporations, making more money available for deals, but it could see a change in a key provision enabling such companies to expense 100% of the cost of acquiring assets in the first year rather than having to amortize them over a period of five years or more.
Lower corporate tax is expected by some sellers, such as private equity, to spur M&A, said Scott Winship, managing director at GulfStar Group. In 2012, the change in capital gains tax had a meaningful impact on M&A, he observed.
Lower taxes, available capital and high equity valuations for publicly traded entities set the stage for increased Financial Services M&A, said Chris Marinac, co-founder of Atlanta-based FIG Partners.
“Banks haven’t had it this good in quite some time,” he said. “They need to embrace that.”
Bank consolidation is likely to spread from Florida and North Carolina, where targets have become scarce, and to other states in the South, particularly in South Carolina, Georgia and eventually Tennessee.
In 2018, look for more international interest in the region, Silcock said, particularly China.
Chinese bidders have faced a challenging regulatory climate in the US with many deals facing national security scrutiny.
Silcock noted that Chinese buyers typically tend to need more time than bidders from other markets to complete deals. Sellers expecting strong international buyer interest are now considering marketing overseas first to give those buyers more time before going to market in the US, she said.
International buyer interest is broad based, Silcock said. Energy, technology and industrial companies are all seeing inbound interest that they are “taking very seriously.”
Gulfstar’s Frederickson also noted that international buyers are looking at the South to increase their exposure to energy, saying their interest is growing by “leaps and bounds,” he said. They are not interested in distressed opportunities but instead are looking for companies that will immediately be accretive.
That would add a new dimension to Southern M&A. In 2017, buyers in the South came mostly from the US—only 20 of more than 700 deals in the region tracked by Mergermarket were categorized as cross-border.
Chad Watt
Mergermarket Deal Drivers Americas 76
mergermarket.com
South
77Mergermarket
Top 15 Announced Deals for the Year Ending 31 December 2017 – South (Based On Target)
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
17-Jan-17 C British American Tobacco Plc Reynolds American Inc (57.83% stake) Consumer 60,567
21-Aug-17 P Sempra Energy Energy Future Holdings Corporation Energy, Mining, Oil & Gas 18,800
1-Feb-17 C ONEOK Inc ONEOK Partners LP (60% stake) Energy, Mining, Oil & Gas 17,118
18-Aug-17 P Calpine Consortium Calpine Corporation Energy, Mining, Oil & Gas 17,023
7-Jul-17 L Berkshire Hathaway Energy Oncor Electric Delivery Company LLC (80.03% stake) Energy, Mining, Oil & Gas Energy Future Holdings Corporation 16,720
31-Jul-17 P Discovery Communications Inc Scripps Networks Interactive Inc Technology, Media & Telecom 14,383
16-Jun-17 C Amazon.com Inc Whole Foods Market Inc Consumer 13,464
9-Jan-17 C Williams Companies Inc Williams Partners LP (32.24% stake) Energy, Mining, Oil & Gas 11,358
30-Oct-17 P Vistra Energy Corp Dynegy Inc Energy, Mining, Oil & Gas Energy Capital Partners LLC 10,609
22-May-17 L Clariant AG Huntsman Corporation Industrials, Chemicals & Engineering 10,355
30-Oct-17 P Lennar Corporation CalAtlantic Group Inc Construction MatlinPatterson Global Advisers LLC 9,256
18-Sep-17 P Northrop Grumman Corporation Orbital ATK Inc Defense 9,170
26-Apr-17 C Abu Dhabi Investment Authority; and GIC Private Limited Pharmaceutical Product Development LLC Life Sciences & Healthcare The Carlyle Group; and Hellman & Friedman LLC 9,050
25-Jan-17 P AltaGas Ltd WGL Holdings Inc Energy, Mining, Oil & Gas 6,685
17-Jan-17 C Exxon Mobil Corporation BOPCO LP; and the Bass Family (Permian Basin oil companies) Energy, Mining, Oil & Gas The Bass Family 6,620
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
South
Mergermarket Deal Drivers Americas 78
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2017201620152014201320122011
Num
ber
of d
eals
85
7483
100
85
108
68570
84
502
636
79
82
521
680
79
70
502
598
112
70
29
1517
19 1622
7
724
1917
12
29
31
1,018
860919 949
623 517477
0
100
200
300
400
500
600
2017201620152014201320122011
Valu
e (U
S$
bn)
US$65.1
US$64
US$68.5
US$80.8
US$26.3US$37.5
US$86.2
US$36.7
US$34.9
US$91.4
US$110.4
US$29.8
US$45.1
US$63.2
US$82.2
US$25
US$33.3
US$76.1
US$78.9
US$27.5US$35.3
US$59.3
US$63.3
US$27.4US$31.9
US$25.4US$31.5
US$86.4
US$100.3
US$163.3
US$177.6
US$253.2
US$273.4
US$222
US$110.6
South
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Mergermarket Deal Drivers Americas 79South
Valu
e (U
S$
bn)
0
20
40
60
80
100
120
140
160
180
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
US$26.3 US$
21.6 US$16.5
US$14.9
US$3.7 US$
9.2
US$2.3
US$40.3
US$21.7
US$29.4 US$
18.6
US$100.1
US$171.3
Num
ber
of d
eals
0
50
100
150
200
250
300
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
25
64
15 103
55
184
285271
158
134
268250
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South. Industry sector is based on the dominant industry of the target.
