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Given the time and expense involved in negotiating and structuring a proposed transaction, acquirers are continuously looking forcreative ways to deter competing bids before the consummation of a transaction. Protective devices used by acquirers are heavilynegotiated and may include termination fees, “lockup” agreements and “no-shop” provisions. Conversely, in seeking to maximizestockholder value, boards of directors of target companies try to obligate the acquirer to consummate the agreed-upon transactionwhile maintaining the flexibility to seek and accept a superior offer for the target.
Termination, or breakup, fees are probably the most common type of lockup device and are typically payable by the target to theacquirer to compensate the acquirer if the transaction fails to close because, among other things:
The target board elects to terminate the acquisition agreement in order to accept a competing offer;
The target board changes its recommendation and the acquirer elects to terminate the merger agreement rather than proceedwith the stockholder vote; or
The original bid fails for some other specified reason, such as being voted down by the stockholders, after a competing proposalhas been announced and is agreed to or closed within a specified period (typically six to 12 months).
Properly crafted, a termination fee provision can facilitate the sale of a company by ensuring that the bidder will receive a material“consolation prize” to defray its investment—in time, out-of-pocket expense and opportunity cost—if the transaction is notconsummated. On the other hand, termination fees protect the acquirer by effectively increasing the price that a third-party bidderwill need to pay in order to consummate a competing transaction.
Enterprise and Transaction Values2012 TransactionTermination FeeStudy Summary
5
Of the 158 transactions reviewed in 2012, the mean transaction value equaled approximately $1.3 billion, a 43.4% decrease fromthe 2011 mean transaction value of approximately $2.2 billion. The mean enterprise value equaled approximately $1.7 billion, a40.8% decrease from the 2011 mean enterprise value of approximately $2.9 billion.
The median transaction value in 2012 equaled $409.8 million, a 28.3% decrease from the 2011 median transaction value of$571.4 million. The median enterprise value equaled $662.9 million, which was 1.6% lower than the 2011 median enterprise valueof $673.5 million.
The distribution of termination fees as a percentage of transaction value generally resembles a classic bell curve, with most resultsclustered around the observed mean (3.5%) and median (3.5%).
Distribution of Termination Fee Percentages
Source: Thomson Reuters.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
< 1.0% 1.0%-2.0%
2.0%-2.5%
2.5%-3.0%
3.0%-3.5%
3.5%-4.0%
4.0%-5.0%
> 5.0%
P e r c e n t a g e o f T o t a l T r a n s a c
t i o n s
Termination Fee as a Percentage of Transaction Value
Termination fees as a percentage of enterprise value were analyzed for deals announced from 2008 through 2012. Due to theinclusion of debt, the enterprise value (the denominator in the fee percentage calculation) is typically greater than transaction value.Accordingly, the observed median termination fees based on enterprise value of 3.2% in 2009, 3.1% in 2011 and 3.1% in 2012,are slightly lower than that observed (3.4% in 2009, 3.2% in 2011 and 3.5% in 2012) using transaction values. In 2008 and 2010,the median termination fees as a percentage of enterprise value (3.3%) were equivalent to the observed median using transactionvalues (3.3%).
Source: Thomson Reuters.(1) Excludes banks and other financial institutions due to lack of reliable data.
Transaction Termination Fees - Enterprise Value (cont.)2012 TransactionTermination FeeStudy Summary
9
The distribution of termination fees as a percentage of enterprise value appears to be slightly weighted toward fees (as a percentageof enterprise value) at and above the mean (3.4%) and median (3.1%).
Distribution of Termination Fee Percentages
Source: Thomson Reuters.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
< 1.0% 1.0%-2.0%
2.0%-2.5%
2.5%-3.0%
3.0%-3.5%
3.5%-4.0%
4.0%-5.0%
> 5.0%
P
e r c e n t a g e o f T o t a l T r a n s a
c t i o n s
Termination Fee as a Percentage of Enterprise Value
The number of transactions announced increased in the second half of 2012. The median size of transactions throughout 2012remained below the median transaction and enterprise values observed in 2007 ($790.6 million and $1.1 billion, respectively), butcontinued to exceed the values observed during the recession.
In dollar terms, the median termination fee increased from $9.9 million in the first half of 2012 to $20.0 million in the second halfof 2012, reflecting an increase in the size of observed deals (e.g., median transaction value increased from $266.2 million to $627.5million). The median termination fee decreased slightly as a percentage of both the transaction value and enterprise value in thesecond half of 2012.
2012 Termination Fee Summary($ in millions)
First Half of 2012 Second Half of 2012
No. of Transactions 73 85
Median Transaction Value $266.2 $627.5
Median Enterprise Value (1) $319.8 $885.1
Median Termination Fee $9.9 $20.0
Median Fee as a Percentage of Transaction Value 3.5% 3.3%
Median Fee as a Percentage of Enterprise Value (1) 3.3% 2.9%
Source: Thomson Reuters.(1) Excludes banks and other financial institutions due to lack of reliable data.
In the 2012 Study, 49 deals had transaction values greater than $1 billion, compared with 64 in 2011. These billion-dollartransactions accounted for 31.0% of the sample in 2012, compared to 38.6% in 2011, 29.3% in 2010, 26.3% in 2009 and 28.8%in 2008. For these deals, the median termination fee as a percentage of transaction value was 3.2% in 2012, a slight increase from2011.
