- Mergermarket

Transcription

- Mergermarket

A mergermarket report on global M&A activity
Monthly M&A Insider
MARCH 2012
CONTENTS
Global overview
01
Americas: Latin America
06
North America
11
Asia-Pacific
16
Europe
21
middle east & africa
27
about merrill corporation
32
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Monthly M&A Insider
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global overview
global overview
With the end of March rapidly approaching, it appears unlikely that Q1 this year will
be as active as last. Global M&A activity stands at 1,687 deals worth US$284.6bn as of
mid-March, compared to 3,242 deals worth US$602.9bn announced in Q1 2011. Private
equity activity is lower too, with 278 buyouts worth US$28.6bn announced so far in Q1
2012 compared to 536 worth US$64.4bn in Q1 2011.
Despite these discouraging numbers, easing volatility in
global markets and rising optimism in the US are fuelling
expectations of an increase in M&A activity. Relieved after
the ECB’s second major injection of liquidity into the banking
system, followed by an orderly Greek default, investors are
now hungrier for growth. On the front line are business
leaders in the corporate sphere, where robust earnings have
heralded stronger forecasts.
Key indicators are also providing good reasons to
expect more fruitful months ahead. In the US, declining
unemployment and better than expected economic growth
are likely to boost business confidence. A number of possible
takeover targets are currently trading at low multiples, cast
aside by wary investors but with strong cases that they’re
undervalued. Eventually, this could trigger more firms in the
region to deploy their capital, seeking expansion at this key
turning point.
The outlook for private equity is looking up as well. Indices
that track fund returns demonstrate that whilst the class has
experienced losses over recent months, it has outperformed
global stock markets and the next couple of years could see
more winners emerge amongst financial investors.
Another particularly buoyant region for M&A over the past
month has been Latin America, thanks mostly to one major
transaction in the card services industry. Brazil’s biggest
bank, Itau, has moved to take the nation’s second biggest
card payment processor, Redecard, private in a US$7bn deal.
The sale comes after an 84% increase in Redecard’s stock
price over the past twelve months. Redecard will continue
to face fierce competition from larger rival Cielo, with whom
it shares 80% of the US$400 billion-a-year card payment
processing market.
The global economic environment has damaged Latin
American growth, yet more M&A is expected in the years
ahead as abundant natural resources and the region’s growth
potential attracts inbound acquirers. In one of the most
prominent recent stories, Andarko Petroleum’s Brazilian
business looks set to fetch up to US$3bn from Norway’s
Statoil. Such a deal would give Norway’s state-controlled
energy group greater access to one of the world’s most
potentially lucrative offshore oil territories.
Meanwhile in Europe, the Central Bank’s US$700m second
round Long Term Refinancing Operation (LTRO 2) reduced the
risk of liquidity driven bank failure, particularly in the south
where bond yields are also beginning to stabilise. M&A has
begun to recover in Financial Services and under-capitalised
banks are possible takeover targets for stronger acquirers.
For example Marfin Popular Bank (MPB), the listed GreekCypriot bank is reportedly being courted by Russia’s VTB
Bank, which is interested in acquiring a 33% stake, though
other possible buyers are in the running. The news comes
as Sberbank completes a US$812m acquisition of Austriabased Volksbank International (VBI), underscoring the hunger
amongst Russian banks for global expansion.
Head of Research: Elias Latsis
Global overview: Rob Imonikhe
Editor: Felicity James
Latin America: Lana Vilner
For advertising opportunities contact:
North America: Jason Cozza
Erik Wickman
Asia-Pacific: Timothy Phillips
Tel: + (1) 212 6863329
[email protected]
Europe: Kirtsy Wilson, Peter Kruk and Yannis Papacostas
Middle East & Africa: Marie-Laure Keyrouz and Silvia Paparello
Monthly M&A Insider
01
Trend graphs
GLOBAL M&A quarterly trend
GLOBAL M&A quarterly private equity trend
1,200
4,500
400
900
4,000
350
800
800
2,500
2,000
600
Value (US$bn)
3,000
700
300
600
250
500
200
400
150
300
1,500
400
100
1,000
200
Mid-market value
Total volume
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Buyout value
Mid-market volume
GLOBAL M&A ANNUAL TREND
Exit value
Buyout volume
Exit volume
GLOBAL M&A Annual private equity trend
18,000
900
3,500
16,000
800
14,000
700
8,000
3,500
3,000
2,500
600
500
2,000
400
1,500
Number of deals
10,000
2,000
Number of deals
12,000
2,500
Value (US$bn)
4,000
3,000
Value (US$bn)
100
0
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Total value
200
50
500
0
Number of deals
Value (US$bn)
3,500
1,000
Number of deals
global overview
1,400
1,500
6,000
300
4,000
200
2,000
100
1,000
1,000
500
0
0
2006
2007
Total value
2008
2009
Mid-market value
2010
Total volume
2011
YTD 2012*
Mid-market volume
500
0
0
2006
2007
2008
Buyout value
2009
Exit value
2010
2011
Buyout volume
YTD 2012*
Exit volume
Monthly M&A Insider
02
Trend graphs
GLOBAL GEOGRAPHIC BREAKDOWN YTD 2012
global overview
value
volume
1.4%
4.2%
15.5%
3.1%
Asia-Pacific
35.5%
4.2%
15.9%
Asia-Pacific
Europe
Europe
North America
North America
Middle East & Africa
Central & South America
Central & South America
35.4%
41.4%
43.4%
GLOBAL M&A Sector Breakdown YTD 2012
value
volume
0.7%
0.2%
1.6%
0.8%
3.4%
1.7%
2.7%
13.3%
0.4%
3.1%
Industrials & Chemicals
7.8%
0.6%
3.8%
23.2%
TMT
7.5%
6.2%
Consumer
TMT
7.0%
Consumer
Business Services
6.0%
Energy, Mining & Utilities
Business Services
7.4%
Pharma, Medical & Biotech
Financial Services
6.8%
Construction
Financial Services
16.2%
8.7%
Transportation
Transportation
Leisure
45.5%
Real Estate
Agriculture
Construction
Leisure
11.0%
14.4%
Real Estate
Agriculture
Defence
Monthly M&A Insider
03
Trend graphs
GLOBAL M&A deal size breakdown
volume
90
80
27.3%
42.1%
39.8%
42.7%
30.2%
36.0%
40.8%
96
16.8%
10
20.1%
15.0%
16.3%
19.1%
20.4%
8.8%
7.9%
9.5%
10.2%
27.5%
21.0%
23.0%
19.3%
Percentage
16.7%
40
20
1.2%
1.3%
5.0%
0.6%
0.5%
0.4%
0.5%
0.4%
0.9%
0.9%
1.1%
1.1%
1.2%
3.9%
3.7%
4.7%
4.7%
4.4%
5.5%
94
20.9%
60
30
0.7%
98
70
50
0.7%
100
100
Percentage
global overview
value
4.6%
92
4.7%
90
3.9%
4.5%
4.8%
4.9%
5.1%
88
25.9%
23.5%
7.5%
7.9%
12.7%
12.5%
14.3%
14.6%
14.9%
14.4%
10.9%
2006
2007
2008
2009
2010
2011
YTD 2012*
9.4%
86
84
88.4%
90.1%
91.0%
87.4%
89.2%
88.8%
2010
2011
89.1%
82
80
0
2006
2007
2008
2009
YTD 2012*
<US$250m or undisclosed value
US$251m-US$500m
US$251m-US$500m
US$501m-US$2,000m
US$501m-US$2,000m
US$2,001m-US$5,000m
US$2,001m-US$5,000m
>US$5,001m
>US$5,001m
Monthly M&A Insider
04
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A mergermarket M&A report on
LATIN AMERICA
LATIN AMERICA
Latin American M&A had a slow start at the beginning of 2012 with 59 deals worth US$10.7bn
taking place in January and February of THIS year. By comparison, 95 deals valued at
US$23.6m were announced in the first two months of 2011. The difference represents a
37.9% decrease in the number of deals and a 54.7% drop in the value of deals. It is difficult
to say so early into the year if the trend will continue into the following months. At the
end of 2011, some analysts predicted that Latin America will see an increase in M&A in 2012,
and there is still time for the predictions to materialise.