mergermarket.com
0
100
200
300
400
500
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 80
mergermarket.com
Deal Drivers Americas South
81Mergermarket
Legal advisors by deal countLegal advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 9 Kirkland & Ellis 195,765 203
2 7 Skadden Arps Slate Meagher & Flom 175,576 69
3 10 Simpson Thacher & Bartlett 156,716 61
4 4 Cravath, Swaine & Moore 148,798 33
5 15 Davis Polk & Wardwell 126,424 50
6 12 Jones Day 125,164 109
7 3 Weil Gotshal & Manges 124,760 80
8 2 Sullivan & Cromwell 111,694 50
9 1 White & Case 111,227 69
10 5 Latham & Watkins 104,551 127
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 195,765 203
2 2 DLA Piper 11,581 130
3 3 Latham & Watkins 104,551 127
4 4 Jones Day 125,164 109
5 6 Weil Gotshal & Manges 124,760 80
6 5 Vinson & Elkins 60,115 80
7 16 Goodwin Procter 28,548 73
8 14 Skadden Arps Slate Meagher & Flom 175,576 69
9 7 White & Case 111,227 69
10 9 Morgan Lewis & Bockius 20,128 65
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Goldman Sachs & Co 205,577 84
2 1 JPMorgan 223,462 79
3 4 Houlihan Lokey 6,500 70
4 5 Barclays 121,296 63
5 14 Piper Jaffray & Co 5,957 63
6 6 Evercore 95,851 61
7 3 Jefferies 38,953 61
8 12 Citi 108,196 60
9 7 Morgan Stanley 163,871 57
10 10 Credit Suisse 70,079 48
2017 2016 Company name Value (USD m)
Number of Deals
1 5 JPMorgan 223,462 79
2 4 Goldman Sachs & Co 205,577 84
3 3 Morgan Stanley 163,871 57
4 13 Lazard 121,698 38
5 6 Barclays 121,296 63
6 16 UBS Investment Bank 116,330 37
7 1 Citi 108,196 60
8 12 Deutsche Bank 100,502 34
9 11 Evercore 95,851 61
10 18 Centerview Partners 94,427 17
Financial advisors by deal countFinancial advisors by value
Mergermarket
mergermarket.com
South Deal Drivers Americas
Mid-Atlantic
Part of the Acuris reporton global M&A activity
MA
Mergermarket Deal Drivers Americas 82
mergermarket.com
Mid-Atlantic
Further informationGet in touch
Richard Tekneci
Mid-AtlanticOverview
The Mid-Atlantic region is expected to see an uptick in M&A activity, with Government Services and Aerospace/Defense among the key drivers in the region for 2018, dealmakers said.
Paul Weisbrich, managing director at D.A. Davidson, said he expects a high volume of smaller government services deals involving companies with enterprise values less than US$50m. The Washington, DC area will continue to be a hotbed for these government services deals, a second sector advisor noted. He added that as the bigger companies compete for government contracts, these smaller companies should continue to get scooped up by larger firms.
Weisbrich said he also sees larger defense contractors becoming more active in the new year. These companies’ efforts to gain scale in the Aerospace & Defense sector will drive deals, as well as divestitures by larger companies pruning their portfolios.
New York-based L3 Technologies [NYSE:LLL] could be one company taking a close look at its portfolio, said the sector advisor. The company announced the potential sale of its Vertex Aerospace business during its 3Q17 earnings call in late October.
Weisbrich noted it is important to look at new CEO appointments, as that is where more M&A could occur. Pennsylvania-based aerospace company Triumph Group [NYSE:TGI] is one example. Triumph’s CEO Daniel Crowley,
Weisbrich noted, is relatively new since he started in January 2016. Triumph announced in December that it plans to merge its precision components and aerospace structures business into a new business unit expected to launch on 1 January. Triumph is a company that could be an eventual seller of assets, noted Weisbrich.
L3 Technologies’ current COO, Christopher Kubasik, will take over as CEO after current CEO Michael Strianese’s retirement is effective 31 December. Weisbrich said he expects L3 to be aggressive on the M&A front.
Weisbrich said Massachusetts-based valve maker CIRCOR International is a company to keep an eye on in 2018, after it announced its acquisition of Colfax Fluid Handling for US$860m in September.
Manan K. Shah, a managing partner at Focus Investment Banking, said an area such as the aerospace maintenance, repair and overhaul (MRO) sector is likely to see continued consolidation, as the sector remains fragmented. Shah expects continued private equity interest in the Aerospace/Defense sector as well.
A third sector advisor said deals are expected to continue to rise across the Defense sector as a whole. There are some exit processes in the Aerospace/Defense sector that are expected to launch in 1Q18 as well, which should bring about more deals, the advisor said. Apollo Global Management portfolio
company Constellis, based in the Washington, DC metro area, is one company that falls under this category, the same advisor said.
The unmanned aerial vehicle (UAV) or drone space should see more traction, the advisor added. He noted many private companies are seeking capital raises, which should bring more attraction to the sector. The use of drones for both military and commercial purposes will continue to drive activity, the same advisor said.