In dollar terms, the highest termination fee among the transactions in 2012 was observed in SoftBank Corp.’s $28.8 billion pendingacquisition of Sprint Nextel Corporation (termination fee of $600 million, or 2.1% of transaction value).
Termination Fees by Transaction Size - Transaction Value($ in millions)
$50 million to $250 million 60 45 $105.4 $131.4 $4.0 $4.4 3.7% 3.5%
$250 million to $500 million 22 32 $328.0 $345.9 $11.0 $10.2 3.5% 3.2%
$500 million to $1 billion 27 25 $705.8 $656.9 $24.0 $20.0 3.4% 3.3%
More than $1 billion 49 64 $2,581.2 $3,410.9 $75.0 $113.8 3.2% 3.1%All 158 166 $409.8 $571.4 $14.8 $19.3 3.5% 3.2%
Sources: Thomson Reuters.(1) Based on median of all calculated termination fees as a percentage of deal value, not calculation of observed median of deal value and termination fee.
Termination Fees by Transaction Size - TransactionValue
Termination Fees by Transaction Size - Distributionof Termination Fees
2012 TransactionTermination FeeStudy Summary
12
In dollar terms, termination fees tend to be heavily weighted toward the lower end of the distribution curve. This was lesspronounced in recent years because the median transaction value continued to increase from $263 million in 2008 to $409.8million in 2012.
Approximately 41.1% of the deals sampled in the 2012 Study had termination fees of less than $10 million, compared with 33.1%in 2011, 41.3% in 2010, 48.0% in 2009 and 51.4% in 2008.
In the 2012 Study, 49 deals had enterprise values greater than $1 billion compared with 66 deals in 2011. These billion-dollartransactions accounted for approximately 38.0% of the sample in 2012, compared to 43.1% in 2011, 34.6% in 2010, 30.5% in2009 and 34.1% in 2008. Within this segment of the sample, the median termination fee was 2.8% of enterprise value, an increasefrom 2.7% in 2011.
Termination fees as a percentage of enterprise value are inversely correlated to deal size.
Less than $250 million 39 34 $120.9 $137.5 $4.0 $4.0 3.6% 3.7%
$250 million to $500 million 19 30 $319.3 $336.6 $11.0 $10.2 3.4% 3.2%
$500 million to $1 billion 22 23 $756.1 $642.4 $19.4 $19.6 2.7% 3.0%
More than $1 billion 49 66 $2,395.2 $3,541.7 $64.0 $109.3 2.8% 2.7%
All 129 153 $662.9 $673.5 $16.6 $20.0 3.1% 3.1%
Source: Thomson Reuters.(1) Excludes banks and financial institutions due to lack of reliable data.(2) Based on median of all calculated termination fees as a percentage of deal value, not calculation of observed median of deal value and termination fee.
Termination Fees by Transaction Size - EnterpriseValue
Termination Fees by Consideration Form2012 TransactionTermination FeeStudy Summary
14
While termination fees do correlate to enterprise value and transaction size, they do not correlate strongly to the form ofconsideration.
The analysis indicates that during 2012, a slightly smaller percentage of the transactions were structured using cash considerationcompared to 2011, with a corresponding increase in cash and stock transactions.
Termination Fee by Consideration Form ($ in millions)
No. of Transactions Median
Median Termination FeeMedian Termination Fee as a Percentage of
Transaction Value Enterprise Value(1) Transaction Value(2) Enterprise Value(1) (2)
Source: Thomson Reuters.(1) Excludes banks and financial institutions due to lack of reliable data.(2) Based on median of all calculated termination fees as a percentage of deal value, not calculation of observed median of deal value and termination fee.
Termination Fees by Acquisition Type2012 TransactionTermination FeeStudy Summary
15
Transaction fees in 2012 were only somewhat affected by the nature of the transactions.
We compared public-to-private transactions (including management buyouts, leveraged buyouts and private equity investments)to all other types of transactions.
44 transactions involved public targets going private, with median termination fees of 3.4% and 3.0% of transaction andenterprise values, respectively. The remaining 114, non-going-private transactions yielded median termination fees of 3.5%and 3.1% of transaction and enterprise values, respectively.
We also compared termination fees paid in transactions involving strategic buyers to those paid in transactions involvingfinancial buyers. A strategic buyer is defined, for the purposes of our study, as a buyer in the same industry, or a buyer seeking tovertically or horizontally integrate (including private equity platform add-ons); a financial buyer is defined as a buyer seeking to
profit by making an acquisition, but not necessarily by expanding its own business operations. For the 121 transactions involving acquirers we considered strategic, the median termination fees equaled 3.5% and 3.1% of
transaction and enterprise values, respectively. The remaining 37 transactions involved financial acquirers and had mediantermination fees of 3.4% and 2.8% of transaction and enterprise values, respectively.
Transactions with so-called “go-shop” provisions generally feature bifurcated termination fees. A lower termination fee is payableduring the go-shop period (the period during which the target is allowed to actively solicit competing offers). In the 2012 Study, 21transactions (13.3% of sample) included bifurcated termination fees.
The post-go-shop period generally has higher termination fees as a percentage of transaction and enterprise value.
Sources: Thomson Reuters and public filings.
