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Mergermarket Q1 2013 MampA Report
Deal Submissions
EMEA Nancy Costantinopoli NancyCostantinopolimergermarketcom Tel +44 201 010 6227
Americas Richard Myers RichardMyersmergermarketcom Tel +1 212 500 1393
Asia-Pacfic Fidelia Liu FideliaLiumergermarketcom Tel +852 2158 9723
Press Contacts
EMEA Flora Wilke FloraWilkemergermarketcom Tel +44 207 010 6348
Americas Chrissy Carney ChrissyCarneymergermarketcom Tel +1 646 378 3118
Asia-Pacfic Jessica Chan JessicaChanmergermarketcom Tel +852 2158 9706
Contents and SummaryGlobal Highlights bull A total of 2621 deals worth US$ 418bn was 76 behind the same period last year bull Davis Polk amp Wardwell advised on US$ 82bn-worth of deals putting it in lead position from 19th in Q1 2012
Spotlight
bull Februaryrsquos flurry of mega-deals (deals above US$ 10bn) this year brings 2013 up to four mega-deals valued at US$ 877bn compared to US$ 707bn (three deals) last year This was the highest Q1 value for mega-deals in a first quarter since Q1 2010 which was valued at US$ 1163bn (seven deals)
bull Every year that has experienced 5+ mega-deals in the first two months has ended with an increased deal value and volume compared to the previous year with the exception of the boom year in 2007
bull Dellrsquos buyout announcement has become one of four deals announced this year to enter into a go-shop period according to Dealreporter
Fortune Fortnight
Advisors bull After working on the Heinz mega-deal (deals above US$
10bn) Davis Polk amp Wardwell skipped ahead to first position in the global and US legal advisor league tables by value
bull Nine advisors not featured in Q1 2012rsquos top 20 global legal advisor league table by deal value made an entrance in Q1 2013
3-7
8-18
29-36
bull Q1 (US$ 1163bn) attempts to haul itself towards levels seen in the same period in 2012 but drops by 281 from US$ 1617bn bull Shearman amp Sterling entered the top 20 from 28th to lead the European legal advisor league table by deal value (US$ 265bn)
US bull The US sets the bar high for 2013 with deals valued at US$ 1724bn surpassing the Q1 2012 value by 38 bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
Asia-Pacific (excl Japan) bull Inbound deals in Q1 worth US$ 131bn outstripped Q1 2012 (US$ 95bn) bull King amp Wood Mallesons skips ahead two spots from third to first position for deals valued at US$ 112bn
Japan bull Deal values canrsquot keep up with Japanrsquos record H2 2012 with deals worth US$ 81bn in Q1 mostly from domestic deals bull Local advisor Nagashima Ohno amp Tsunematsu (US$ 34bn) retains its leading place in the legal advisor league table by deal value
Emerging Markets bull Outbound deal values increased but aggregate deal value (US$ 905bn) is down to a level not seen in a Q1 in four years
Private Equity bull US buyout values contributed 696 to total buyout MampA - a level never before seen on Mergermarket record bull Exits worth US$ 328bn in Q1 2013 were down compared to both Q1 and Q4 2012
19-28
37-40
44-45
46-48
Criteria 50
Deal Value and Mid-Market bull Q1 2013 is the fourth quarter in a row to have an average deal size above US$ 300m bull The US mid-market quarterly value in Q1 2013 moves ahead of Europe for the fifth consecutive quarter
49
41-43Africa amp Middle East bull One of two areas in this report to see deal values exceed Q1 2012 with deals valued at US$ 185bn bull Local advisor Zulficar amp Partners is in first place after advising on US$ 64bn-worth of deals
Global Overview for Q1 2013 bull A fortnight of mega-deals failed to push Q1 2013 ahead of Q1 2012 down 76 on the same period last year
bull Davis Polk amp Wardwell leads the global league table by deal value with US$ 82bn-worth of deals including three of the top ten announced deals
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S$bn
)
European MampA US MampA Asia-Pacific (excl Japan MampA) RoW MampA Number of Deals
Num
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f Dea
ls
Global Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull 2013 began with Q1 deal value (US$ 418bn 2621 deals) 76 down on the corresponding period in 2012 (US$ 4522bn 3262 deals) It was the slowest opening quarter in ten years (Q1 2003 US$ 2329bn)
bull After the highest quarterly value in five years (Q4 2012 US$ 737bn 3561 deals) Q1 2013 saw a decrease in total MampA value of 433 It is the seventh year in a row to see lower totals in Q1 than in the preceding Q4
bull The year has already seen four mega-deals adding up to US$ 861bn Last yearrsquos mega-deals in the same period totalled US$ 707bn
bull Only the US and Africa amp Middle East saw higher totals in Q1 2013 than in the same period in 2012 with increases in deal value of 38 and 1025 respectively
Global Industry amp Geography analysis for Q1 2013
51 68
356
101
136
65
43
61
97
23
33
143
217
95 96
40
32
48
245
51
Business Services US$ 138bn (US$ 23bn)
Consumer US$ 596bn (US$ 308bn)
Energy Mining amp Utilities US$ 909bn (US$ 1611bn)
Financial Services US$ 397bn (US$ 457bn)
Industrials amp Chemicals US$ 402bn (US$ 613bn)
Other US$ 168bn (US$ 293bn)
Pharma Medical amp Biotech US$ 135bn (US$ 195bn)
Real Estate US$ 199bn (US$ 274bn)
TMT US$ 1026bn (US$ 439bn)
Transport US$ 212bn (US$ 103bn)
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ls
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e of
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ls (U
S$bn
)
Global Cross Border - value (US$bn) Global MampA - value (US$bn) Global Cross Border - volume Global MampA - volume
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison Q1 2013 Geography and Cross-Border Focus
bull After TMT (bias due to the mega-deals) energy mining amp utilities was the second largest sector by market share at 217 with US$ 909bn-worth of deals This activity is boosted by a search for gas supplies which is visible in three of the top ten global deals with a combined value of US$ 126bn
bull Countries including China are likely competitors for overseas acquisitions of new shale gas export projects in North America Chinese acquisitions of US targets in the energy mining and utilities sector hit their highest aggregate value on Mergermarket record in 2012 (US$ 39bn)
bull Global energy demand permeates into other sectors such as transport where rail and shipping companies are being acquired to filter into price competitive geographies and avoid pipeline constraints The transport sector increased 1058 in deal value (US$ 212bn from US$ 103bn) with US$ 65bn deriving from the US
bull Despite only one cross-border mega-deal cross-border deals accounted for an increased proportion of global MampA compared to Q4 2012 In Q1 cross-border deals valued at US$ 1457bn (916 deals) contributed 348 to the global total up from 281 in Q4 (US$ 2709bn from 1218 cross-border deals)
bull The number of cross-border deals in Q1 was down 203 compared to the same period in 2012 (1150 deals) although value was down just 18 (from US$ 1483bn)
bull Four of the top ten global deals involved cross-border acquisitions but the rest were mostly US domestic deals which accounts for North America having a 412 market share by deal value in global MampA
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
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ls
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ue o
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ls (U
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n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
