an acuris company the comprehensive review of mergers and ... · the end of 2017, and that the new...

The comprehensive review of mergers and acquisitions in the Americas region

Deal DriversAmericas

FY 2017

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An Acuris Company

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Mergermarket Deal Drivers Americas

Contents

3

Foreword 4

Americas Heat Chart 5

All Sectors 6

Financial Services 18

Industrials, Manufacturing & Engineering 24

Energy, Mining, Oil & Gas 30

Consumer 36

Technology, Media & Telecom 42

Life Sciences & Healthcare 48

Canada 54

West 61

Midwest 68

South 75

Mid-Atlantic 82

New England 89

Latin America 96

About Merrill Corporation 104

Merrill Corporation Contacts 104

Contents

mergermarket.com


Foreword

Welcome to the full-year 2017 edition of Deal Drivers Americas, published by Mergermarket in association with Merrill Corporation. In this report, we take an in-depth look at M&A data in North America and Latin America, as well as examine key trends that dealmakers expect to see in 2018.

Despite heightened expectations at the beginning of the year, dealmaking in 2017 was never likely to hit the heights of the two previous years. Many dealmakers appeared to be taking a wait-and-see approach to promises from the Trump administration, particularly on corporate tax cuts, and this led to a year-on-year drop in deal value.

However, this decline needs to be put into context. While activity appears uninspiring in comparison to recent years, there were numerous deals that not only made headlines but also pointed to the nature of transactions that could be coming down the pipeline in 2018. It is likely we will see more disruptive megadeals in 2018 as the uncertainty around tax reforms was lifted with the signing of the US government’s tax bill on December 22. This reform, the largest overhaul of the US tax code for 31 years—allied with a benign economy and record corporate cash balances—has dealmakers and financial forecasters predicting that 2018 could see numbers back to 2015-16 levels.

Top sectors In terms of sectors in 2017, the Technology, Media & Telecom (TMT) sector saw the highest volume of activity in North America with 1,357 deals, eclipsing the sector’s 2016 tally of 1,255 deals. And the appetite for technology targets is only likely to strengthen in 2018 as corporates from outside the Technology sector and deal-hungry buyout firms look to compete with big-spending tech giants for companies in a variety of subsectors, including software and cybersecurity.

Beyond TMT, the Energy, Financial Services and Consumer sectors will also be sectors to watch throughout 2018, as they look to carry over positive dealmaking momentum from last year.

Full of promise Canada continues to be a strong contributor to the region’s dealmaking activity, with an uptick in deal value in 2017 based on rising confidence in the Canadian economy and positive forecasts for the year ahead. On the other hand, the pace and strength of Latin American dealmaking is expected to be hindered by upcoming elections in Mexico, Colombia and Brazil.

After a strong start to 2018, which has seen a number of megadeals announced, dealmakers are anticipating a busy year for M&A activity, with the uncertainty that was present last year now behind us.

The US economy is more stable than it has been for a long time with an expectation of 2.5% growth in 2018, according to the World Bank; both private equity and corporate bidders are sitting on excess cash; the stock market continues to break records and confidence is understandably high. All these factors combined means 2018 could be a very interesting year indeed.

Sincerely,

Mark Williams Chief Revenue Officer, Americas

Mark Williams Chief Revenue Officer, AmericasMerrill Corporation

Mergermarket Deal Drivers Americas 4

mergermarket.com

Foreword


5Mergermarket

Heat Chart based on potential companies for sale

Hot Warm Cold

Criteria of heat chart: Mergermarket’s sector heat chart is based on companies tagged as potential targets in 2017.

Sector West South Mid-Atlantic

Midwest LatAm New England

Canada Total

TMT 553 243 225 122 75 104 75 1397

Industrials/Chemicals 189 248 96 248 88 84 37 990

Consumer 199 163 146 151 147 56 28 890

Pharma/Med/Biotech

150 176 126 147 50 83 39 771

Energy/Mining/Utilities

145 198 66 58 118 22 46 653

Business Services 146 151 108 79 81 49 10 624

Financial Services 82 87 101 40 49 32 29 420

Leisure 41 50 29 23 31 9 3 186

Construction 15 18 10 12 23 5 4 87

Transportation 12 20 6 8 36 1 4 87

Real Estate 12 12 13 10 7 1 7 62

Agriculture 5 9 3 10 9 0 3 39

Defense 9 10 3 5 0 5 1 33

Government 0 6 3 0 2 0 0 11

Total 1558 1391 935 913 716 451 286 6250

Our heat chart of “companies for sale” stories in 2017 shows that Technology, Media & Telecoms (TMT) remains the dominant sector in terms of M&A targets in the Americas, while the West is top of the heap when it comes to regions. The Industrials & Chemicals and Consumer segments rounded out the top three sectors, and the South and Mid-Atlantic followed the West when it came to regional targeting.

Many regions lived up to their reputations for having a dominant position in certain sectors. For instance, the Midwest was the top region for stories about Industrials & Chemicals companies on the market, with 25% of the total number of articles related to businesses in the sector.

Meanwhile, the South had by far the most articles related to Energy, Mining & Utilities (EMU) targets, with 30% of the total, thanks to the huge number of commodity-focused businesses in Texas, Oklahoma, and neighboring states. The West and Latin America also had significant percentages of EMU “companies for sale” stories in 2017.

Examining the overall position of different sectors, the consumer industry’s position in third place with 890 stories suggests that deal activity may rise in the sector, given that there were only 588 deals in 2017 for consumer businesses in the Americas.

At the same time, a decline may be in store for Business Services dealmaking—there were just 624 “companies for sale” articles for companies in the sector in 2017, while there were 862 Business Services deals last year, according to Mergermarket data.

Overall, one thing remains certain for 2018: the Americas are set for another busy year in M&A.

90 60 30

80

70

50

40

20

10

Americas Heat Chart


mergermarket.com

Heat Chart


All Sectors

Part of the Acuris reporton global M&A activity


mergermarket.com

All Sectors


Tom Cane

Further informationGet in touch

Tax reform, digital disruption and pent-up demand for deals have set the stage for an expected uptick in North American M&A activity this year after a relatively lackluster 2017, dealmakers told this news service.

Unless there is a major geopolitical destabilization, M&A should flourish this year, said Bill Curtin, global head of M&A at Hogan Lovells.

There were US$1.4tn worth of deals in North America last year, down 12.2% from 2016, according to Mergermarket data, falling short of high expectations at the start of the year. One factor explaining the slowdown was that many companies wanted more clarity on where the Trump administration was heading, one M&A lawyer said.

A year on, however, the administration’s softening of regulations coupled with the reform of the US tax code will likely facilitate more deal flow, advisors said.

In particular, the tax overhaul presents US companies with a “once in a lifetime opportunity,” the lawyer said, singling out pharmaceutical companies as key beneficiaries whose significant offshore cash piles could now be used to fund M&A. Real Estate and Energy are other sectors that should see an overall benefit from the bill, leading to increased activity, he said.

Overall, deals involving strategic acquirers—including stock deals—look set to dominate in

2018, against the background of record-high valuations, said another M&A lawyer.

When presenting these deals to shareholders, there will likely be “a huge focus” on putting synergies “front and center because of sky-high valuations,” this M&A lawyer said.

A media industry executive confirmed that tax reform weighed on his decisions toward the end of 2017, and that the new legislation, combined with the Trump administration’s general deregulatory push, will lead to a spike in deal flow.

This executive also expected that, on the sell-side, smaller, private, family-owned businesses will be brought off the sidelines and consider cashing out now that they have clarity on the tax regime.

For private equity buyers, not only do they face competition from strategic acquirers, they also face pressure from the proliferation of new market entrants, including family offices, SPACs and sovereign wealth funds, advisors said.

“It’s very competitive and people are challenged to deploy their funds,” said Matt Sondag of West Monroe Partners.

Disruption While total 2017 M&A value was down, the year was noteworthy for the “Amazon effect.” The Seattle, Washington-based tech giant sent shockwaves through the market with

its US$13.5bn acquisition of Whole Foods in the summer. Then, in December, CVS Health [NYSE:CVS] and Aetna [NYSE:AET] announced a US$67.8bn merger agreement, seen by many as partly a response to Amazon’s expected entry into—and disruption of—the prescription drug market.

Technology is set to be at the forefront of companies’ M&A plans in 2018, allowing companies to transform their customer experience or add more automation via acquisitions. Many companies are questioning how they can “mimic the Amazon-like experience,” said Tom Bolger of West Monroe Partners.

“There’s only one industry and that’s technology,” said Hogan Lovells’ Curtin. “When we look at what our clients want to do whether they’re a healthcare or automotive company, it’s about technology.”

Cross-border Another factor behind the drop in deal value last year was declining inbound cross-border M&A, which fell 23.6% to US$263.1bn, according to Mergermarket data.

Advisors said demand for US assets from both Europe and Asia Pacific remains high. Yet the increasing scope of deal reviews by the Committee on Foreign Investment in the United States (CFIUS) means the hurdles are getting higher—especially for Chinese buyers.

All SectorsOverview

Jonathan Guilford


mergermarket.com

All Sectors

mailto:tom.cane%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry

mailto:jonathan.guilford%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


8Mergermarket

Top deals

AnnouncedDate

Status Bidder Company Target Company Sector Vendor Company Deal Value(US$m)

14-Dec-17 P The Walt Disney Company Twenty-First Century Fox Inc Technology, Media & Telecom 68,422

3-Dec-17 P CVS Health Corporation Aetna Inc Financial Services 67,823

17-Jan-17 C British American Tobacco Plc Reynolds American Inc (57.83% stake) Consumer 60,567

4-Sep-17 P United Technologies Corporation Rockwell Collins Inc Industrials, Chemicals & Engineering 29,948

23-Apr-17 C Becton, Dickinson and Company C.R. Bard Inc Life Sciences & Healthcare 23,609

21-Aug-17 P Sempra Energy Energy Future Holdings Corporation Energy, Mining, Oil & Gas 18,800

10-Feb-17 C Reckitt Benckiser Group Plc Mead Johnson & Company Consumer 17,835

15-Dec-17 C Marathon Petroleum Corporation MPLX LP (40.32% stake) Energy, Mining, Oil & Gas 17,279

1-Feb-17 C ONEOK Inc ONEOK Partners LP (60% stake) Energy, Mining, Oil & Gas 17,118

18-Aug-17 P Calpine Consortium Calpine Corporation Energy, Mining, Oil & Gas 17,023

7-Jul-17 L Berkshire Hathaway Energy Oncor Electric Delivery Company LLC (80.03% stake) Energy, Mining, Oil & Gas Energy Future Holdings Corporation 16,720

31-Jul-17 P Discovery Communications Inc Scripps Networks Interactive Inc Technology, Media & Telecom 14,383

16-Jun-17 C Amazon.com Inc Whole Foods Market Inc Consumer 13,464

29-Mar-17 C Cenovus Energy Inc ConocoPhillips (Canadian conventional natural gas assets); and Foster Creek Christina Lake Oil Sands Partnership (50% stake)

Energy, Mining, Oil & Gas ConocoPhillips Company 13,240

9-Jan-17 C Williams Companies Inc Williams Partners LP (32.24% stake) Energy, Mining, Oil & Gas 11,358

30-Oct-17 P Vistra Energy Corp Dynegy Inc Energy, Mining, Oil & Gas Energy Capital Partners LLC 10,609

22-May-17 L Clariant AG Huntsman Corporation Industrials, Chemicals & Engineering 10,355

28-Aug-17 C Gilead Sciences Inc Kite Pharma Inc Life Sciences & Healthcare 10,161

30-Oct-17 P Lennar Corporation CalAtlantic Group Inc Construction MatlinPatterson Global Advisers LLC 9,256

18-Sep-17 P Northrop Grumman Corporation Orbital ATK Inc Defense 9,170

C= Completed; P= Pending; L= Lapsed

Top 20 Announced Deals for the Year Ending 31 December 2017 (any North American Involvement)


mergermarket.com

All Sectors


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Please use corresponding AIT filePlease use corresponding AIT file

39.9%

1.6%

17.6%

3%

3.7%

6.5%

22.7%

5%

29%

3.4%

23.8%

3.2%

5.8%

6.4%

22.8%

5.6%

USA

Northern Europe

Asia-Pacific

USA

Northern Europe

Asia-Pacific

Canada

Central & Eastern Europe

RoW

Canada

Central & Eastern Europe

RoW

Western Europe

Southern Europe

Western Europe

Southern Europe

Mix of deals by geographic regionDeal Count

Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.

Mix of deals by geographic regionValue

Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.

Mergermarket 9

mergermarket.com

All SectorsDeal Drivers Americas


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value


Mergermarket Deal Drivers Americas 10All Sectors

Valu

e (U

S$

bn)

0

50

100

150

200

250

300

350

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$117.1

US$154.7

US$71.7

US$180.7

US$307.9

US$161.1

US$248.8

US$9.3 US$

3.3

US$35US$

17.3

US$34.7

US$30.3

Num

ber

of d

eals

0

200

400

600

800

1,000

1,200

1,400

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

46

596

1,357

12 29

173115

218

990

518

862

588 581

Mix of deals by industry sectorDeal Count

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada. Industry sector is based on the dominant industry of the target.

Mix of deals by industry sectorValue

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada. Industry sector is based on the dominant industry of the target.

mergermarket.com



0

50,000

100,000

150,000

200,000

250,000

300,000

2017201620152014201320122011

Valu

e (U

S$

m)

Volum

e

0

200

400

600

800

1,000

1,200

US$176,954US$

159,944US$

162,496

US$249,647 US$

242,268

US$295,990

US$271,305

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

2017201620152014201320122011

Valu

e (U

S$

m)

Volum

e0

200

400

600

800

1,000

1,200

1,400

US$171,000

US$145,217

US$127,612US$

114,724

US$175,692

US$157,844

US$204,390

Deal Count Deal CountValue Value

Buyouts

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the US & Canada.

Exits



mergermarket.com

All Sectors


Please use corresponding AIT filePlease use corresponding AIT file Please use corresponding AIT file

Valu

e (U

S$

m)

0

30,000

60,000

90,000

120,000

150,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12011 2012 2013 2014 2015 2016 2017

Num

ber

of d

eals

0

50

100

150

200

250

300

350


European bidder acquiring a North American target

North American bidder acquiring a European target

Total North American/European deals

Transatlantic dealsDeal Count

Based on dominant location of target and bidder and excludes all buyouts.

Transatlantic dealsValue

Based on dominant location of target and bidder and excludes all buyouts.