Nonetheless, despite the low overall M&A activity in early
2012, the number of Latin American leveraged buyouts in
January and February of the year (7 deals worth US$160m)
was on par with Q4 2011’s numbers (9 deals worth US$390m).
It is not inconceivable that by the end of March the number of
buyout transactions in the first quarter of 2012 will surpass
last quarter’s figures. The growing volume and value of such
deals is a further proof that Latin American markets – and
especially Brazil – are becoming increasingly popular among
global private equity firms. For example, H.I.G. Capital has
recently opened an office in Rio de Janeiro and announced a
plan to expand its operations in Latin America.
Although PE investors are beginning to explore opportunities
in several countries of the region such as Colombia and Peru,
Brazil, with its growing economy and untapped potential,
is the number one target for private equity firms at this
point. At the beginning of March, for instance, the Carlyle
Group announced its acquisition of Ri Happy Brinquedos
Ltda, the largest retail toy chain in Brazil, for an estimated
consideration of US$352m.
Notably, the Ri Happy deal belongs to the Consumer sector,
which saw the largest number of announced deals in January
and February of 2012 (13 transactions valued at US$ 330m).
This one deal announced in the beginning of March will more
than double the overall value in the sector. At the same time,
Business Services dominated the sector tables by value with
6 deals worth US$7bn. However, most of the value for the
sector came from Itau Unibanco Holdings SA’s acquisition of
a 49.99% stake in Redecard SA, a Brazil-based provider of
credit card payment processing services, for a total deal value
of US$6.9bn). The transaction had an EBITDA multiple of
12.3x and a relatively high revenue multiple of 7.6x. As a result
of this transaction, Itau, which already owns the remaining
50.01% stake in Redecard, will be able to strengthen its
position in the lucrative and expanding credit card payment
processing industry in Brazil.
As the Brazilian economy continues to thrive, the middle
class in the country is also expected to grow, further driving
innovation and expansion in the banking, services, and
consumer sectors in the country. Given the expectations, it will
be interesting to see what will happen to the M&A market in
this and the following quarters of 2012.
Monthly M&A Insider
06
Top deals
Top 10 LATIN AMERICAN announced deals of the month (feb-12)
LATIN AMERICA
Announced
Bidder company
Target company
Target dominant
sector
7-Feb-12
Itau Unibanco Holding SA
Redecard SA
(49.99% stake)
Business Services
24-Jan-12
Banco Davivienda SA
HSBC Costa Rica;
HSBC El Salvador; and
HSBC Honduras SA
Financial Services
8-Feb-12
BTG Pactual SA
Celfin Capital
Financial Services
21-Feb-12
Cosan SA Industria e Comercio
America Latina
Logistica (ALL)
(5.67% stake)
Transportation
8-Feb-12
Sinochem Group
TEPMA BV
Energy, Mining &
Utilities
5-Feb-12
Daewoo Securities Co Ltd;
Samsung Securities Co
Ltd; and Korea Investment
Management Co Ltd
Ankor Oil Field
(29.00% Stake)
25-Jan-12
Codere Mexico SA
21-Jan-12
Revenue
EBITDA
P/E
Bid premia
1-day
before
Deal
value
(US$m)
7.6
12.3
18.2
9.5%
6,864
n/a
n/a
-
801
Seller company
HSBC Bank
(Panama) SA
Exit multiples (x)
-
600
109.6%
524
Total SA
-
438
Energy, Mining &
Utilities
KNOC USA
Corporation
-
308
Impulsora de Centros
de Entretenimiento
de las Americas
(35.80% stake)
Leisure
Corporacion
Interamericana
de
Entretenimiento
SAB de CV
-
199
Actis LLP
Universidade Cruzeiro
do Sul (37.00% stake)
Business Services
-
102
1-Feb-12
Valeant Pharmaceuticals
International Inc
Probiotica Laboratorios Consumer
Ltda
2.0
-
86
22-Feb-12
Mitsui & Co Ltd
Veloce Logistica SA
0.5
-
59
Based on announced deals, including lapsed and withdrawn bids
Based on dominant geography of target company being Latin America
Data correct as of 05-Mar-12
Transportation
Source: mergermarket
Monthly M&A Insider
07
Trend graphs
LATIN AMERICAN M&A quarterly trend
18
160
4,000
16
140
3,500
14
3,000
12
2,500
10
2,000
8
60
1,500
6
40
1,000
4
20
500
2
50
120
40
100
30
80
Number of deals
4,500
Number of deals
Value (US$bn)
60
180
Value (US$m)
LATIN AMERICA
70
LATIN AMERICAN M&A quarterly private
equity trend
20
10
0
0
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Total value
Mid-market value
Total volume
Mid-market volume
Buyout value
LATIN AMERICAN M&A ANNUAL TREND
Exit value
Buyout volume
Exit volume
LATIN AMERICAN M&A Annual private
equity trend
180
700
160
8,000
50
45
7,000
600
40
140
100
400
80
300
Value (US$m)
120
6,000
35
5,000
30
25
4,000
20
3,000
60
200
40
Number of deals
500
Number of deals
Value (US$bn)
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
15
2,000
10
100
20
0
0
2006
2007
Total value
2008
2009
Mid-market value
2010
Total volume
2011
YTD 2012*
Mid-market volume
1,000
5
0
0
2006
2007
2008
Buyout value
2009
Exit value
2010
2011
Buyout volume
YTD 2012*
Exit volume
Monthly M&A Insider
08
Trend graphs
LATIN American M&A geographic Breakdown YTD 2012
LATIN AMERICA
value
volume
6%
1%
3.4%
Brazil
7%
Chile
4%
3.4%
Brazil
Chile
13.6%
Colombia
Colombia
Costa Rica
Costa Rica
8%
Mexico
Argentina
1.7%
Mexico
3.4%
Peru
Argentina
54.2%
20.3%
74%
LATIN American M&A Sector Breakdown YTD 2012
value
2.0%
0.1% 3.4%
0.3%
volume
7.4%
10.2%
Financial Services
5.4%
Business Services
Financial Services
6.8%
Technology
Technology
2.0%
0.4%
5.1%
Leisure
Transportation
65.4%
14.0%
13.6%
Business Services
Leisure
Transportation
20.3%
5.1%
Construction
Construction
Real Estate
5.1%
Consumer
5.1%
22.0%
1.7%
Agriculture
3.4%
Consumer
1.7%
Monthly M&A Insider
09
Trend graphs
LATIN American M&A deal size breakdown
volume
1.0%
100
5.4%
46.9%
10.8%
90
28.6%
30.5%
29.3%
50
18.2%
20.3%
19.2%
8.3%
36.6%
40
21.8%
16.2%
20
10.3%
12.7%
10.1%
14.8%
2008
2009
5.3%
4.7%
6.3%
5.3%
1.2%
0.3%
6.9%
1.8%
1.2%
2.0%
8.2%
0.8%
5.1%
6.2%
3.4%
6.1%
5.4%
1.7%
1.1%
70
60
85.1%
87.5%
88.2%
85.7%
2006
2007
2008
2009
85.8%
89.8%
2011
YTD 2012*
82.2%
18.0%
40
11.0%
7.0%
6.9%
14.7%
0.6%
50
24.9%
10.0%
25.5%
10
28.1%
24.5%
30
0.7%
80
64.1%
31.3%
0.2%
39.6%
70
60
7.4%
1.0%
6.3%
Percentage
80
100
9.2%
16.2%
90
Percentage
LATIN AMERICA
value
9.4%
14.2%
10.9%
2011
YTD 2012*
30
20
0
2006
2007
2010
2010
US$251m-US$500m
US$251m-US$500m
US$501m-US$2,000m
US$501m-US$2,000m
US$2,001m-US$5,000m
US$2,001m-US$5,000m
>US$5,001m
>US$5,001m
Monthly M&A Insider
10
NORTH AMERICA
NORTH AMERICA
Deal activity sluggish in 2012
In the first two months of the year, 480 deals were announced in North America with an
aggregate value of US$89.4bn. Deal activity in the region has not been the strongest, as
evident from Q1 2012’s current average deal size (US$186bn) compared to a quarterly average
of US$235bn since Q1 2004. Current deal values amount to less than half of Q4 2011 (US$200.8bn)
and are similar in proportion for deal count (957 deals).
