capital inside

8142019 Capital Inside

httpslidepdfcomreaderfullcapital-inside 144

Capital InsightsHelping businesses raise invest preserve and optimize capital

SAPrsquos Werner Brandt on smartMampA organic growth andclear capital management

Makingthe market

The top 10 acquirers

India open for business

Asset managementthe dawn of a new era



Capital Insights from the Transaction Advisory Services practice at EY

For EYMarketing Director Leor Franks(lfranksukeycom)

Program Director Nathaniel Hass(nhassukeycom)Consultant Editor Richard HallCompliance Editor Jwala PoovakattCreative Manager Laura HodgesCreative Executive Jess CowleyDesign Consultant David HaleSenior Digital Designer Christophe MenardDeployment Executive Angela Singgih

For RemarkEditor Nick CheekAssistant Editor Sean LightbownHead of Design Jenisa PatelDesigner Anna ChouProduction Managers Daniela SchichorDavid SwettenhamEMEA Director Simon Elliott

Capital Insights is published on behalf of

EY by Remark the publishing

and events division of Mergermarket Ltd

80 Strand London WC2R 0RL UK

wwwmergermarketgroupcomevents-publications

EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance tax transactionand advisory services The insights and qualityservices we deliver help build trust and condence

in the capital markets and in economies the worldover We develop outstanding leaders who team todeliver on our promises to all of our stakeholdersIn so doing we play a critical role in building a betterworking world for our people for our clients and forour communities

EY refers to the global organization and mayrefer to one or more of the member rms of EY

Global Limited each of which is a separate legalentity EY Global Limited a UK company limited byguarantee does not provide services to clients Formore information about our organization please

visit eycom

About EYs Transaction Advisory Services How organizations manage their capital agendatoday will dene their competitive position

tomorrow We work with our clients to helpthem make better and more informed decisionsabout how they strategically manage capitaland transactions in a changing world Whetheryoursquore preserving optimizing raising or investingcapital EYrsquos Transaction Advisory Services bringtogether a unique combination of skills insightand experience to deliver tailored advice attunedto your needs mdash helping you drive competitiveadvantage and increased shareholder returnsthrough improved decision-making across allaspects of your capital agenda

copy 2013 EYGM Limited

All Rights Reserved

EYG no DE 0433

ED 1013

This material has been prepared for general

informational purposes only and is not intended to be

relied upon as accounting tax or other professional

advice Please refer to your advisors for specic advice

The opinions of third parties set out in this publication

are not necessarily the opinions of the global

EY organization or its member rms Moreover

they should be viewed in the context of the time

they were expressed

wwweycomServicesTransactions

ContributorsCapital Insights would like to thank the following

business leaders for their contribution to this issue

A l l d a t a i n C a p i t a l I n s i g h t s i s c o r r e c t a t 1 J u l y 2 0 1 3 u n l e s s o t h e r w i s e s t a t e d

copy P

a u l H e a r t f e l d

Helping businesses raise invest

preserve and optimize capital

P r e s e r v

i n g O

p t i m i z

i n g

R a i s

i n g

I n v e s

t i n g

Gunjan Bagla

Author Doing

Business in 21st

Century India

James M Loree

President and

COO

Stanley Black amp

Decker

Wolf-Dieter

Starp

Head of Global

MampA

BASF

Hugh Young

Managing

Director

Aberdeen Asset

Management Asia

Alix Stewart

Head of UK

Corporate

Bonds

Schroders

Mike Teng

CEO

Corporate

Turnaround

Centre

Bill Bohstedt

Vice President mdash

MampA Arthur J

Gallagher amp Co

Cedric Collange

Senior Vice

President for

MampA Schneider

Electric

Rob Conn

Founder

Innova Capital

Elizabeth

Corley

CEO Allianz

Global Investors

Arvind Dham

Chairman

Amtek Auto

Group

Barry Donlon

Managing

Director DCM

EMEA

UBS

Yves Doz

Professor

of Strategic

Management

INSEAD

Ed Dymott

Head of

Business

Development

Fidelity

Anna Faelten

Deputy Director

MARC

Cass Business

School

Campbell

Fleming

CEO

Threadneedle

Investments

Ehud Ronn

Professor of

Finance

University of

Texas at Austin

Prashant Mara

Head of India

Practice

Osborne Clarke

Chetan Modi

EMEA Head

of Leverage

Finance

Moodys

Brian May

Finance Director

Bunzl

Massimo Tosato

Global Head of

Distribution

Schroders

Adrian MuttonCEO

Sannam S4

Angad PaulCEO

Caparo

Piers

Prichard-Jones

CorporatePartner

Freshelds

Brendon Moran

Co-head

CorporateOriginations

Socieacuteteacute Geacuteneacuterale

Werner Brandt

CFO SAP



For more insights visit wwwcapitalinsightsinfo where you can find our latest

thought leadership including our market-leading Capital Confidence Barometer

Joachim Spi

Transaction Advisory Services Leader EMEI

(Europe Middle East India and Africa) at E

If you have any feedback or questions please email joachimcapitalinsightsinf

American golfing great Jack Nicklaus once said ldquoConfidence is

the most important single factor in this gamerdquo The same notion

rings true for MampA And thankfully it appears that confidence in

dealmaking is returning to the boardroom

In EYrsquos latest Capital Confidence Barometer (CCB) released in

April 72 of respondents said they expected global deal volumes to

improve over the next year Overall economic confidence has improved

significantly 87 of those surveyed in the CCB view the global economy

as either stable or improving up from 69 in October 2012

As self-belief grows business leadersrsquo focus shifts back to investing

So in this issue of Capital Insights we explore how companies can get

the very best from their deals

MampA is a three-act story First pinpointing the right locations

Second doing the deal Third ensuring that post-merger integration

plans are ready early And we have key insights for every stage

On page 30 we explore why companies need to take a more targeted

approach when entering rapid-growth markets Elsewhere corporates

both inside and outside India provide insights into how to get the best ou

of deals in Asias third-largest economy (page 24) And on page 20 we

investigate how to pull off a successful post-merger integration planThese issues are brought together in our in-depth and exclusive