One example of capital raise activity is drone radar maker Fortem Technologies. VP Business Development Bruce Carpenter told this news service the company is looking to raise US$10m to US$20m in Series A funding. He named New York-based Griffon Corporation as one potential partner down the road because Griffon’s ground-based radars could go well with Fortem’s DroneHunter product.
Mergermarket Deal Drivers Americas 83
mergermarket.com
Mid-Atlantic
84Mergermarket
Top 15 Announced Deals for the Year Ending 31 December 2017 – Mid-Atlantic (Based On Target)
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
14-Dec-17 P The Walt Disney Company Twenty-First Century Fox Inc Technology, Media & Telecom 68,422
23-Apr-17 C Becton, Dickinson and Company C.R. Bard Inc Life Sciences & Healthcare 23,609
19-Jun-17 C EQT Corporation Rice Energy Inc Energy, Mining, Oil & Gas 7,689
5-May-17 C Avantor Performance Materials Inc VWR International LLC Business Services Madison Dearborn Partners LLC 6,418
17-Mar-17 C Kohlberg Kravis Roberts & Co LP; and Caisse de Depot et Placement du Quebec
USI Holdings Corporation Financial Services Onex Corporation 4,300
12-Sep-17 P Centene Corporation The New York State Catholic Health Plan Inc Financial Services 3,750
24-Jul-17 C Internet Brands Inc WebMD LLC Technology, Media & Telecom 3,472
8-Mar-17 C Caisse de Depot et Placement du Quebec; and Suez Suez Water Technologies & Solutions Industrials, Chemicals & Engineering General Electric Company 3,379
14-Feb-17 C SoftBank Group Corp Fortress Investment Group LLC Financial Services 3,300
24-Aug-17 C SoftBank Group Corp WeWork Companies Inc Business Services 3,000
26-Nov-17 C Meredith Corporation Time Inc Technology, Media & Telecom 2,743
24-Aug-17 C Beacon Roofing Supply Inc Allied Building Products Corporation Construction CRH Plc 2,625
8-May-17 C Coach Inc Kate Spade & Company Consumer 2,349
24-Jan-17 C WestRock Company Multi Packaging Solutions Inc Industrials, Chemicals & Engineering 2,248
7-Mar-17 C Sterling Bancorp Astoria Financial Corporation Financial Services 2,219
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Mid-Atlantic
Mergermarket Deal Drivers Americas 85
Please use corresponding AIT file
Mid-Atlantic
Valu
e (U
S$
bn)
0
50
100
150
200
250
300
350
400
2017201620152014201320122011
US$11.2
US$11
US$12.2
US$12.9
US$62.6
US$29
US$64.7
US$9.8
US$14.5
US$9.2
US$12.8
US$10
US$11.9
US$203.6
US$50.2
US$44
US$17.1
US$37.9
US$32.9
US$16.4
US$45.7
US$36.4
US$16.3
US$30.9
US$37.8
US$37.6
US$39.6
US$40.6
US$22.1
US$33.4
US$44.1
US$16.1
US$137.9 US$
106.1
US$260.5
0
100
200
300
400
500
600
700
800
900
2017201620152014201320122011
Num
ber
of d
eals
42
30
35
33
238
39
32
246
39
27
204
43
27
208
2228
213
249
34
40
3 7
6
5
145
10
1211
4
14
13
15
16
426466
339
455
224285
290292
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Mergermarket Deal Drivers Americas 86Mid-Atlantic
Valu
e (U
S$
bn)
0
10
20
30
40
50
60
70
80
90
100
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
US$17.6
US$14.4
US$6.4
US$14.9 US$
3.2 US$0.8
US$3.5US$
1.6 US$N/D
US$N/D
US$26.8
US$94
US$29.5
Num
ber
of d
eals
0
20
40
60
80
100
120
140
160
180
200
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
85
17 17 22
5 2 1
7568
46
197
122111
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region. Industry sector is based on the dominant industry of the target.