Energy dominates top deals; large cap deals find
Switzerland buyers
The Energy sector has dominated the top deals of the year so
far, with 40 deals valued at US$32.2bn. In late February, El
Paso Corporation agreed to sell its exploration and production
business, EP Energy Corporation, to affiliates of Apollo Global
Management and Riverstone Holdings. Net proceeds from the
transaction will be used to repay loans for Kinder Morgan’s
acquisition of El Paso, announced last year. The transaction
marks the largest announced deal in the region during 2012 so
far, with a deal value of US$7.15bn.
Mitsubishi recently announced its intention to acquire a
40% stake in the Cutbank Ridge Partnership, which include
409,000 acres of undeveloped Montney lands in Canada and
additional development potential in the Cadomin and Doig
geological formations, from Canadian energy provider EnCana
Corporation. Outside of Canada, Mitsubishi could find M&A
opportunities in the US and abroad as it attempts to shore up
its renewable energy business and focus on power generation
and Independent Power Producer (IPP) capabilities, industry
sources have recently speculated.
Another cross-border deal featured in the top deals table was
announced by Tennessee-based Thomas & Betts Corporation,
the low voltage products provider, which signed a definitive
agreement to be acquired by the Swedish-Swiss automation
technology group ABB Ltd. for a cash consideration of
US$3.7bn.
Industrials lead deal count; Technology absent
from top deals
By deal count, Industrials & Chemicals was the most active
sector with 97 deals worth US$13.4bn. Notably absent from the
top deals list is the Technology sector, which did not see any
large cap billion dollar transactions in the first two months of
2012. Nonetheless, Technology is currently the second most
active sector by deal count, with 78 deals worth US$7.3bn in
the year so far.
Amid global uncertainty and tightening corporate regulations,
Switzerland-based buyers are eyeing American targets in
some of the largest announced deals of the year. Swiss
pharmaceutical giant Roche Holdings submitted a bid for
Illumina, the California-based provider of analysis for genetic
variations and functions, in a hostile offer worth US$6bn. The
deal had initially gathered speculation that a rival bidder would
emerge, but due to current macro conditions and sale channel
issues in the space, a higher valuation for the American
company may not occur. As of late February, Roche extended
its cash tender offer expatriation to 23 March 2012.
Monthly M&A Insider
11
Top deals & Expected deals
Top 10 North American announced deals of the month (feb-12)
NORTH AMERICA
Announced
Bidder company
Target company
Target dominated
sector
Seller company
El Paso Corporation
Exit multiples (x)
Revenue
EBITDA
P/E
Bid premia
1-day
before
Deal value
(US$m)
-
7,150
24-Feb-12
Apollo Global
Management LLC;
Riverstone Holdings LLC;
and Access Industries Inc
EP Energy Corporation
Energy, Mining
& Utilities
25-Jan-12
Roche Holding Ltd
Illumina Inc
Pharma, Medical
& Biotech
5.7
22.6
71.8
18.1%
6,070
27-Jan-12
Eastman Chemical
Company
Solutia Inc
Industrials &
Chemicals
2.2
8.7
12.8
41.7%
4,600
30-Jan-12
ABB Ltd
Thomas & Betts
Corporation
Industrials &
Chemicals
1.6
10.1
20.0
24.2%
3,770
16-Jan-12
Pembina Pipeline Corp
Provident Energy Ltd
Energy, Mining
& Utilities
25.3%
3,681
15-Feb-12
Kellogg Company
Procter & Gamble
Company (Pringles
snack business)
Consumer
Procter & Gamble
Company
2.4
14.6
-
3,545
17-Feb-12
Advent International
Corporation; and
Goldman Sachs Capital
Partners
TransUnion Corp
Financial
Services
Madison Dearborn
Partners LLC; and
Pritzker family
3.1
9.4
-
3,178
17-Feb-12
Mitsubishi Corporation
Encana Corporation
(Cutbank Ridge
Partnership)
(40.00% stake)
Energy, Mining
& Utilities
EnCana Corporation
-
2,909
23-Jan-12
Apache Corporation
Cordillera Energy
Partners III LLC
Energy, Mining
& Utilities
EnCap Investments
LLC
-
2,850
03-Jan-12
Sinopec International
Petroleum Exploration
and Production
Corporation
Devon Energy
Corporation (five US
oil and gas projects)
(33.00% stake)
Energy, Mining
& Utilities
Devon Energy
Corporation
-
2,500
Based on dominant geography of target company being North America (US + Canada)
34.5
Monthly M&A Insider
12
Pipeline of North American expected deals
NORTH AMERICA
Situation
Target company
Sector
Potential bidder
company
Financial advisor to
bidder (B); target (T);
seller (S)
Expected Deal
SemGroup
Corporation
Energy,
Mining &
Utilities
Plains All
American
Pipeline
Barclays Capital (T)
Expected Deal
Prestige Brands
Holdings Inc
Consumer
Expected Deal
Jakks Pacific Inc
Expected Deal
AMAG
Pharmaceuticals
Inc
Seller
company
Market cap/
est. value
(US$m)
Comments
1,208
On 24-Oct-2011, Plains All American
Pipeline, L.P., the listed US based oil
transportation and storage company, made
an offer of USD 24 per share for SemGroup
Corporation, the listed US based provider
of transportation and storage services to
the oil and gas sector. Plains stated that
the offer represented a 16% premium
over Semgroup's 10-day average closing
price through 05-Oct-2011. Nonetheless,
SemGroup has rejected the offer as
being too low and claimed that the offer
actually represented a mere 2% premium
over the previous trading day's close.
Genomma Lab
Internacional
SAB de CV
834
On 21-Feb-2012, Genomma Lab
Internacional, the listed Mexico based
pharmaceutical company, submitted a nonbinding proposal to acquire all outstanding
shares of Prestige Brands Holdings, Inc.,
the listed US based distributor of over-thecounter healthcare products and household
cleaning products, for USD 16.60 per
share in cash. The transaction is valued at
approximately USD 834m, not including net
debt. Among other matters, this proposal is
subject to confirmatory due diligence and
the negotiation of definitive documentation,
as well as a receipt of customary corporate
and regulatory approvals. On 27-Feb-2012,
in response to the proposal, Prestige Brands
Holdings' Board of Directors approved the
adoption of a stockholder rights plan.
Consumer
Oaktree Capital Rothschild (T)
492
On 13-Sep-2011, Jakks Pacific Inc, the listed
US based manufacturer of toy products,
received a public unsolicited offer from
Oaktree Capital to buy the target at USD 20
per share. The bidder already owns a 4.99%
stake in Jakks. This offer was unanimously
rejected by the target's Board of Directors on
05-Oct-2011
Pharma,
Medical &
Biotech
MSMB Capital
MA
286
On 03-Aug-2011, AMAG Pharmaceuticals,
the listed US based biopharmaceutical
company, received an unsolicited proposal
from MSMB Capital Management to
acquire the company at USD 18 per share
in cash. AMAG Board of Directors has
unanimously opposed the proposal and
urged stockholders to take no action on the
offer. One of the reasons why the Board of
Directors might not support the acquisition
is that MSMB is proposing to remove six
of the seven current members of AMAG's
Board and to replace them with its own
nominees.
Expected deals based on confirmed announcements by companies involved
Monthly M&A Insider
13
Trend graphs
North American M&A quarterly trend
NORTH AMERICA
600
north American M&A quarterly private
equity trend
1600
250
350
1,400
300
500
200
800
Value (US$bn)
300
250
150
200
150
100
600
Number of deals
1000
Number of deals
Value (US$bn)
1200
400
200
100
400
50
100
50
200
0
0
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q!