Bifurcated Termination Fees for Deals Announced in 2011Bifurcated Termination Fees for Deals Announced in 2012
1.8% 1.8%
3.2%3.4%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
During Go-Shop Period After Go-Shop Period
Median Termination Fee as a Percentageof Enterprise Value
Median Termination Fee as a Percentageof Transaction Value
1.6%1.8%
3.4% 3.4%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
During Go-Shop Period After Go-Shop Period
Median Termination Fee as a Percentageof Enterprise Value
Median Termination Fee as a Percentageof Transaction Value
Transaction Termination Fees in Court2012 TransactionTermination FeeStudy Summary
17
The Delaware courts have found termination fees to be an acceptable and customary component of M&A transactions. However, atarget company’s board of directors can face criticism if the agreed-upon termination fee (alone or in conjunction with otherprotective provisions) is sufficiently onerous to dissuade or prevent another potential bidder from making a superior offer for thetarget.
In assessing the reasonableness of termination fees, the Delaware Chancery Court (the Court) has refused to establish a bright-linerule as to the maximum permissible size of a termination fee. Instead, the Court has insisted that each case be decided on theparticular facts and circumstances surrounding the transaction. In this regard, Vice Chancellor Strine in In re Toys “R” Us, Inc.S’holder Litig., 877 A.2d 975 (Del. Ch. 2005) (Toys “R” Us) observed that the reasonableness of a particular termination feerequires a “nuanced fact intensive inquiry.” That inquiry requires the Court to “consider a number of factors, including withoutlimitation: the overall size of the termination fee, as well as its percentage value; the benefits to shareholders, including a premium(if any) that directors seek to protect; the absolute size of the transaction, as well as the relative size of the partners to the merger;the degree to which a counterparty found such protections to be crucial to the deal, bearing in mind differences in bargainingpower; and the preclusive or coercive power of all deal protections included in a transaction, taken as a whole.” See LouisianaMunicipal Police Employees’ Retirement System v. Crawford , 918 A.2d 1172 (Del. Ch. 2007).
The reasonableness of termination fees was recently assessed in three cases decided by the Court: In re Novell, Inc. S’holder Litig.,Consol. C.A. No 6032-VCN, 2012 WL 6761017 (Del. Ch. Jan. 3, 2013) (Novell ) , In re Synthes, Inc. S’holder Litig., 50 A.3d 1022,1030 (Del. Ch. 2012) (Synthes) and In re Plains Exploration & Production Company S’holder Litig., Consol. C.A. No. 8090-VCN(Del. Ch. May 9, 2013) (Plains Exploration).
Transaction Termination Fees in Court (cont.)2012 TransactionTermination FeeStudy Summary
18
In Novell , the plaintiffs argued that the termination fee constituted 8% of the actual purchase price and was therefore actionable.The Court rejected the argument indicating that the proper measure of the termination fee (due to substantial cash proceeds from aconcurrent patent sale) was based on its percentage (2.7%) of equity value. In reaching its conclusion the Court cited to In reCogent , 7 A.3d 487, 502 (Del. Ch. 2010), which rejected an attempt to omit cash from the termination fee calculation and In reDollar Thrifty, 14 A.3d 573, 619 (Del. Ch. 2010) which rejected the plaintiff’s attempt to omit a special dividend, stock options andunits from the calculation of the termination fee.
In Synthes, the Court approved a termination fee which “represented approximately 3.05% of the equity value of the [m]erger atthe time of signing, and an even lower percentage of enterprise value (approximately 2.9%).” Citing to In re Lear Corp. S’holderLitig., 926 A.2d 94, 120 (Del. Ch. 2007), the Court observed the enterprise value is “typically the more relevant measure forassessing the preclusive effect of a termination fee on a materially better topping bid.” In Lear, the Court had explained that theenterprise value metric is arguably more instructive than the equity value metric for assessing the preclusive effect of a terminationfee because “most acquisitions require the buyer to pay for the company’s equity and refinance all of its debt.”
In Plains Exploration, the Court approved a 3% termination as “not unreasonable.” The Court noted that “termination fees inexcess of three percent have been deemed reasonable by this Court before.”
The signpost for the outer limit of acceptability remains Phelps Dodge Corp. v. Cyprus Amax Minerals Co., C.A. No. 17398 (Del.Ch. Sept. 27, 1999), in which the Court found that a 6.3% termination fee “stretches the definition of reasonableness beyond itsbreaking point.” Another judicial warning is Vice Chancellor Strine’s admonition in Toys “R” Us that, in mega-deals, the absolute
size of a termination fee can be offensive irrespective of being within the range of historical percentages due to the “preclusivedifferences between termination fees starting with a ‘b’ rather than an ‘m’.”
Prior to 2005, private equity transactions were typically subject to financing conditions that would allow the buyer to terminate thedeal if debt financing was unavailable. As competition among private equity firms increased and financing became readily available,
targets began to require private equity buyers to absorb more of the financing risk and to provide recourse, in the form of “reversebreakup fees,” which are fees payable by the acquirer to the target if funding falls through or the transaction is otherwiseterminated. These fees are backstopped by a limited guarantee by the private equity fund. The rationale behind such fees is tocompensate the target for the risk that “committed” financing does not fund and the transaction does not close.
With the addition of a fund commitment or guarantee, financial sponsors sought to limit the exposure of their investors by seekinga cap on the maximum extent of the fund’s exposure for a failed deal. Sponsors were generally successful in this effort and thereverse termination fee quickly became a ceiling on a fund’s liability for intentionally breaching the agreement.