European bidder acquiring a North American target

North American bidder acquiring a European target

Total North American/European deals


mergermarket.com

All Sectors


Value Value Value Value Value Value

Please use corresponding AIT file


Please use corresponding AIT file Please use corresponding AIT file

All Sectors

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2017201620152014201320122011

Valu

e (U

S$

bn)

US$248.4

US$272.9

US$85.6

US$129.6

US$308.5

US$268.8

US$99.3

US$119.8

US$269.2

US$309

US$106.3

US$152.4

US$158.4

US$238.9

US$73

US$113.4

US$207.8

US$268.7

US$81.2US$112

US$192.2

US$191.9

US$84.4US$115

US$327.1

US$88.7US$123.6

US$241.2

US$394.9

US$315.2

US$341.2

US$1,140.2

US$765.1US$

644.6US$591.3

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2017201620152014201320122011

Num

ber

of d

eals

280

236

2,197

3,1543,357 3,528

275

271

1,946

312

299

2,399

2,872

245

1,860

205

2,259

274

231

1,845

2,2602,010

1,859

243

337

1,828

210

237

29

60

50

87 80 9777

2566

27

50 69 49 41

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

mergermarket.com



0

200

400

600

800

1,000

1,200

1,400

1,600

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000


Quarterly M&A activityValue


Quarterly M&A activityDeal Count


Moving average trend lineDeal Value Moving average trend lineDeal Count


mergermarket.com

All Sectors


15Mergermarket

Legal advisors by value Legal advisors by deal count

League tables

2017 2016 Company name Value (USD m)

Number of Deals

1 5 Skadden Arps Slate Meagher & Flom 474,995 211

2 13 Kirkland & Ellis 395,257 455

3 12 Simpson Thacher & Bartlett 375,934 147

4 1 Sullivan & Cromwell 360,481 118

5 6 Davis Polk & Wardwell 359,120 109

6 3 Cravath, Swaine & Moore 354,835 73

7 2 White & Case 336,254 154

8 14 Cleary Gottlieb Steen & Hamilton 330,612 79

9 11 Latham & Watkins 224,717 306

10 10 Shearman & Sterling 211,600 93


Number of Deals

1 1 Kirkland & Ellis 395,257 455

2 3 Jones Day 172,578 308

3 2 Latham & Watkins 224,717 306

4 4 DLA Piper 41,491 291

5 14 Goodwin Procter 61,675 262


7 7 Morgan Lewis & Bockius 44,108 198

8 5 Weil Gotshal & Manges 188,545 189

9 8 White & Case 336,254 154

10 9 Paul Weiss Rifkind Wharton & Garrison 130,397 148


Number of Deals

1 2 Goldman Sachs & Co 674,080 233

2 1 JPMorgan 499,305 222

3 3 Morgan Stanley 437,495 180

4 4 Houlihan Lokey 35,266 167

5 11 Citi 321,125 145

6 7 Jefferies 114,998 137

7 6 Barclays 291,241 136

8 10 Credit Suisse 233,719 132

9 12 Lazard 300,508 131

10 5 Bank of America Merrill Lynch 300,119 129


Number of Deals


2 4 JPMorgan 499,305 222


4 5 Citi 321,125 145

5 12 Lazard 300,508 131


7 6 Barclays 291,241 136

8 10 Centerview Partners 262,916 42

9 9 Deutsche Bank 234,229 80


Financial advisors by deal countFinancial advisors by value

The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.


mergermarket.com

All Sectors


16Mergermarket

Legal advisors by deal count – mid-market (US$5M–US$250M)Legal advisors by value – mid-market (US$5M–US$250M)

League tables


Number of Deals




4 2 DLA Piper 5,085 67

5 4 Jones Day 4,939 72


7 15 Cooley 4,407 54

8 16 Blake, Cassels & Graydon 4,328 59


10 24 Vinson & Elkins 4,109 34


Number of Deals


2 4 Jones Day 4,939 72

3 1 DLA Piper 5,085 67




7 9 Cooley 4,407 54

8 8 Stikeman Elliott 3,889 44


10 3 Norton Rose Fulbright 3,060 43


Number of Deals

1 1 Stifel/KBW 4,909 59


3 5 Raymond James & Associates 3,390 39

4 6 KPMG 3,053 39

5 3 Sandler O'Neill & Partners 3,537 38

6 11 Evercore 4,423 35

7 4 Piper Jaffray & Co 3,305 34

8 7 JPMorgan 4,172 32

9 12 Deloitte 2,138 30



Number of Deals

1 3 Stifel/KBW 4,909 59

2 5 Evercore 4,423 35


4 2 JPMorgan 4,172 32

5 4 RBC Capital Markets 3,868 27


7 12 Jefferies 3,551 25


9 15 Citi 3,522 22


Financial advisors by deal count – mid-market (US$5M–US$250M)Financial advisors by value – mid-market (US$5M–US$250M)

The legal advisor mid-market league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The financial advisor mid-market league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.


mergermarket.com

All Sectors


17Mergermarket

The PR advisor mid-market league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

PR advisors by deal count – mid-market (US$5M–US$250M)PR advisors by value – mid-market (US$5M–US$250M)


Number of Deals

1 1 Sard Verbinnen & Co 5,158 39

2 2 Joele Frank Wilkinson Brimmer Katcher 3,132 27

3 5 Edelman 2,980 23

4 3 FTI Consulting 2,927 30

5 4 ICR (Integrated Corporate Relations) 2,915 33

6 16 Abernathy MacGregor Group (AMO) 2,869 24

7 7 Finsbury Hering Schuppener GPG 2,159 15

8 8 Kekst (Publicis/MSLGROUP) 2,047 20

9 6 Brunswick Group 1,401 13

10 24 Blueshirt Group 1,174 12


Number of Deals






6 5 Edelman 2,980 23




10 23 Blueshirt Group 1,174 12


Number of Deals








8 9 Edelman 51,839 74


10 14 BackBay Communications 2,895 52


Number of Deals








8 14 Sloane & Company 81,776 15

9 - Gladstone Place Partners 68,422 1

10 21 Ashton Consulting (AMO) 64,201 5

PR advisors by deal count PR advisors by value

League tables

The PR advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

Mergermarket

mergermarket.com

Deal Drivers Americas All Sectors


Financial Services



mergermarket.com

Financial Services


Yizhu Wang


Financial ServicesOverview

Dealmaking among Financial Services firms is expected to increase this year, driven by the consolidation of community and regional banks, demands on diversifying revenue, as well as the emerging shareholder activism in Financial Services, sector advisors said.

Bank deals increased in 2017 to 197 transactions worth US$28bn compared to 186 deals worth US$25bn in 2016, according to Mergermarket data. Overall deal counts among Financial Services companies declined by seven to 518, though value surged thanks to pharmacy chain CVS Heath’s [NYSE:CVS] US$67.8bn proposed acquisition of health insurer Aetna [NYSE:AET].

In 1H18, community banks in the US$1bn to US$15bn asset size range will be one notable area for consolidation, said Ben Chung, of counsel at Morrison & Foerster.

M&A among banks in this size range will be more impacted if lawmakers ease regulations by modifying the Dodd-Frank Act, Chung said. Currently, banks with more than US$50bn in assets face a heavier regulatory burden. A pending bill in the Senate would increase the asset threshold to US$250bn.

If Dodd-Frank is revised, mid-sized banks will be able to more easily expand without triggering additional Dodd-Frank oversight, and there will be a push for mergers, said Jones Day partner Peter Izanec.

Along with the robust credit and public markets, bank deal values have gone up “significantly”

over the past few years since the financial crisis, Chung said. Banks can now fetch valuations at over 2x book value, he noted.

Analysts at Keefe, Bruyette & Woods, a financial services investment bank, said in a recent report that banks’ stronger stock currencies, the demand for deposits and deregulation will drive bank deals in 2018. The report identified as prime takeover candidates Associated Banc-Corp [NYSE:ASB], BankUnited [NYSE:BKU], Investors Bancorp[NASDAQ:ISBC], Signature Bank [NASDAQ:SBNY] and TCF Financial [NYSE:TCF].

Bank regulators have picked up the pace of deal reviews, from an average of 140 days in 2014 to 130 days last year, according to KBW. Shortened closing periods could enable banks to pursue more deals, said Christopher McGratty, managing director of equity research at KBW.

Driven by a strong sellers’ market, buyers in the wider Financial Services space beyond banks are willing to take more risk and moving more quickly to win deals, said panelists at the Mergermarket Financial Services M&A Forum in November in New York.

Deal processes have been more atypical and less predictable, said Danny Rodriguez, partner at Lee Equity Partners, at the panel. Rodriguez has seen bidders start bidding a few weeks early. Bidders are also accepting more aggressive terms and valuations for top-notch companies in order to secure the property, said Rodriguez and Jeb Doggett, managing director at Deloitte.

Going forward, other issues driving bank deal talks include institutions’ expansion into wealth management, the rise of financial technology and shareholder activism, advisors said.

Banks have continued to expand their wealth management businesses, Izanec said. Particularly for regional banks, a common model nowadays is to work with wealth management firms through contracts and get referral fees, Chung said.

Because the advisory service is complementary and tends to have higher profitability than the interest margin in banking, banks could seek buys to bring the capacity in-house, Chung said.

On the technology side, financial data is a large opportunity for institutions, who collect considerable amounts of data but haven’t yet figured out how to extract the data and make good use of it, said Brad Armstrong, principal at Lovell Minnick Partners, a Pennsylvania-based private equity firm.

Banks are more likely to partner with technology firms in the near-term rather than make acquisitions because the valuation gap between institutions and fintech firms is still too wide, Armstrong said.

Shareholder activism is also emerging to drive more actions in Financial Services, said Jones Day’s Izanec.


mergermarket.com

Financial Services

mailto:Yizhu%20Wang?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


20Mergermarket

Top deals

Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Financial Services Sector

AnnouncedDate

Status Bidder Company Target Company Vendor Company Deal Value(US$m)

3-Dec-17 P CVS Health Corporation Aetna Inc 67,823

29-Jun-17 C MetLife Inc (Shareholders) Brighthouse Financial Inc MetLife Inc 6,073

17-Mar-17 C Kohlberg Kravis Roberts & Co LP; and Caisse de Depot et Placement du Quebec USI Holdings Corporation Onex Corporation 4,300

12-Sep-17 P Centene Corporation The New York State Catholic Health Plan Inc 3,750

14-Feb-17 C SoftBank Group Corp Fortress Investment Group LLC 3,300

2-Oct-17 C Sprott Inc Central Fund of Canada Limited 3,298

4-May-17 C First Horizon National Corporation Capital Bank Financial Corp 2,225

7-Mar-17 C Sterling Bancorp Astoria Financial Corporation 2,219

4-Dec-17 P Bank J. Safra Sarasin AG; Pine Brook Road Partners LLC; Global Atlantic Financial Group Limited; Atlas Merchant Capital; Cornell Capital LLC; and TRB Advisors LP

Talcott Resolution Inc The Hartford Financial Services Group Inc 2,050

18-Oct-17 P Assurant Inc The Warranty Group Inc 1,906

24-May-17 C CF Corporation Fidelity & Guaranty Life Insurance Company HRG Group Inc 1,835

23-Jan-17 C Pinnacle Financial Partners Inc BNC Bancorp 1,761

1-Nov-17 P Permira Advisers LLP Duff & Phelps LLC The Carlyle Group; Pictet & Cie; NB Private Equity Partners Limited; and University of California's Office of the Chief Investment Officer of the Regents

1,750

21-Feb-17 C PNC Financial Services Group Inc ECN Capital Corp (US commercial and vendor finance business) ECN Capital Corp 1,559

5-Jan-17 L IEG Holdings Corporation OneMain Holdings Inc 1,469



mergermarket.com

Financial Services






Financial Services

0

30

60

90

120

150

180

210

240

2017201620152014201320122011

Valu

e (U

S$

bn)

US$4.8

US$6.5

US$7.4 US$

6.6US$5.7

US$26.2

US$17.9

US$14.7

US$38.6

US$11.2

US$12.4

US$10.9

US$xx

US$12.2

US$18.9

US$16.8

US$15.8

US$12.9

US$11.8

US$28.7

US$25.6

US$11.2

US$28.6

US$13.2

US$9.7

US$21.1

US$32.7

US$11.1

US$15.8

US$10

US$18.4US$

26.4

US$15.9

US$9

US$149.6

US$73.9

0

100

200

300

400

500

600

2017201620152014201320122011

Num

ber

of d

eals

253

1916

272

30

1312

259

210

21

20

210

253

19

182

202

26

14

176

229

160

1416

206

31

33

2 1

3

9

1

98 5

4

7

1

13

27

195

239

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com



0

20

40

60

80

100

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160

180


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ber

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eals

2011 2012 2013 2014 2015 2016 2017

Valu

e (U

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m)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000








mergermarket.com

Financial Services


23Mergermarket


League tables


Number of Deals

1 22 White & Case 82,567 20






7 60 Dechert 71,770 15

8 259 McDermott Will & Emery 67,849 2


10 7 Willkie Farr & Gallagher 14,959 16


Number of Deals



3 3 Wachtell, Lipton, Rosen & Katz 14,713 23



6 44 White & Case 82,567 20

7 26 Alston & Bird 6,884 20


9 12 Sidley Austin 5,843 19

10 13 Debevoise & Plimpton 12,714 18


Number of Deals


2 2 Stifel/KBW 13,779 61

3 3 JPMorgan 26,959 27



6 11 Citi 23,100 20

7 23 Stephens 2,989 18

8 21 FIG Partners 862 17


10 17 Evercore 77,578 15


Number of Deals


2 16 Evercore 77,578 15

3 12 Lazard 74,704 8

4 7 Barclays 73,859 14

5 - Allen & Company 72,156 3


7 1 JPMorgan 26,959 27


9 8 Citi 23,100 20



The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.


mergermarket.com

Financial Services


Industrials, Manufacturing & Engineering


Mergermarket 24

mergermarket.com

Deal Drivers Americas Industrials, Manufacturing & Engineering



Industrials, Manufacturing & EngineeringOverview

Marlene Givant Star

Sam Weisberg

Richard Tekneci

One of the biggest drivers of consolidation in 2018 will be the need for traditional industrials components groups to broaden their technology offerings, according to several sector advisors interviewed by this news service.

Paul Scrivano, partner and global head of the M&A practice at the law firm Ropes & Gray, noted that Siemens’ [ETR:SIE] US$4bn acquisition, in late March, of Mentor Graphics signifies a trend of industrial giants wanting to diversify beyond industrial components.

These companies do not want to be “disintermediated in the value chain,” Scrivano noted. Acquirers are looking at exerting control over the entire value chain, including collecting and harvesting information so they can sell more products and services and make more repairs.

In particular, artificial intelligence, machine learning, the Internet of things (IoT) and 3D printing tied with manufacturing are likely to draw players such as General Electric [NYSE:GE] and Boeing [NYSE:BA], Scrivano projected. Dan Shea, a managing director at BDO Capital Advisors, agreed that the IoT space should see heavy activity, as should any sector involving upgrading equipment to incorporate robotics and sensors. Building products, aerospace, machine automation and specialty chemicals are especially attractive subsectors right now, Shea added.

Manan K. Shah, a managing partner at Focus Investment Banking, said one aerospace area that could see consolidation is missile defense, in light of continuing tensions with North Korea. One major deal in this sector was defense giant Northrop Grumman’s [NYSE:NOC] recent acquisition of Orbital ATK for around US$9.2bn, a 20% premium. Shah added that the aerospace maintenance, repair and overhaul (MRO) sector is likely to see continued M&A activity, as the sector remains fragmented.

In the transport sector, direct-to-consumer and e-commerce logistics services continue to thrive, as Amazon [NASDAQ:AMZN] and other retailers’ volume of same-day or express delivery freight is hastily growing, said Chip Grayson, a managing director at Raymond James.

International air freight is seeing a similar uptick as customers are demanding faster service on imported goods such as apparel and footwear, Grayson added. He pointed to private equity firm Quad-C Management’s October acquisition of AIT Worldwide Logistics, which provides air and marine freight services. Freight rates are strong in that sector as well as in asset-based trucking, Grayson noted.

Meanwhile, private equity will continue to invest in third-party logistics groups, Grayson said, citing TPG Capital’s October acquisition of Transplace, a transportation management

firm. Valuations are high in the non-asset-based transport services sector, well into double-digit multiples.