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ls
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ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
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175
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S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
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Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
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Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
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Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
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ue o
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ls (U
S$b
n)
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cent
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of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
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In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
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Contents and SummaryGlobal Highlights bull A total of 2621 deals worth US$ 418bn was 76 behind the same period last year bull Davis Polk amp Wardwell advised on US$ 82bn-worth of deals putting it in lead position from 19th in Q1 2012
Spotlight
bull Februaryrsquos flurry of mega-deals (deals above US$ 10bn) this year brings 2013 up to four mega-deals valued at US$ 877bn compared to US$ 707bn (three deals) last year This was the highest Q1 value for mega-deals in a first quarter since Q1 2010 which was valued at US$ 1163bn (seven deals)
bull Every year that has experienced 5+ mega-deals in the first two months has ended with an increased deal value and volume compared to the previous year with the exception of the boom year in 2007
bull Dellrsquos buyout announcement has become one of four deals announced this year to enter into a go-shop period according to Dealreporter
Fortune Fortnight
Advisors bull After working on the Heinz mega-deal (deals above US$
10bn) Davis Polk amp Wardwell skipped ahead to first position in the global and US legal advisor league tables by value
bull Nine advisors not featured in Q1 2012rsquos top 20 global legal advisor league table by deal value made an entrance in Q1 2013
3-7
8-18
29-36
bull Q1 (US$ 1163bn) attempts to haul itself towards levels seen in the same period in 2012 but drops by 281 from US$ 1617bn bull Shearman amp Sterling entered the top 20 from 28th to lead the European legal advisor league table by deal value (US$ 265bn)
US bull The US sets the bar high for 2013 with deals valued at US$ 1724bn surpassing the Q1 2012 value by 38 bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
Asia-Pacific (excl Japan) bull Inbound deals in Q1 worth US$ 131bn outstripped Q1 2012 (US$ 95bn) bull King amp Wood Mallesons skips ahead two spots from third to first position for deals valued at US$ 112bn
Japan bull Deal values canrsquot keep up with Japanrsquos record H2 2012 with deals worth US$ 81bn in Q1 mostly from domestic deals bull Local advisor Nagashima Ohno amp Tsunematsu (US$ 34bn) retains its leading place in the legal advisor league table by deal value
Emerging Markets bull Outbound deal values increased but aggregate deal value (US$ 905bn) is down to a level not seen in a Q1 in four years
Private Equity bull US buyout values contributed 696 to total buyout MampA - a level never before seen on Mergermarket record bull Exits worth US$ 328bn in Q1 2013 were down compared to both Q1 and Q4 2012
19-28
37-40
44-45
46-48
Criteria 50
Deal Value and Mid-Market bull Q1 2013 is the fourth quarter in a row to have an average deal size above US$ 300m bull The US mid-market quarterly value in Q1 2013 moves ahead of Europe for the fifth consecutive quarter
49
41-43Africa amp Middle East bull One of two areas in this report to see deal values exceed Q1 2012 with deals valued at US$ 185bn bull Local advisor Zulficar amp Partners is in first place after advising on US$ 64bn-worth of deals
Global Overview for Q1 2013 bull A fortnight of mega-deals failed to push Q1 2013 ahead of Q1 2012 down 76 on the same period last year
bull Davis Polk amp Wardwell leads the global league table by deal value with US$ 82bn-worth of deals including three of the top ten announced deals
0
500
1000
1500
2000
2500
3000
3500
4000
4500
0
200
400
600
800
1000
1200
1400
1600
1800
Valu
e of
Dea
ls (U
S$bn
)
European MampA US MampA Asia-Pacific (excl Japan MampA) RoW MampA Number of Deals
Num
ber o
f Dea
ls
Global Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull 2013 began with Q1 deal value (US$ 418bn 2621 deals) 76 down on the corresponding period in 2012 (US$ 4522bn 3262 deals) It was the slowest opening quarter in ten years (Q1 2003 US$ 2329bn)
bull After the highest quarterly value in five years (Q4 2012 US$ 737bn 3561 deals) Q1 2013 saw a decrease in total MampA value of 433 It is the seventh year in a row to see lower totals in Q1 than in the preceding Q4
bull The year has already seen four mega-deals adding up to US$ 861bn Last yearrsquos mega-deals in the same period totalled US$ 707bn
bull Only the US and Africa amp Middle East saw higher totals in Q1 2013 than in the same period in 2012 with increases in deal value of 38 and 1025 respectively
Global Industry amp Geography analysis for Q1 2013
51 68
356
101
136
65
43
61
97
23
33
143
217
95 96
40
32
48
245
51
Business Services US$ 138bn (US$ 23bn)
Consumer US$ 596bn (US$ 308bn)
Energy Mining amp Utilities US$ 909bn (US$ 1611bn)
Financial Services US$ 397bn (US$ 457bn)
Industrials amp Chemicals US$ 402bn (US$ 613bn)
Other US$ 168bn (US$ 293bn)
Pharma Medical amp Biotech US$ 135bn (US$ 195bn)
Real Estate US$ 199bn (US$ 274bn)
TMT US$ 1026bn (US$ 439bn)
Transport US$ 212bn (US$ 103bn)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
0
200
400
600
800
1000
1200
1400
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Global Cross Border - value (US$bn) Global MampA - value (US$bn) Global Cross Border - volume Global MampA - volume
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison Q1 2013 Geography and Cross-Border Focus
bull After TMT (bias due to the mega-deals) energy mining amp utilities was the second largest sector by market share at 217 with US$ 909bn-worth of deals This activity is boosted by a search for gas supplies which is visible in three of the top ten global deals with a combined value of US$ 126bn
bull Countries including China are likely competitors for overseas acquisitions of new shale gas export projects in North America Chinese acquisitions of US targets in the energy mining and utilities sector hit their highest aggregate value on Mergermarket record in 2012 (US$ 39bn)
bull Global energy demand permeates into other sectors such as transport where rail and shipping companies are being acquired to filter into price competitive geographies and avoid pipeline constraints The transport sector increased 1058 in deal value (US$ 212bn from US$ 103bn) with US$ 65bn deriving from the US
bull Despite only one cross-border mega-deal cross-border deals accounted for an increased proportion of global MampA compared to Q4 2012 In Q1 cross-border deals valued at US$ 1457bn (916 deals) contributed 348 to the global total up from 281 in Q4 (US$ 2709bn from 1218 cross-border deals)
bull The number of cross-border deals in Q1 was down 203 compared to the same period in 2012 (1150 deals) although value was down just 18 (from US$ 1483bn)