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Total value
Mid-market value
Total volume
Mid-market volume
Buyout value
north American M&A ANNUAL TREND
Exit value
Buyout volume
Exit volume
north American M&A Annual private
equity trend
1,800
6,000
500
1,200
450
1,600
5,000
3,000
800
600
2,000
400
1,000
200
Value (US$bn)
1,000
350
800
300
250
600
200
Number of deals
4,000
Number of deals
1,200
1,000
400
1,400
Value (US$bn)
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
400
150
100
200
50
0
0
2006
2007
Total value
2008
2009
Mid-market value
2010
Total volume
2011
YTD 2012*
Mid-market volume
0
0
2006
2007
2008
Buyout value
2009
Exit value
2010
2011
Buyout volume
YTD 2012*
Exit volume
Monthly M&A Insider
14
Trend graphs
North American M&A Sector Breakdown YTD 2012
0.01%
1%
1%
volume
0.1%
0.5%
0.1%
0.01%
4%
0.4%
0.1%
15%
3%
2%
2%
2% 2%
20%
Technology
Technology
9%
Consumer
8%
Consumer
Business Services
Business Services
40%
Financial Services
7%
4%
10%
Financial Services
16%
Media
Media
Leisure
15%
Leisure
10%
Construction
Construction
Real Estate
5%
12%
11%
Real Estate
Transportation
Transportation
Telecommunications
Defence
Defence
Telecommunications
Agriculture
north American M&A deal size breakdown
value
volume
100
100
14.8%
90
32.1%
43.5%
52.8%
49.3%
70
18.8%
14.7%
21.3%
13.8%
13.3%
16.8%
21.6%
10
7.3%
29.8%
27.8%
1.1%
1.5%
1.8%
5.3%
0.7%
0.7%
0.6%
0.7%
0.4%
0.8%
1.0%
1.1%
1.5%
2.1%
3.7%
3.5%
5.6%
5.0%
5.8%
5.2%
5.4%
5.2%
87.5%
87.5%
86.6%
2010
2011
YTD 2012*
6.2%
4.2%
90
5.3%
85
90.6%
86.8%
9.6%
8.8%
10.1%
6.2%
6.5%
9.5%
9.6%
12.2%
9.2%
12.5%
11.6%
10.3%
2006
2007
2008
2009
2010
2011
YTD 2012*
3.8%
5.3%
20.6%
17.5%
13.2%
20
1.1%
35.1%
18.0%
50
30
95
58.8%
60
40
37.7%
Percentage
80
Percentage
NORTH AMERICA
value
80
91.0%
85.6%
5.4%
0
75
2006
2007
2008
2009
US$251m-US$500m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Monthly M&A Insider
15
ASIA-pacific
ASIA-Pacific
The year 2012 started out with positive news coming out of the US regarding GDP growth.
Already cheered at a healthy 2.8%, Q4 2011 was recently revised up to 3% on the back of
stronger consumer numbers.
Even so, deal numbers in Asia-Pacific for the first two
months took a massive hit. A total of US$38.5bn in deals were
announced, compared to US$97.8bn worth of deals in Q1
2011. Cash is clearly sitting on the sidelines waiting for signs
of a sustainable recovery both in the US and Europe.
Energy, Mining & Utilities bore witness to the biggest total
deal value, with a combined US$15.33bn worth of deals in the
first two months of 2012. And it was in India, which suffered
an M&A drought last year, where Sesa Goa’s US$10.29bn
blockbuster bid for Sterlite Industries (India) made up nearly
two thirds of the sector total. Industrials & Chemicals was
second, with a combined total of US$7.2bn in deals. This
was followed by the Consumer sector, which notched up
US$3.43bn worth of deals.
Meanwhile, Industrials & Chemicals topped the deal count,
notching up 42 deals in the first two months of 2012. Coming
in joint-second were Business Services and Energy, Mining &
Utilities, which both posted 25 deals apiece.
Looking ahead, there will be continued interest in
Southeast Asian investment in sectors such as Technology,
Consumer, and Energy, Mining & Utilities. Indonesia,
boasting a population of nearly 250m and generating twothirds of its GDP from consumer spending, will be a focal
point for growth going forward. There have already been
significant deals; a US$146m bid for a 36.06% stake in
Trikomsel, an Indonesian retailer of mobile phones, from
Legacy Investment and Golden Soleil, two mobile phone
retailers based in the Seychelles and British Virgin Islands,
respectively, is just one example.
Cash-rich Japanese and Chinese companies, as well as the
behemoth Korean chaebols such as Samsung and Lotte
Group, will ensure there is continued cross-border interest
within Asia.
Private equity stamped its mark on the top 10 announced
deals, with TPG’s US$1.46bn bid for Australia’s Billabong.
However, this was short lived as the deal later lapsed as
Billabong rejected TPG’s improved offer. Eurozone woes have
overseen a vertiginous drop in confidence. And the “waitand-see” approach seems to be borne out by the numbers.
Buyouts in the region in the first two months of 2012 only
totalled US$0.8bn, compared to US$10.4bn in Q1 2011. Exits
followed a similar path, with US$0.9bn in exits so far this
year, compared to US$10.8bn in Q1 2011.
Monthly M&A Insider
16
Top deals
Top 10 Asia-Pacific announced deals of the month (feb-12)
ASIA-PACIFIC
Announced
Bidder company
Target company
Target dominant sector Seller company
Revenue
Exit multiples (x)
EBITDA
P/E
Bid premia
1-day before
Deal
value
(US$m)
25-Feb-12
Sesa Goa Limited
Sterlite Industries (India)
Limited
Energy, Mining &
Utilities
3.3
21.9
35.8
15.0%
10,289
21-Feb-12
Alibaba Group
Holding Ltd
Alibaba.com Limited
(27.03% stake)
Technology
8.2
27.2
32.4
45.9%
2,355
17-Feb-12
TPG Capital LP
Billabong International
Limited
Consumer
0.8
6.6
7.0
84.4%
1,464
16-Feb-12
Perenco SA
ConocoPhillips Company
(Vietnam business unit)
Energy, Mining &
Utilities
-
1,290
20-Feb-12
Henan Dayou Energy
Co Ltd
Energy, Mining &
Yimei Group Yangguang
Utilities
Coal Mining Co Ltd; Yimei
Group Gongyi Tieshenggou
Coal Mining Co Ltd; Xinjiang
Dahuangshan Yuxin Coal
Mining Co Ltd (49.00%
stake); and Tianjun Yihai
Energy Mining Operating
Co Ltd
-
1,171
04-Feb-12
Piramal Healthcare
Limited
Vodafone Essar Limited
(5.50% stake)
Telecommunications ETHL
Communications
Holdings Limited
-
610
24-Feb-12
AGL Energy Limited
Loy Yang Power
(67.46% stake)
Energy, Mining &
Utilities
Great Energy
Alliance Corp Pty
Ltd
-
480
29-Feb-12
Caterpillar Inc
Caterpillar Japan Ltd
(33.00% stake)
Industrials &
Chemicals
Mitsubishi Heavy
Industries Ltd
-
449
03-Feb-12
Hana Financial
Group Inc
Korea Exchange Bank
(6.25% stake)
Financial Services
The Export-Import
Bank of Korea
n/a
n/a
48.2%
427
24-Feb-12
J Front Retailing
Co Ltd
Parco Co Ltd (33.20% stake) Consumer
Mori Trust Co Ltd
0.6
9.5
61.3%
371
Based on dominant geography of target company being Asia-Pacific
ConocoPhillips
Company
Yima Coal Mining
Group Co Ltd
2.5
5.9
22.7
Monthly M&A Insider
17
Trend graphs
asia-pacific M&A quarterly trend
160
