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Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of March 10, 2017 unless otherwise specified. “Last 12 Months” data is for the period from March 2016 to February 2017 inclusive. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
February 2017
Last 12 Months
By Number of Deals
February 2017
Last 12 Months
$0 $200 $400 $600 $800
Healthcare
Real Estate/Property
Computers & Electronics
Food & Beverage
Oil & Gas
$13.13
$9.56
$8.54
$22.03
$21.30
$0 $200 $400 $600 $800
Leisure & Recreation
Oil & Gas
Utility & Energy
Healthcare
Computers & Electronics
$189.67
$297.08
$185.37
$185.06
$126.14
0 1,000 2,000 3,000 4,000 5,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics 205
110
77
49
36
February 2017 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 202.45 (87.25) 106.47 (4.13)
No. of deals 2,858 (262) 828 (94)
Avg. value of deals (US$mil) 155.4 (58.6) 411.1 (21.0)
Avg. deal multiple1 11.4x (0.7) 14.7x 1.7
Strategic Transactions
Volume (US$B) 144.56 (98.93) 77.63 (2.19)
No. of deals 2,520 (293) 666 (127)
Avg. value of deals (US$mil) 122.2 (71.2) 351.3 (11.5)
Avg. deal multiple1 11.4x (0.5) 15.5x 1.7
Sponsor-Related Transactions
Volume (US$B) 57.88 11.68 28.84 (1.94)
No. of deals 338 31 162 33
Avg. value of deals (US$mil) 482.4 (3.9) 758.9 (96.1)
Avg. deal multiple1 11.0x (1.7) 11.3x 0.3
Crossborder Transactions2
Volume (US$B) 81.68 (36.12) Inbound
39.73Outbound
11.84
Inbound
19.07Outbound
(28.91)
No. of deals 761 (47) Inbound
155Outbound
133
Inbound
16Outbound
(29)
Avg. value of deals (US$mil) 234.0 (127.3) Inbound
575.8Outbound
211.4
Inbound
186.0Outbound
(758.9)
Avg. deal multiple1 11.7x (0.1) Inbound
13.4xOutbound
18.1x
Inbound
0.7Outbound
9.0
Figure 1 Figure 2 - Most Active U.S. Target Industries3
March 2017, Issue 60M&A Activity
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 1
A T A G L A N C E
1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.2 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.3 Industries categories are determined and named by Dealogic.
0 1,000 2,000 3,000 4,000 5,000
Oil & Gas
Finance
Healthcare
Professional Services
Computers & Electronics
1,141
1,022
2,455
422
536
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 2
A T A G L A N C E
Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for February 2017 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for February 2017 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $30 $60 $90 $120 $150
France
United Kingdom
Saudi Arabia
Japan
Germany $2.73
$2.46
$2.21
$0.75
$0.70
$0 $50 $100 $150 $200 $250
Japan
China
Germany
Canada
United Kingdom
$98.29
$87.31
$54.18
$44.89
$103.64
0 100 200 300 400 500
Germany
China
United Kingdom
Japan
Canada 415
189
179
85
171
$0 $30 $60 $90 $120 $150
France
Switzerland
Netherlands
Germany
United Kingdom
$50.40
$62.96
$49.09
$14.87
$35.47
0 100 200 300 400 500
Brazil
Australia
Germany
Canada
United Kingdom 325
297
101
92
70
0 100 200 300 400 500
France andGermany
Japan
United Kingdom
Canada
4
36
23
17
13
0 100 200 300 400 500
Brazil
Australia
Germany
Canada
United Kingdom
18
25
7
12
8
4 Each of France and Germany was the country of origin for 13 transactions in February 2017.
$0 $50 $100 $150 $200 $250
Singapore
Mexico
Canada
Japan
United Kingdom $19.11
$6.46
$5.30
$2.70
$1.38
February 2017
Equity Value (US$B)
Last 12 Months
Equity Value (US$B)
Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers
Aug 20
16
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar
201
6
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16$0
$5000
$10000
$15000
$20000
$25000
$30000
$35000
$40000
$45000
$3,647.7
$3,185.6$4,300.3 $3,288.3 $2,920.5 $2,129.9 $2,736.2
$13,412.7
$2,810.9 $1,013.2$1,611.6
$2,413.0
$7,265.8
$8,921.3
$16,460.2
$12,189.3
$7,558.4
$5,514.4
$8,094.0
$39,958.9
$8,592.9
$2,074.2$4,332.8
$6,662.9
$0 $20 $40 $60 $80 $100
Spectra Energy Corp ~ Enbridge, Inc.(September 6, 2016)
Baker Hughes, Inc. ~ General Electric Co.(October 31, 2016)
Reynolds American Inc. ~ British American Tobacco Plc(October 21, 2016)
Monsanto Company ~ Bayer AG(May 18, 2016)
Time Warner Inc. ~ AT&T Inc.(October 22, 2016)
$28.33
$83.24
$56.14
$49.20
$35.90
$0 $20 $40 $60 $80 $100
DigitalGlobe, Inc. ~ MacDonald, Dettwiler & Associates Ltd.(February 24, 2017)
ZELTIQ Aesthetics, Inc. ~ Allergan Plc(February 13, 2017)
Fortress Investment Group LLC ~ SoftBank Group Corp.(February 14, 2017)
ONEOK Partners LP ~ ONEOK, Inc.(February 1, 2017)
Mead Johnson Nutrition Co. ~ Reckitt Benckiser Group Plc(February 2, 2017) $16.50
$2.27
$2.10
$9.31
$3.13
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)
Figure 5 - Five Largest U.S. Public Mergers
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 3
A T A G L A N C E
5 Based on the highest target break fees and reverse break fees payable in a particular deal.6 No transactions in February 2017 involving a financial buyer had a reverse break fee.7 No transactions in February 2017 involved a financial buyer.8 One transaction in February 2017 had a go-shop provision.9 No transactions in February 2017 involving a financial buyer had a go-shop provision.10 One transaction in February 2017 involving a strategic buyer had a go-shop provision.