EBITDA multiples throughout industrials are strong, with most middle-market industrials companies valued at around 9x EBITDA, according to BDO’s Shea.

Grayson with Raymond James said that the mandatory electronic logging devices now placed on trucks could hurt smaller transport groups unable to comply with new regulations, leading to consolidation by large players such as Knight-Swift Transportation Holdings [NYSE:SWFT], CRST International and J.B. Hunt Transport Services [NASDAQ:JBHT]. He noted that in July, Hunt announced its first acquisition in several years, of Special Logistics Dedicated for US$136m.

Taking smaller drivers out of the industry will reduce capacity and increase rates, which will benefit everyone, Grayson said.

Finally, succession planning—or the lack of it—will figure into consolidation for smaller companies next year, said Shea. The youngest baby boomers are 53 and will need to sell their businesses in order to retire, as well as to avoid making the necessary investments in technology. This trend could lead to a 10% pick up in volume from 2017, he added.


mergermarket.com


mailto:marlene.star%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry

mailto:sam.weisberg%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry

mailto:richard.tekneci%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


26Mergermarket

Top deals

Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Industrials, Manufacturing & Engineering Sector

AnnouncedDate


4-Sep-17 P United Technologies Corporation Rockwell Collins Inc 29,948

22-May-17 L Clariant AG Huntsman Corporation 10,355

19-Dec-17 P Crown Holdings Inc Signode Industrial Group The Carlyle Group 3,910

18-Dec-17 P Platinum Equity LLC Husky Injection Molding Systems Ltd Berkshire Partners LLC; and OMERS Private Equity Inc 3,850

8-Mar-17 C Caisse de Depot et Placement du Quebec; and Suez Suez Water Technologies & Solutions General Electric Company 3,379

4-Dec-17 P Prysmian SpA General Cable Corporation 2,521

24-Jan-17 C WestRock Company Multi Packaging Solutions Inc 2,248

17-Apr-17 C NOVA Chemicals Corporation Williams Olefins LLC Williams Partners LP 2,100

16-Mar-17 C 3M Company Scott Safety Johnson Controls Inc 2,000

19-Jun-17 C CCMP Capital Advisors LLC; Alberta Investment Management Corporation; and MSD Partners LP Hayward Industries Inc Davis Family 1,920

18-Aug-17 C Equity Group Investments LLC; HPS Investment Partners LLC; PointNorth Capital Inc; and Poole family Waste Industries USA Inc Macquarie Infrastructure Partners Inc 1,900

24-Oct-17 C Graphic Packaging Holding Company International Paper Company (North America consumer packaging business)

International Paper Company 1,800

12-Dec-17 P Unimin Corporation Fairmount Santrol 1,736

4-Sep-17 C H.B. Fuller Company Royal Adhesives & Sealants LLC American Securities LLC 1,575

2-May-17 C Leonard Green & Partners LP; and Oak Hill Advisors LP Charter NEX Films Inc Pamplona Capital Management LLP 1,500



mergermarket.com







0

50

100

150

200

250

2017201620152014201320122011

Valu

e (U

S$

bn)

US$22.4

US$38.3

US$10.5US$15.3

US$40.6

US$26.3

US$11.7

US$16.7

US$53.5

US$23.7

US$50.5

US$14.8

US$20.9

US$17.7

US$38.2

US$9.7

US$14.4

US$10.7

US$36.5

US$34.4

US$9.3

US$17.4

US$72.8

US$26.4

US$21.3

US$12.7

US$16.5

US$43.2

US$11.5US$14.4

US$18

US$29.9US$

6.5

US$156.2

US$136.4

0

100

200

300

400

500

600

700

800

900

1,000

1,100

2017201620152014201320122011

Num

ber

of d

eals

3930

301

563

3134

273

50

41

349

552

4126

249

447

3726

288

499

2535

298

392

7

41

32

2

1

6

67

11

6

8

813

6

7

1

657

253

619

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


0

25

50

75

100

125

150

175

200

225

250

275


Num

ber

of d

eals

2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000








mergermarket.com



29Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials – electronics; automation and products and services; and Manufacturing – other.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials – electronics; automation and products and services; and Manufacturing – other.

League tables


Number of Deals





5 38 Hengeler Mueller 57,285 10


7 13 Linklaters 54,529 11

8 35 Freshfields Bruckhaus Deringer 54,232 15

9 90 Willkie Farr & Gallagher 53,586 16



Number of Deals

1 1 Jones Day 20,487 83



4 6 Baker McKenzie 17,788 36

5 3 DLA Piper 2,095 35



8 32 Gibson Dunn & Crutcher 6,267 25


10 50 Winston & Strawn 2,805 23


Number of Deals

1 10 Lincoln International 1,630 47



4 6 PwC 3,505 30

5 2 Rothschild 25,472 29

6 7 Lazard 12,912 28

7 17 Deloitte 3,815 28

8 4 JPMorgan 45,671 26

9 8 Robert W. Baird & Co 8,713 26

10 5 KPMG 2,928 25


Number of Deals



3 8 Citi 72,154 21



6 29 Macquarie Group 48,778 8

7 42 Perella Weinberg Partners 45,960 2

8 9 JPMorgan 45,671 26


10 20 UBS Investment Bank 15,910 12



mergermarket.com



Energy, Mining, Oil & Gas



mergermarket.com




Energy, Mining, Oil & GasOverview

Chad Watt

Nate Trela

Energy companies have plenty of fuel for a healthy M&A environment in 2018. But coming off a lackluster close to 2017, the sector needs a spark to ignite dealmaking, industry sources say.

Fear of making a bad deal is holding transactions back, said David Kirkland, corporate practice chair for Baker Botts. Private equity-backed teams don’t want to overpay, though they could face losing their committed capital. And equity holders in restructured companies don’t want to make a deal just to end up with equity from a similarly sized company afterward.

Mike O’Leary, partner at Andrews Kurth Kenyon, said companies that took assets to market late in the year saw prices coming in significantly below what they expected. And further, he said bidders who have expressed interest in buying have actually revised their offers downward after making it through a first-round bidding.

Commodity prices are expected to remain range-bound and fresh capital is in short supply. Energy companies face the new reality of having to live within cash flow, O’Leary said. And in 2018, many companies without access to capital may have to look to sell or joint venture with a financially stronger strategic partner.

Another impetus for deals could be fatigue: “Some of it may come from people who may not know what is going to happen, but they are sick and tired of waiting to make deals,” Kirkland said.

As banks and institutional investors shun energy companies, activist investors are seizing an opportunity, O’Leary said. Low trading prices mean they can acquire meaningful stakes in companies and “be an instrument for short-term change.”

O’Leary said the best defense is, of course, to get your stock price up and operate within your means. A strategic business combination can improve a company’s stock price if the investment community and analysts believe the combination is favorable.

SandRidge Energy [NYSE:SD] attempted that in signing a deal to acquire Bonanza Creek Energy [NYSE:BCEI] in November only to have shareholder groups take a stand against it. The merger was called off on 28 December.

Energy-focused private equity firms also have great opportunities now, O’Leary said. There are few other sources of capital available, similar to the market after the 2014 oil price crash.

According to Mergermarket data, deal activity in 2017 has been slower than 2016. The 616 deals valued at US$349.1bn in 2016 approached the levels of 2014—when oil spent part of the year near US$100 a barrel.

O’Leary said the midstream business is in a better position today than it was 8 to 12 months ago. Prices have firmed up somewhat, and in certain plays, producers are increasing the

wells being drilled, which benefits midstream service providers. The challenge for midstream is that outside the Permian and the Eagle Ford, there hasn’t been much drilling going on, and they have not yet seen much growth in their volumes gathered or processed.

On the power side, utilities will see continuing consolidation and some divestitures in the year ahead, said Brian Boufarah, a partner in Deloitte Advisory’s transactions business.

Companies are increasingly likely to sell off utility assets if they’re not their core focus. That’s in part because there’s a ready universe of buyers now. Canadian buyers will continue to be active because they have a lower cost of capital than US counterparts and are looking for opportunities, Boufarah said.

Marlene Motyka, US and Global Renewable Energy Leader at Deloitte, predicted that M&A activity for renewables will continue around generation portfolios. Tax law changes could mean less available tax equity, which could put pressure on smaller renewable developers to sign joint ventures or execute partnerships to get their pipelines flowing, Motyka said. Likely buyers include infrastructure buyers and utilities.


mergermarket.com


mailto:chad.watt%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry

mailto:nate.trela%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


32Mergermarket

Top deals

AnnouncedDate


21-Aug-17 P Sempra Energy Energy Future Holdings Corporation 18,800

15-Dec-17 C Marathon Petroleum Corporation MPLX LP (40.32% stake) 17,279

1-Feb-17 C ONEOK Inc ONEOK Partners LP (60% stake) 17,118

18-Aug-17 P Calpine Consortium Calpine Corporation 17,023

7-Jul-17 L Berkshire Hathaway Energy Oncor Electric Delivery Company LLC (80.03% stake) Energy Future Holdings Corporation 16,720


ConocoPhillips Company 13,240

9-Jan-17 C Williams Companies Inc Williams Partners LP (32.24% stake) 11,358

30-Oct-17 P Vistra Energy Corp Dynegy Inc Energy Capital Partners LLC 10,609

9-Mar-17 C Canadian Natural Resources Limited The Athabasca Oil Sands Project (60% stake); and Royal Dutch Shell plc (Peace River Complex in-situ assets, including Carmon Creek, and a number of undeveloped oil sands leases in Alberta)

Royal Dutch Shell Plc 8,500

10-Jul-17 P Westar Energy Inc Great Plains Energy Inc 8,240

13-Nov-17 C MPLX LP MPLX Refining Logistics LLC; and MPLX Fuels Distribution LLC Marathon Petroleum Corporation 8,100

19-Jun-17 C EQT Corporation Rice Energy Inc 7,689

25-Jan-17 P AltaGas Ltd WGL Holdings Inc 6,685

17-Jan-17 C Exxon Mobil Corporation BOPCO LP; and the Bass Family (Permian Basin oil companies) The Bass Family 6,620

19-Jul-17 P Hydro One Limited Avista Corporation 5,226



mergermarket.com


Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Energy, Mining, Oil & Gas Sector






0

50

100

150

200

250

300

350

400

2017201620152014201320122011

Valu

e (U

S$

bn)

US$34.2

US$49.9

US$19.4US$19.8

US$40.2

US$64.3

US$26.5

US$21.3

US$57.6

US$71.8

US$26.8

US$30.3

US$30.3

US$51.7

US$19.1

US$22.2

US$48

US$57.5

US$25.5

US$21.1

US$57.1

US$50.6

US$18.9US$19.9

US$15.9US$23.4

US$68.6

US$38.5

US$130.8

US$39.1

US$150.4

US$185.4

US$85.1

US$161.6

US$196.9

0

100

200

300

400

500

600

700

800

2017201620152014201320122011

17

Num

ber

of d

eals

54

53

273

125

65

71

296

159

13

74

70

395

148

53

57

304

123

71

61

277

95

60

54

235

64

43

297

139

15

74

13

17

11

14

18

95

10

11

8

11

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



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120,000

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35Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy, Mining, and Utilities – other.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy, Mining, and Utilities – other.

League tables


Number of Deals

1 1 White & Case 82,587 29




5 44 Andrews Kurth Kenyon 61,872 25







Number of Deals






6 7 Baker Botts 40,622 31

7 11 White & Case 82,587 29

8 13 Locke Lord 8,888 29


10 10 Bracewell 40,420 28


Number of Deals

1 2 Evercore 37,359 38

2 3 Jefferies 46,034 32


4 10 Citi 62,423 30

5 5 JPMorgan 69,130 29

6 15 Tudor, Pickering, Holt & Co 21,548 27

7 6 Barclays 74,305 24


9 11 Scotiabank 24,388 24



Number of Deals


2 1 Barclays 74,305 24

3 6 JPMorgan 69,130 29

4 11 Lazard 66,562 16

5 3 Citi 62,423 30


7 13 Jefferies 46,034 32

8 10 Evercore 37,359 38

9 29 TD Securities 34,603 19




mergermarket.com



Consumer



mergermarket.com

Consumer



ConsumerOverview

Dayna Fields

Emily Fasold

While 2017 will be remembered as the year Amazon [NASDAQ:AMZN] bought Whole Foods, 2018 will continue to see food-related deals dominate headlines, dealmakers said. The upcoming federal reductions in corporate taxes will yield greater cash flow, and there will be stiff competition among consumer packaged goods (CPG) giants in finding quality, innovative private companies to buy.

But will more free cash for private business owners increase or decrease their interest in selling? “If there will be more money available and less willingness to sell, then prices will go up yet again—I didn’t think I’d ever say that,” said Gian Ricco with Stout Advisory, noting already astonishing multiples seen for on-trend F&B companies throughout 2017.

But offers this year may be too good to refuse, said Mel Deane, partner at Insignia Capital, who is seeing F&B companies sold for 10x-11x EBITDA, and better-for-you foodstuffs reaching 15x-20x EBITDA. According to Mergermarket data, the US saw 174 food and beverage deals worth a total of US$50.9bn in 2017, up significantly in value from 2016, which saw 111 deals worth US$25.6bn.

The food industry is undergoing a fundamental shift as young consumers shun the three-meals-a-day concept and move instead toward healthy snacking options. Millennials are also buying fresh foods over processed, causing the center aisles to shrink, said Jeff Robards

with Alantra, a global middle market investment banking firm. This leaves juggernauts ConAgra [NYSE:CAG], Campbell’s [NYSE:CPB] and General Mills [NYSE:GIS] to scramble for growth.

Huge food companies will continue the race to diversify portfolios—and divest off-trend products—by focusing on mid-size and even lower middle market targets, as low as US$20m in revenue, said Deane with Insignia.

The truly innovative ones will continue to fetch inflated prices as CPG’s invest in M&A in lieu of R&D, said Ricco with Stout. Hot areas for M&A will be in-store bakery, refrigerated meals, private label innovation, and of course healthy snacking, said Robards.

Nestle [VTX:NESN] has been active in divesting parts of its confectionary portfolio and acquiring healthier brands, such as Chameleon Cold Brew Coffee and Atrium Innovations supplements and vitamins, said a sector advisor. Ricco also noted Kellogg’s [NYSE:K] acquisition of two-year-old Chicago, Illinois-based RXbar in October for US$600m—a valuation of 12x-14x times EBITDA.

In 2018, Deane anticipates continued cross-border interest in the snacking space, too, particularly from buyers in Mexico and Asia. Deane pointed to the Mexico-based Coca Cola bottler and Wise Snacks parent company—Arca Continental—which acquired Connecticut-based Deep River Snacks in November, as an example of Mexican interest in US snacking

companies. He added that his firm is aware of at least two Asian investors that are actively pursuing US snack acquisitions.

Meanwhile, activity in the restaurant space has been partially driven by the trend of financial sponsors acquiring “fallen angels,” according to a consumer-focused sector advisor, who explained that “dramatically lower” valuations have made these viable takeover targets, a trend that he sees continuing in 2018. The advisor pointed to Darden Restaurant’s US$780m acquisition of Cheddar’s Scratch Kitchen, and JAB Holding’s US$7.4bn acquisition of Panera Bread last spring as examples.

Fast-casual franchised concepts are fetching multiples of 13x-15x EBITDA, while quick service restaurants (QSR) concepts are garnering closer to 8-9x EBITDA, the advisor said.

The better-for-you trend spills into beauty, laundry and even car cleaners, said Deane. “The multiples in natural hard goods are lower, but we think that will change in the first half of [2018], and we’re already seeing that,” he said.