800
140
700
120
600
100
500
80
400
60
300
40
200
20
100
0
25
20
Total volume
70
15
60
50
40
30
5
20
10
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Mid-market value
80
10
0
Total value
100
90
Value (US$bn)
900
Number of deals
180
Number of deals
Value (US$bn)
ASIA-PACIFIC
asia-pacific M&A quarterly private
equity trend
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Mid-market volume
Buyout value
asia-pacific M&A ANNUAL TREND
Exit value
Buyout volume
Exit volume
asia pacific M&A Annual private
equity trend
500
3,000
70
350
60
300
50
250
40
200
30
150
20
100
10
50
450
Value (US$bn)
300
250
1,500
200
Number of deals
2,000
Number of deals
350
Value (US$bn)
2,500
400
1,000
150
100
500
50
0
0
2006
2007
Total value
2008
2009
Mid-market value
2010
Total volume
2011
YTD 2012*
Mid-market volume
0
0
2006
2007
2008
Buyout value
2009
Exit value
2010
2011
Buyout volume
YTD 2012*
Exit volume
Monthly M&A Insider
18
Trend graphs
ASIA-PACIFIC M&A GEOGRAPHIC BREAKDOWN YTD 2012
ASIA-PACIFIC
value
volume
1.7% 1.4%
1.1%
2.2%
2.6%
3.6%
9.4%
India
Japan
36.5%
7.0%
Australia
China
13.1%
India
1.9%
3.8%
Japan
0.9%
Australia
8.0%
China
19.2%
Hong Kong
9.1%
Vietnam
South Korea
13.9%
1.9%
Vietnam
South Korea
5.6%
Malaysia
Malaysia
Indonesia
Indonesia
Thailand
Thailand
15.0%
21.1%
Other
20.8%
Hong Kong
Other
Asia-Pacific M&A Sector Breakdown YTD 2012
value
volume
0.2%
1.6%
0.6%
5.9%
3.1%
3.3%
18.7%
1.8%
1.4%
2.5%
Business Services
7.6%
Consumer
2.3% 1.4%
19.7%
5.2%
Business Services
5.2%
7.6%
Consumer
5.6%
Technology
Technology
Financial Services
11.7%
5.6%
6.1%
Leisure
Leisure
Construction
39.8%
Real Estate
Financial Services
Transportation
Transportation
8.7%
11.7%
9.4%
11.3%
Construction
Real Estate
Telecommunications
Telecommunications
Agriculture
Agriculture
Monthly M&A Insider
19
Trend graphs
asia-pacific M&A deal size breakdown
volume
100
100
17.5%
19.8%
13.6%
26.7%
24.4%
29.6%
80
70
15.6%
17.0%
16.9%
23.6%
13.8%
16.3%
30.5%
50
30.7%
27.1%
22.1%
26.5%
29.9%
26.3%
40
30
0.4%
0.4%
0.3%
0.4%
0.5%
0.9%
0.9%
1.0%
1.5%
0.9%
0.9%
4.8%
5.1%
4.5%
5.5%
4.5%
5.4%
4.8%
5.4%
3.8%
5.8%
5.3%
90
5.3%
6.2%
6.1%
85
12.5%
12.0%
11.0%
11.2%
10.7%
12.4%
88.9%
11.4%
20
10
0.3%
27.5%
15.8%
60
0.3%
1.2%
95
Percentage
90
Percentage
ASIA-PACIFIC
value
88.3%
88.4%
87.8%
88.8%
87.2%
88.7%
2007
2008
2009
2010
2011
YTD 2012*
80
20.8%
24.4%
20.5%
21.4%
21.6%
2008
2009
2010
19.5%
19.3%
2011
YTD 2012*
0
2006
2007
75
2006
US$251m-US$500m
US$251m-US$500m
US$501m-US$2,000m
US$501m-US$2,000m
US$2,001m-US$5,000m
US$2,001m-US$5,000m
>US$5,001m
>US$5,001m
Monthly M&A Insider
20
EUROPE
europe
A FOCUS ON THE NORDIC REGION
The Nordic region gets 2012 off to a slow start with a total of 66 deals valuing €6.176bn in the
first two months. March’s activity is unlikely to equalise the 116 deals difference compared
to 2011’s full Q1 at 182 deals and a deal value of €11.635bn. Nevertheless, M&A dealmakers
in Scandinavia (Sweden, Denmark, Finland, Norway and Iceland) “remain mildly optimistic”
according to mergermarket intelligence.
Stable Scandinavia
Country breakdown
2011 was a successful year for the Nordics and accounted
for €50.1bn worth of transaction, according to mergermarket
data. This is supported by 2011’s 182 deals in Q1 producing
a 98% increase since 2009’s low of 92 deals. It wouldn’t be
surprising, however, to see 2012’s Q1 looking very similar
to 2009 when also considering the on-going debt crisis in
the Eurozone and the global economic uncertainty. For deal
value, the biggest increase in a Q1 during the last six years
has been between Q1 2010 and Q1 2011 at 97% from €5.906bn
to €11.635bn. Standards are high for 2012 and Q1 is unlikely
to catch up with 2011 meaning a halt in the gradual rise in
activity since 2009.
Sweden and Norway have eight active sectors already,
making them the most lively in Scandinavia. Sweden’s second
largest sector at 16.7% is Construction and also provides the
largest deal value at a total market share of 51.9%. Sweden
was the busiest for the whole of 2011 within the Nordic area
with 266 transactions totalling €21bn. Potential takeovers
of Swedish target companies are likely to include Ahlsell,
the construction products and machinery distributor being
acquired by CVC. Bravida, the integrated supplier of technical
installation and service solutions for buildings and plants,
is also up for sale by owner private equity firm Triton, which
has hired Deutsche Bank and Handelsbanken as financial
advisors to find bidders. Another targeted company is Actic,
the Swedish fitness chain, which is planning to be sold by
owner FSN Capital.
Sector
Industrials & Chemicals is the consolidated sector that has
dominated the Nordics since 2007. From 2009 though, this
has been the chief sector for both deal value and volume,
even when activity hasn’t been very high. Q1 2012 will see
the same trend continue but the 20 deals so far valuing at
€2.556bn result in a 47% decrease in deals and a 68% drop
in deal value compared to last years’ Q1 showing 38 deals
valuing at €7.035bn.
Finland’s six active sectors and Denmark’s four active sectors
prove that they deal mostly in the areas that are known
to provide a positive return in their niche markets. These
markets are Industrials & Chemicals for both while Pharma,
Medial and Biotech coming second in Finland and Energy,
Mining & Utilities coming second in Denmark. The difficulty
for Danish M&A in 2012 will be the proposed increase in tax
law which will discourage generational takeovers.
Despite a slow start to 2012, conditions remain relatively
conducive to M&A transactions in the Nordic region. The
lending environment looks largely positive across the
Nordics region. This works well with both factors of the
overhang of maturities of private equity portfolios and the
healthy amount of companies with strong balance sheets
and expansive ambitions.
Monthly M&A Insider
21
Top 10 european announced deals of the month (feb-12)
EUROPE
Announced
Bidder company
Target company
Target dominated
sector
Revenue
EBITDA
P/E
Bid premia
1-day
before
Deal value
(€m)
2.2
6.4
10.5
2.3%
40,319
Seller company
Exit multiples (x)
07-Feb-12
Glencore International
plc
Xstrata Plc (65.92%
Stake)
Energy, Mining &
Utilities
17-Jan-12
Sumitomo Mitsui
Financial Group, Inc.