In the aftermath of the numerous transactions that were abandoned in late 2007 and 2008, sellers became more concerned aboutthe optionality created by the reverse termination fee structure. As a result, among other things, reverse breakup fees increased inmagnitude, with the median percentage of transaction value increasing to 4.7% in 2009 from 3.5% in 2008 and the medianpercentage of enterprise value increasing to 4.1% in 2009 from 3.2% in 2008. Reverse breakup fees remained at these elevatedlevels in 2010 (4.5% of transaction value and enterprise value), 2011 (5.1% of transaction value and 4.5% of enterprise value) and2012 (5.0% of transaction value and 4.7% of enterprise value).
In recognition, however, of the turbulent financing markets, two-tier fees were not uncommon, with a lower fee payable if theclosing did not occur due to a financing failure rather than a willful failure. For example during 2011, in connection with its
acquisition of Emdeon Inc., Blackstone Capital Partners VI agreed to a reverse termination fee of 3.6% of transaction value in theevent it was unable to raise financing; but a 7.0% reverse termination fee for a "willful breach" of the merger agreement. Similarly,in 2011, Eagle Parent Inc. agreed to pay 2.5% of transaction value in the event it was unable to raise financing for its acquisition ofEpicor Software Corp., but a fee of 7.5% for a "willful breach" of the merger agreement.
Beginning in 2008, a number of strategic cash deals began to duplicate the private equity reverse break fee structure. Historically,sellers had had less deal protection concerns with strategic buyers than with private equity buyers. However, with the state of the
financing markets and the fact that banks had begun to introduce greater conditionality into their commitments, that attitudechanged. In April 2008, the $23 billion Mars Inc./Wm. Wrigley Jr. Co. deal became the first large strategic deal to be structuredwith a private equity-style reverse termination fee.
During 2011, there was increased use of reverse termination fees as a means of mitigating antitrust risk. For example, Google Inc.’smerger agreement with Motorola Mobility Holdings, Inc. (Motorola Mobility) required Google to pay a reverse termination fee of$2.5 billion (20.7% of transaction value and 27.6% of enterprise value) if antitrust clearance is not obtained and the transaction isterminated as a result. Similarly, AT&T Inc. (AT&T) agreed to pay a $3.0 billion reverse termination fee (7.7% of transaction valueand enterprise value) to Deutsche Telekom AG in connection with AT&T’s proposed acquisition of T-Mobile USA, Inc., which wasultimately blocked for antitrust reasons. This represents the largest triggered reverse termination fee on record.
Commentators have noted that forward and reverse termination fees serve different functions and should be analyzed differently.Target termination fees have the potential to foreclose a competitive bidding process, against the interests of shareholders of thetarget, by making acquisitions prohibitively expensive for bidders late to approach the target. Accordingly, courts have expressedconcern that termination fees greater than approximately 3% of the purchase price may interfere with the Revlon duties of asellers’ board to secure the highest price under the circumstances. Reverse termination fees, by contrast, raise no such obviousconcerns because they do not increase the cost of a bidding contest for later bidders.
Of the 158 transactions reviewed in the 2012 Study, 69 (approximately 44%) had reverse breakup fees, with median fees of 5.0%and 4.7% of transaction and enterprise values, respectively. In 2011, 73 (44%) of the 166 transactions reviewed had reciprocal
termination fees, with median fees of 5.1% and 4.5% of transaction and enterprise values, respectively.
Reverse Breakup Fee Summary($ in millions)
2012 2011
No. of Transactions 69 73
Median Transaction Value $405.3 $991.2
Median Target Fee as a Percentage of Transaction Value 3.3% 3.1%
Median Acquirer Fee as a Percentage of Transaction Value 5.0% 5.1%
Median Enterprise Value $558.7 $1,191.2
Median Target Fee as a Percentage of Enterprise Value 2.8% 2.8%
Median Acquirer Fee as a Percentage of Enterprise Value 4.7% 4.5%
Percentage with Identical Termination Fee 27.6% 32.9%
Percentage with Target Fee Higher than Acquirer Fee 13.0% 6.8%
Percentage with Acquirer Fee Higher than Target Fee 59.4% 60.3%
In 2011 and 2012, reverse breakup fees as a percentage of transaction and enterprise values were significantly higher intransactions involving financial buyers.
Reverse Breakup Fee Summary($ in millions)
2012 Transactions 2011 Transactions
Strategic
Buyers
Financial
Buyers
Strategic
Buyers
Financial
Buyers
No. of Transactions 38 31 42 31
Median Transaction Value $524.9 $333.2 $2,763.1 $534.2
Median Target Fee as a Percentage of Transaction Value 3.3% 3.3% 3.1% 3.1%
Median Acquirer Fee as a Percentage of Transaction Value 3.8% 6.1% 3.6% 6.2%
Median Enterprise Value $640.7 $361.2 $3,963.9 $564.6
Median Target Fee as a Percentage of Enterprise Value 2.8% 2.7% 2.6% 3.0%
Median Acquirer Fee as a Percentage of Enterprise Value 3.9% 4.9% 3.0% 6.0%
Analysis of Withdrawn Transactions2012 TransactionTermination FeeStudy Summary
23
Of the 158 transactions reviewed in the 2012 Study, only three (1.9%) were terminated. One of these proposals was withdrawnbecause the target company received a superior proposal during the go-shop period, one was terminated due to antitrust issues and
one was terminated because of a material adverse effect on the target’s financial condition prior to the close of the transaction.