Beauty products generate high margins, which yield high multiples, added Deane. Traditional retailers—many of which are struggling—are equally invested in these on-trend natural beauty brands because they lure inside much-needed foot traffic from a coveted consumer demographic.


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Consumer

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38Mergermarket

Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Consumer Sector

Top deals

AnnouncedDate


17-Jan-17 C British American Tobacco Plc Reynolds American Inc (57.83% stake) 60,567

10-Feb-17 C Reckitt Benckiser Group Plc Mead Johnson & Company 17,835

16-Jun-17 C Amazon.com Inc Whole Foods Market Inc 13,464

5-Apr-17 C JAB Holdings BV Panera Bread Company 7,404

28-Jun-17 C Sycamore Partners Staples Incorporated 6,657

18-Dec-17 P Campbell Soup Company Snyder's-Lance Inc 5,958

29-Jun-17 P Walgreens Boots Alliance Inc Rite Aid Corporation (1,932 stores) Rite Aid Corporation 4,375

25-Apr-17 C Tyson Foods Inc AdvancePierre Foods Holdings Inc Oaktree Capital Management LP 4,121

31-Mar-17 C CK Asset Holdings Limited Reliance Home Comfort Limited Partnership Alinda Capital Partners LLC 3,561

2-Oct-17 P Metro Inc Jean Coutu Group Inc The Coutu family 3,472

18-Apr-17 C PetSmart Inc Chewy Inc Volition Capital; Verlinvest SA; and Greenspring Associates Inc 3,350

6-Apr-17 C 7-Eleven Inc Sunoco LP (1,112 gas stand/convenience stores in Texas and eastern US) Sunoco LP 3,306

27-Mar-17 C Bain Capital LLC Diversey Inc Sealed Air Corporation 3,200

8-May-17 C Coach Inc Kate Spade & Company 2,349

17-Jan-17 C L Catterton; and GIC Private Limited Leslie's Holdings Inc CVC Capital Partners Limited 1,800



mergermarket.com

Consumer





Consumer

0

25

50

75

100

125

150

175

2017201620152014201320122011

Valu

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S$

bn)

US$14.3

US$25

US$8.9

US$28.7

US$24.6

US$27.4

US$7.4

US$10.2

US$27.9

US$25.9

US$9

US$13.3

US$10.7

US$19.5

US$7.4

US$7.8

US$9

US$30.4

US$8.1

US$7.6

US$15.5

US$8.2

US$9.2

US$8.1

US$23.8

US$2.6

US$116.8

US$84

US$44.9 US$

59.1

US$3.9

US$111.9

US$27.7

US$5.4

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2017201620152014201320122011

Num

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5

7

6

4

3

4

9

5

8

1

624

166

420

25

21

152

25

24

1731921

256

121

29

23

126

272

1516

145

247

142

20

25

108

337

393 387

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

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> $5,001m



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41Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer – retail, food and other.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer – retail, food and other.

League tables


Number of Deals







7 10 Jones Day 69,334 32

8 63 Herbert Smith Freehills 61,671 5

9 106 Moore & Van Allen 60,567 1



Number of Deals


2 3 Jones Day 69,334 32

3 4 DLA Piper 4,678 28




7 9 Ropes & Gray 4,011 18



10 5 King & Spalding 4,004 17


Number of Deals



3 2 Lazard 64,836 19

4 8 Barclays 26,101 18

5 7 JPMorgan 79,456 17







Number of Deals



3 3 JPMorgan 79,456 17


5 4 Lazard 64,836 19





10 8 Barclays 26,101 18



mergermarket.com

Consumer


Technology, Media & Telecom



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Technology, Media & TelecomOverview

Thomas Zadvydas

The universe of technology buyers will keep expanding in 2018, with old-line industrial companies looking to add advanced capabilities through M&A, said sources. Private equity firms—flush with record levels of cash—will also be better able to compete with strategics for software assets, and are finding subscription-based models particularly attractive, they said.

“There is this emergence of the non-traditional technology buyers buying into the technology ecosystem,” said Jace Kowalzyk, partner at Union Square Advisors. “It’s a reasonable balance between three different constituencies in terms of strategics, financial-led sponsors doing deals and then some of the non-traditional buyers coming in,” he added.

More deals such as Emerson Electric’s [NYSE: EMR] October purchase of Paradigm for US$510m are expected, said Kowalzyk. Emerson, a diversified manufacturing conglomerate, will add Paradigm, a seismic data processing and analytics software company, to its Roxar business, whose software helps oil and gas companies manage their reservoirs. General Electric [NYSE: GE] and other industrial giants have also created such technology-focused business units, Kowalzyk and others noted.

Software for automotive applications, as well as security and cyber defense, will be a particular target, added Rob Townsend, partner at Morrison & Foerster.

The spotlight will also fall on private equity firms, whose dry powder is at all-time highs, noted Jason Flegel, a partner at Deloitte. PE firms held a record US$954bn in cash at the end of September, according to research firm Preqin.

Cybersecurity plays are of particular interest, especially with the proliferation of Internet of Things (IoT) devices, Flegel said. “If you take every widget on the planet and connect them to the Internet, it leaves [them open] to be hacked,” he said.

But financial sponsors face competition for IoT assets from strategic-backed venture funds, such as Intel Capital, who can provide strategic expertise, noted Helen Croke, PE partner at Ropes & Gray.

In addition to private equity’s continued focus on cybersecurity, sponsors will also focus on sectors such as voice recognition technology and artificial intelligence, Croke said.

PE will be particularly interested in acquiring software companies they can expand through bolt-on acquisitions, added Thomas Vaughn, a corporate finance attorney at Dykema Gossett PLLC.

“In the tech industry, PE firms are becoming increasingly competitive with the strategics,” Vaughn said. “They are upping their prices to take these opportunities.”

Enterprise software-as-a-service (SaaS) companies should continue as areas for

private equity to place bets in 2018, said Joe Morgan, managing director at D.A. Davidson &Co.

“SaaS continues to be a disruptive model. Private equity has gotten comfortable [because] there is 13 years of SaaS publicly traded valuation data available,” he said.

Software bets should give PE inroads in all types of sectors, including media, retail, fintech and industrial services, adds Brad Gevurtz, managing director at D.A. Davidson.

“Software is eating the world,” he said.

In one such example, Synchronoss Technologies [NASDAQ:SNCR] agreed to sell cloud software company Intralinks Holdings, to Siris Capital Group for US$1bn on 17 October. Intralinks serves banks and other regulated industries.

Debt remains inexpensive and increased strategic activity in TMT may hinge on whether the recently passed tax reform will incentivize the repatriation of international profits, said Kowalzyk.

“More of the large strategics’ cash balances are off-shore versus on-shore,” he noted.

Corporates likely won’t return this to shareholders, said Deloitte’s Flegel.

But one concern for TMT dealflow in 2018 is on the regulatory front, specifically on international deals in sensitive industries such as defense technology.


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44Mergermarket

Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Technology, Media & Telecom Sector

Top deals

AnnouncedDate


14-Dec-17 P The Walt Disney Company Twenty-First Century Fox Inc 68,422

31-Jul-17 P Discovery Communications Inc Scripps Networks Interactive Inc 14,383

28-Dec-17 C TPG Capital LP; SoftBank Group Corp; General Atlantic LLC; Sequoia Capital; Tencent Holdings Ltd; Dragoneer Investment Group LLC; and Didi Chuxing Technology Co Ltd

Uber Technologies Inc (17.5% stake) Benchmark Capital; and Menlo Ventures 8,983

18-Jul-17 C Crown Castle International Corporation Lightower Fiber Networks Berkshire Partners LLC; and Pamlico Capital 7,100

8-May-17 P Sinclair Broadcast Group Inc Tribune Media Company Oaktree Capital Management LP; and Angelo, Gordon & Co 6,597

20-Nov-17 P Marvell Technology Group Ltd Cavium Inc 6,306

9-May-17 C Apollo Global Management LLC West Corporation Quadrangle Group LLC; and Thomas H. Lee Partners LP 4,963

24-Jan-17 C Cisco Systems Inc AppDynamics Inc General Atlantic LLC; Greylock Partners; Battery Ventures; Kleiner Perkins Caufield & Byers; Lightspeed Venture Partners; Institutional Venture Partners; and Cross Creek Capital LP

3,700

24-Jul-17 C Internet Brands Inc WebMD LLC 3,472

13-Mar-17 C Vista Equity Partners DH Corporation 3,428

11-May-17 P Verizon Communications Inc Straight Path Communications Inc 3,100

26-Nov-17 P Meredith Corporation Time Inc 2,743

25-Sep-17 P ABB Ltd General Electric Industrial Solutions Inc General Electric Company 2,600

4-Apr-17 P Liberty Interactive Corporation General Communication Inc Searchlight Capital Partners LP 2,543

5-Sep-17 P Aveva Group Plc Schneider Electric Software LLC Schneider Electric SA 2,426



mergermarket.com







0

50

100

150

200

250

300

350

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450

2017201620152014201320122011

Valu

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bn)

US$56.5

US$36.5

US$30.4

US$90.7

US$68.7

US$25.4

US$46.1

US$48.5

US$19.6

US$29.8

US$26.4

US$37.3

US$23.4

US$34.8

US$45.8

US$21.9

US$42.3

US$31.9

US$21.2

US$35.8

US$19

US$26.1

US$56.1

US$16.7US$

13.8US$12.6

US$16.2

US$107.9

US$62.4US$

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US$190.4

US$262.6

US$170

US$17.3

US$111.8

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2017201620152014201320122011

Num

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45

585

41 44

68

713

397

521

57

47

592

3435

461

413

4044

414

383

4831

381

364

804

62

53

4

7

6

13

11

9

15

2

13

5

18

12

6

28

420

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

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> $5,001m



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47Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer – software, hardware and semiconductors; Telecommunications – hardware; Internet/e-Commerce; Media; and Telecommunications – carriers.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer – software, hardware and semiconductors; Telecommunications – hardware; Internet/e-Commerce; Media; and Telecommunications – carriers.

League tables


Number of Deals




4 4 White & Case 94,227 23



7 43 Covington & Burling 80,671 16

8 11 Allen & Overy 78,165 16

9 54 Hogan Lovells International 78,046 37

10 39 Fried Frank Harris Shriver & Jacobson 76,149 9


Number of Deals



3 2 DLA Piper 10,261 94

4 3 Cooley 19,656 85



7 6 Jones Day 13,234 60

8 9 Orrick Herrington & Sutcliffe 6,486 60

9 4 Wilson Sonsini Goodrich & Rosati 12,488 55

10 11 O'Melveny & Myers 9,837 54


Number of Deals

1 3 JPMorgan 138,657 44




5 16 Jefferies 12,943 29

6 8 William Blair & Company 8,955 29

7 18 Citi 25,708 26

8 4 Evercore 35,284 25


10 32 EY 6,929 22


Number of Deals

1 3 JPMorgan 138,657 44


3 21 Guggenheim Partners 91,805 9




7 8 Evercore 35,284 25



10 4 Citi 25,708 26



mergermarket.com



Life Sciences & Healthcare



mergermarket.com




Life Sciences & HealthcareOverview

Favorable equity markets and low interest rates will drive continued robust healthcare M&A activity in the first half of 2018, dealmakers agreed. The marketplace can expect more megadeals among insurers, hospitals and physician groups, particularly as pressure to scale and vertically integrate continues, they noted.

Two landmark deals of 2H17, CVS Health’s [NYSE:CVS] proposed US$67.8bn acquisition of Aetna [NYSE:AET] and UnitedHealth-owned [NYSE:UNH] Optum’s US$4.9bn acquisition of DaVita Medical Group, can be seen as an indication of the shape of things to come in the new year, according to Mark Tomaino, operating partner at Welsh, Carson, Anderson & Stowe.

Tomaino said CVS-Aetna exemplifies the increasing consumerism of healthcare and a growing focus on vertical integration, while Optum-DaVita is “evidence that consolidation is here to stay and will continue to manifest itself in additional payors acquiring providers.”

With just over two weeks left in the year, Tomaino’s firm, along with Humana [NYSE:HUM] and TPG Capital, entered into an agreement to acquire Kindred Healthcare [NYSE:KND] for about US$4.1bn. William Eck, partner at law firm Seyfarth Shaw, said the move represents the further integration of insurers and healthcare providers.

“Organizations aren’t just one thing,” said Roger Strode, partner and healthcare business lawyer with Foley & Lardner. “Hospitals aren’t just hospitals, they’re integrated delivery networks and sometimes they’re insurance companies. CVS is not just a drug store chain and an infusion business, it’s going to be basically a health management company.”

Seyfarth Shaw’s Eck, who represents clients in healthcare transactions, said he expects more deals wherein pharmacy players like CVS look to broaden their services over the next six months. Tomaino said he could see Walmart [NYSE:WMT] re-evaluating its position in the Pharma sector and partnering with a payor like Humana or Cigna [NYSE: CI].

Hospitals also saw significant consolidation in 2H17, with Ascension and Providence St. Joseph Health reportedly in merger talks, and planned mergers between Catholic Health Initiatives and Dignity, and Advocate Health Care and Aurora Health Care. Activity within the sector is unlikely to slow in 2018, the experts said.

“It’s almost like somebody opened up a spigot,” said Strode of Foley & Lardner. “Providers are realizing you’ve got to have scale. I don’t see hospital M&A slowing down any time soon,” he added. Eb LeMaster, managing director at Ponder & Co., said the shift to outpatient care, lack of volume growth and persistent payor consolidation will propel continued hospital M&A.

The life sciences space saw significant deals like Gilead Sciences’ [NASDAQ:GILD] US$10.2bn acquisition of Kite Pharma in 2H17, and Ropes & Gray’s Christopher Comeau said oncology will continue to be an area of interest in 2018. Large pharma companies seeking to expand their pipelines will drive dealmaking, with the pending Republican tax bill expected to “loosen the reins” when it comes to pharma M&A, Comeau noted.

The experts agreed life sciences will see cross-border activity in 2018. Comeau named China as an attractive region, while Eck noted he expects increased inbound interest from Western Europe in the US and Asia-Pacific.

Though both strategic and private equity buyers are putting capital to work, the experts agreed that strategics are more likely to drive healthcare M&A over the next six months, due to synergies and cost-containment pressures. Calling the CVS deal “seismic,” Eck said the transaction will drive a lot of strategic activity in the marketplace.

Tomaino noted, however, that private equity investors are taking advantage of secular tailwinds, including a growing aging population and the evolution of health benefits provisions. In Pharma, Comeau said he expects an uptick of private equity activity in the middle market over the next six months.