RBS Aviation Capital
Financial Services
Royal Bank of
Scotland Group Plc
n/a
n/a
-
5,732
28-Feb-12
Deutsche Bank AG
Deutsche Postbank AG
(39.5% Stake)
Financial Services
Deutsche Post AG
n/a
n/a
-
2,411
31-Jan-12
Outokumpu Oyj
Inoxum
Industrials &
Chemicals
ThyssenKrupp AG
0.4
13.5
-
2,384
16-Feb-12
Delmi SpA
Edipower SpA (70%
Stake)
Energy, Mining &
Utilities
Edison International
SpA; and Alpiq
Holding Ltd
1.6
9.7
-
1,904
29-Feb-12
CVC Capital Partners
Limited
Ahlsell Sverige AB
Construction
Cinven Limited; and
GS Capital Partners
0.8
9.5
-
1,800
17-Jan-12
DS Smith Plc
Svenska Cellulosa
Aktiebolaget SCA
(packaging division)
Industrials &
Chemicals
Svenska Cellulosa
Aktiebolaget SCA
-
1,600
24-Jan-12
Anadolu Efes Biracilik
ve Malt Sanayii AS
Consumer
SABMiller Plc (beer
business in Ukraine and
Russia)
SABMiller Plc
-
1,458
13-Feb-12
LBBW Immobilien
consortium led by
PATRIZIA Immobilien
AG
LBBW Immobilien
GmbH
Landesbank BadenWurttemberg
-
1,435
17-Jan-12
The Federal Agency
for State Property
Management
Rostelecom OAO (7.43% Technology
Stake)
51.0%
1,264
Based on dominant geography of target company being Europe
Real Estate
Deposit Insurance
Agency
2.8
12.8
Monthly M&A Insider
22
EUROPE
Pipeline of european expected deals
Situation
Target company
Sector
Potential bidder
company
Potential
takeover
target
Transdev SA
Transportation
Rumoured
takeover
Zespol Elektrowni
Wodnych Niedzica
SA (ZEW Niedzica)
Energy, Mining Energo PRO as
& Utilities
Rumoured
takeover
Oesterreichische
Volksbanken AG
Financial
Services
Potential
takeover
target
Endesa SA
Energy, Mining ContourGlobal LP
(business in Ireland) & Utilities
Potential
takeover
target
TAV Havalimanlari
Holding
Financial adviser to
bidder (B); target (T);
seller (S)
PKF Consult sp z
oo (B)
BAWAG PSK
Transportation Vinci SA
Note: Expected deals based on confirmed announcements by companies involved
Deutsche Bank (S)
Seller company
Market
cap/est.
value (€m)
Comments
Veolia
Environnement SA
-
Veolia Environnement, the
listed French multi-utility and
transportation group, is understood
to be considering selling its
transportation division Veolia
Transdev, daily Le Figaro reported.
Ministry of
Treasury of the
Republic of
Poland
-
Poland’s Treasury plans sale of
Enea, Energa, ZEW Niedzica, ZE
PAK and portion of shares in PGE. Government of
Austria
1,350
Oesterreichische Volksbanken
(OVAG), the co-operative Austrian
bank, could reconsider a merger
with privately owned Austrian rival
Bawag PSK, Format reported. The
Austrian state has invested roughly
€1.35bn in OVAG so far. Bawag PSK
is controlled by international private
equity house Cerberus Capital.
300
Endesa (ELE:SM), the Spainbased utility group, is in talks with
prospective buyers for its Irish
assets according to its CEO Andrea
Brentan. A published report citing
sources with knowledge of the
situation said Endesa had a number
of potential buyers interested in
acquiring Endesa Ireland. One of
the buyers was the New York-based
investment fund ContourGlobal, the
report said, adding that the sale was
worth an estimated €300m.
1,181
Vinci, the French construction
company said it was going to
place a bid to buy a 40.00% stake
in TAV, the Turkey based airport
management company, according to
reports in ntvmsnbc. Zaman quoted
Louis-Roch Burgard, CEO of Vinci,
as saying that TAV seems to be in
favour of the sale process to be
finalised as soon as possible, and
Vinci is ready to act accordingly.
Endesa SA
Tepe Group; and
Akfen Holding AS
Monthly M&A Insider
23
Trend graphs
european M&A quarterly trend
EUROPE
european M&A quarterly private
equity trend
500
140
2,000
450
130
1,800
400
120
1,400
100
1,200
1,000
200
800
Value (€bn)
110
350
300
90
80
250
70
200
60
50
100
600
40
400
30
150
100
20
200
0
0
Mid-market value
Total volume
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Total value
50
10
0
Buyout value
Mid-market volume
european M&A ANNUAL TREND
Exit value
Buyout volume
Exit volume
european M&A Annual private equity trend
1,200
8,000
300
1,600
7,000
1,400
1,000
250
6,000
600
4,000
Value (€bn)
5,000
1,200
200
1,000
150
800
3,000
400
Number of deals
800
Number of deals
Value (€bn)
Number of deals
300
1,600
Number of deals
Value (€bn)
400
600
100
2,000
200
400
50
1,000
0
0
2006
2007
Total value
2008
2009
Mid-market value
2010
Total volume
2011
YTD 2012*
Mid-market volume
200
0
0
2006
2007
2008
Buyout value
2009
Exit value
2010
2011
Buyout volume
YTD 2012*
Exit volume
Monthly M&A Insider
24
Trend graphs
European M&A GEOGRAPHIC Breakdown Ytd 2012
EUROPE
value
volume
8.0%
9.7%
7.7%
6.0%
0.9%
0.3%
UK
2.9%
CEE
UK
20.8%
CEE
5.1%
Iberia
7.4%
France
Iberia
France
9.2%
Nordic
Nordic
9.6%
Germany
11.5%
Benelux
Italy
48.5%
2.6%
Benelux
16.2%
5.1%
Switzerland
Italy
Switzerland
Others
5.1%
Germany
Others
11.8%
11.6%
European M&A Sector Breakdown Ytd 2012
value
3.0%
0.7%
0.7%
1.4%
volume
1.8% 2.2%
0.3%
1.9%
11.2%
3.0%
4.3%
12.0%
Consumer
2.0%
2.1%
1.8%
Business Services
Technology
1.1%
0.9%
0.7%
0.5%
4.6%
28.8%
4.6%
Business Services
Technology
4.7%
6.0%
Financial Services
Construction
Financial Services
6.5%
Construction
Media
Transportation
56.5%
Leisure
Consumer
Media
16.5%
9.1%
11.1%
Transportation
Leisure
Telecommunications
Telecommunications
Real Estate
Real Estate
Agriculture
Agriculture
Defence
Monthly M&A Insider
25
Trend graphs
european M&A deal size breakdown
volume
90
26.4%
34.6%
39.2%
10
0.4%
0.2%
0.2%
0.2%
0.4%
0.9%
0.9%
0.6%
0.6%
0.7%
0.7%
0.4%
3.3%
3.1%
3.2%
20.0%
17.6%
16.4%
21.2%
14.8%
30.9%
2.7%
3.0%
3.5%
24.2%
23.5%
22.3%
8.4%
8.4%
9.1%
15.9%
13.7%
17.0%
2006
2007
2008
9.2%
20.2%
20.7%
9.2%
93.1%
93.0%
92.6%
2010
2011
YTD 2012*
2.3%
3.2%
94
3.5%
3.9%
92
94.8%
11.2%
93.1%
8.3%
17.2%
18.7%
2010
2011
2.1%
4.0%
96
5.6%
30.2%
20.4%
2.7%
3.8%
56.2%
30
20
0.4%
98
21.9%
50
40
17.4%
38.7%
70
60
22.1%
Percentage
80
0.4%
100
100
Percentage
EUROPE
value
90
91.4%
90.8%
9.3%
88
0
2009
YTD 2012*
2006
2007
2008
2009
<€250m or undisclosed value
<€250m or undisclosed value
€251m-€500m
€251m-€500m
€501m-€2,000m
€501m-€2,000m
€2,001m-€5,000m
€2,001m-€5,000m
>€5,001m
>€5,001m
Monthly M&A Insider
26
THE MIDDLE EAST
& AFRICA
ME&A M&A ACTIVITY
With a political environment that continues to be defined by uncertainty in the Middle East &
Africa (ME&A), the M&A activity in the region shows no sign of recovery. Activity in the region is
quite targeted, with 59% of the volume of deals taking place in South Africa and Israel.
After a slight recovery in the last period of 2011, with a total
number of deals amounting to US$4bn for the month of
December only, the M&A activity in the ME&A region has seen
a slowdown in the first two months of 2012, with a total value
of US$3.5bn, representing a 72.2% decrease in value and 15%
decrease in number of deals compared to the same period
last year.