M&A Terms
Avg. Reverse Break Fee as % of Equity ValueAvg. Target Break Fee as % of Equity Value
Average Value of All U.S. Public Mergers with Definitive Agreements
Jun 2
016
Jul 2
016
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 20
16
May 20
16
(US$mil)
6%
12%
$5000
$10000
$15000
3.2
4.9
3.4
4.4
3.9
5.0
3.6
5.9
3.3
4.9
3.6
5.2
3.5
5.8
3.3
4.0
3.6
6.3
3.5
5.3
3.7
9.1
3.7
4.4
$3,075.4$3,035.0
$4,595.3
$2,759.3 $3,025.1
$2,245.9$2,887.8
$13,412.7
$3,227.1
$1,096.4$1,796.1
$2,485.1
Figure 6 - Average Break Fees as % of Equity Value5
Figure 7 - Average Break Fees as % of Equity Value
February 2017
Last 12 Months
Target Break Fee for All Mergers 3.7 3.6
February 2017
Last 12 Months
Reverse Break Fee for All Mergers 4.4 5.4
Reverse Break Fee for Mergers Involving Financial Buyers6
N/A 6.6
Reverse Break Fee for Mergers Involving Strategic Buyers
4.4 5.0
February 2017
Last 12 Months
% of Mergers with Go-Shops 6.3 10.4
% of Mergers Involving Financial Buyers with Go-Shops7
N/A 48.3
% of Mergers Involving Strategic Buyers with Go-Shops
6.3 3.7
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops8
30.0 33.9
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops9
N/A 33.8
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops10
30.0 34.2
Figure 8 - U.S. Public Merger Go-Shop Provisions
Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at $100 million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 4
A T A G L A N C E
11 Due to rounding, percentages may not add up to 100%12 This data includes both announced transactions for which a definitive merger agreement was reached
and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions).
Cash Only
Stock Only
Cash & Stock Only
Choice (Cash Election)
Other
Last 12 Months
February 2017
5.2%
64.2%17.1%
13.5%
62.5%12.5%
25.0%
February 2017 100.0
Last 12 Months 89.8
February 2017 18.8
Last 12 Months 23.8
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers12
February 2017 5.9
Last 12 Months 12.8
M&A Terms (Continued)
Figure 9 - Form of Consideration as % of U.S. Public Mergers11 Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio
A T A G L A N C E
Our Mergers & Acquisitions PracticeThe Paul, Weiss M&A Group consists of more than 30 partners and over 100 counsel and associates based in New York, Washington, Wilmington, London, Toronto, Tokyo, Hong Kong and Beijing. The firm’s Corporate Department consists of more than 60 partners and over 200 counsel and associates.
Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions.
Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions.
Recent highlights include: advising Time Warner Cable in its $79 billion merger with Charter Communications; representing Qualcomm in its approximately $47 billion pending acquisition of NXP Semiconductors; advising Agrium in its $36 billion pending merger of equals with Potash Corp. of Saskatchewan; representing funds affiliated with Apollo Global Management and Protection 1 in their $15 billion acquisition of ADT Corporation; advising Alere in its $8 billion pending acquisition by Abbott Laboratories; representing ARIAD Pharmaceuticals in its approximately $5.2 billion acquisition by Takeda Pharmaceutical Company; advising Jeffrey Katzenberg in DreamWorks Animation’s $4 billion acquisition by Comcast; and representing the Board of Directors of Xerox in its separation of the company into two public companies.
Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients’ short- and long-term goals.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 5
Matthew W. Abbott
Edward T. Ackerman
Scott A. Barshay
Angelo Bonvino
Jeanette K. Chan
Ellen N. Ching
Ariel J. Deckelbaum
Ross A. Fieldston
Brian P. Finnegan
Adam M. Givertz
Robert D. Goldbaum
Neil Goldman
Bruce A. Gutenplan
Justin G. Hamill
David M. Klein
David K. Lakhdhir
Stephen P. Lamb
John E. Lange
Xiaoyu Greg Liu
Brian C. Lavin
Jeffrey D. Marell
Kelley D. Parker
Carl L. Reisner
Kenneth M. Schneider
Robert B. Schumer
John M. Scott
Judie Ng Shortell
Tarun M. Stewart
Steven J. Williams
Betty Yap
Kaye N. Yoshino
Tong Yu
Taurie M. Zeitzer
This publication is not intended to provide legal advice, and no legal or business decisions should be based on its content. Questions concerning issues addressed in this memorandum should be directed to:
Our M&A Partners
Ariel J. Deckelbaum Partner New York 212-373-3546 [email protected]
Scott A. Barshay Partner New York 212-373-3040 [email protected]
Matthew W. Abbott Partner New York 212-373-3402 [email protected]
Angelo Bonvino Partner New York 212-373-3570 [email protected]
Jeffrey D. Marell Partner New York 212-373-3105 [email protected]
A T A G L A N C E
6© 2017 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication may be considered attorney advertising. Past representations are no guarantee of future outcomes.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P P A U L W E I S S . C O M
NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON
Counsel Frances F. Mi, associates Ryan D. Blicher, David S. Lightstone, Edy Glozman, N. Arie Abramov and Yae Na Woo and law clerks David Okada and Michael Wysolmerski contributed to this publication.
Figure 1A - U.S. Deal Volume (US$B)
Figure 2A - Global Deal Volume (US$B)
M&A Activity – 12-Month Trends
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 7
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 20
16
Strategic TotalSponsor
$0
$500
$100
$150
$200
$250
$300
$350
$400
$71.75
$101.21
$182.65
$150.47$132.71
$110.81
$127.43
$354.72
$157.69
$86.32$110.60 $106.47
$51.63$81.85
$133.42$99.96 $91.43
$73.10
$109.94
$315.67
$119.43
$54.63$79.82 $77.63
$20.12 $19.36$49.23 $50.52 $41.28 $37.72
$17.49$39.05 $38.27 $31.70 $30.78 $28.84
Aug 20
16
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar
201
6
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Strategic TotalSponsor
$0
$100
$200
$300
$400
$500
$600
$236.77$229.81
$331.64$300.66
$334.67
$223.13
$325.46
$564.84
$297.76$388.51
$289.69
$202.44
$174.43 $180.22
$250.62$219.34
$265.24
$170.30
$276.53
$485.02
$224.96
$306.58
$243.49
$144.56
$62.34 $49.59$81.02 $81.32 $69.43 $52.83 $48.93
$79.82 $72.80 $81.93$46.20 $57.88
A T A G L A N C E
A N N E X
Figure 3A - U.S. Number of Deals
Figure 4A - Global Number of Deals
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 8
A T A G L A N C E
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 20
16
Strategic TotalSponsor
0
200
400
600
800
1000
786763 764
799
656
742765
730
846 719
922
828
640 614 599 613
519
587620
581
694
625
793
666
146 149 165 186137 155 145 149 152
94129 162
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 20
16
Strategic TotalSponsor
0
500
1000
1500
2000
2500
3000
3500
329 377 360 383343 310 320 342 340
257 307 338
3,0272,856
2,7462,951
2,739 2,738 2,732
2,533
3,0292,774 2,813
2,520
3,3563,233
3,106
3,3343,082 3,048 3,052
2,8753,369 3,031 3,120
2,858
A N N E X
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 9
A T A G L A N C E
Figure 5A - Inbound U.S. Crossborder Transactions
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 2
016
By Volume (US$B) By Number of Deals
$0
$20
$60
$40
$80
$100
$120
0
100
200
140 131 133149
109 118141
122
160
123139
155
$24.65 $17.34 $83.88 $22.42 $28.68 $26.83 $66.72 $107.23 $31.63 $24.58 $20.66 $39.73
Figure 6A - Outbound U.S. Crossborder Transactions
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 2
016
By Volume (US$B) By Number of Deals
$0
$20
$40
$60
$80
$100
100
150
200
119
141
128136
117
141
114
126
169
119
162
133
$16.03 $8.95 $17.28 $8.73 $10.70 $10.38 $20.63 $60.62 $5.31 $80.66 $40.75 $11.84
Figure 7A - Global Crossborder Transactions
Jul 2
016
Jun 2
016
May 20
16
Apr 20
16
Mar 20
16
Feb
2017
Jan 2
017
Dec 20
16
Nov 20
16
Oct 20
16
Sep 20
16
Aug 2
016
By Volume (US$B) By Number of Deals
$0
$50
$100
$150
$200
$250
100
550
1000
807 796720
827739 744 746
685
898
785 808761
$88.84 $61.00 $134.36 $79.55 $126.92 $63.49 $136.59 $214.61 $78.37 $199.27 $117.79 $81.68
A N N E X