Claire Rychlewski

Kevin McCaffrey


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50Mergermarket

Top deals

AnnouncedDate


23-Apr-17 C Becton, Dickinson and Company C.R. Bard Inc 23,609

28-Aug-17 C Gilead Sciences Inc Kite Pharma Inc 10,161

26-Apr-17 C Abu Dhabi Investment Authority; and GIC Private Limited Pharmaceutical Product Development LLC The Carlyle Group; and Hellman & Friedman LLC 9,050

9-Jan-17 C Mars Incorporated VCA Inc 8,792

18-Apr-17 C Cardinal Health Inc Medtronic Inc (Patient care, deep vein thrombosis and nutritional insufficiency businesses)

Medtronic Inc 6,100

20-Jun-17 C Pamplona Capital Management LLP PAREXEL International Corporation 4,913

6-Dec-17 P Optum Inc DaVita Medical Group DaVita Inc 4,900

9-Jan-17 C Takeda Pharmaceutical Company Limited Ariad Pharmaceuticals 4,893

24-Apr-17 P Fresenius Kabi AG Akorn Inc 4,843

10-May-17 C INC Research LLC Syneos Health Advent International Corporation; and Thomas H. Lee Partners LP 4,582

19-Dec-17 P Kindred Consortium Kindred Healthcare Inc 3,973

10-Oct-17 C Express Scripts Holding Company eviCore healthcare General Atlantic LLC; TA Associates Management LP; and Ridgemont Equity Partners 3,600

9-Jan-17 C UnitedHealth Group Inc Surgical Care Affiliates Inc TPG Capital LP 3,260

14-Mar-17 C American Securities LLC Air Methods Corporation 2,452

8-Aug-17 P Air Medical Group Holdings Inc American Medical Response Inc Envision Healthcare Corporation 2,400



mergermarket.com


Top 15 Announced Deals for the Year Ending 31 December 2017 – North American Targets Life Sciences & Healthcare Sector






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US$31.3

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US$25.2

US$28

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US$33

US$10.4US$14

US$52.2

US$14.9

US$19.1

US$11.2

US$60.7

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US$12.8

US$62.4

US$20.3

US$22

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US$152.4

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Deal Drivers Americas Life Sciences & Healthcare


53Mergermarket


League tables


Number of Deals





5 11 Freshfields Bruckhaus Deringer 47,722 13





10 7 Ropes & Gray 31,545 29


Number of Deals




4 4 Jones Day 16,641 39


6 3 Ropes & Gray 31,545 29

7 6 DLA Piper 3,506 29

8 10 Cooley 13,968 26




Number of Deals

1 2 JPMorgan 63,448 35


3 1 Jefferies 23,994 24





8 29 Moelis & Company 6,971 14

9 19 Lazard 52,398 13

10 6 Barclays 36,375 13


Number of Deals



3 8 JPMorgan 63,448 35

4 7 Citi 62,911 10

5 17 Lazard 52,398 13


7 28 Perella Weinberg Partners 42,369 8


9 3 Barclays 36,375 13

10 - ALANTRA 29,592 3


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.


mergermarket.com



Canada


CA


mergermarket.com

Canada



CanadaOverview

After an uptick in deal value last year, Canadian M&A activity is expected to remain robust in 2018, on the back of strong underlying conditions, dealmakers said.

Energy, Financial Services and Consumer are among the sectors to watch. While the total volume of deals fell from 665 in 2016 to 563 in 2017, Canadian M&A recorded a 22% year-on-year surge in deal value from US$77.5bn to US$97.2bn, according to Mergermarket data.

Looking ahead, growing confidence in the Canadian economy, readily available debt financing and a hunger for deals from both global and domestic private equity and pension funds augurs well for continued activity, the dealmakers said.

Moreover, a strong Canadian dollar could favor more outbound M&A. Top M&A destinations for Canadian companies in 2018 could include the US, Switzerland, Germany and the UK, according to Doug Jenkinson, a partner at EY Canada. He noted that Canadian companies will be interested in any non-core assets being divested by larger companies in these markets.

Despite the broadly rosy outlook, potential clouds of uncertainty for Canadian M&A include tax reform in the US, which could have fundamental implications for US-Canada M&A, said Stephen Pincus, a partner at Goodmans.

Lower tax rates mean there is less incentive for US multinationals to hold cash offshore and

more incentive to do business in the US, he said, though he noted that the full implications won’t be fully clear for a long time.

Other potential dark clouds on the horizon for Canadian M&A include political uncertainty in Europe, the Middle East and Asia, as well as the future of the North American Free Trade Agreement (NAFTA).

Sector-wise, oil and gas will be a key driver for more M&A activity, according to Jenkinson, who said he expects more deals in both the middle market, involving exploration companies in deals up to C$100m, and at C$1bn-plus end of the market.

“There are exploration companies that are continuing to find opportunities missed by the larger players,” he said, “but the larger transactions will involve more established players with meaningful production.”

Energy, Mining & Utilities was the most active sector in 2017, recording 129 deals with an aggregate deal value of US$46.6bn, followed by Consumer, Financial Services, and Technology sectors, according to Mergermarket data.

Financial Services is expected to be another hotspot in 2018, with some Canadian financial institutions looking for global expansion opportunities, as well as opportunities to acquire more digitization, said Jenkinson.

TD Bank, for instance, has set up several partnerships with fintech companies,

including the Toronto-based AI-driven receipt management platform Sensibill and personalized mobile banking service provider Flybits.

Fintech deals will range from a couple of million to around C$100m, said EY’s Jenkinson. Goodmans’ Pincus said early-stage companies specializing in block chain and cryptocurrency will likely grow quickly.

Real Estate is another area to watch, amid high property valuations, low interest rates, as well as the potential for shareholder activism, Pincus said. Commercial, residential and specialty REITs, for instance hospitality, will likely be active in both domestic and cross-border M&A in 2018, he said.

In Consumer, Cameron Belsher, a partner at McCarthy, said buyers are willing to pay for significant brands, both for consumer packaged goods and for restaurant assets.

Premium Brands Holdings [TSX: PBH] is one of the most active acquirers in Canada, he noted. Its recent deals include the November acquisitions of Burnsville, Minnesota-based frozen food producer Buddy’s Kitchen and San Ramon, California-based sandwich maker Raybern Foods.

Elsewhere, Canada’s upcoming legalization of cannabis, slated for July 2018, is expected to trigger consolidation, said Stefan Timms, partner at Borden Ladner Gervais.

Sirui Shao

Elizabeth Lim


mergermarket.com

Canada

mailto:sirui.shao%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry

mailto:elizabeth.lim%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


56Mergermarket

Top deals

AnnouncedDate




9-Mar-17 C Canadian Natural Resources Limited The Athabasca Oil Sands Project (60% stake); and Royal Dutch Shell plc (Peace River Complex in-situ assets, including Carmon Creek, and a number of undeveloped oil sands leases in Alberta)

Energy, Mining, Oil & Gas Royal Dutch Shell Plc 8,500

1-May-17 C Pembina Pipeline Corp Veresen Inc Energy, Mining, Oil & Gas 5,105

18-Dec-17 P Platinum Equity LLC Husky Injection Molding Systems Ltd Industrials, Chemicals & Engineering Berkshire Partners LLC; and OMERS Private Equity Inc 3,850

31-Mar-17 C CK Asset Holdings Limited Reliance Home Comfort Limited Partnership Consumer Alinda Capital Partners LLC 3,561

2-Oct-17 P Metro Inc Jean Coutu Group Inc Consumer The Coutu family 3,472

13-Mar-17 C Vista Equity Partners DH Corporation Technology, Media & Telecom 3,428

2-Oct-17 C Sprott Inc Central Fund of Canada Limited Financial Services 3,298

9-Mar-17 C Royal Dutch Shell Plc; and Canadian Natural Resources Limited The Athabasca Oil Sands Project (20% stake) Energy, Mining, Oil & Gas Marathon Oil Corporation 2,500

5-Dec-17 P Nestle SA Atrium Innovations Inc Life Sciences & Healthcare Permira Advisers LLP; Caisse de Depot et Placement du Quebec; and Fonds de Solidarite FTQ

2,300

25-Jul-17 C Refresco Gerber BV Cott Corporation (bottling activities) Consumer Cott Corporation 1,250

26-Oct-17 P China Communications Construction Company Limited Aecon Group Inc Construction 1,186

18-Apr-17 C Parkland Fuel Corp Chevron Canada R&M ULC Energy, Mining, Oil & Gas Chevron Canada Limited 1,098

19-Oct-17 P Schlumberger Limited; and Torxen Resources Ltd Cenovus Energy Inc (Palliser oil and natural assets in southeastern Alberta)

Energy, Mining, Oil & Gas Cenovus Energy Inc 1,041

17-Jul-17 C Washington Corporations Dominion Diamond Corporation Energy, Mining, Oil & Gas 999



mergermarket.com

Canada

Top 15 Announced Deals for the Year Ending 31 December 2017 – Canada All Sectors (Based On Target)





Canada

0

20

40

60

80

100

120

2017201620152014201320122011

Valu

e (U

S$

bn)

US$24.7

US$20.7

US$12.5

US$8

US$18.4

US$7.6

US$29.4

US$9.6

US$37.3

US$9.9

US$23.2

US$13.3

US$19.6

US$24.2

US$4.6

US$19.1

US$7.4

US$18

US$35.1

US$22.2

US$30.4

US$12.3

US$14.4

US$14.5

US$13.4

US$24.7

US$20.5

US$9.3

US$17.9 US$

14.9

US$9.7

US$23.2

US$22.4

US$26.8

US$12.5

0

100

200

300

400

500

600

700

2017201620152014201320122011

Num

ber

of d

eals

4

3

413

2

1

97

1

4 3

7

324

306

32

26

298

305

335

27

2237

270

1920

294

246

31

33

196

24

26

181

27

30

262254

285

260

301

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Mergermarket Deal Drivers Americas 58Canada

Valu

e (U

S$

bn)

0

10

20

30

40

50

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$9.6

US$12.9

US$6.8

US$0

US$1.4US$

2.6

US$5.3

US$0.8

US$7

US$2.7

US$0.8

US$0.7

US$46.6

Num

ber

of d

eals

0

25

50

75

100

125

150

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

4351

2517

43

27

490

8374

128

108


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

25

50

75

100

125

150

175

200


Num

ber

of d

eals

2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Canada.


Mergermarket 59

mergermarket.com

Deal Drivers Americas Canada


60Mergermarket


League tables


Number of Deals

1 3 Osler, Hoskin & Harcourt 51,784 84






7 19 Bennett Jones 28,831 23

8 4 McCarthy Tetrault 23,944 63


10 60 Vinson & Elkins 18,010 12


Number of Deals



3 4 Osler, Hoskin & Harcourt 51,784 84

4 3 McCarthy Tetrault 23,944 63

5 7 Davies Ward Phillips & Vineberg 10,891 58

6 17 Borden Ladner Gervais 3,979 47

7 6 Torys 16,806 43


9 9 Fasken Martineau Dumoulin 10,552 41

10 14 Goodmans 12,487 34


Number of Deals


2 2 Deloitte 2,856 40


4 3 BMO Capital Markets 19,049 36

5 9 JPMorgan 52,665 30

6 4 CIBC World Markets 25,784 27

7 8 National Bank Financial 11,256 26

8 17 KPMG 674 25


10 15 Scotiabank 22,678 22


Number of Deals

1 5 JPMorgan 52,665 30





6 6 Barclays 30,649 16

7 10 CIBC World Markets 25,784 27

8 11 Lazard 22,837 14


10 13 Scotiabank 22,678 22


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.


mergermarket.com

Canada


West


W


mergermarket.com

West



WestOverview

Low interest rates and even lower corporate tax rates will make more cash available for mergers and acquisitions next year, but high valuations could constrain the pace of West Coast M&A, dealmakers say.

With positive GDP growth now completing its eighth year, the US economic expansion may literally or figuratively be approaching the ninth inning, or its conclusion, said Blaine Riley, president of the merchant bank International Monetary, based in Newport Beach, California. The long-running expansion has pushed valuations high across all sectors, said Riley. When you add relatively low interest rates to the mix, bidders have more capital for acquisitions but desirable targets likewise perceive they are more valuable than the last competitor bought. Stalemates ensue.

The standoff could last longer next year, thanks to the new tax bill signed in December, said attorney Eric McCrath, co-chair of the Morrison & Foerster’s Mergers & Acquisitions and Private Equity Investment & Buyouts Groups. Larger companies anticipate paying lower corporate tax rates next year, potentially freeing up more cash for acquisitions or buying back shares, said McCrath.

McCrath noted the M&A market, particularly in the Technology sector, started off slowly in the first quarter of 2017. Now that the market has a good understanding of how the Trump administration will work, McCrath

does not expect caution in the first half of 2018. Consolidation will continue for attractive businesses, both small and large, in the Consumer and Technology sectors, said McCrath.

In two of the largest deals of 2017, Marvell Technology [NASDAQ:MRVL] paid US$6.3bn to acquire the semiconductor company Cavium while Synchrony [NYSE:SYF] bought the receivables portfolio of PayPal Holdings [NASDAQ:PYPL].

Both deals reflect how the current market will continue to “melt up”—or encourage larger and larger deals—given the conditions of low interest rates and a Trump economy that appears to favor larger companies, said Riley, noting consolidators want more scale. The Synchrony acquisition increased Synchrony’s scale in financial services while Marvell broadened its reach in semiconductors through the purchase of Cavium.

The proposed US$130bn combination between Broadcom [NASDAQ:AVGO] and Qualcomm [NASDAQ:QCOM] likewise would be a consummate example of consolidation in technology. While Qualcomm has rejected the bid, Broadcom looks set to pursue a deal in 2018, according to various reports.

While the participants in the US$67.8bn merger between CVS [NYSE:CVS] and Aetna [NYSE:AET] were not California based, Riley said

the combination of an insurer and prescription drug provider made perfect sense as big companies seek to consolidate. The deal will influence the delivery of healthcare services in the West, said Riley, and smaller insurers and healthcare companies may face more pressure to consolidate.

The threat of Amazon [NASDAQ:AMZN] entering the prescription drug delivery market frequently was cited as a motivator for the Aetna/CVS deal. Amazon already has demonstrated it can disrupt industries once it moves into a vertical, said an industry executive, pointing to Amazon’s US$13.5bn bid this year for Whole Foods. Amazon likely will remain an active buyer next year, said two dealmakers.

The dynamics driving M&A in the Technology, Consumer, Healthcare and Industrial sectors are established, said Riley, laying the foundation for deals to be completed in mature markets. One sector of the economy that should emerge in 2018 as a high-growth segment is cannabis-related businesses, said Riley. Recreational use of marijuana, legal in California from 1 January, follows similar moves in Oregon and Washington.