The M&A activity in January and February was mainly driven
by a series of large deals in the Energy, Mining & Utilities
sector which accounted for the largest percentage of deal
value in the region, with 43.6% of the market share. The top
ME&A mining deals announced include the acquisition of the
Democratic Republic of Congo-based Kolwezi Tailings project,
Frontier and Lonshi mines and related exploration interests of
First Quantum Minerals, the Canada-based mining company
engaged in mineral exploration, development and mining, by
Eurasian Natural Resources Corporation Plc, the UK-based
diversified natural resources group with integrated mining,
processing, energy and transport operations, and the Evander
Gold Mines Ltd acquisition by Pan African Resources Plc along
with Witwatersrand Consolidated Gold Resources Limited,
which amounted to US$1.3bn and US$221m respectively.
However, TMT was the most active sector by number of deals,
with 9 transactions (representing 20.5% of the market share)
announced in January and February, worth US$577m.
Orascom – France Telecom saga over?
After a long period of dispute and rejection, France Telecom
(FT) and Orascom Telecom have finally reached an agreement
on the acquisition of the Egyptian mobile operator Mobinil.
The French operator has been keen to take control over
Mobinil since at least 2010, when it made a bid to purchase
the remaining stake it doesn’t own in Mobinil. That deal was
then cancelled by the Egyptian Court, who ruled in favour
of Orascom. Almost two years later, France Telecom made
a non-binding offer valuing Mobinil share at EGP202.5, and
intends to launch a tender offer at the same offer price for
the remainder of the 29% stake in the company traded on the
Egyptian stock exchange. Shareholders of Orascom Telecom
voted in favour of the sale of most of their stake in the jointly
owned Mobinil, in a deal worth about US$2bn. Orascom
Telecom will remain as France Telecom strategic local partner
in Egypt, and will keep a 5% stake in Mobinil and a 30% voting
rights along with board representation.
The question remains on whether the deal will go through this
time. According to Marc Rennard, Vice President of France
Telecom for Africa, the Middle East and Asia, the deal should
not face any obstacles because of the offer price of EGP202.5
per share, which was valued by FT at EGP245 per share back
in 2010 ( a discount of 17%). The sale, which is subject to
final documentation and to the approval of the companies’
respective boards of directors and of regulatory authorities, is
expected to be completed in two months.
France Telecom owns about 71% of Mobinil Telecom Co.,
which controls Mobinil, and Orascom Telecom owns the rest.
Orascom Telecom also holds a 20% direct stake in Mobinil,
while about 29% is traded on the Egyptian Exchange.
Monthly M&A Insider
27
Top deals
Top 10 Middle Eastern & African announced deals of the month (feb-12)
Announced
Bidder company
Target company
Target dominated
sector
Seller company
Clal Industries and
Investments Ltd
Exit multiples (x)
Revenue
EBITDA
P/E
Bid premia
1-day
before
Deal value
(US$m)
-
356
-
167
-
134
-
130
-
124
-
118
10-Feb-12
Livnat Family
Mashav Initiating and
Development Ltd
(55.00% stake)
Construction
9-Feb-12
Olam International
Limited
Titanium Holding
Company SA
Consumer
3-Feb-12
Coca Cola Icecek AS
Al Waha for Soft Drinks, Consumer
Mineral water and Juices
LLC (85.00% stake)
20-Feb-12
F5 Networks Inc
Traffix Systems
TMT
6-Feb-12
International Finance
Corporation
The Mediterranean
and Gulf Insurance
and Reinsurance Co
(15.00% stake)
Financial Services
14-Feb-12
Duet Group
Dashen Brewery
Share Company Ltd
(41.00% stake)
Consumer
22-Feb-12
Al Raya For Foodstuff
Citi Venture Capital
Company Ltd
International; and
Levant Capital Limited (Controlling stake)
Consumer
-
100
21-Feb-12
Litha Healthcare
Group Limited
Pharmaplan Pty Ltd
Pharma, Medical & Paladin Labs Inc
Biotech
-
77
21-Feb-12
OBO Bettermann
Gmbh & Co Kg
O-Line Holdings Limited
(81.57% stake)
Construction
110.0%
32
27-Feb-12
Mealpass Motivation
Solutions Israel Ltd
Cibus Business Meals
Ltd
Business Services
-
28
Based on dominant geography of target being Middle East or Africa
1.0
Bessemer Venture
Partners; StageOne
Ventures; Benny
Schnaider (Private
Investor); and Shaked
Ventures
12.9
Tiret Endowment
Investment
Organization
0.6
New Hamashbir
Lazarchan Ltd
4.8
6.9
Monthly M&A Insider
28
Trend graphs
Middle eastERN & africaN M&A quarterly
private equity trend
40,000
160
35,000
140
30,000
120
25,000
100
7,000
25
6,000
80
15,000
60
10,000
40
5,000
20
Value (US$m)
20,000
5,000
15
4,000
3,000
10
Number of deals
Value (US$m)
20
Number of deals
2,000
5
0
1,000
0
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Mid-market value
Total volume
Mid-market volume
Buyout value
Middle eastERN & africaN M&A
ANNUAL TREND
80
400
70
350
60
300
50
250
40
200
30
150
20
100
10
50
0
0
Total value
2008
2009
Mid-market value
2010
Total volume
Buyout volume
Exit volume
2011
YTD 2012*
Mid-market volume
14
70
12
60
10
50
8
40
6
30
4
20
2
10
0
Number of deals
450
Number of deals
500
90
2007
Exit value
Middle eastERN & africaN M&A Annual
private equity trend
100
2006
0
06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12*
Value (US$bn)
Total value
Value (US$bn)
Middle eastERN & africaN M&A
quarterly trend
0
2006
2007
2008
Buyout value
2009
Exit value
2010
2011
Buyout volume
YTD 2012*
Exit volume
Monthly M&A Insider
29
Trend graphs
Middle eastERN & africaN M&A GEOGRAPHIC BREAKDOWN YTD 2012
value
volume
2.0%
3.4%
0.4%
2.3%
0.3%
2.3%
3.9%
Israel
5.0%
28.3%
South Africa
Saudi Arabia
Democratic Republic
of Congo
2.3%
2.3%
Israel
2.3%
2.3%
29.5%
South Africa
4.5%
United Arab Emirates
Saudi Arabia
4.5%
Democratic Republic
of Congo
Nigeria
Ethiopia
36.7%
13.5%
Nigeria
9.1%
Iraq
Ethiopia
Mozambique
Iraq
Tanzania
Mauritius
9.1%
Zimbabwe
Mozambique
29.5%
6.5%
Tanzania
Zimbabwe
Middle eastERN & africaN M&A Sector Breakdown YTD 2012
value
volume
1.9%
2.6%
0.2%
16.7%
11.2%
4.5%
TMT
Consumer
Business Services
3.9%
TMT
20.5%
4.5%
Energy, Mining & Utilites
4.1%
2.3% 2.3%
Energy, Mining & Utilites
4.5%
Consumer
Business Services
4.5%
Financial Services
Financial Services
Construction
Construction
9.1%
15.9%
15.7%
43.6%
Transportation
Transportation
Leisure
15.9%
15.9 %
Agriculture
Monthly M&A Insider
30
Trend graphs
Middle eastERN & africaN M&A DEAL SIZE BREAKDOWN
volume
100
100
90
90
70
80
47.9%
65.7%
36.2%
54.9%
53.3%
67.0%
68.0%
60
21.6%
50
19.1%
40
30
20
10
11.3%
12.7%
2006
17.6%
12.6%
19.2%
14.8%
7.5%
1.0%
2007
0.9%
2008
12.7%
1.7%
2009
14.5%
5.6%
3.8%
5.7%
3.4%
4.1%
11.2%
13.2%
36.4%
32.4%
2.3
6.0%
5.7%
10.2%
15.4%
1.6%
2010
9.8%
9.7%
8.9%
1.0%
2011
60
50
6.7%
6.4%
33.9%
4.5%
15.9%
11.0%
20.5%
33.7%
27.9%
32.5%
30
20
9.4%
13.7%
6.2%
7.2%
40
19.2%
13.2%
7.8%
0
13.2%
29.0%
12.8%
9.1%
70
Percentage
80
Percentage
value
1.4%
2.3%
YTD 2012
36.3%
39.3%
42.9%
2006
2007
2008
47.0%
44.4%
2009
2010
47.9%
56.8%
2011
YTD 2012*
10
0
<US$14.9m or undisclosed value
<US$14.9m or undisclosed value
US$15m-US$100m
US$15m-US$100m
US$101m-US$250m
US$101m-US$250m
US$251m-US$500m
US$251m-US$500m
>US$501m
>US$501m
Monthly M&A Insider
31
About Merrill Corporation
ABOUT MERRILL CORPORATION
Founded in 1968 and headquartered in St. Paul, Minnesota, Merrill Corporation is
a leading provider of outsourced solutions for complex business communication
and information management. Merrill’s services include document and data
management, litigation support, language translation services, fulfillment, imaging
and printing. Merrill serves the corporate, legal, financial services, insurance
and real estate markets. With more than 5,000 people in over 40 domestic and 22
international locations, Merrill empowers the communications of the world’s
leading organisations.