bull Four of the top ten global deals involved cross-border acquisitions but the rest were mostly US domestic deals which accounts for North America having a 412 market share by deal value in global MampA
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
0
200
400
600
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1000
1200
1400
1600
1800
2000
0
100
200
300
400
500
600
700
Num
ber o
f Dea
ls
Val
ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
50
100
150
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250
300
0
25
50
75
100
125
150
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
0
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0
100
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400
500
600
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
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140
160
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
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30
40
50
60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
100
150
200
250
300
0
10
20
30
40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
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20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
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Global Overview for Q1 2013 bull A fortnight of mega-deals failed to push Q1 2013 ahead of Q1 2012 down 76 on the same period last year
bull Davis Polk amp Wardwell leads the global league table by deal value with US$ 82bn-worth of deals including three of the top ten announced deals
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Valu
e of
Dea
ls (U
S$bn
)
European MampA US MampA Asia-Pacific (excl Japan MampA) RoW MampA Number of Deals
Num
ber o
f Dea
ls
Global Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull 2013 began with Q1 deal value (US$ 418bn 2621 deals) 76 down on the corresponding period in 2012 (US$ 4522bn 3262 deals) It was the slowest opening quarter in ten years (Q1 2003 US$ 2329bn)
bull After the highest quarterly value in five years (Q4 2012 US$ 737bn 3561 deals) Q1 2013 saw a decrease in total MampA value of 433 It is the seventh year in a row to see lower totals in Q1 than in the preceding Q4
bull The year has already seen four mega-deals adding up to US$ 861bn Last yearrsquos mega-deals in the same period totalled US$ 707bn
bull Only the US and Africa amp Middle East saw higher totals in Q1 2013 than in the same period in 2012 with increases in deal value of 38 and 1025 respectively
Global Industry amp Geography analysis for Q1 2013
51 68
356
101
136
65
43
61
97
23
33
143
217
95 96
40
32
48
245
51
Business Services US$ 138bn (US$ 23bn)
Consumer US$ 596bn (US$ 308bn)
Energy Mining amp Utilities US$ 909bn (US$ 1611bn)
Financial Services US$ 397bn (US$ 457bn)
Industrials amp Chemicals US$ 402bn (US$ 613bn)
Other US$ 168bn (US$ 293bn)
Pharma Medical amp Biotech US$ 135bn (US$ 195bn)
Real Estate US$ 199bn (US$ 274bn)
TMT US$ 1026bn (US$ 439bn)
Transport US$ 212bn (US$ 103bn)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
0
200
400
600
800
1000
1200
1400
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Global Cross Border - value (US$bn) Global MampA - value (US$bn) Global Cross Border - volume Global MampA - volume
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison Q1 2013 Geography and Cross-Border Focus
bull After TMT (bias due to the mega-deals) energy mining amp utilities was the second largest sector by market share at 217 with US$ 909bn-worth of deals This activity is boosted by a search for gas supplies which is visible in three of the top ten global deals with a combined value of US$ 126bn
bull Countries including China are likely competitors for overseas acquisitions of new shale gas export projects in North America Chinese acquisitions of US targets in the energy mining and utilities sector hit their highest aggregate value on Mergermarket record in 2012 (US$ 39bn)
bull Global energy demand permeates into other sectors such as transport where rail and shipping companies are being acquired to filter into price competitive geographies and avoid pipeline constraints The transport sector increased 1058 in deal value (US$ 212bn from US$ 103bn) with US$ 65bn deriving from the US
bull Despite only one cross-border mega-deal cross-border deals accounted for an increased proportion of global MampA compared to Q4 2012 In Q1 cross-border deals valued at US$ 1457bn (916 deals) contributed 348 to the global total up from 281 in Q4 (US$ 2709bn from 1218 cross-border deals)
bull The number of cross-border deals in Q1 was down 203 compared to the same period in 2012 (1150 deals) although value was down just 18 (from US$ 1483bn)
bull Four of the top ten global deals involved cross-border acquisitions but the rest were mostly US domestic deals which accounts for North America having a 412 market share by deal value in global MampA
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
0
200
400
600
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1000
1200
1400
1600
1800
2000
0
100
200
300
400
500
600
700
Num
ber o
f Dea
ls
Val
ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
50
100
150
200
250
300
0
25
50
75
100
125
150
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
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25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
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160
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ber o
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ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
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300
0
10
20
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40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
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400
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600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
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Global Industry amp Geography analysis for Q1 2013
51 68
356
101
136
65
43
61
97
23
33
143
217
95 96
40
32
48
245
51
Business Services US$ 138bn (US$ 23bn)
Consumer US$ 596bn (US$ 308bn)
Energy Mining amp Utilities US$ 909bn (US$ 1611bn)
Financial Services US$ 397bn (US$ 457bn)
Industrials amp Chemicals US$ 402bn (US$ 613bn)
Other US$ 168bn (US$ 293bn)
Pharma Medical amp Biotech US$ 135bn (US$ 195bn)
Real Estate US$ 199bn (US$ 274bn)
TMT US$ 1026bn (US$ 439bn)
Transport US$ 212bn (US$ 103bn)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
0
200
400
600
800
1000
1200
1400
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Global Cross Border - value (US$bn) Global MampA - value (US$bn) Global Cross Border - volume Global MampA - volume
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison Q1 2013 Geography and Cross-Border Focus
bull After TMT (bias due to the mega-deals) energy mining amp utilities was the second largest sector by market share at 217 with US$ 909bn-worth of deals This activity is boosted by a search for gas supplies which is visible in three of the top ten global deals with a combined value of US$ 126bn
bull Countries including China are likely competitors for overseas acquisitions of new shale gas export projects in North America Chinese acquisitions of US targets in the energy mining and utilities sector hit their highest aggregate value on Mergermarket record in 2012 (US$ 39bn)