mergermarket.com
0
50
100
150
200
250
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
eals
2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 87
mergermarket.com
Deal Drivers Americas Mid-Atlantic
88Mergermarket
Legal advisors by deal countLegal advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a US (Mid-Atlantic) bidder, target or vendor. States: New Jersey, New York, Pennsylvania.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (Mid-Atlantic) bidder, target or vendor. States: New Jersey, New York, Pennsylvania.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 8 Skadden Arps Slate Meagher & Flom 203,455 88
2 14 Cleary Gottlieb Steen & Hamilton 173,954 28
3 7 Simpson Thacher & Bartlett 161,254 85
4 1 White & Case 144,374 66
5 4 Cravath, Swaine & Moore 132,548 25
6 16 Fried Frank Harris Shriver & Jacobson 108,844 27
7 23 Debevoise & Plimpton 100,500 31
8 13 Wachtell, Lipton, Rosen & Katz 98,253 30
9 22 Allen & Overy 87,555 21
10 25 Hogan Lovells International 79,106 35
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 66,263 156
2 2 Jones Day 30,129 123
3 3 Latham & Watkins 70,474 105
4 8 Paul Weiss Rifkind Wharton & Garrison 53,952 89
5 7 Skadden Arps Slate Meagher & Flom 203,455 88
6 6 Simpson Thacher & Bartlett 161,254 85
7 4 DLA Piper 12,469 84
8 5 Morgan Lewis & Bockius 16,817 81
9 23 Goodwin Procter 24,657 79
10 9 Weil Gotshal & Manges 52,814 74
2017 2016 Company name Value (USD m)
Number of Deals
1 2 Goldman Sachs & Co 222,958 89
2 1 JPMorgan 183,471 82
3 4 Houlihan Lokey 13,584 70
4 3 Morgan Stanley 131,818 67
5 13 Citi 159,916 66
6 8 Credit Suisse 105,569 60
7 12 Lazard 80,156 53
8 7 Barclays 72,662 53
9 6 Bank of America Merrill Lynch 112,350 52
10 5 Jefferies 35,970 52
2017 2016 Company name Value (USD m)
Number of Deals
1 5 Goldman Sachs & Co 222,958 89
2 1 JPMorgan 183,471 82
3 3 Citi 159,916 66
4 2 Morgan Stanley 131,818 67
5 4 Bank of America Merrill Lynch 112,350 52
6 9 Deutsche Bank 107,756 33
7 11 Credit Suisse 105,569 60
8 13 Centerview Partners 82,816 16
9 20 Lazard 80,156 53
10 17 Guggenheim Partners 76,056 13
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
mergermarket.com
Mid-Atlantic
New England
Part of the Acuris reporton global M&A activity
NE
Mergermarket Deal Drivers Americas 89
mergermarket.com
New England
Further informationGet in touch
Hana Askren
New EnglandOverview
The New England region enjoyed a banner year for M&A in 2017, and dealmakers told Mergermarket that they expect activity to continue. The economy is growing in a variety of sectors, while debt and equity capital are available for deals, said several New England-based M&A professionals.
Looking back, the M&A market has been the strongest it has been “in a long time,” said KPMG partner Tod Short. High valuations in the public equity markets are raising comparable valuations for private deals as well, he noted. Private equity will be active on the buy-side, but firms will also continue to take advantage of the “seller-friendly valuation environment” and lock-in gains, which will buoy the next round of fundraising expected around 2019–2020, added TM Capital Managing Director Jarrad Zalkin.
The middle market is a particular source of strength, added PwC partner Michael Mockus. The high valuations of 2017 show no signs of flagging and many companies will be seeking to exit in 2018 on a positive part of the cycle, said Mockus. Owners of middle market businesses have “gone past the usual kicking of tires” and have engaged advisers to sell their companies, added Hank Nelson, managing director at Monadnock Advisors.
The coming year should bring deals reaching beyond “typical” consolidation rationale, with unusual combinations possible, said Short.
Several large high-profile deals have aimed at vertical integration and transforming business models, and continuing transformation could lead to “wholesale disruptive acquisitions,” he said.
Zalkin agreed, noting recent examples of deals that brought companies a new way to engage with customers and expand their addressable markets. Amazon’s US$13.5bn deal to acquire Whole Foods brought it into competition with brick-and-mortar stores, while CVS’ US$67.8bn deal to acquire Aetna will change the way it engages with customers. The availability of capital and strong economy are “promoting this expansive, creative thinking” for all companies, including those in New England, he noted.
Transformative acquisitions could emerge particularly for companies trying to penetrate a digital market, if their “DNA is not digital,” said Zalkin. Artificial intelligence, machine learning and data analytics are now considerations for companies in a wide range of sectors, said Nelson. AI has fully entered the mainstream in just the past year or so, he said. Because the Technology sector is heavily represented in New England, other sectors may be more likely to become tech-savvy, said Nelson.
Organic growth can be a struggle for businesses looking to digitize, automate or otherwise transform their businesses, said Mockus. Healthcare and industrial manufacturing are two sectors in New England where this type
of business conversion is occurring and could drive deals, he noted.
New tax regulations could spur M&A, with a lower statutory tax rate for corporations. Companies may be more motivated to sell non-core assets with a lower tax liability on proceeds from the sale, said Mockus. In addition, the new legislation gives companies the ability to repatriate foreign cash, potentially adding to balance sheets and war chests. Tech companies, many in the New England region, have a significant amount of cash in foreign jurisdictions, said Short.
On the other hand, the same high valuations creating a ripe environment for sellers are giving some buyers pause. High valuations have spurred some larger players with cash to pursue collaboration arrangements versus outright purchases, said Mockus. In the technology and life sciences spaces in particular, increased caution is driving buyers toward these types of deals instead of M&A in some cases, he said.