Termination fees were paid for two of the three withdrawn transactions.
03/13/2012 Complet ed Grea t Wolf Resor ts Inc. Own,op indoor waterpark
resort
K-9 Acquisition Inc. Investment company Tender Offer Cash $258.3 $724.1 $7.0 2.71% 0.97%
03/19/2012 Completed Adams Golf Inc. Manufacture,whl golf clubs Taylor Made Golf Co Inc. Wholesale golf equipments Going Private Cash $90.7 $72.5 $3.6 4.00% 5.00%
03/19/2012 Completed AboveNet Inc. Pvd bandwidth connectivity
0 5/0 1/2 01 2 Co mp leted Eas yLin k Ser vices I ntl
Corp.
Pvd electronic messaging svcs Open Text Corp. Dvlp entrp management
software
Not Applicable Cash $250.6 $307.7 $9.4 3.73% 3.04%
05/01/2012 Completed Collective Brands Inc. Own,operate shoe stores Collective Brands Inc. SPV Special purpose acq vehicle Going Private Cash $1,321.8 $1,737.4 $44.0 3.33% 2.53%
0 5/0 2/2 01 2 Co mp leted Stan dar d Micro sys tems
Corp.
Manufacture integrated circuit Microchip Technology Inc. Mnfr,wholesale
semiconductors
Not Applicable Cash $870.6 $723.5 $32.9 3.77% 4.54%
0 5/0 2/2 01 2 Co mp leted Ch ar ming Sh op pes I nc. Own ,o p wo men 's a pp ar el
stores
Ascena Retail Group Inc. Own,op women's apparel
store
Tender Offer Cash $880.4 $805.1 $30.0 3.41% 3.73%
0 5/0 3/2 01 2 Co mp leted Ken sey Nash Co rp . Mnfr res or bable med imp lan ts Ko nin klijk e DSM NV Mn fr ,wh l ch emical
preparations
Tender Offer Cash $359.9 $349.4 $12.6 3.50% 3.61%
05/07/2012 Completed GTSI Corp. Pvd info technology services UNICOM Systems Inc. Pvd information tech svcs Going Private Cash $75.2 $12.0 $3.0 3.99% 25.03%
05/08/2012 Pending First CA Finl Grp Inc. Bank holding company PacWest BanCorp. Bank holding company Stock Swap Stock $234.1 NA $10.0 4.27% NA
05/09/2012 Part Comp Cost Plus Inc. Ret home furnishings Bed Bath & Beyond Inc. Own,op home furnishing
stores
Tender Offer Cash $543.8 $680.0 $16.3 2.99% 2.39%
05/14/2012 Completed Golfsmith Intl Hldg Inc. Retail golf,tennis equipment Golf Town Inc.ome Fund Retail golf merchandise Going Private Cash $104.9 $150.5 $3.8 3.62% 2.52%
0 5/1 4/2 01 2 Co mp leted Citizen s So uth Ban kin g
Corp.,NC
Bank holding company Park Sterling Bank Bank holding company Stock Swap Cash / Stock $80.5 NA $3.0 3.72% NA
05/22/2012 Completed Benihana Inc. Own and operate restaurants Angelo Gordon & Co Private equity firm Going Private Cash $292.2 $269.9 $11.1 3.80% 4.12%
05/22/2012 Completed Ariba Inc. Pvd ecommerce services SAP America Inc. Dvlp business mgmt software Not Applicable Cash $4,520.5 $4,294.8 $150.0 3.32% 3.49%
Bank holding company Stock Swap Stock $55.4 NA $5.0 9.03% NA
0 5/3 1/2 01 2 Co mp leted Beaco n F ed Ban Co rp .
Inc.,NY
Bank holding company Berkshire Hills BanCorp.
Inc.
Bank holding company Stock Swap Cash / Stock $135.1 NA $5.3 3.91% NA
0 5/3 1/2 01 2 Co mp leted New En glan d Ban cs har es
Inc.,CT
Bank holding company United Financial BanCorp.
Inc.