bull Global energy demand permeates into other sectors such as transport where rail and shipping companies are being acquired to filter into price competitive geographies and avoid pipeline constraints The transport sector increased 1058 in deal value (US$ 212bn from US$ 103bn) with US$ 65bn deriving from the US
bull Despite only one cross-border mega-deal cross-border deals accounted for an increased proportion of global MampA compared to Q4 2012 In Q1 cross-border deals valued at US$ 1457bn (916 deals) contributed 348 to the global total up from 281 in Q4 (US$ 2709bn from 1218 cross-border deals)
bull The number of cross-border deals in Q1 was down 203 compared to the same period in 2012 (1150 deals) although value was down just 18 (from US$ 1483bn)
bull Four of the top ten global deals involved cross-border acquisitions but the rest were mostly US domestic deals which accounts for North America having a 412 market share by deal value in global MampA
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
100
200
300
400
500
600
700
Num
ber o
f Dea
ls
Val
ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
50
100
150
200
250
300
0
25
50
75
100
125
150
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
0
200
400
600
800
1000
1200
1400
0
100
200
300
400
500
600
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
50
60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
100
150
200
250
300
0
10
20
30
40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
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200
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Num
ber o
f Dea
ls
Val
ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
50
100
150
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250
300
0
25
50
75
100
125
150
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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500
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
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60
80
100
120
140
160
0
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20
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45
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
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30
40
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60
0
5
10
15
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25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
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300
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70
Num
ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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30
0
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900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
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Num
ber o
f Dea
ls
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ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
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ls
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e of
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ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ls
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ls (U
S$bn
)
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Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
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160
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ber o
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ls
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e of
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ls (U
S$bn
)
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Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
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)
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Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
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ue o
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ls (U
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n)
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cent
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of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
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Num
ber o
f Dea
ls
Val
ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
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ber o
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ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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)
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US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
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10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
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20
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60
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140
160
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ber o
f Dea
ls
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e of
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ls (U
S$bn
)
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Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
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ls
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ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
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900
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ue o
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ls (U
S$b
n)
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cent
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of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
bull Deal value in Q1 (US$ 1163bn 1037 deals) struggled to beat Q4 (US$ 2345bn 1371 deals) down 504
bull Shearman amp Sterling jumped to top position in the advisory rankings by deal value with deals worth US$ 265bn
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Num
ber o
f Dea
ls
Val
ue o
f Dea
ls (U
S$b
n)
Value (US$bn)
Number of Deals
Europe Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull European MampA in Q1 2013 saw 1037 deals worth US$ 1163bn a drop of 281 in value from the same period last year (US$ 1617bn 1355 deals)
bull Despite the eurozone crisisrsquo negative impact on MampA activity Q1 2013 recorded 13 deals over US$ 2bn worth a combined value of US$ 575bn driving up Europersquos share of global MampA activity to 278 To compare in Q1 2012 there were also 13 deals over US$ 2bn although overall value (US$ 906bn) was distorted by the Xstrata mega-deal
bull Of these 13 deals only Liberty Globalrsquos US$ 219bn acquisition of Virgin Media topped US$10bn the next biggest deal being Italyrsquos US$ 4bn merger between Atlantia and Gemina
Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
0
200
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1000
1200
1400
0
100
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300
400
500
600
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
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60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
100
150
200
250
300
0
10
20
30
40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
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Europe Industry amp Geography analysis for Q1 2013
21
57
410
106
101
103
23
42
94
44
43 62
184
151
54 60 47
07
322
70
Business Services US$ 5bn (US$ 35bn)
Consumer US$ 72bn (US$ 96bn)
Energy Mining amp Utilities US$ 214bn (US$ 692bn)