Mergermarket Deal Drivers Americas 90
mergermarket.com
New England
91Mergermarket
Top 15 Announced Deals for the Year Ending 31 December 2017 – New England (Based On Target)
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
3-Dec-17 P CVS Health Corporation Aetna Inc Financial Services 67,823
18-Jul-17 C Crown Castle International Corporation Lightower Fiber Networks Technology, Media & Telecom Berkshire Partners LLC; and Pamlico Capital 7,100
28-Jun-17 C Sycamore Partners Staples Incorporated Consumer 6,657
20-Jun-17 C Pamplona Capital Management LLP PAREXEL International Corporation Life Sciences & Healthcare 4,913
9-Jan-17 C Takeda Pharmaceutical Company Limited Ariad Pharmaceuticals Life Sciences & Healthcare 4,893
10-May-17 C INC Research LLC Syneos Health Life Sciences & Healthcare Advent International Corporation; and Thomas H. Lee Partners LP
4,582
4-Dec-17 P Bank J. Safra Sarasin AG; Pine Brook Road Partners LLC; Global Atlantic Financial Group Limited; Atlas Merchant Capital; Cornell Capital LLC; and TRB Advisors LP
Talcott Resolution Inc Financial Services The Hartford Financial Services Group Inc 2,050
14-Apr-17 P Blackstone Group LP; and Canada Pension Plan Investment Board Ascend Learning LLC Business Services Providence Equity Partners LLC; and Ontario Teachers' Pension Plan
2,000
7-Aug-17 P Fresenius Medical Care AG & Co KGaA NxStage Medical Inc Life Sciences & Healthcare 1,918
24-Oct-17 C Graphic Packaging Holding Company International Paper Company (North America consumer packaging business)
Industrials, Chemicals & Engineering International Paper Company 1,800
2-Jun-17 C Eversource Energy Aquarion Water Company Energy, Mining, Oil & Gas British Columbia Investment Management Corporation; and Macquarie Infrastructure Partners Inc
1,675
23-Oct-17 C The Hartford Financial Services Group Inc Aetna Inc (US group life insurance and disability insurance business) Financial Services Aetna Inc 1,450
1-Jun-17 C CVC Capital Partners Limited PDC Brands Consumer Yellow Wood Partners LLP 1,425
23-Oct-17 C Vitol Holding BV Noble Americas Corporation Energy, Mining, Oil & Gas Noble Group Limited 1,418
14-Feb-17 C Hologic Inc Cynosure Inc Life Sciences & Healthcare 1,394
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
New England
Mergermarket Deal Drivers Americas 92
Please use corresponding AIT file
New England
0
20
40
60
80
100
120
140
160
180
2017201620152014201320122011
Valu
e (U
S$
bn)
US$9
US$8.2
US$8.3
US$15.7
US$12.4
US$9.4
US$15.9
US$18.1
US$8.6
US$13.4
US$17.2
US$16.5
US$7
US$9.6
US$10.7
US$28.5
US$16.4
US$28.5US$
13.2
US$7.1
US$2.6
US$6
US$4.8
US$6.9US$
4.7US$6.8
US$5.2
US$5.5
US$5.2
US$5.6
US$81.6
US$141.5
0
50
100
150
200
250
300
350
400
450
2017201620152014201320122011
Num
ber
of d
eals
8823
133
140
149
147
194218
192
241
1211
1316
1413
15
19
15
19
19
28
2
2
3
3
3
4
25
5
1
136157
133
96
121
116
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Mergermarket Deal Drivers Americas 93New England
Valu
e (U
S$
bn)
0
10
20
30
40
50
60
70
80
Agr
icul
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Def
ense
Real
Est
ate
Con
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s &
Hea
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re
Tran
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Leis
ure
TMT
Ener
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inin
g, O
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Gas
Con
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Fina
ncia
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s
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g
US$5.8
US$5.5
US$10.5 US$
4.5
US$15.8
US$0.1
US$0.6
US$1 US$
N/DUS$N/D
US$0.7
US$74.3
US$25.4
Num
ber
of d
eals
0
20
40
60
80
100
120
140
Agr
icul
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Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
ence
s &
Hea
lthca
re
Tran
spor
tatio
n
Leis
ure
TMT
Ener
gy, M
inin
g, O
il &
Gas
Con
sum
er
Bus
ines
s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
stria
ls, M
anuf
actu
ring
& E
ngin
eerin
g
39
7 7
61
615
N/D2 1
79
61
126
38
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England. Industry sector is based on the dominant industry of the target.