Bank holding company Stock Swap Stock $84.6 NA $3.2 3.75% NA
06/04/2012 Completed Credo Petroleum Corp. Oil,gas exploration,prodn co Forestar Group Inc. Real estate development firm Not Applicable Cash $146.7 $143.6 $5.2 3.54% 3.62%
0 6/0 4/2 01 2 Co mp leted MEDTOX Scien tific In c. Mn fr,wh l lab test k its Lab or ato ry C or p. o f
06/19/2012 Completed Network Engines Inc. Develop server-based software Unicom Sub Two Inc. Investment company Going Private Cash $63.1 $55.3 $2.5 3.96% 4.52%
06/20/2012 Completed Sun Healthcare Group Inc. Pvd long-term healthcare svcs Genesis HealthCare LLC Pvd nursing care services Not Applicable Cash $217.0 $247.4 $6.9 3.18% 2.79%
06/25/2012 Completed J Alexander's Corp. Own,operate restaurants American Blue Ribbon
Bank holding company Stock Swap Cash / Stock $73.5 NA $3.2 4.35% NA
07/22/2012 Completed GenOn Energy Inc. Provide electricity services NRG Energy Inc. Electric,gas utility company Stock Swap Stock $1,693.6 $4,163.6 $60.0 3.54% 1.44%
07/23/2012 Completed GeoEye Inc. Provide satellite imagery svcs DigitalGlobe Inc. Pvd satellite based imaging Stock Swap Cash / Stock $466.6 $779.7 $20.0 4.29% 2.57%
07/23/2012 Completed Peet's Coffee & Tea Inc. Produce,whl coffee Investor Group Investor group Going Private Cash $1,016.8 $978.5 $30.0 2.95% 3.07%
07/23/2012 Completed RailAmerica Inc. Pvd short line,railroad svcs Genesee & Wyoming Inc. Pvd short line,railroad svcs Not Applicable Cash $1,386.3 $1,976.1 $49.0 3.53% 2.48%
07/27/2012 Completed AuthenTec Inc. Manufacture semiconductors Apple Inc. Manufacture personal
computers
Not Applicable Cash $392.9 $370.8 $11.0 2.79% 2.95%
0 7/3 0/2 01 2 Co mp leted Th e Sh aw Gr ou p In c. Mn fr pip e fittin gs ,s ystems Ch icago Br id ge & Ir on Co
0 8/0 7/2 01 2 Co mp leted US Ho me Sys tems In c. Pvd home p rod in stallatio n s vc Ho me Dep ot In c. Retail h ome imp ro vemen t
prod
Not Applicable Cash $97.4 $82.9 $2.9 2.94% 3.46%
08/08/2012 Completed Savannah
BanCorp.,Savannah,GA
Commercial bank holding co SCBT Finl
Corp.,Columbia,SC
Bank holding company Stock Swap Stock $67.1 NA $2.6 3.88% NA
08/09/2012 Completed Robbins & Myers Inc. Mnfr,whl engineered equip,sys National Oilwell Varco Inc. Mnfr,whl gas drilling equip Not Applicable Cash $2,581.2 $2,434.7 $75.0 2.91% 3.08%
08/13/2012 Pending Pervasive Software Inc. Dvlp data mgmt software Actian Corp. Dvlp bus automation software Going Private Cash $155.4 $112.6 $4.9 3.13% 4.31%
0 8/1 3/2 01 2 P art Co mp F SI In ter natio nal In c. Wh l s ur face co nd itio nin g
equip
Tokyo Electron Ltd. Mnfr,whl semiconductor
equip
Tender Offer Cash $249.8 $200.7 $8.8 3.54% 4.40%
08/15/2012 Pending Physicians Formula
Holdings
Mnfr,whl cosmetic products Swander Pace Capital LLC Private equity firm Going Private Cash $58.3 $60.5 $1.3 2.20% 2.12%
08/17/2012 Completed Western Liberty
BanCorp.,NV
Bank hold ing company Wes tern Alliance
BanCorp.,NV
Bank holding company Stock Swap Cash / Stock $55.0 NA $2.0 3.64% NA
08/20/2012 Pending Coventry Health Care Inc. Pvd managed health care svcs Aetna Inc. Provide HMO services Not Applicable Cash / Stock $5,695.4 $5,764.4 $167.5 2.94% 2.91%
08/22/2012 Completed Sunrise Senior Living Inc. Own,op senior care facilities Health Care REIT Inc. Real estate investment trust Not Applicable Cash $897.5 $1,312.0 $40.0 4.46% 3.05%
08/22/2012 Pending Private Bank of California Community bank Beach Business Bank,CA Commercial bank Stock Swap Cash $50.0 NA $2.0 4.00% NA
Bank holding company FirstMerit Corp. Bank holding compnay Stock Swap Stock $952.3 NA $37.5 3.94% NA
09/17/2012 Completed Complete Genomics Inc. Biotechnology company BGI Pvd research,development svcs Going Private Cash $108.0 $86.4 $4.0 3.70% 4.63%
09/17/2012 Completed IRIS International Inc. Mnfr medical imaging systems Danaher Corp. Mnfr tools,control equipment Tender Offer Cash / Stock $371.0 $339.7 $15.0 4.04% 4.42%
09/25/2012 Completed Union Drilling Inc. Pvd contract land drilling svc Sidewinder Drilling Inc. Pvd land drilling services Going Private Cash $139.4 $243.9 $5.0 3.59% 2.05%
09/25/2012 Completed ECB B anCorp.
Inc.,Engelhard,NC
Bank holding company Crescent Financial
Bancshares
Bank holding company Stock Swap Stock $53.4 NA $2.0 3.74% NA
09/26/2012 Completed Wes t Coast BanCorp. Commercia l bank hold ing co Columbia Banking Sys tem
Inc.
Bank holding company Not Applicable Cash / Stock $506.0 NA $20.0 3.95% NA
0 9/2 7/2 01 2 C omp leted P hys ician s F or mu la
Bank holding company NBT BanCorp. Inc. Commercial bank holding co Stock Swap Stock $106.0 NA $9.3 8.81% NA
10/15/2012 Completed Shona Energy Co Inc. Oil,gas expl,prodn company Canacol Energy Ltd. Oil,gas expl,prodn company Stock Swap Cash / Stock $121.0 $129.6 $4.0 3.30% 3.09%
1 1/0 5/2 01 2 C omp leted Metr o Health Netwo rk s
Inc.