Financial Services US$ 175bn (US$ 178bn)
Industrials amp Chemicals US$ 63bn (US$ 17bn)
Other US$ 7bn (US$ 173bn)
Pharma Medical amp Biotech US$ 55bn (US$ 39bn)
Real Estate US$ 08bn (US$ 71bn)
TMT US$ 374bn (US$ 159bn)
Transport US$ 81bn (US$ 74bn)
0
50
100
150
200
250
300
0
25
50
75
100
125
150
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull As Morgan Stanley analysts cut eurozone growth rates for 2013 the area racks up just US$ 437bn-worth of deals making Q1 the slowest performing quarter since Q2 2009 (US$ 373bn)
bull Italy sliding deeper into recession and with concern building about its political landscape since the election has been cushioned by Europersquos second largest deal the Atlantia-Germina merger (US$ 4bn)
bull Cross-border MampA in Europe was up in both directions compared to Q1 2012 Inbound investment in Q1 (US$ 473bn 169 deals) was off to a better start than Q1 2012 (US$ 396bn 230 deals) while outbound investment totalled US$ 272bn over 165 deals 82 higher in value than Q1 2012 (US$ 251bn 188 deals)
Quarterly Cross-Border European MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
bull All sectors witnessed a lower deal count in comparison to Q1 2012 although four sectors had increased deal values including business services at 429 and 41 in the pharma medical amp biotech sector
bull A dramatic nine-fold increase in total deal value in the media sector was driven by the mega-deal between Liberty Global and Virgin Media The deal also led to the sector accounting for a 241 share of the European market compared to only 18 of the market in Q1 2012
bull The real estate sector struggled with 64 fewer deals last quarter bringing down the total value by 89 from US$ 71bn in Q1 2012 to US$ 750m in Q1 2013
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
0
200
400
600
800
1000
1200
1400
0
100
200
300
400
500
600
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
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30
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5
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25
30
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
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300
0
10
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50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
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US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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1400
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Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
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20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
50
60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
100
150
200
250
300
0
10
20
30
40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
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30
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60
0
5
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25
30
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
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200
250
300
0
10
20
30
40
50
60
70
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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1000
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1400
0
100
200
300
400
500
600
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
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10
15
20
25
30
35
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45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
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25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
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300
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10
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50
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70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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30
0
100
200
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400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
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25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
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10
15
20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
50
60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
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50
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
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US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
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25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
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20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
50
60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
100
150
200
250
300
0
10
20
30
40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
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30
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60
0
5
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25
30
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
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200
250
300
0
10
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30
40
50
60
70
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
0
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1000
1200
1400
0
100
200
300
400
500
600
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
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45
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
50
60
0
5
10
15
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25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
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300
0
10
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50
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70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
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15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
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t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
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All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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1400
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300
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600
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
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20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
0
20
40
60
80
100
120
140
160
0
5
10
15
20
25
30
35
40
45
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
10
20
30
40
50
60
0
5
10
15
20
25
30
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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25
30
0
100
200
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400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
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25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
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20
40
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100
120
140
160
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25
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45
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
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30