William Langbein


mergermarket.com

West

mailto:william.langbein%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


63Mergermarket

Top deals

AnnouncedDate


28-Aug-17 C Gilead Sciences Inc Kite Pharma Inc Life Sciences & Healthcare 10,161

28-Dec-17 C TPG Capital LP; SoftBank Group Corp; General Atlantic LLC; Sequoia Capital; Tencent Holdings Ltd; Dragoneer Investment Group LLC; and Didi Chuxing Technology Co Ltd

Uber Technologies Inc (17.5% stake) Technology, Media & Telecom Benchmark Capital; and Menlo Ventures 8,983

9-Jan-17 C Mars Incorporated VCA Inc Life Sciences & Healthcare 8,792

10-Aug-17 C Invitation Homes Inc Starwood Waypoint Homes Real Estate Starwood Capital Group 7,884

20-Nov-17 P Marvell Technology Group Ltd Cavium Inc Technology, Media & Telecom 6,306

18-Dec-17 P Penn National Gaming Inc Pinnacle Entertainment Inc Leisure 5,885

19-Jul-17 P Hydro One Limited Avista Corporation Energy, Mining, Oil & Gas 5,226

6-Dec-17 P Optum Inc DaVita Medical Group Life Sciences & Healthcare DaVita Inc 4,900

4-Jan-17 C DCP Midstream Partners LP DCP Midstream LLC Energy, Mining, Oil & Gas Spectra Energy Corp; and Phillips 66 Company 3,851

24-Jan-17 C Cisco Systems Inc AppDynamics Inc Technology, Media & Telecom General Atlantic LLC; Greylock Partners; Battery Ventures; Kleiner Perkins Caufield & Byers; Lightspeed Venture Partners; Institutional Venture Partners; and Cross Creek Capital LP

3,700

10-Apr-17 C Knight Transportation Inc Swift Transportation Co Transportation Jerry Moyes family 3,656

2-Aug-17 P Jacobs Engineering Group Inc CH2M Business Services Apollo Global Management LLC 3,266

24-Feb-17 C Maxar Technologies Ltd DigitalGlobe Inc Business Services 3,115

13-Apr-17 C Hilcorp San Juan LP ConocoPhillips Company (San Juan Basin assets) (50% stake)


4-Apr-17 P Liberty Interactive Corporation General Communication Inc Technology, Media & Telecom Searchlight Capital Partners LP 2,543



mergermarket.com

West

Top 15 Announced Deals for the Year Ending 31 December 2017 – West (Based On Target)





West

0

100

200

300

400

500

2017201620152014201320122011

Valu

e (U

S$

bn)

US$66.9

US$70.8

US$20.9

US$33.6

US$90.2

US$72.2

US$24.9US$28.8

US$68.8

US$68.5

US$27.5

US$39.3

US$36.9

US$53.6

US$27.6

US$38.3

US$58.6

US$26.7

US$35.6

US$37.5

US$19.5US$27.5

US$71.4

US$21.7

US$32.3

US$41.8

US$283

US$46.9

US$35

US$15.3

US$15.9

US$53.2

US$171.2

US$165.3

US$95.5

0

200

400

600

800

1,000

1,200

1,400

1,600

2017201620152014201320122011

Num

ber

of d

eals

73

56 69

7476

65

15

4712 53

9

5644

43

4

54

61

79

4

16

14

11

14

7

2228

22

725803

704

560521501

885

12

616 541466

499

473469471

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Mergermarket Deal Drivers Americas 65West

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

70

80

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$7.9

US$8.3

US$17.3 US$

10.7US$9.5 US$

5.7US$N/D

US$8.6

US$1.5 US$

0.3

US$30.8

US$69.3

US$50.5

Num

ber

of d

eals

0

100

200

300

400

500

600

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

102

170

5318

162

55414 5

97

159 196

510


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

50

100

150

200

250

300

350

400

450


Num

ber

of d

eals

2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

25,000

50,000

75,000

100,000

125,000

150,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the West.


Mergermarket 66

mergermarket.com

Deal Drivers Americas West


67Mergermarket


League tables


Number of Deals




4 13 White & Case 117,402 34






10 34 Covington & Burling 81,410 17


Number of Deals




4 3 DLA Piper 18,258 106

5 10 Cooley 29,817 91


7 8 Jones Day 30,946 87

8 5 O'Melveny & Myers 14,464 78

9 4 Wilson Sonsini Goodrich & Rosati 14,848 70



Number of Deals


2 1 JPMorgan 151,538 66


4 10 Jefferies 33,617 53


6 5 Evercore 49,402 46

7 13 Citi 49,571 41

8 9 Lazard 45,770 40




Number of Deals


2 4 JPMorgan 151,538 66






8 10 Citi 49,571 41

9 3 Evercore 49,402 46

10 8 Barclays 46,357 37


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor. States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor.States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.


mergermarket.com

West


Midwest


MW


mergermarket.com

Midwest



MidwestOverview

The Midwest’s bread-and-butter sectors of Industrials and Consumer—especially tech-enabled and “better-for-you” offerings—will continue to whet the appetite of strategic and financial buyers in 1H18, dealmakers say. Overall sentiment in the region remains upbeat heading into a new year, with long-promised federal tax reform a reality, the economy steadily rising and loads of cash waiting to be deployed.

“M&A activity in the second half of 2017 has been strong and will continue to be strong in the first half,” said Steven M. Dresner, president of the Chicago-based investment bank Dresner Partners. “There is still more money than deals, and with the tax law changes prices are going to continue to go up.”

The Industrials sector, perennially the region’s leader in terms of deal volume and value, continues to be transformed by—what else—technology.

“The future lies with companies that are developing highly engineered products and introducing new technology because that adds value,” said Steven Rosen, co-CEO of the Cleveland, Ohio-based private equity firm Resilience Capital Partners.

“In our portfolio we’ve applied for 20-plus patents for highly-engineered defensible products in areas including robotics and automation,” he said. Smaller enterprises must either differentiate through technology or find themselves “pushed out of the market,” he added.

The region’s blockbuster deal of the year, United Technologies’ [NYSE:UTX] pending US$29.9bn acquisition of Cedar Rapids, Iowa-based Rockwell Collins [NYSE:COL], will combine two companies in the technology-heavy Aerospace and Defense sector.

Tech-enabled companies in a variety of sectors including manufacturing, third-party logistics and healthcare will command some of the highest multiples in the region going forward, said Muhammad Azfar, managing partner and CEO of the Chicago-based investment bank Auctus Group.

“Technology acquisition is such a big driver of M&A,” he said. “Anybody in a tech-enabled industry or segment is in a higher-multiple area.”

Meanwhile, companies delivering the perceived “better-for-you” food, snacks and drinks that consumers and investors crave are also in demand. One of the larger transactions in the region saw Michigan-based Kellogg [NYSE:K] acquire Illinois-based Chicago Bar Company, producer of protein snacks RXBAR, for US$600m.

“Larger companies are continuing to try and compete with small, innovative brands that they can’t create organically,” said Andrew Dickow, director at the Birmingham, Michigan-based investment bank Greenwich Capital Group.

Dickow said he expects to see large consumer goods companies step up their divestment

of non-core or slow-growth brands to free up capital to invest in brands and companies that have products and services that address changing consumer tastes and habits.

Though not quite in the healthy category, Arby’s owner Roark Capital’s proposed acquisition of Minnesota-based Buffalo Wild Wings for US$2.8bn is a reminder that PE firms are sitting on buckets of cash and are willing and able to compete with strategics in the current low-interest rate environment, the sources said.

Competition between strategic and financial buyers, both groups heavily armed with cash, will be as fierce as ever in the Midwest, dealmakers said. The scales might tip one way or another based on borrowing costs, they agreed.

“If there is any risk to the current slow, steady pace of growth it will come from the credit markets, and that risk is on everyone’s mind,” Rosen said.

Rising interest rates could actually be a good thing for strategic buyers, so long as stock valuations do not fall accordingly, Azfar noted.

“Most financial sponsors still use high leverage, so the cost of debt is huge,” he said. “A half-a-point rise in interest rates could shock the financial system, and if that happened you might see strategic buyers finding assets more affordable,” he said.

Jeff Sheban


mergermarket.com

Midwest

mailto:jeff.sheban%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry


70Mergermarket

Top deals

AnnouncedDate


4-Sep-17 P United Technologies Corporation Rockwell Collins Inc Industrials, Chemicals & Engineering 29,948

10-Feb-17 C Reckitt Benckiser Group Plc Mead Johnson & Company Consumer 17,835

15-Dec-17 C Marathon Petroleum Corporation MPLX LP (40.32% stake) Energy, Mining, Oil & Gas 17,279

10-Jul-17 P Westar Energy Inc Great Plains Energy Inc Energy, Mining, Oil & Gas 8,240

13-Nov-17 C MPLX LP MPLX Refining Logistics LLC; and MPLX Fuels Distribution LLC Energy, Mining, Oil & Gas Marathon Petroleum Corporation 8,100

5-Apr-17 C JAB Holdings BV Panera Bread Company Consumer 7,404

8-May-17 P Sinclair Broadcast Group Inc Tribune Media Company Technology, Media & Telecom Oaktree Capital Management LP; and Angelo, Gordon & Co 6,597

18-Apr-17 C Cardinal Health Inc Medtronic Inc (Patient care, deep vein thrombosis and nutritional insufficiency businesses)

Life Sciences & Healthcare Medtronic Inc 6,100

9-May-17 C Apollo Global Management LLC West Corporation Technology, Media & Telecom Quadrangle Group LLC; and Thomas H. Lee Partners LP 4,963

24-Apr-17 P Fresenius Kabi AG Akorn Inc Life Sciences & Healthcare 4,843

25-Apr-17 C Tyson Foods Inc AdvancePierre Foods Holdings Inc Consumer Oaktree Capital Management LP 4,121

7-May-17 C Sabra Health Care REIT Inc Care Capital Properties Inc Real Estate 3,914

19-Dec-17 P Crown Holdings Inc Signode Industrial Group Industrials, Chemicals & Engineering The Carlyle Group 3,910

20-Sep-17 P CRH Plc Ash Grove Cement Company Construction 3,500

9-Jan-17 C UnitedHealth Group Inc Surgical Care Affiliates Inc Life Sciences & Healthcare TPG Capital LP 3,260



mergermarket.com

Midwest

Top 15 Announced Deals for the Year Ending 31 December 2017 – Midwest (Based On Target)





Midwest

0

50

100

150

200

250

300

350

400

2017201620152014201320122011

Valu

e (U

S$

bn)

US$41.4

US$49.5

US$18.6

US$53.9

US$35.6

US$17.9

US$37.6

US$52.4

US$20.2

US$23.4

US$20.3

US$32.7

US$16.9

US$27.7

US$43.9

US$17.3

US$22.5

US$32

US$16.3

US$18.1

US$49.4

US$40.7

US$86.9

US$11

US$11.1

US$12.2

US$140.3

US$64.8

US$11.7

US$9.5

US$6.5

US$11.3

US$101.5

US$253

US$161.9

0

100

200

300

400

500

600

700

800

900

1,000

1,100

2017201620152014201320122011

Num

ber

of d

eals

12

71

8 13

87

12

66

7

15

8

48

31

40

3156

57

507

291

3727

391

33

43

414

272

3136

264

347

48

32

17

589 616 644

309287

368

252

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

Value

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Value

Value

Mergermarket Deal Drivers Americas 72Midwest

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

Agr

icul

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ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

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s &

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lthca

re

Tran

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Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

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Con

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er

Bus

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ces

Fina

ncia

l Ser

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Indu

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anuf

actu

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g

US$12

US$12.1

US$3.2

US$7.2 US$

5.6 US$0.1

US$3.4

US$0.1

US$54.6

US$40.2

US$39.9

US$22.7 US$

21

Num

ber

of d

eals

0

50

100

150

200

250

300

Agr

icul

ture

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ense

Real

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ate

Con

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n

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Sci

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re

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TMT

Ener

gy, M

inin

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Con

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Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

1631

78

44

6

45

131

33

164

287

92 96


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

25

50

75

100

125

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275

300


Num

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2011 2012 2013 2014 2015 2016 2017

Valu

e (U

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0

20,000

40,000

60,000

80,000

100,000

120,000

140,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Midwest.


Mergermarket 73

mergermarket.com

Deal Drivers Americas Midwest


74Mergermarket


League tables


Number of Deals







7 7 White & Case 47,432 36


9 5 Jones Day 45,567 117



Number of Deals


2 2 Jones Day 45,567 117

3 3 DLA Piper 5,583 61



6 5 Sidley Austin 20,351 51






Number of Deals

1 3 JPMorgan 104,542 57





6 12 Lazard 25,329 35


8 4 Jefferies 43,222 34


10 6 Lincoln International 1,861 33


Number of Deals


2 9 JPMorgan 104,542 57


4 4 Citi 83,808 27



7 6 Barclays 47,276 29

8 17 Jefferies 43,222 34


10 14 Lazard 25,329 35


The legal advisor league tables by value and volume have been run from 01/01/2016 to the 12/31/2016, including lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017, excluding lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.


mergermarket.com

Midwest


South


S


mergermarket.com

South



Mark Druskoff

SouthOverview

Despite reduced dealmaking at the tail-end of 2017, positive influences set the stage for a return of more robust activity in the year ahead, dealmakers said.

Chief among those forces is a business environment that is attracting large companies to relocate or establish headquarters in the region, said Julie Silcock, managing director at Houlihan Lokey in Dallas. That’s evidenced by reported potential interest from Amazon [NYSE:AMZN] in cities in Texas, North Carolina, Georgia or Virginia for its Headquarters 2 project. In June, Amazon acquired Austin-based Whole Foods [NYSE:WFM] for US$13.5bn.

In addition to its business-friendly reputation, Bryan Frederickson, managing director, GulfStar Group in Houston, noted that the region is benefitting from large-scale trends such as the bounceback of the energy industry and even the widening of the Panama Canal, which is driving an expansion of ports across the Gulf Coast and Southeast.

Indeed, energy M&A improved through the middle of the year to make it the single most active sector among deals tracked by Mergermarket in the region between Virginia, Florida and Texas.

To be sure, dealflow slowed at the end of the year, according to Mergermarket data.

Silcock said the “unusually” light activity in 4Q17 might be blamed on uncertainty over tax law

changes. While the ability to deduct interest payments has been significantly decreased in the new law, reductions in corporate taxes in most cases can offset much or all of this.

Large strategic buyers could reap substantial benefit from the changes. The law not only lowers the tax rate for corporations, making more money available for deals, but it could see a change in a key provision enabling such companies to expense 100% of the cost of acquiring assets in the first year rather than having to amortize them over a period of five years or more.

Lower corporate tax is expected by some sellers, such as private equity, to spur M&A, said Scott Winship, managing director at GulfStar Group. In 2012, the change in capital gains tax had a meaningful impact on M&A, he observed.

Lower taxes, available capital and high equity valuations for publicly traded entities set the stage for increased Financial Services M&A, said Chris Marinac, co-founder of Atlanta-based FIG Partners.

“Banks haven’t had it this good in quite some time,” he said. “They need to embrace that.”

Bank consolidation is likely to spread from Florida and North Carolina, where targets have become scarce, and to other states in the South, particularly in South Carolina, Georgia and eventually Tennessee.

In 2018, look for more international interest in the region, Silcock said, particularly China.

Chinese bidders have faced a challenging regulatory climate in the US with many deals facing national security scrutiny.

Silcock noted that Chinese buyers typically tend to need more time than bidders from other markets to complete deals. Sellers expecting strong international buyer interest are now considering marketing overseas first to give those buyers more time before going to market in the US, she said.

International buyer interest is broad based, Silcock said. Energy, technology and industrial companies are all seeing inbound interest that they are “taking very seriously.”

Gulfstar’s Frederickson also noted that international buyers are looking at the South to increase their exposure to energy, saying their interest is growing by “leaps and bounds,” he said. They are not interested in distressed opportunities but instead are looking for companies that will immediately be accretive.

That would add a new dimension to Southern M&A. In 2017, buyers in the South came mostly from the US—only 20 of more than 700 deals in the region tracked by Mergermarket were categorized as cross-border.