Pvd med group practice svcs Humana Inc. Provide health care services Not Applicable Cash $533.7 $776.3 $16.0 3.00% 2.06%
11/05/2012 Completed KBW Inc. Investment bank Stifel Financial Corp. Pvd sec brokerage,invest svcs Not Applicable Cash / Stock $606.3 NA $17.3 2.85% NA
11/08/2012 Completed DUSA Pharmaceut icals Inc. B iopharmaceutical company Sun Pharmaceutical Inds
11/12/2012 Completed Jefferies Group Inc. Pvd investment banking svcs Leucadia National Corp. Invest hldg co;mnfr coml prod Stock Swap Stock $3,586.9 NA $90.0 2.51% NA
11/14/2012 Completed Teavana Holdings Inc. Ret teawares,tea-related prod Starbucks Corp. Own,operate coffee shops Not Applicable Cash $617.5 $636.3 $18.4 2.98% 2.89%
11/15/2012 Complet ed Sch if f Nutr ition In tl Inc. Mnfr ,whl pharmaceutica ls Reck it t Benck is er Group
Announced Status Target Name Target Description Acquirer Name Acquirer Description
Acquisition
Technique Consideration
Transaction
Value
($ M)
Enterprise
Value
($ M)
Target
Term Fee
($ M)
Term Fee as
a % of
Transaction
Value
Term Fee as
a % of
Enterprise
Value
11/19/2012 Completed BioMimetic TherapeuticsInc. Biotech company Wright Medical Group Inc. Mnfr med orthopaedic devic Not Applicable Cash / Stock $405.3 $361.2 $8.3 2.04% 2.29%
11/27/2012 Completed RalCorp. Holdings Inc. Produce,whl cereals,snacks ConAgra Foods Inc. Produce,whl,retail food prod Not Applicable Cash $4,981.3 $6,715.6 $180.0 3.61% 2.68%
11/28/2012 Pending Knight Capital Group Inc. Provide brokerage services GETCO Holding Co LLC Holding company Going Private Cash / Stock $1,375.8 NA $53.0 3.85% NA
12/06/2012 Completed Epoch Holding Corp. Pvd investment advisory svcs Toronto-Dominion Bank Commercial bank holding co Not Applicable Cash $669.7 NA $20.0 2.99% NA
12/09/2012 Pending Intermec Inc. Mnfr,whl data collection sys Honeywell InternationalInc.
Mnfr automation solutionsprod
Not Applicable Cash $603.4 $601.4 $24.0 3.98% 3.99%
12/10/2012 Completed Heelys Inc. Manufacture,whl athletic
shoes
Sequential Brands Group
Inc.
Mnf,whl contemporary
apparel
Not Applicable Cash $62.0 $4.3 $0.9 1.45% 21.05%
12/11/2012 Completed TNS Inc. Pvd data communications svcs Investor Group Investor group Going Private Cash $521.5 $830.2 $18.7 3.59% 2.25%
12/16/2012 Completed Caribou Coffee Co Inc. Own,operate coffee stores Investor Group Investor group Not Applicable Cash $338.4 $309.8 $10.4 3.07% 3.35%
12/18/2012 Pending Arbitron Inc. Pvd media,mktg research svcs Nielsen Holdings NV Pvd info,measurement svcs Not Applicable Cash $1,287.8 $1,250.7 $32.7 2.54% 2.61%
1 2/2 0/2 01 2 C omp leted Westway Gr ou p In c. P vd bu lk liq uid sto rage svcs EQT In fr astr uctu re II GP
BV
Private equity fund Not Applicable Cash $189.1 $463.3 $13.0 6.87% 2.81%
12/20/2012 Completed Eloqua Inc. Develop software Oracle Corp. Develop enterprise software Not Applicable Cash $967.0 $881.5 $31.5 3.26% 3.57%
06/11/2012 IntegraMed America Inc. Pvd specialty healthcare svcs SCP-325 Holding Corp. Special purpose acq vehicle Going Private Cash $168.4 $120.9 $5.1 3.02% 4.21%
06/19/2012 Network Engines Inc. Develop server-based software Unicom Sub Two Inc. Investment company Going Private Cash $63.1 $55.3 $1.8 2.77% 3.16%
06/20/2012 Sun Healthcare Group Inc. Pvd long-term healthcare svcs Genesis HealthCare LLC Pvd nursing care services Not Applicable Cash $217.0 $247.4 $6.9 3.18% 2.79%
07/22/2012 GenOn Energy Inc. Provide electricity services NRG Energy Inc. Electric,gas utility company Stock Swap Stock $1,693.6 $4,163.6 $120.0 7.09% 2.88%
07/23/2012 GeoEye Inc. Provide satellite imagery svcs DigitalGlobe Inc. Pvd satellite based imaging Stock Swap Cash / Stock $466.6 $779.7 $20.0 4.29% 2.57%
07/27/2012 AuthenTec Inc. Manufacture semiconductors Apple Inc. Manufacture personal
computers
Not Applicable Cash $392.9 $370.8 $20.0 5.09% 5.39%
07/30/2012 The Shaw Group Inc. Mnfr pipe f it tings,systems Chicago Bridge & Iron Co
Announced Target Name Target Description Acquirer Name Acquirer Description
Acquisition
Technique Consideration
Transaction
Value
($ M)
Enterprise
Value
($ M)
Reverse
Termination
Fee ($ M)
Reverse Term
Fee as a % of
Transaction
Value
Reverse Term
Fee as a % of
Enterprise
Value
08/15/2012 Physicians Formula
Holdings
Mnfr,whl cosmetic products Swander Pace Capital LLC Private equity firm Going Private Cash $58.3 $60.5 $1.9 3.30% 3.18%
08/20/2012 Coventry Health Care Inc. Pvd managed health care svcs Aetna Inc. Provide HMO services Not Applicable Cash / Stock $5,695.4 $5,764.4 $450.0 7.90% 7.81%
08/27/2012 TPC Group Inc. Manufacture chemical
products
TPC Group Inc. SPV Special purpose acq vehicle Going Private Cash / Stock $705.8 $888.6 $45.0 6.38% 5.06%
08/27/2012 Hudson City Bancorp Inc. Savings bank;holding
company
M&T Bank
Corp.,Buffalo,New York
Bank holding company Stock Swap Cash / Stock $3,811.0 NA $125.0 3.28% NA
08/31/2012 US Airways Group Inc. Passenger airline AMR Corp. Pvd passenger airline svcs Stock Swap Stock $3,080.0 $3,080.0 $135.0 4.38% 4.38%
Bank holding company FirstMerit Corp. Bank holding compnay Stock Swap Stock $952.3 NA $37.5 3.94% NA
09/25/2012 Union Drilling Inc. Pvd contract land drilling svc Sidewinder Drilling Inc. Pvd land drilling services Going Private Cash $139.4 $243.9 $10.0 7.18% 4.10%
09/26/2012 West Coast Bancorp Commercial bank holding co Columbia Banking System
Inc.