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60
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5
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25
30
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
100
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200
250
300
0
10
20
30
40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
5
10
15
20
25
30
0
100
200
300
400
500
600
700
800
900
Val
ue o
f Dea
ls (U
S$b
n)
Per
cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company
US Overview for Q1 2013 bull US MampA in Q1 2013 (US$ 1724bn) overtook Q1 2012 (US$125bn) by 38
bull Davis Polk amp Wardwell displaced Sullivan amp Cromwell and now leads the advisor table by deal value coming up from tenth
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
US Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull The US market looks optimistic amid the Dow Jones breaking records and mega-deals sparking hope for MampA resurgence With a total value of US$ 1724bn from 727 deals Q1 surpassed the deal value for Q1 2012 (US$ 125bn 922 deals) by 38
bull The quarter was 438 down by deal value compared to Q4 2012 (US$ 3069bn 1103 deals) but this was the strongest quarter of 2012
bull There were three transactions over US$ 5bn with a combined value of US$ 658bn In comparison Q1 2012 had three of such transactions with just under half of that deal value (US$ 242bn)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Comcastrsquos acquisition of NBCUniversal Media for US$ 167bn was responsible for an upsurge in technology media and telecommunications (TMT) activity in the US this quarter TMT transactions in the US totalled US$ 498bn in Q1 2013 compared to US$ 145bn last year
bull In Q1 2013 the dominant un-consolidated sector was consumer with a 222 market share by deal value (US$ 382bn 63 deals)
bull The Heinz deal resulted in this sector surpassing Q1 2012rsquos 68 market share (US$ 84bn 85 deals) and also the previous leading sector energy mining amp utilities which had a 261 market share in Q1 2012 (US$ 326bn 71 deals)
bull Outbound investments from the US into the rest of the world increased by deal value from US$ 27bn in the same period of 2012 to US$ 502bn in Q1 2013 following the Virgin Media deal
bull Asia is becoming more of a target for US companies Investment into Asia from the US in Q1 2013 increased to US$ 63bn from US$ 23bn in Q4 2012 up 174
bull Outbound deals were slightly steadier in the first quarter of 2013 from Q4 2012 compared to inbound deals Outbound deals were down 223 (Q4 2012 valued at US$ 645bn from 257 deals) whereas inbound cross-border transactions (US$ 154bn 124 deals) were down 81 This inbound activity was the lowest level seen in four years (Q4 2008 US$ 154bn)
Quarterly Cross-Border US MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Asia-Pacific (exclJapan) Overview for Q1 2013 bull Inbound deals are ahead of Q1 2012 with deals valued at US$ 131bn
bull King amp Wood Mallesons (US$ 108bn) was lead advisor in Asia-Pacific (excl Japan) and Kim amp Chang (US$ 61bn) entered into fifth position from 27th in Q1 2012
bull MampA in Asia-Pacific (excl Japan) got off to a slow start in 2013 with 453 deals worth US$ 645bn 23 below the deal value seen in the same period of 2012 (US$ 838bn 484 deals)
bull Q1 for Asia-Pacific (excl Japan) MampA was the slowest in four years since Q1 2009 (US$ 458bn)
bull Total value tumbled 27 from US$ 884bn (632 deals) in Q4 2012 giving little confidence for investors in the region going forward
bull The biggest transaction of the quarter was in the energy sector - SapuraKencana Petroleum acquired the tender rigs business of Seadrill The cross-border deal between Malaysia and Singapore was valued at US$ 29bn Malaysia also saw the second-biggest deal where Petroliam Nasional made an offer for the remaining shares in MISC for US$ 29bn
Asia-Pacific (exclJapan) Industry amp Geography analysis for Q1 2013
46
39
346
195
168
43
35 20
93 14
26
113
299
81
186
40
50
16
96
93
Business Services US$ 17bn (US$ 39bn)
Consumer US$ 73bn (US$ 33bn)
Energy Mining amp Utilities US$ 193bn (US$ 291bn)
Financial Services US$ 52bn (US$ 164bn)
Industrials amp Chemicals US$ 12bn (US$ 141bn)
Other US$ 26bn (US$ 36bn)
Pharma Medical amp Biotech US$ 32bn (US$ 29bn)
Real Estate US$ 1bn (US$ 17bn)
TMT US$ 62bn (US$ 78bn)
Transport US$ 6bn (US$ 12bn)
0
25
50
75
100
125
150
175
0
5
10
15
20
25
30
35
40
45
50
55
60
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Once again energy mining amp utilities played the largest part in deal making with US$ 193bn-worth of deals accounting for 298 of all Asia-Pacific (excl Japan) targeted MampA
bull China (US$ 109bn) and Singapore (US$ 34bn) were the main targets in the energy mining and utilities sector while Australia saw only eleven deals worth US$ 973m
bull There was a decline in deal value in all but three sectors compared to Q1 2012 with the notable exceptions of the transport and consumer sectors which saw increases of 389 and 119 respectively The transport sector featured the US$ 29bn offer of MISC The consumer sector featured a deal worth US$ 1bn where US TPG Capital acquired Australian Ingham Enterprises
bull Inbound deals into Asia-Pacific were up from US$ 95bn (121 deals) in Q1 2012 to US$ 131bn (122 deals) in Q1 2013 but were down compared to US$ 176bn (135 deals) in the last quarter of 2012
bull Outbound activity saw a decline in momentum a second consecutive quarterly decrease brought deal value down 13 to US$ 17bn (68 deals) from Q4 (US$ 196bn 88 deals) It was however slightly above a full Q1 2012 (US$ 165bn 83 deals)
bull China remained the most attractive target (inbound and domestic) in Asia-Pacific (excl Japan) MampA with 142 deals worth US$ 263bn although the value of Chinese MampA was down by 263 compared to the same period last year
bull Singapore was one of the major countries in the region which saw increased activity compared to Q1 2012 with deals worth US$ 45bn up 522 from US$ 723m due to Asia-Pacificrsquos highest valued deal
Japan Overview for Q1 2013 bull Japanrsquos currency war manifests itself in weaker outbound activity which after two successive quarterly increases fell to the lowest level since Q2 2010 2010
bull Nagashima Ohno amp Tsunematsu retains its leading position from Q1 2012 by deal value with deals worth US$ 152bn
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20
40
60
80
100
120
140
160
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20
25
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45
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ber o
f Dea
ls
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e of
Dea
ls (U
S$bn
)
Value (US$bn)
Number of Deals
Japan Q1 2013 Trend Comparison Quarterly MampA Trend Breakdown
bull Japanrsquos 107 deals in Q1 2013 MampA amounted to US$ 83bn plunging 515 from Q4 2012 (US$ 171bn 87 deals) and mirroring the sluggish MampA activity in the rest of Asia-Pacific
bull The dramatic drop in Q1 made it the lowest quarterly total since Q4 2010 (US$ 68bn 83 deals)
bull Several sizeable domestic consolidations most notably Hitachi Metalsrsquo merger with Hitachi Cables took place in Q1 2013 These underscore the tendency of Japanese corporations to merge in order to enhance their competitiveness vis-a-vis overseas competitors
bull Key sectors for Japanese MampA experienced diminished activity when compared with Q1 2012 The value of deals in the business services sector fell from US$ 12bn to US$ 08bn