Merrill Transaction and Compliance Services
Through a broad range of tools and services, Merrill
Corporation streamlines document composition, filing,
printing, distribution and electronic access to the transaction
and regulatory compliance activities of its clients engaged
in securities offerings, reorganisations, mergers and
acquisitions, SEC and other regulatory filings. As a registered,
third-party service provider offering public companies expert
EDGARization and XBRL filing services, Merrill professionals
can compose, edit, electronically file, manage and distribute
data in printed or electronic format.
Merrill Legal Solutions provide both on-demand and on-site
litigation support, information management and electronic
and print document management services for law firms,
corporate legal departments and professional services firms.
Examples of our expertise include the creation of searchable
litigation document repositories, management of electronic
data discovery and the delivery of real-time court reporting
and deposition videography services.
Merrill’s Marketing and Communication Solutions supply
brand identity management, customer communication
and packaged direct marketing programmes for sales
professionals in industries such as real estate, mutual funds
and insurance. Examples of our services include customisable
corporate identity materials, direct-mail marketing pieces and
promotional programs supported by web-based technologies.
Merrill’s Translations Services provide a range of translation
options to help clients achieve the most efficient and cost
effective approach to their translation projects. Merrill Brink
offers extensive legal translation services for international
litigation, intellectual property, patents, contractual matters,
antitrust matters, mergers and acquisitions, arbitration
and more.
www.datasite.com
About Merrill DataSite
Revolutionising the due diligence process
Merrill DataSite is designed for rapid deployment and can be
up and running within two hours of a client’s need. Our team
can scan, upload and organise thousands of pages of content
from any source in 24 hours or less. Every aspect of the
process, from document scanning to VDR hosting and project
management is delivered by Merrill’s multilingual team,
available around the clock worldwide.
With Merrill DataSite, all documents are captured and indexed
to an online database and because all rights are designated
by the client, security and control are guaranteed. Each user’s
ability to view, print or access source documents is set up
by the client administrator and can be changed at any time.
Merrill DataSite provides useful tools, including full search,
viewer audit capability, Q&A, bulk uploads and detailed user
activity tracking that help clients maintain tighter control and
have greater insight into reviewer behaviour.
Merrill DataSite enhances transaction success
Merrill DataSite is the industry’s acknowledged leader. More
than 61,000 different private and public companies across the
globe have leveraged Merrill DataSite to increase the value of
the following types of transactions:
• Mergers, acquisitions and divestitures
• Private placement transactions
• Leveraged buyout transactions
• Bankruptcy and reorganisation transactions
• Financial restructuring transactions
• Initial public offerings and dual-track processes
• Asset purchases and liquidations
• Post-merger integration
Monthly M&A Insider
32
About Merrill DATASITE
Now Smarter, Faster, Easier!
ABOUT MERRILL DATASITE
Please visit our website: www.datasite.com
Merrill DataSite – built with the client in mind
Merrill DataSite was created to meet its clients’ needs and
built to their specifications. Since 2002 we have consistently
leveraged the experiences of our clients to add leading-edge
functionality to the available toolset. Merrill DataSite allows its
users and administrators to:
Examine documents immediately. Patented technology
ensures you never have to wait for a document to be
downloaded. Because the data resides on Merrill’s servers, you
can simultaneously view an unlimited number of documents
in multiple windows without having to close out or save to your
“temp” file. When faced with hundreds of documents to review,
this feature saves significant time and expense.
Designate user permissions. Team administrators can control
which users will be able to view, print or download specific
documents, folders or projects – simply and quickly.
Search every word in every document. With large document
collections, sophisticated search features are key to finding
critical information and accelerating the due diligence process.
Merrill DataSite performs Optical Character Recognition (OCR)
on each and every letter in each and every document. Our
search capabilities allow users to search tens – if not hundreds
– of thousands of pages to find what’s relevant to them. Merrill
DataSite’s search capabilities ensure nothing is missed in any
of the posted documents - regardless of where they may be
organised within the index (e.g. find every instance of “contract”
and “termination” within 5 words of each other, etc.). Search
results are returned much faster and are unlimited in terms of
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Using wildcard, fuzzy, proximity, boosting, Boolean and
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will enjoy increased confidence knowing they’ve received and
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Protect confidential information. ”View-only” documents
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No problem. Whether you’re working in Beijing or New York,
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Security is our highest priority
Merrill has been a trusted provider of secure information to
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employees execute letters of confidentiality and we are audited
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Merrill DataSite was the first virtual data room to receive the
ISO 27001 certification for its comprehensive Information
Security Management System (ISMS).
The ISO 27001 standard, developed by the International
Organisation for Standards to establish international
requirements for information security and certification of
ISMS, is designed to ensure effective protection of information
assets in foreign markets, as well as across national and
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The best tool in the industry
Merrill DataSite technology allows for the fastest conversion
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As a leading provider of VDR solutions worldwide, Merrill
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totalling trillions of dollars in asset value.
Monthly M&A Insider
33
About Merrill Corporation
EXECUTIVE MANAGEMENT
ABOUT MERRILL CORPORATION
Chris Robilliard
Regional Director, Australia & New Zealand
Tel: +612 8667 3064
Steve Piccone
Vice President, New York
Tel: +1 212 229 6883
Paul Hartzell
Senior Vice President
Tel: +1 212 367 5950
Manuel Bentosinos
Regional Director, Mexico, Columbia and
Caribbean
Tel: +52 55 9171 2237
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EXECUTIVE SALES
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Account Manager, Europe
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Regional Director, Europe Tel: +44 20 7422
6100
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Tel: +1 651 632 4585
Jon Blue
Vice President, Clean Tech
Tel: +1 206-696-9169
Monthly M&A Insider
34
The following notes pertain to data contained in this publication:
• Deals are included where the deal value is greater than or equal to €5m.
• Where no deal value has been disclosed, deals are included if the turnover of the
target is greater than or equal to €10m.
• Deals are included in the graphs and Top Deals in each section based on the
dominant geography and dominant sector of the target company. Data underlying
the League Tables are based on deals where the bidder, target or parent
geography of either is that of the geography in focus.
• *Q1 2012 refers to the period 1-Jan-12 to 29-Feb-12.
*YTD 2012 refers to the period 1-Jan-12 to 29-Feb-12.
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Disclaimer
This publication contains general information and is not intended to be comprehensive nor to provide financial, investment, legal, tax or other professional advice or
services. This publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any investment
or other decision or action that may affect you or your business. Before taking any such decision you should consult a suitably qualified professional adviser. Whilst
reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and neither Mergermarket nor
any of its subsidiaries nor any affiliate thereof or other related entity shall have any liability to any person or entity which relies on the information contained in this
publication, including incidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk.
Remark, the events and publications arm of The Mergermarket Group, offers a range
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