Bank holding company Not Applicable Cash / Stock $506.0 NA $5.0 0.99% NA
Mnfr,whl mattresses Not Applicable Cash $230.3 $901.9 $90.0 39.08% 9.98%
10/15/2012 Shona Energy Co Inc. Oil,gas expl,prodn company Canacol Energy Ltd. Oil,gas expl,prodn company Stock Swap Cash / Stock $121.0 $129.6 $4.0 3.30% 3.09%
10/25/2012 PSS World Medical Inc. Whl medequip,supplies,pharm McKesson Corp. Whl pharm,medical supplies Not Applicable Cash $1,459.1 $1,796.6 $100.0 6.85% 5.57%
10/29/2012 OPNET Technologies Inc. Pvd network mgmt software
11/12/2012 Jefferies Group Inc. Pvd investment banking svcs Leucadia National Corp. Invest hldg co;mnfr coml prod Stock Swap Stock $3,586.9 NA $90.0 2.51% NA
11/15/2012 White River Capital Inc. Pvd auto financing svcs Coastal Credit Merger Sub
Inc.
Provide financial svcs Going Private Cash $77.7 NA $4.0 5.11% NA
11/16/2012 Outdoor Channel
Holdings Inc.
Provide cable TV services InterMedia Outdoors
Holdings
Media holding company Going Private Cash / Stock $207.5 $149.5 $9.0 4.34% 6.02%
11/19/2012 BioMimetic Therapeutics
Inc.
Biotech company Wright Medical Group Inc. Mnfr med orthopaedic devic Not Applicable Cash / Stock $405.3 $361.2 $30.0 7.40% 8.31%
DateAnnounced Target Name Target Description Acquirer Name Acquirer Description
AcquisitionTechnique Consideration
Transaction
Value($ M)
Enterprise
Value($ M)
Reverse
TerminationFee ($ M)
Reverse Term
Fee as a % of
TransactionValue
Reverse Term
Fee as a % of
EnterpriseValue
11/28/2012 Knight Capital Group Inc. Provide brokerage services GETCO Holding Co LLC Holding company Going Private Cash / Stock $1,375.8 NA $53.0 3.85% NA
12/04/2012 Young Innovations Inc. Mnfr,whl dental equipment Linden LLC Private equity firm Going Private Cash $315.1 $300.1 $18.8 5.98% 6.28%
12 /0 9/2 01 2 In ter mec In c. Mn fr ,whl data collectio n s ys Hon eywell Inter natio nal
Inc.
Mnfr automation solutions
prod
Not Applicable Cash $603.4 $601.4 $24.0 3.98% 3.99%
12/11/2012 TNS Inc. Pvd data communications svcs Investor Group Investor group Going Private Cash $521.5 $830.2 $32.1 6.15% 3.86%
12/18/2012 Arbitron Inc. Pvd media,mktg research svcs Nielsen Holdings NV Pvd info,measurement svcs Not Applicable Cash $1,287.8 $1,250.7 $131.0 10.17% 10.47%
12 /2 0/2 01 2 NYSE Eu ron ex t P vd sec tr ad in g,b rkg s vcs In ter co ntin en talEx ch an ge
Inc.
Pvd commodity exchange svcs Stock Swap Cash / Stock $8,052.2 NA $750.0 9.31% NA
12/21/2012 Ameristar Casinos Inc. Own,operate casinos,hotels Pinnacle Entertainment Inc. Own,operate casino hotels Not Applicable Cash $904.4 $2,709.1 $85.0 9.40% 3.14%
12/21/2012 FirstCity Financial Corp. Provide f inancing services Varde Partners Inc. Pvd investment management
svcs
Going Private Cash / Stock $107.0 NA $5.0 4.67% NA
12/30/2012 Duff & Phelps Corp. Pvd finl advisory,invest svcs Duff & Phelps Corp. SPV Special purpose acq vehicle Going Private Cash $660.4 NA $39.9 6.05% NA