bull Industrials amp chemicalsrsquo deal value fell from US$ 41bn to US$ 2bn but accounted for the highest market share at 244
bull The construction sector was one of the few silver linings in a torrid start to the year
bull Outbound acquisitions of foreign firms by their Japanese counterparts in Q1 2013 totalled US$ 44bn over 41 deals the lowest quarterly value since Q2 2010 (US$ 36bn 40 deals) The yenrsquos relentless fall from US$yen 758 in October 2012 to US$yen 946 appears to be the main catalyst in dampening the appetite for overseas assets
bull This is demonstrated by only one outbound acquisition accounting for over half of the outbound value Orix Corporationrsquos US$ 26bn acquisition of Dutch Robeco Groep reaffirms the desire of Japanese firms to reduce dependence on the domestic market
bull Acquisitions of Japanese targets by foreign bidders decreased for the second successive quarter to US$ 11bn the lowest level of inward investment since Q4 2010 (US$ 1bn) This underscores the poor fundamentals of the Japanese market which failed to entice overseas bidders in spite of a sharp decrease in the value of the yen
Japan Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Africa amp Middle East Overview for Q1 2013 bull Deal value not short of momentum as it increases on Q1 2012 and only just falls short of Q4 2012
0
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60
0
5
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25
30
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ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Africa amp Middle East Q1 2013 Trend Comparison Japan Quarterly Cross-Border MampA
bull Q1 2013 deals (US$ 185bn 60 deals) dropped by only 51 compared with the previous quarter (US$ 195bn 80 deals) and MampA activity in the region has surpassed Q1 2012 levels (US$ 92bn 87 deals) by 1025
bull Inbound investment in Q1 2013 (US$ 15bn 27 deals) is off to a better start than Q1 2012 (US$ 57bn 40 deals) by deal value up 164
bull On the other hand outbound deal value shrunk by 502 with deals valued at US$ 29bn (23 deals) in Q1 2013 compared to US$ 58 (39 deals) in Q1 2012
bull After the most productive year for emerging markets on Mergermarket record in 2012 Q1 took a downward turn with significantly lower deal value than in Q4 2012 at US$ 905bn (540 deals) down from Q4 (US$ 1928bn 705 deals)
bull Emerging market MampA deal value and deal count were both down 144 in Q1 compared to the same period in 2012 (US$ 1056 631 deals)
bull Emerging market MampA contributed 217 to global MampA (US$ 418bn) down from 234 in Q1 2012
bull The largest deal was the acquisition of Orascom Telecom Holding SAE by Altimo for a total consideration of US$ 64bn
Emerging Markets Industry amp Geography analysis for Q1 2013
06
97 19
89
321 193
141
41
23 70
13 27
31
100
04
301
128
108
85
31
171
Agriculture US$ 12bn (US$ 06bn)
Business Services US$ 24bn (US$ 10bn)
Construction US$ 28bn (US$ 2bn)
Consumer US$ 9bn (US$ 92bn)
Defence US$ 04bn (US$ 0bn)
Energy Mining amp Utilities US$ 272bn (US$ 333bn)
Financial Services US$ 116bn (US$ 20bn)
Industrials amp Chemicals US$ 98bn (US$ 146bn)
Other US$ 77bn (US$ 42bn)
Pharma Medical amp Biotech US$ 28bn (US$ 24bn)
TMT US$ 155bn (US$ 73bn)
0
50
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250
300
0
10
20
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40
50
60
70
Num
ber o
f Dea
ls
Valu
e of
Dea
ls (U
S$bn
)
Inbound Value (US$bn) Outbound Value (US$bn) Inbound Volume Outbound Volume
Q1 2013 Geography and Cross-Border Focus
bull Energy mining and utilities had the largest market share for deal value in Q1 2013 Deals worth US$ 272bn equated to a 30 market share
bull The second largest deal in the emerging markets was in the energy mining amp utilities sector - a 378 stake in Polyus Gold International was acquired by two private investors Gavril Yushvaev and Zelimkhan Mustsoev for a total consideration of US$ 36bn
bull Deal value of BRIC MampA (US$ 464bn 288 deals) was down 413 by deal value compared to the comparative period in 2012 (US$ 791bn 373 deals) and 65 down from Q4 2012 (US$ 1327bn 395 deals)
bull China was the most active of the BRIC countries contributing 29 (US$ 263bn 142 deals) of all emerging market activity Russia was the second most active country contributing 137 (US$ 124bn 31 deals)
bull Investor confidence in the emerging markets may be waning with Q1 2013 inbound total deal value (US$ 244bn 185 deals) down 569 compared to Q4 2012 (US$ 567bn 217 deals)
bull Private equity firms are avoiding the emerging market countries as Q1 saw a second quarterly decline for buyouts at US$ 71bn the lowest value since Q2 2012 (US$ 48bn 68 deals)
Emerging Markets Quarterly Cross-Border MampA
Q1 2013 vs (Q1 2012) Value and Market Share Percentage Comparison
Private Equity Buyouts bull Global buyouts (US$ 836bn) accounted for the highest share of global MampA activity in one quarter since Q2 2007 (282) at 20
bull Kirkland amp Ellis was the lead legal advisor by deal value and deal count (advising the buy-side only) with 18 deals worth US$ 309bn including the Heinz deal
0
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30
0
100
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900
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ue o
f Dea
ls (U
S$b
n)
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cent
age
of G
loba
l Mamp
A
Europe (Value) US (Value) Asia-Pacific ex Japan (Value) Rest of the World (Value) Buyouts ( of Total MampA)
bull Global buyouts totalled US$ 836bn in the first quarter of 2013 ndash the highest quarterly total since Q4 2010 (US$ 856bn)
bull In contrast deal numbers were down with Q1 2013 seeing 375 deals the lowest quarterly number since Q2 2009 (323 deals)
bull Compared to Q4 2012 European and Asia-Pacific total deal values decreased in Q1 2013 by 359 (US$ 267bn to US$ 17bn) and 194 (US$ 79bn to US$ 64bn) respectively as the US mega-deals took over
bull The US more than doubled its value up 108 (US$ 276bn to US$ 575bn) ndash this was driven by the top two mega-deal buyouts which contributed 826 of the total US buyout value with the remaining 173 coming from the other 132 deals
bull These US-based deals resulted in the country accounting for 688 of the global buyout activity ndash a level never before seen by any region on Mergermarket record
bull The consumer sector (bolstered by the Heinz mega-deal) accounted for US$ 401bn in Q1 2013 an increase of 429 compared to Q1 2012rsquos US$ 76bn
bull The technology sector (including the Dell mega-deal) was the next most active sector accounting for US$ 216bn-worth of buyout MampA in Q1 2013 an increase of 503 compared to Q1 2012rsquos US$ 36bn
bull The debt-to-EBITDA ratio remained on level with 2012 at 55x
bull A March report from the Bank of England said that the peak buyout leverage ratios (total debt to total funding) in the boom years will surface in 2014 - the current average ratio increased from 595 last year to 598 in 2013 so far the highest average since 2007
Global Debt Financing Ratios Trend (US$ 200m+buyouts excl buyins)
bull Private equity exits in Q1 2013 totalled US$ 323bn (289 deals) a decrease of 513 on Q4 2012 (US$ 663bn 378 deals) and 35 on Q1 2012 (US$ 497bn 334 deals)
bull The lowest EVEBITDA multiple on Mergermarket record at 84x was a significant decrease from last yearrsquos 104x showing that portfolio companies are being exited at lower valued rates However these figures are slightly higher for Europe (86x) and the US (85x)