mergermarket.com
Num
ber
of d
eals
0
25
50
75
100
125
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Valu
e (U
S$
m)
2011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 94
mergermarket.com
Deal Drivers Americas New England
95Mergermarket
Legal advisors by value Legal advisors by deal count
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a US (New England) bidder, target or vendor.States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (New England) bidder, target or vendor.States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 13 Davis Polk & Wardwell 175,339 30
2 11 Sullivan & Cromwell 171,143 18
3 4 Kirkland & Ellis 127,049 107
4 8 Simpson Thacher & Bartlett 96,482 24
5 2 White & Case 85,320 29
6 1 Cravath, Swaine & Moore 78,280 20
7 7 Shearman & Sterling 77,841 13
8 69 Dechert 74,085 25
9 23 Latham & Watkins 73,212 71
10 47 McDermott Will & Emery 70,399 21
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Kirkland & Ellis 127,049 107
2 4 Goodwin Procter 13,195 96
3 2 Latham & Watkins 73,212 71
4 3 Weil Gotshal & Manges 48,919 64
5 5 Ropes & Gray 22,023 57
6 6 Morgan Lewis & Bockius 16,268 46
7 12 Skadden Arps Slate Meagher & Flom 65,895 42
8 9 Jones Day 15,299 40
9 7 DLA Piper 7,257 38
10 11 Choate Hall & Stewart 641 32
2017 2016 Company name Value (USD m)
Number of Deals
1 4 Morgan Stanley 150,896 47
2 1 Goldman Sachs & Co 182,178 44
3 2 JPMorgan 77,715 41
4 8 Evercore 102,818 29
5 7 Bank of America Merrill Lynch 89,946 29
6 5 Houlihan Lokey 3,265 28
7 3 Barclays 102,560 26
8 6 Credit Suisse 73,435 25
9 14 Jefferies 9,176 25
10 15 William Blair & Company 3,673 25
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Goldman Sachs & Co 182,178 44
2 7 Morgan Stanley 150,896 47
3 6 Evercore 102,818 29
4 3 Barclays 102,560 26
5 5 Bank of America Merrill Lynch 89,946 29
6 25 Centerview Partners 86,688 14
7 8 Lazard 78,010 19
8 2 JPMorgan 77,715 41
9 - Allen & Company 74,402 3
10 4 Credit Suisse 73,435 25
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
mergermarket.com
New England
Latin America
Part of the Acuris reporton global M&A activity
LA
Mergermarket Deal Drivers Americas 96
mergermarket.com
Latin America
Further informationGet in touch
Latin AmericaOverview
Dealmaking in Latin America this year is expected to be heavily influenced by elections around the region, with voters in Colombia, Brazil and Mexico all set to elect new presidents. Announced M&A deals in Latin America totaled US$94.3bn in 2017, up 23.3% from US$76.5bn in 2016, according to Mergermarket data.
A rush of transactions is expected in Colombia, Brazil and Mexico during 1Q18 before activity slows, as elections in respective jurisdictions draw closer. Chile, meanwhile, is expecting to see an uptick in activity after re-electing President Pinera last month.
Mexico Companies will be keen to complete transactions as early as possible in 2018 before investor sentiment is affected by the presidential election in July, Rion M&A founding partner Pablo Rion said.
Increased activity is expected in 1Q18 as sellers seek to close transactions before buyers, particularly financial sponsors, delay investment decisions until after the election, said Seale & Associates Director Sergio Garcia. M&A activity is expected to slow down from March, he added.
Energy reform, which opened up the sector to foreign investment, will be an important driver of 1H18 M&A activity in the country, Rion said. Dealmaking is anticipated throughout the energy supply chain with petrochemical production, lubricant manufacturing and clean
energy generation offering opportunities for M&A consolidation, Rion and Garcia agreed.
The Agriculture sector is attractive to investors given Mexico’s year-round production of vital crops and its proximity to the US market, Garcia said. Thanks to increasingly advanced distribution, irrigation and logistics systems, leading Mexican producers are considering transactions and, while the outcome of NAFTA renegotiations could have an impact on this industry, it should not be sufficient to impinge on consolidation during 1H18, Rion noted.
Mexico’s family-owned businesses are increasingly eager to participate in M&A and this trend will help to offset any negative effects generated by volatility in the global financial markets and an unfavorable peso-dollar exchange rate, Garcia said.
Brazil Brazilians will choose a new president in October and, despite uncertainties about the economic direction the winner will adopt, investors remain confident in the country’s growth prospects, said Deloitte’s Reinaldo Grasson.
The total volume of M&A deals in Brazil grew by 5% in 2017, though this rise was lower than expected for Latin America’s largest economy, according to Rogerio Gollo, partner at PwC Brazil. The improvement in the macroeconomic scenario is helping to drive investor confidence and PwC foresees a 20% growth in dealmaking next year, Gollo added.
Driven by a recovery of purchasing power, Gollo said many retail/consumer deals will come to fruition during 2018, while Technology—a sector that has historically helped drive deals—will continue to see consolidation.
Healthcare and the K-12 education segment are still flourishing and are likely to attract private equity investment, Grasson said. Infrastructure and agribusiness are also of interest for foreign suitors.
Chile Meanwhile, the victory of center-right candidate Sebastian Pinera in Chile’s run-off presidential election held on 17 December is expected to usher in more M&A in the country. Pinera, who governed Chile from 2010-2014 and will assume his second term in March, has vowed to lower bureaucratic hurdles and corporate tax measures, noted Laura Sharkey of risk consultancy Control Risks.
Mining, Agriculture, Infrastructure and Renewable Energy are some sectors likely to gain M&A momentum next year, Sharkey noted.
Colombia Presidential elections, scheduled for May, could dampen dealmaking in Colombia especially if the winner is a candidate opposed to the peace agreement struck between the government and the Revolutionary Armed Forces of Colombia (Farc), said a local M&A banker.