Chad Watt


mergermarket.com

South

mailto:mark.druskoff%40acuris.com?subject=Deal%20Drivers%20Americas%20FY%202017%20Inquiry



77Mergermarket

Top 15 Announced Deals for the Year Ending 31 December 2017 – South (Based On Target)

Top deals

AnnouncedDate


17-Jan-17 C British American Tobacco Plc Reynolds American Inc (57.83% stake) Consumer 60,567

21-Aug-17 P Sempra Energy Energy Future Holdings Corporation Energy, Mining, Oil & Gas 18,800

1-Feb-17 C ONEOK Inc ONEOK Partners LP (60% stake) Energy, Mining, Oil & Gas 17,118

18-Aug-17 P Calpine Consortium Calpine Corporation Energy, Mining, Oil & Gas 17,023

7-Jul-17 L Berkshire Hathaway Energy Oncor Electric Delivery Company LLC (80.03% stake) Energy, Mining, Oil & Gas Energy Future Holdings Corporation 16,720

31-Jul-17 P Discovery Communications Inc Scripps Networks Interactive Inc Technology, Media & Telecom 14,383

16-Jun-17 C Amazon.com Inc Whole Foods Market Inc Consumer 13,464

9-Jan-17 C Williams Companies Inc Williams Partners LP (32.24% stake) Energy, Mining, Oil & Gas 11,358

30-Oct-17 P Vistra Energy Corp Dynegy Inc Energy, Mining, Oil & Gas Energy Capital Partners LLC 10,609

22-May-17 L Clariant AG Huntsman Corporation Industrials, Chemicals & Engineering 10,355

30-Oct-17 P Lennar Corporation CalAtlantic Group Inc Construction MatlinPatterson Global Advisers LLC 9,256

18-Sep-17 P Northrop Grumman Corporation Orbital ATK Inc Defense 9,170

26-Apr-17 C Abu Dhabi Investment Authority; and GIC Private Limited Pharmaceutical Product Development LLC Life Sciences & Healthcare The Carlyle Group; and Hellman & Friedman LLC 9,050

25-Jan-17 P AltaGas Ltd WGL Holdings Inc Energy, Mining, Oil & Gas 6,685

17-Jan-17 C Exxon Mobil Corporation BOPCO LP; and the Bass Family (Permian Basin oil companies) Energy, Mining, Oil & Gas The Bass Family 6,620



mergermarket.com

South



0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2017201620152014201320122011

Num

ber

of d

eals

85

7483

100

85

108

68570

84

502

636

79

82

521

680

79

70

502

598

112

70

29

1517

19 1622

7

724

1917

12

29

31

1,018

860919 949

623 517477

0

100

200

300

400

500

600

2017201620152014201320122011

Valu

e (U

S$

bn)

US$65.1

US$64

US$68.5

US$80.8

US$26.3US$37.5

US$86.2

US$36.7

US$34.9

US$91.4

US$110.4

US$29.8

US$45.1

US$63.2

US$82.2

US$25

US$33.3

US$76.1

US$78.9

US$27.5US$35.3

US$59.3

US$63.3

US$27.4US$31.9

US$25.4US$31.5

US$86.4

US$100.3

US$163.3

US$177.6

US$253.2

US$273.4

US$222

US$110.6

South

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 79South

Valu

e (U

S$

bn)

0

20

40

60

80

100

120

140

160

180

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

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Sci

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s &

Hea

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re

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n

Leis

ure

TMT

Ener

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inin

g, O

il &

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Con

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Fina

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& E

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US$26.3 US$

21.6 US$16.5

US$14.9

US$3.7 US$

9.2

US$2.3

US$40.3

US$21.7

US$29.4 US$

18.6

US$100.1

US$171.3

Num

ber

of d

eals

0

50

100

150

200

250

300

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

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s &

Hea

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re

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ure

TMT

Ener

gy, M

inin

g, O

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l Ser

vice

s

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

25

64

15 103

55

184

285271

158

134

268250


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

100

200

300

400

500


Num

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2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the South.


Mergermarket 80

mergermarket.com

Deal Drivers Americas South


81Mergermarket

Legal advisors by deal countLegal advisors by value

The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.

League tables


Number of Deals






6 12 Jones Day 125,164 109



9 1 White & Case 111,227 69

10 5 Latham & Watkins 104,551 127


Number of Deals


2 2 DLA Piper 11,581 130


4 4 Jones Day 125,164 109





9 7 White & Case 111,227 69



Number of Deals


2 1 JPMorgan 223,462 79


4 5 Barclays 121,296 63


6 6 Evercore 95,851 61

7 3 Jefferies 38,953 61

8 12 Citi 108,196 60




Number of Deals

1 5 JPMorgan 223,462 79



4 13 Lazard 121,698 38

5 6 Barclays 121,296 63


7 1 Citi 108,196 60


9 11 Evercore 95,851 61



Mergermarket

mergermarket.com

South Deal Drivers Americas


Mid-Atlantic


MA


mergermarket.com

Mid-Atlantic



Richard Tekneci

Mid-AtlanticOverview

The Mid-Atlantic region is expected to see an uptick in M&A activity, with Government Services and Aerospace/Defense among the key drivers in the region for 2018, dealmakers said.

Paul Weisbrich, managing director at D.A. Davidson, said he expects a high volume of smaller government services deals involving companies with enterprise values less than US$50m. The Washington, DC area will continue to be a hotbed for these government services deals, a second sector advisor noted. He added that as the bigger companies compete for government contracts, these smaller companies should continue to get scooped up by larger firms.

Weisbrich said he also sees larger defense contractors becoming more active in the new year. These companies’ efforts to gain scale in the Aerospace & Defense sector will drive deals, as well as divestitures by larger companies pruning their portfolios.

New York-based L3 Technologies [NYSE:LLL] could be one company taking a close look at its portfolio, said the sector advisor. The company announced the potential sale of its Vertex Aerospace business during its 3Q17 earnings call in late October.

Weisbrich noted it is important to look at new CEO appointments, as that is where more M&A could occur. Pennsylvania-based aerospace company Triumph Group [NYSE:TGI] is one example. Triumph’s CEO Daniel Crowley,

Weisbrich noted, is relatively new since he started in January 2016. Triumph announced in December that it plans to merge its precision components and aerospace structures business into a new business unit expected to launch on 1 January. Triumph is a company that could be an eventual seller of assets, noted Weisbrich.

L3 Technologies’ current COO, Christopher Kubasik, will take over as CEO after current CEO Michael Strianese’s retirement is effective 31 December. Weisbrich said he expects L3 to be aggressive on the M&A front.

Weisbrich said Massachusetts-based valve maker CIRCOR International is a company to keep an eye on in 2018, after it announced its acquisition of Colfax Fluid Handling for US$860m in September.

Manan K. Shah, a managing partner at Focus Investment Banking, said an area such as the aerospace maintenance, repair and overhaul (MRO) sector is likely to see continued consolidation, as the sector remains fragmented. Shah expects continued private equity interest in the Aerospace/Defense sector as well.

A third sector advisor said deals are expected to continue to rise across the Defense sector as a whole. There are some exit processes in the Aerospace/Defense sector that are expected to launch in 1Q18 as well, which should bring about more deals, the advisor said. Apollo Global Management portfolio

company Constellis, based in the Washington, DC metro area, is one company that falls under this category, the same advisor said.

The unmanned aerial vehicle (UAV) or drone space should see more traction, the advisor added. He noted many private companies are seeking capital raises, which should bring more attraction to the sector. The use of drones for both military and commercial purposes will continue to drive activity, the same advisor said.

One example of capital raise activity is drone radar maker Fortem Technologies. VP Business Development Bruce Carpenter told this news service the company is looking to raise US$10m to US$20m in Series A funding. He named New York-based Griffon Corporation as one potential partner down the road because Griffon’s ground-based radars could go well with Fortem’s DroneHunter product.


mergermarket.com

Mid-Atlantic



84Mergermarket

Top 15 Announced Deals for the Year Ending 31 December 2017 – Mid-Atlantic (Based On Target)

Top deals

AnnouncedDate


14-Dec-17 P The Walt Disney Company Twenty-First Century Fox Inc Technology, Media & Telecom 68,422

23-Apr-17 C Becton, Dickinson and Company C.R. Bard Inc Life Sciences & Healthcare 23,609

19-Jun-17 C EQT Corporation Rice Energy Inc Energy, Mining, Oil & Gas 7,689

5-May-17 C Avantor Performance Materials Inc VWR International LLC Business Services Madison Dearborn Partners LLC 6,418

17-Mar-17 C Kohlberg Kravis Roberts & Co LP; and Caisse de Depot et Placement du Quebec

USI Holdings Corporation Financial Services Onex Corporation 4,300

12-Sep-17 P Centene Corporation The New York State Catholic Health Plan Inc Financial Services 3,750

24-Jul-17 C Internet Brands Inc WebMD LLC Technology, Media & Telecom 3,472

8-Mar-17 C Caisse de Depot et Placement du Quebec; and Suez Suez Water Technologies & Solutions Industrials, Chemicals & Engineering General Electric Company 3,379

14-Feb-17 C SoftBank Group Corp Fortress Investment Group LLC Financial Services 3,300

24-Aug-17 C SoftBank Group Corp WeWork Companies Inc Business Services 3,000

26-Nov-17 C Meredith Corporation Time Inc Technology, Media & Telecom 2,743

24-Aug-17 C Beacon Roofing Supply Inc Allied Building Products Corporation Construction CRH Plc 2,625

8-May-17 C Coach Inc Kate Spade & Company Consumer 2,349

24-Jan-17 C WestRock Company Multi Packaging Solutions Inc Industrials, Chemicals & Engineering 2,248

7-Mar-17 C Sterling Bancorp Astoria Financial Corporation Financial Services 2,219



mergermarket.com

Mid-Atlantic




Mid-Atlantic

Valu

e (U

S$

bn)

0

50

100

150

200

250

300

350

400

2017201620152014201320122011

US$11.2

US$11

US$12.2

US$12.9

US$62.6

US$29

US$64.7

US$9.8

US$14.5

US$9.2

US$12.8

US$10

US$11.9

US$203.6

US$50.2

US$44

US$17.1

US$37.9

US$32.9

US$16.4

US$45.7

US$36.4

US$16.3

US$30.9

US$37.8

US$37.6

US$39.6

US$40.6

US$22.1

US$33.4

US$44.1

US$16.1

US$137.9 US$

106.1

US$260.5

0

100

200

300

400

500

600

700

800

900

2017201620152014201320122011

Num

ber

of d

eals

42

30

35

33

238

39

32

246

39

27

204

43

27

208

2228

213

249

34

40

3 7

6

5

145

10

1211

4

14

13

15

16

426466

339

455

224285

290292

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 86Mid-Atlantic

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

70

80

90

100

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$17.6

US$14.4

US$6.4

US$14.9 US$

3.2 US$0.8

US$3.5US$

1.6 US$N/D

US$N/D

US$26.8

US$94

US$29.5

Num

ber

of d

eals

0

20

40

60

80

100

120

140

160

180

200

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

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Con

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Bus

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s S

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ces

Fina

ncia

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vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

85

17 17 22

5 2 1

7568

46

197

122111


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

50

100

150

200

250


Num

ber

of d

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2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in the Mid-Atlantic region.


Mergermarket 87

mergermarket.com

Deal Drivers Americas Mid-Atlantic


88Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a US (Mid-Atlantic) bidder, target or vendor. States: New Jersey, New York, Pennsylvania.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (Mid-Atlantic) bidder, target or vendor. States: New Jersey, New York, Pennsylvania.

League tables


Number of Deals




4 1 White & Case 144,374 66





9 22 Allen & Overy 87,555 21



Number of Deals


2 2 Jones Day 30,129 123





7 4 DLA Piper 12,469 84





Number of Deals


2 1 JPMorgan 183,471 82



5 13 Citi 159,916 66


7 12 Lazard 80,156 53

8 7 Barclays 72,662 53


10 5 Jefferies 35,970 52


Number of Deals


2 1 JPMorgan 183,471 82

3 3 Citi 159,916 66






9 20 Lazard 80,156 53




mergermarket.com

Mid-Atlantic


New England


NE


mergermarket.com

New England



Hana Askren

New EnglandOverview

The New England region enjoyed a banner year for M&A in 2017, and dealmakers told Mergermarket that they expect activity to continue. The economy is growing in a variety of sectors, while debt and equity capital are available for deals, said several New England-based M&A professionals.

Looking back, the M&A market has been the strongest it has been “in a long time,” said KPMG partner Tod Short. High valuations in the public equity markets are raising comparable valuations for private deals as well, he noted. Private equity will be active on the buy-side, but firms will also continue to take advantage of the “seller-friendly valuation environment” and lock-in gains, which will buoy the next round of fundraising expected around 2019–2020, added TM Capital Managing Director Jarrad Zalkin.

The middle market is a particular source of strength, added PwC partner Michael Mockus. The high valuations of 2017 show no signs of flagging and many companies will be seeking to exit in 2018 on a positive part of the cycle, said Mockus. Owners of middle market businesses have “gone past the usual kicking of tires” and have engaged advisers to sell their companies, added Hank Nelson, managing director at Monadnock Advisors.

The coming year should bring deals reaching beyond “typical” consolidation rationale, with unusual combinations possible, said Short.

Several large high-profile deals have aimed at vertical integration and transforming business models, and continuing transformation could lead to “wholesale disruptive acquisitions,” he said.

Zalkin agreed, noting recent examples of deals that brought companies a new way to engage with customers and expand their addressable markets. Amazon’s US$13.5bn deal to acquire Whole Foods brought it into competition with brick-and-mortar stores, while CVS’ US$67.8bn deal to acquire Aetna will change the way it engages with customers. The availability of capital and strong economy are “promoting this expansive, creative thinking” for all companies, including those in New England, he noted.

Transformative acquisitions could emerge particularly for companies trying to penetrate a digital market, if their “DNA is not digital,” said Zalkin. Artificial intelligence, machine learning and data analytics are now considerations for companies in a wide range of sectors, said Nelson. AI has fully entered the mainstream in just the past year or so, he said. Because the Technology sector is heavily represented in New England, other sectors may be more likely to become tech-savvy, said Nelson.

Organic growth can be a struggle for businesses looking to digitize, automate or otherwise transform their businesses, said Mockus. Healthcare and industrial manufacturing are two sectors in New England where this type

of business conversion is occurring and could drive deals, he noted.

New tax regulations could spur M&A, with a lower statutory tax rate for corporations. Companies may be more motivated to sell non-core assets with a lower tax liability on proceeds from the sale, said Mockus. In addition, the new legislation gives companies the ability to repatriate foreign cash, potentially adding to balance sheets and war chests. Tech companies, many in the New England region, have a significant amount of cash in foreign jurisdictions, said Short.