Average Exit EBITDA Multiples
bull Secondary buyout exits (SBOs) valued at US$ 75bn and trade sales valued at US$ 248bn both decreased to levels not seen since Q3 2009 a dire year for exits (US$ 926bn)
bull The largest exit in Q1 2013 was the US$ 26bn sale of a 273 stake in Charter Communications by Apollo Global Management LLC Crestview Partners LP and Oaktree Capital Group LLC to Liberty Media Corporation
European Mid-Market MampA US Mid-Market MampA Asia-Pacific ex Jp Mid-Market MampA RoW MampA of Global MampA
Q1 2013 Deal Value Breakdown - based on value Q1 2013 Mid-Market (US$ 251m - US$ 2bn) Analysis
bull The average global deal size in Q1 2013 was US$ 3268m the fourth consecutive quarter to witness an average deal size of over US$ 300m However it was down 169 from Q4 2012 (US$ 3933m) despite the mega-deal flurry in February
bull Global deals between US$ 2-10bn totalled US$ 118bn US deals in this bracket valued at US$ 422bn accounted for 245 of US MampA this quarter the second lowest level since Q2 2009 (213)
bull Four mega-deals totalled US$ 861bn accounted for 206 of Q1 2013rsquos global MampA ndash below the 271 chalked up in Q4 2012 (US$ 1997bn) but above the US$ 707bn in the same period last year
bull Mega-deals in the US worth US$ 642bn contributed a sizeable 373 to US deal value in Q1 2013 just trailing Q4 2012 (414)
bull Mid-market transactions (231 deals) totalled US$ 1563bn down 37 from Q4 2012 (US$ 248bn 359 deals) and the lowest quarterly total in three years (Q1 2010 US$ 1493bn 220 deals)
bull Europe took a steep fall with 63 deals dropping 172 to US$ 425bn in value compared to Q1 2012 (US$ 513bn 83 deals) As a result the US mid-market moved ahead of Europe for the fifth consecutive quarter with US$ 504bn-worth of deals marking 323 of total global mid-market acquisitions
bull Energy mining amp utilities remained the most active sector with 288 of total market share (based on deal value) with US$ 451bn-worth of deals
bull US-based MetLifersquos acquisition of Chile-based Provida Internacional for US$ 2bn was the biggest mid-market deal of the quarter All of the top three deals were acquisitions by North American companies
Mergermarket is a mergers amp acquisitions (MampA) intelligence service
Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York London and Hong Kong
In any market the life blood of advisors is deal flow Mergermarket is unique in the provision of origination intelligence to the investment banking legal private equity acquisition finance public relations (PR) and corporate markets
With an unrivalled network of analysts covering MampA in the Americas Europe Middle-East Africa and Asia-Pacific Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content on its mergermarketcom platform and by real-time email alerts to subscribers
This wealth of intelligence together with a series of deal databases individual and house league tables profiles and editorial have proven time and time again that this product can and does gener-ate real revenues for clients This is apparent when you see that mergermarket is used by over 1500 of the worldrsquos foremost advisory firms to assist in their origination process
t +44(0)20 7059 0000 f +44 (0)20 7059 6101salesmergermarktetcom
11 West 19th Street2nd FloorNew York NY 10011 USA
t +1 212-686-5606f +1 212-686-2664salesusmergermarketcom
Suite 2401-3Grand Millennium Plaza181 Queenrsquos Road CentralHong Kong
t +852 2158 9700f +852 2158 9701salesasiamergermarketcom
All data is based on transactions over US$5m Q1 for this report is based on 1st January 2013 and 31st March 2013 unless stated otherwise Deals with undisclosed deal values are included where the targetrsquos turnover exceeds US$10m Deals where the stake acquired is less than 30 will only be included if their value is greater than US$100m Activities excluded from the league tables include property transactions and restructurings where the ultimate shareholdersrsquo inter-ests are not changed
The MampA activity table and league tables are based on the dominant geography of any of the target bidder or seller The overall trend graph and pie charts are based on the dominant geog-raphy of the target only The cross-border trend graph and pie charts are based on the dominant geography of the target and the bidder All sector breakdowns are based on the dominant sector of the target only
The trend graphs are based on transactions announced in the given time periods
For this report ldquoinboundrdquo refers to deals where the dominant geography of the target is X and the dominant geography of the bidder is outside X ldquooutboundrdquo refers to deals where the dominant geography of the target is outside X and the dominant geography of the bidder is X
Mega-deal is the term used for deals above US$ 10bn
Industry consolidations TMT refers to consolidated sectors of Technology Media amp Tellecommunications OTHER refers to consolidated sectors of Lesire Defence Agriculture amp Construction for Global Europe US amp Asia-Pacific sections OTHER refers to consolidated sectors of Leisure Real Estate and Transport in the Emerging Markets section
Our global team of 400 dedicated MampA journalists spread in over 65 locations worldwide gathers proprietary information about corporate strategy through its network of industry contacts and executives This is MampA intelligence you wonrsquot find anywhere The insight we provide often doesnrsquot become public knowledge until 6-24 months after our journalists first start reporting giving you a large window of opportunity to take early action
Our multilingual team of journalists monitors more than 3000 global media sources daily analyzing and translating the most relevant information into summarized articles that subscribers receive in their alerts together with our proprietary intelligence
Mergermarketrsquos comprehensive Deals Database offers you the opportunity to search a global library of historical MampA transactions with fully-sourced financials and exit multiples You can analyze volumes and values of MampA activity in specific regions or sectors to discover deal patterns and identify trends ahead of competitors
Our customizable Private Equity Search facility provides you with extensive analyses of more than 1000 of the worldrsquos biggest private equity firms Analyse specific PE firms in terms of current portfolio historical exits potential investments firm profile historical advisor and investment relationships as well as rival bidders to monitor competitors and stay on top of your market
Because we are always up-to-speed on which advisers are working on which deals our detailed lsquoWhorsquos who in MampArsquo league tables have become an industry standard among investment professionals Tailor-build individual or house league tables to analyze firm performance and enhance your marketing strategy competitor analysis or pitch book efforts
PREDICTIVE INTELLIGENCE
ANALYSIS
DEALS DATABASE
PRIVATE EQUITY PORTFOLIOLEAGUE TABLES
Mergermarket is a business development tool designed specifically for the MampA sector providing proprietary news intelligence and analysis on corporate strategy before that strategy becomes public knowledge
Over 2000 of the worldrsquos foremost advisory firms investment banks law firms private equity firms and corporates use mergermarket to drive their origination process and capture lucrative business opportunities Click the buttons at the bottom of the page to find out about the real benefits mergermarket can bring to your company