Dominic Pasteiner
Carlos Martinez
Thiago Barrozo
Bruna Maia
Mergermarket Deal Drivers Americas 97
mergermarket.com
Latin America
98Mergermarket
Top 15 Announced Deals for the Year Ending 31 December 2017 – Latin America (Based On Target)
Top deals
AnnouncedDate
Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)
12-Dec-17 C Liberty Global plc (Shareholders) Liberty Latin America Ltd Technology, Media & Telecom Liberty Global Plc 13,434
1-Jul-17 P Telecom Argentina SA Cablevision Holding SA Technology, Media & Telecom 6,685
2-Sep-17 P Paper Excellence Canada Holdings Corp Eldorado Brasil Celulose SA (81% stake) Industrials, Chemicals & Engineering J&F Investimentos SA 4,345
30-Nov-17 C State Grid Corporation of China CPFL Energia SA (45.36% stake) Energy, Mining, Oil & Gas 3,971
22-Dec-17 P UnitedHealth Group Inc Banmedica SA Life Sciences & Healthcare 3,394
5-Dec-17 P The Bank of Nova Scotia Banco Bilbao Vizcaya Argentaria Chile SA Financial Services Banco Bilbao Vizcaya Argentaria SA 3,226
8-Feb-17 C AC Bebidas S de RL de CV Arca Continental SAB de CV (Beverage businesses in Mexico, Argentina, Peru and Ecuador); and Coca-Cola Southwest Beverages LLC
Consumer Arca Continental SAB de CV; and Coca-Cola Refreshments USA Inc
2,700
18-Dec-17 P Statoil ASA Petroleo Brasileiro SA (Roncador oil field) (25% stake) Energy, Mining, Oil & Gas Petroleo Brasileiro SA 2,350
11-May-17 P Itaú Unibanco Holding SA XP Investimentos CCTVM SA (49.9% stake) Financial Services General Atlantic LLC; Dyna III Fundo de Investimento em Participacoes; and XP Controle Participacoes SA
1,982
21-Feb-17 C Ternium SA Thyssenkrupp Companhia Siderurgica do Atlantico Ltda Industrials, Chemicals & Engineering ThyssenKrupp AG 1,648
3-Aug-17 C Grupo Lala SAB de CV Vigor Alimentos SA Consumer Arla Foods amba; JBS SA; and FB Participacoes SA 1,610
25-Aug-17 P China Three Gorges Corporation; Hubei Energy Group Co Ltd; CNIC Corporation Limited; and ACE Investment Fund II LP
Empresa de Generacion Huallaga SA Energy, Mining, Oil & Gas Odebrecht Latinvest SA 1,390
25-Oct-17 P Grupo Financiero Banorte SA de CV Grupo Financiero Interacciones SAB de CV Financial Services 1,388
8-Jun-17 P Neoenergia SA Elektro Redes SA Energy, Mining, Oil & Gas Iberdrola SA 1,385
26-Dec-17 P China Southern Power Grid International (HK) Co Ltd Transelec SA (27.8% stake) Energy, Mining, Oil & Gas Brookfield Infrastructure Partners LP 1,300
C= Completed; P= Pending; L= Lapsed
Mergermarket Deal Drivers Americas
mergermarket.com
Latin America
Mergermarket Deal Drivers Americas 99
Please use corresponding AIT file
Latin America
0
30
60
90
120
150
2017201620152014201320122011
Valu
e (U
S$
bn)
US$17.1
US$14.1
US$40.8US$
25.3
US$37.8
US$7.1
US$27.1
US$8.6
US$16.1
US$14
US$10.5
US$14.2
US$28.2
US$29.2
US$13.3
US$16.9
US$13.2
US$41.4
US$13.6
US$18.8
US$16.6
US$38.9
US$16
US$24.1
US$38.4
US$14.1
US$19.2 US$
14.5
US$10.5
US$20
US$20
US$23.2
US$29.2
US$20.1
0
100
200
300
400
500
600
700
800
2017201620152014201320122011
Num
ber
of d
eals
9
25
53
22
5
63
5
5
7
30
2625
28
37
292
38
237
46
37
333
39
4541
37 29
31
248 238 247
288 284 289247
272 251
322
331
$5m - $250m
$2,001m - $5,000m
Value not disclosed
$501m - $2,000m
$251m - $500m
> $5,001m
$5m - $250m
$2,001m - $5,000m
$501m - $2,000m $251m - $500m
> $5,001m
M&A split by deal sizeValue
M&A split by deal sizeDeal Count
mergermarket.com
Mergermarket Deal Drivers Americas 100Latin America
Valu
e (U
S$
bn)
0
5
10
15
20
25
30
Agr
icul
ture
Def
ense
Real
Est
ate
Con
stru
ctio
n
Life
Sci
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s &
Hea
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re
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tatio
n
Leis
ure
TMT
Ener
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g, O
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Gas
Con
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Bus
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s S
ervi
ces
Fina
ncia
l Ser
vice
s
Indu
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ls, M
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actu
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& E
ngin
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g
US$8.4
US$1.5
US$1
US$4.1
US$1.7
US$2
US$11.1
US$0.8 US$
0.1
US$21.8
US$26.8
US$5.5
US$9.5
Num
ber
of d
eals
0
20
40
60
80
100
120
Agr
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Def
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Real
Est
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Con
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n
Life
Sci
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s &
Hea
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re
Tran
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Ener
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Gas
Con
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Bus
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Fina
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l Ser
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s
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actu
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& E
ngin
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g
2731
50
18
1
19
7
39
91
62
86
119
54
Mix of deals by industry sectorDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America. Industry sector is based on the dominant industry of the target.