On the other hand, the same high valuations creating a ripe environment for sellers are giving some buyers pause. High valuations have spurred some larger players with cash to pursue collaboration arrangements versus outright purchases, said Mockus. In the technology and life sciences spaces in particular, increased caution is driving buyers toward these types of deals instead of M&A in some cases, he said.


mergermarket.com

New England

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91Mergermarket

Top 15 Announced Deals for the Year Ending 31 December 2017 – New England (Based On Target)

Top deals

AnnouncedDate


3-Dec-17 P CVS Health Corporation Aetna Inc Financial Services 67,823

18-Jul-17 C Crown Castle International Corporation Lightower Fiber Networks Technology, Media & Telecom Berkshire Partners LLC; and Pamlico Capital 7,100

28-Jun-17 C Sycamore Partners Staples Incorporated Consumer 6,657

20-Jun-17 C Pamplona Capital Management LLP PAREXEL International Corporation Life Sciences & Healthcare 4,913

9-Jan-17 C Takeda Pharmaceutical Company Limited Ariad Pharmaceuticals Life Sciences & Healthcare 4,893

10-May-17 C INC Research LLC Syneos Health Life Sciences & Healthcare Advent International Corporation; and Thomas H. Lee Partners LP

4,582

4-Dec-17 P Bank J. Safra Sarasin AG; Pine Brook Road Partners LLC; Global Atlantic Financial Group Limited; Atlas Merchant Capital; Cornell Capital LLC; and TRB Advisors LP

Talcott Resolution Inc Financial Services The Hartford Financial Services Group Inc 2,050

14-Apr-17 P Blackstone Group LP; and Canada Pension Plan Investment Board Ascend Learning LLC Business Services Providence Equity Partners LLC; and Ontario Teachers' Pension Plan

2,000

7-Aug-17 P Fresenius Medical Care AG & Co KGaA NxStage Medical Inc Life Sciences & Healthcare 1,918

24-Oct-17 C Graphic Packaging Holding Company International Paper Company (North America consumer packaging business)

Industrials, Chemicals & Engineering International Paper Company 1,800

2-Jun-17 C Eversource Energy Aquarion Water Company Energy, Mining, Oil & Gas British Columbia Investment Management Corporation; and Macquarie Infrastructure Partners Inc

1,675

23-Oct-17 C The Hartford Financial Services Group Inc Aetna Inc (US group life insurance and disability insurance business) Financial Services Aetna Inc 1,450

1-Jun-17 C CVC Capital Partners Limited PDC Brands Consumer Yellow Wood Partners LLP 1,425

23-Oct-17 C Vitol Holding BV Noble Americas Corporation Energy, Mining, Oil & Gas Noble Group Limited 1,418

14-Feb-17 C Hologic Inc Cynosure Inc Life Sciences & Healthcare 1,394



mergermarket.com

New England




New England

0

20

40

60

80

100

120

140

160

180

2017201620152014201320122011

Valu

e (U

S$

bn)

US$9

US$8.2

US$8.3

US$15.7

US$12.4

US$9.4

US$15.9

US$18.1

US$8.6

US$13.4

US$17.2

US$16.5

US$7

US$9.6

US$10.7

US$28.5

US$16.4

US$28.5US$

13.2

US$7.1

US$2.6

US$6

US$4.8

US$6.9US$

4.7US$6.8

US$5.2

US$5.5

US$5.2

US$5.6

US$81.6

US$141.5

0

50

100

150

200

250

300

350

400

450

2017201620152014201320122011

Num

ber

of d

eals

8823

133

140

149

147

194218

192

241

1211

1316

1413

15

19

15

19

19

28

2

2

3

3

3

4

25

5

1

136157

133

96

121

116

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 93New England

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

70

80

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$5.8

US$5.5

US$10.5 US$

4.5

US$15.8

US$0.1

US$0.6

US$1 US$

N/DUS$N/D

US$0.7

US$74.3

US$25.4

Num

ber

of d

eals

0

20

40

60

80

100

120

140

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

39

7 7

61

615

N/D2 1

79

61

126

38


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England. Industry sector is based on the dominant industry of the target.

mergermarket.com


Num

ber

of d

eals

0

25

50

75

100

125


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000


Valu

e (U

S$

m)

2011 2012 2013 2014 2015 2016 2017


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in New England.


Mergermarket 94

mergermarket.com

Deal Drivers Americas New England


95Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a US (New England) bidder, target or vendor.States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (New England) bidder, target or vendor.States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

League tables


Number of Deals





5 2 White & Case 85,320 29



8 69 Dechert 74,085 25




Number of Deals





5 5 Ropes & Gray 22,023 57



8 9 Jones Day 15,299 40

9 7 DLA Piper 7,257 38

10 11 Choate Hall & Stewart 641 32


Number of Deals



3 2 JPMorgan 77,715 41

4 8 Evercore 102,818 29



7 3 Barclays 102,560 26


9 14 Jefferies 9,176 25



Number of Deals



3 6 Evercore 102,818 29

4 3 Barclays 102,560 26



7 8 Lazard 78,010 19

8 2 JPMorgan 77,715 41

9 - Allen & Company 74,402 3




mergermarket.com

New England


Latin America


LA


mergermarket.com

Latin America



Latin AmericaOverview

Dealmaking in Latin America this year is expected to be heavily influenced by elections around the region, with voters in Colombia, Brazil and Mexico all set to elect new presidents. Announced M&A deals in Latin America totaled US$94.3bn in 2017, up 23.3% from US$76.5bn in 2016, according to Mergermarket data.

A rush of transactions is expected in Colombia, Brazil and Mexico during 1Q18 before activity slows, as elections in respective jurisdictions draw closer. Chile, meanwhile, is expecting to see an uptick in activity after re-electing President Pinera last month.

Mexico Companies will be keen to complete transactions as early as possible in 2018 before investor sentiment is affected by the presidential election in July, Rion M&A founding partner Pablo Rion said.

Increased activity is expected in 1Q18 as sellers seek to close transactions before buyers, particularly financial sponsors, delay investment decisions until after the election, said Seale & Associates Director Sergio Garcia. M&A activity is expected to slow down from March, he added.

Energy reform, which opened up the sector to foreign investment, will be an important driver of 1H18 M&A activity in the country, Rion said. Dealmaking is anticipated throughout the energy supply chain with petrochemical production, lubricant manufacturing and clean

energy generation offering opportunities for M&A consolidation, Rion and Garcia agreed.

The Agriculture sector is attractive to investors given Mexico’s year-round production of vital crops and its proximity to the US market, Garcia said. Thanks to increasingly advanced distribution, irrigation and logistics systems, leading Mexican producers are considering transactions and, while the outcome of NAFTA renegotiations could have an impact on this industry, it should not be sufficient to impinge on consolidation during 1H18, Rion noted.

Mexico’s family-owned businesses are increasingly eager to participate in M&A and this trend will help to offset any negative effects generated by volatility in the global financial markets and an unfavorable peso-dollar exchange rate, Garcia said.

Brazil Brazilians will choose a new president in October and, despite uncertainties about the economic direction the winner will adopt, investors remain confident in the country’s growth prospects, said Deloitte’s Reinaldo Grasson.

The total volume of M&A deals in Brazil grew by 5% in 2017, though this rise was lower than expected for Latin America’s largest economy, according to Rogerio Gollo, partner at PwC Brazil. The improvement in the macroeconomic scenario is helping to drive investor confidence and PwC foresees a 20% growth in dealmaking next year, Gollo added.

Driven by a recovery of purchasing power, Gollo said many retail/consumer deals will come to fruition during 2018, while Technology—a sector that has historically helped drive deals—will continue to see consolidation.

Healthcare and the K-12 education segment are still flourishing and are likely to attract private equity investment, Grasson said. Infrastructure and agribusiness are also of interest for foreign suitors.

Chile Meanwhile, the victory of center-right candidate Sebastian Pinera in Chile’s run-off presidential election held on 17 December is expected to usher in more M&A in the country. Pinera, who governed Chile from 2010-2014 and will assume his second term in March, has vowed to lower bureaucratic hurdles and corporate tax measures, noted Laura Sharkey of risk consultancy Control Risks.

Mining, Agriculture, Infrastructure and Renewable Energy are some sectors likely to gain M&A momentum next year, Sharkey noted.

Colombia Presidential elections, scheduled for May, could dampen dealmaking in Colombia especially if the winner is a candidate opposed to the peace agreement struck between the government and the Revolutionary Armed Forces of Colombia (Farc), said a local M&A banker.

Dominic Pasteiner

Carlos Martinez

Thiago Barrozo

Bruna Maia


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Latin America

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98Mergermarket

Top 15 Announced Deals for the Year Ending 31 December 2017 – Latin America (Based On Target)

Top deals

AnnouncedDate


12-Dec-17 C Liberty Global plc (Shareholders) Liberty Latin America Ltd Technology, Media & Telecom Liberty Global Plc 13,434

1-Jul-17 P Telecom Argentina SA Cablevision Holding SA Technology, Media & Telecom 6,685

2-Sep-17 P Paper Excellence Canada Holdings Corp Eldorado Brasil Celulose SA (81% stake) Industrials, Chemicals & Engineering J&F Investimentos SA 4,345

30-Nov-17 C State Grid Corporation of China CPFL Energia SA (45.36% stake) Energy, Mining, Oil & Gas 3,971

22-Dec-17 P UnitedHealth Group Inc Banmedica SA Life Sciences & Healthcare 3,394

5-Dec-17 P The Bank of Nova Scotia Banco Bilbao Vizcaya Argentaria Chile SA Financial Services Banco Bilbao Vizcaya Argentaria SA 3,226

8-Feb-17 C AC Bebidas S de RL de CV Arca Continental SAB de CV (Beverage businesses in Mexico, Argentina, Peru and Ecuador); and Coca-Cola Southwest Beverages LLC

Consumer Arca Continental SAB de CV; and Coca-Cola Refreshments USA Inc

2,700

18-Dec-17 P Statoil ASA Petroleo Brasileiro SA (Roncador oil field) (25% stake) Energy, Mining, Oil & Gas Petroleo Brasileiro SA 2,350

11-May-17 P Itaú Unibanco Holding SA XP Investimentos CCTVM SA (49.9% stake) Financial Services General Atlantic LLC; Dyna III Fundo de Investimento em Participacoes; and XP Controle Participacoes SA

1,982

21-Feb-17 C Ternium SA Thyssenkrupp Companhia Siderurgica do Atlantico Ltda Industrials, Chemicals & Engineering ThyssenKrupp AG 1,648

3-Aug-17 C Grupo Lala SAB de CV Vigor Alimentos SA Consumer Arla Foods amba; JBS SA; and FB Participacoes SA 1,610

25-Aug-17 P China Three Gorges Corporation; Hubei Energy Group Co Ltd; CNIC Corporation Limited; and ACE Investment Fund II LP

Empresa de Generacion Huallaga SA Energy, Mining, Oil & Gas Odebrecht Latinvest SA 1,390

25-Oct-17 P Grupo Financiero Banorte SA de CV Grupo Financiero Interacciones SAB de CV Financial Services 1,388

8-Jun-17 P Neoenergia SA Elektro Redes SA Energy, Mining, Oil & Gas Iberdrola SA 1,385

26-Dec-17 P China Southern Power Grid International (HK) Co Ltd Transelec SA (27.8% stake) Energy, Mining, Oil & Gas Brookfield Infrastructure Partners LP 1,300



mergermarket.com

Latin America




Latin America

0

30

60

90

120

150

2017201620152014201320122011

Valu

e (U

S$

bn)

US$17.1

US$14.1

US$40.8US$

25.3

US$37.8

US$7.1

US$27.1

US$8.6

US$16.1

US$14

US$10.5

US$14.2

US$28.2

US$29.2

US$13.3

US$16.9

US$13.2

US$41.4

US$13.6

US$18.8

US$16.6

US$38.9

US$16

US$24.1

US$38.4

US$14.1

US$19.2 US$

14.5

US$10.5

US$20

US$20

US$23.2

US$29.2

US$20.1

0

100

200

300

400

500

600

700

800

2017201620152014201320122011

Num

ber

of d

eals

9

25

53

22

5

63

5

5

7

30

2625

28

37

292

38

237

46

37

333

39

4541

37 29

31

248 238 247

288 284 289247

272 251

322

331

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

$501m - $2,000m $251m - $500m

> $5,001m



mergermarket.com


Mergermarket Deal Drivers Americas 100Latin America

Valu

e (U

S$

bn)

0

5

10

15

20

25

30

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$8.4

US$1.5

US$1

US$4.1

US$1.7

US$2

US$11.1

US$0.8 US$

0.1

US$21.8

US$26.8

US$5.5

US$9.5

Num

ber

of d

eals

0

20

40

60

80

100

120

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

TMT

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

ervi

ces

Fina

ncia

l Ser

vice

s

Indu

stria

ls, M

anuf

actu

ring

& E

ngin

eerin

g

2731

50

18

1

19

7

39

91

62

86

119

54


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America. Industry sector is based on the dominant industry of the target.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America. Industry sector is based on the dominant industry of the target.

mergermarket.com


0

20

40

60

80

100

120

140

160

180

200

220


Num

ber

of d

eals

2011 2012 2013 2014 2015 2016 2017

Valu

e (U

S$

m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000



Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America.


Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Latin America.


Mergermarket 101

mergermarket.com

Deal Drivers Americas Latin America


102Mergermarket


The legal advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and include lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.

The financial advisor league tables by value and volume have been run from 01/01/2017 to the 12/31/2017 and exclude lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.

League tables


Number of Deals


2 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 15,098 48

3 - Conyers Dill & Pearman 13,494 3

4 16 Carey y Cia 10,169 17

5 105 DLA Piper 7,954 8

6 31 Lefosse Advogados 7,583 15

7 17 Machado Meyer Sendacz e Opice 7,263 29

8 54 Jones Day 6,933 12

9 76 Stocche Forbes Advogados 6,900 24

10 113 Errecondo Gonzales Funes Abogados 6,696 3


Number of Deals

1 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 15,098 48

2 2 Pinheiro Neto Advogados 4,353 35

3 4 Machado Meyer Sendacz e Opice 7,263 29

4 5 Baker McKenzie 3,784 28

5 7 Tozzini Freire Teixeira e Silva Advogados 4,239 26

6 6 Philippi Prietocarrizosa, Ferrero DU & Uria 5,006 25

7 11 Demarest 2,510 25

8 12 Stocche Forbes Advogados 6,900 24

9 3 Cescon, Barrieu, Flesch & Barreto Advogados 5,963 24

10 17 Lobo de Rizzo Advogados 2,668 22


Number of Deals

1 1 Banco Itau BBA 8,815 36

2 5 Banco BTG Pactual 14,377 33

3 3 Banco Bradesco BBI 4,704 20


5 2 Santander Global Corporate Banking 9,804 15


7 6 Lazard 6,791 13

8 13 BNP Paribas 2,000 11


10 8 Banco Bilbao Vizcaya Argentaria 7,389 10


Number of Deals

1 - LionTree Advisors 20,119 3


3 12 Banco BTG Pactual 14,377 33

4 6 JPMorgan 12,236 8


6 1 Santander Global Corporate Banking 9,804 15

7 7 Banco Itau BBA 8,815 36


9 9 Citi 7,789 9

10 10 Banco Bilbao Vizcaya Argentaria 7,389 10



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Latin America


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Deal Drivers Americas 104Mergermarket

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Criteria Contacts

The following notes pertain to data contained in this publication:

Deals are included where the deal value is greater than or equal to US$5m.

Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to US$10m.

North America = US & Canada.

Industry section charts, top deals, and graphs are based on the dominant geography being North America or Latin America.

Geographic section charts and graphs are based on the dominant target geography.

Transactions exclude property transactions and restructurings where the ultimate shareholders’ interests are not changed.

Mid-market is defined as US$5m - US$250m.

All data included is correct as of 12 January, 2018.

League Tables correct as of 30 January, 2018

Top deals correct as of 30 January, 2018.

For a full version of the Mergermarket M&A deal database inclusion and league table criteria, go to: www.mergermarket.com/pdf/deal_criteria.pdf

Advertising Opportunities Erik [email protected]+ (1) 212 686 3329

Life Sciences & HealthcareClaire Rychlewski (in Chicago), Kevin McCaffreyCanadaSirui Shao, Elizabeth Lim

WestWilliam Langbein

MidwestJeff Sheban

SouthMark Druskoff, Chad Watt

Mid-AtlanticRichard Tekneci

New EnglandHana Askren

Latin AmericaDominic Pasteiner, Carlos Martinez, Bruna Maia, Thiago Barrozo

Head of Research Giovanni Amodeo

AmericasLana Vilner

All SectorsTom Cane, Jonathan Guilford

Financial ServicesYizhu Wang

Industrials, Manufacturing & EngineeringMarlene Givant Star, Sam Weisberg, Richard Tekneci

Energy, Mining, Oil & Gas Chad Watt, Nate Trela

ConsumerDayna Fields, Emily Fasold

Technology, Media & Telecom Thomas Zadvydas


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