Mix of deals by industry sectorValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America. Industry sector is based on the dominant industry of the target.
mergermarket.com
0
20
40
60
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160
180
200
220
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
Num
ber
of d
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2011 2012 2013 2014 2015 2016 2017
Valu
e (U
S$
m)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017
Quarterly M&A activityValue
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America.
Quarterly M&A activityDeal Count
Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America.
Moving average trend lineDeal Value Moving average trend lineDeal Count
Mergermarket 101
mergermarket.com
Deal Drivers Americas Latin America
102Mergermarket
Legal advisors by deal countLegal advisors by value
The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.
The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.
League tables
2017 2016 Company name Value (USD m)
Number of Deals
1 44 Shearman & Sterling 19,017 11
2 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 15,098 48
3 - Conyers Dill & Pearman 13,494 3
4 16 Carey y Cia 10,169 17
5 105 DLA Piper 7,954 8
6 31 Lefosse Advogados 7,583 15
7 17 Machado Meyer Sendacz e Opice 7,263 29
8 54 Jones Day 6,933 12
9 76 Stocche Forbes Advogados 6,900 24
10 113 Errecondo Gonzales Funes Abogados 6,696 3
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 15,098 48
2 2 Pinheiro Neto Advogados 4,353 35
3 4 Machado Meyer Sendacz e Opice 7,263 29
4 5 Baker McKenzie 3,784 28
5 7 Tozzini Freire Teixeira e Silva Advogados 4,239 26
6 6 Philippi Prietocarrizosa, Ferrero DU & Uria 5,006 25
7 11 Demarest 2,510 25
8 12 Stocche Forbes Advogados 6,900 24
9 3 Cescon, Barrieu, Flesch & Barreto Advogados 5,963 24
10 17 Lobo de Rizzo Advogados 2,668 22
2017 2016 Company name Value (USD m)
Number of Deals
1 1 Banco Itau BBA 8,815 36
2 5 Banco BTG Pactual 14,377 33
3 3 Banco Bradesco BBI 4,704 20
4 12 Bank of America Merrill Lynch 15,645 16
5 2 Santander Global Corporate Banking 9,804 15
6 15 Morgan Stanley 7,998 14
7 6 Lazard 6,791 13
8 13 BNP Paribas 2,000 11
9 19 Goldman Sachs & Co 11,949 10
10 8 Banco Bilbao Vizcaya Argentaria 7,389 10
2017 2016 Company name Value (USD m)
Number of Deals
1 - LionTree Advisors 20,119 3
2 2 Bank of America Merrill Lynch 15,645 16
3 12 Banco BTG Pactual 14,377 33
4 6 JPMorgan 12,236 8
5 15 Goldman Sachs & Co 11,949 10
6 1 Santander Global Corporate Banking 9,804 15
7 7 Banco Itau BBA 8,815 36
8 11 Morgan Stanley 7,998 14
9 9 Citi 7,789 9
10 10 Banco Bilbao Vizcaya Argentaria 7,389 10
Financial advisors by deal countFinancial advisors by value
Mergermarket Deal Drivers Americas
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Latin America
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Deal Drivers Americas 104Mergermarket
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Criteria Contacts
The following notes pertain to data contained in this publication:
Deals are included where the deal value is greater than or equal to US$5m.
Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to US$10m.
North America = US & Canada.
Industry section charts, top deals, and graphs are based on the dominant geography being North America or Latin America.
Geographic section charts and graphs are based on the dominant target geography.
Transactions exclude property transactions and restructurings where the ultimate shareholders’ interests are not changed.
Mid-market is defined as US$5m - US$250m.
All data included is correct as of 12 January, 2018.
League Tables correct as of 30 January, 2018
Top deals correct as of 30 January, 2018.
For a full version of the Mergermarket M&A deal database inclusion and league table criteria, go to: www.mergermarket.com/pdf/deal_criteria.pdf
Advertising Opportunities Erik [email protected]+ (1) 212 686 3329
Life Sciences & HealthcareClaire Rychlewski (in Chicago), Kevin McCaffreyCanadaSirui Shao, Elizabeth Lim
WestWilliam Langbein
MidwestJeff Sheban
SouthMark Druskoff, Chad Watt
Mid-AtlanticRichard Tekneci
New EnglandHana Askren
Latin AmericaDominic Pasteiner, Carlos Martinez, Bruna Maia, Thiago Barrozo
Head of Research Giovanni Amodeo
AmericasLana Vilner
All SectorsTom Cane, Jonathan Guilford
Financial ServicesYizhu Wang
Industrials, Manufacturing & EngineeringMarlene Givant Star, Sam Weisberg, Richard Tekneci
Energy, Mining, Oil & Gas Chad Watt, Nate Trela
ConsumerDayna Fields, Emily Fasold
Technology, Media & Telecom Thomas Zadvydas
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In M&A, information is the most valuable currency. Mergermarket reports on deals 6-24 months before they become public knowledge, giving our subscribers a powerful competitive advantage. With the largest network of dedicated M&A journalists and analysts, Mergermarket offers the most comprehensive M&A intelligence service available today. Our reporters are based in 67 locations across the Americas, Europe, Asia-Pacific, the Middle East and Africa.
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