interview with SAPrsquos CFO Werner Brandt He tells us how brave

acquisitions and a strong integration policy have helped SAP become

Europersquos most successful technology company (page 14) In another

exclusive story (page 8) we reveal the top 10 acquirers of the last five

years and analyze what other corporates can learn

Itrsquos good news that confidence is making a comeback but it needs

to be allied to a strong deal rationale proper preparation and a clear

growth strategy For those not only looking to do deals but also to raise

preserve invest and optimize capital I hope that this issue of EYs

Capital Insights will help give you the tools to go with your appetite

Confidence breeds success

wwwcapitalinsightsinfo | Issue 7 | Q3 2013 |



14SAP

Features8 Transaction insights The top 10

In a special edition of ldquoTransaction insightsrdquowe reveal the top 10 acquirers since 2008and discuss MampA with some of the worldrsquosmost acquisitive corporates

14 Cover story Making the market

SAP CFO Werner Brandt reveals howintelligent deals innovation and clear capitalmanagement have helped the Europeantechnology giant to thrive

20 Put the pieces togetherIt may not grab the headlines quite like a dealannouncement but post-merger integrationis vital to MampA success We identify the topfactors behind uniting companies correctly

24 India IncAs one of the worldrsquos leading emerging

economies the Asian giant is a key target forthose looking to grow But what do companiesneed to know before investing in India

30 Taking aimCorporates from developed economies areincreasingly looking to emerging nations forgrowth But how can companies target thesemarkets effectively

34 The big issuanceCorporate bond markets are boomingBut as a source of capital is their growth

in popularity sustainable or will governmentaction change the funding cycle again

38 Taking care of businessAsset management emerged relativelyunscathed from the nancial crisis But

the industry must push for innovation andmanage regulation to reach its full potential

8Top 10 acquirers

WINNER 2012

EY is proud to be the FinancialTimesMergermarket EuropeanAccountancy Firm of The Year

1EY mdash recognized by Mergermarket as

top of the European league tables for

accountancy advice on transactions

in calendar year 2012

As run on 7 January 2013

C o r b i s L y n s e y A d d a r i o V I I

copy P


G e t t y I m a g e s Z e n S e k i z a w a



Q 3 2 0 1 3



On the web or on the moveCapital Insights is available online and on your mobiledevice To access extra content and download the appvisit wwwcapitalinsightsinfo

Regulars06 HeadlinesThe latest news in the world ofcorporate fnance and what it means

for your business

07 Deal dynamicsEYrsquos Paumlr-Ola Hansson explains howcompanies can establish a successfulplatform in brand-new countries

29 The PE perspectiveEYrsquos Sachin Date discusses how privateequity needs to work hard to attractlimited partnersrsquo capital

42 Moellerrsquos cornerMampA Professor Scott Moeller reveals thesigns that show a deal is in trouble andhow corporates can mitigate the risks

43 Further insightsFind out about exclusive content

available on the Capital Insights website

(wwwcapitalinsightsinfo) and new

apps Plus details on three EY thought

leadership reports on rapid-growth

markets private equity and working

capital management

30MampA targeting

India 24

Corporate bonds34

G e t t y I m a g e s W e s t e n d 6 1

D o r l i n g K i n d e r s l e y




Capital Insights from the Transaction Advisory Services practice at EYCapital Insights from the Transaction Advisory Services practice at EY

HeadlinesEmerging bonds boomEmerging market corporates are set to overtake

their developed peers in terms of debt

Standard and Poorrsquos (SampP) figures show that

Chinarsquos corporates could owe US$138t by the

end of 2014 more than the US$137t set to be

owed by the US This figure could reach US$18t

by 2017 mdash over a third of the US$53t that SampP

expects global companies will need in terms

of debt and refinancing And in May Brazilrsquos

Petrobas (pictured below) sold US$11b-worth

of bonds on a single day mdash the largest bond issue

by an emerging market company ever With

investors hungry for returns corporates in rapid-

growth economies are in an ideal position to tap

the market For more on bonds see page 34

Safety first for fundsAsset managers are playing safe when it comes

to distributing their investorsrsquo capital The BofA

Merrill Lynch Fund Manager Survey for June

revealed that fund managers are focusing more

on the US and Japan whereas by contrast

emerging markets are being shunned Global

emerging market equity allocations are at their

lowest since 2008 according to the survey

with a net 9 underweight in that area Opti-

mism in Europe is returning however with 6

of asset allocators overweight in that area mdash a

14 percentage point swing from Mayrsquos survey

Managers should be wary of balancing the

need to safeguard funds with the imperative

to generate returns For more on the asset

management sector see page 38

Time to bet on India India could be in store for a deal boom as inter-

national corporates look to tap the countryrsquosincreasingly prosperous population Consumer

spending growth in India is expected to average

89 in the next five years according to market

researcher Euromonitor On the back of this

foreign company bids for Indian food drink

cosmetic and household goods businesses

reached a record US$56b in the year to

15 May according to Bloomberg Examples in-

clude Unileverrsquos offer to raise its majority stake

in Hindustan Unilever Corporates continuing

the search for new growth areas would do well

to keep an eye on this Asian tiger For more onIndia see page 24

Confidence is coming back Corporate executives are getting ready to invest

their capital again In EYrsquos latest Global Capital

Confidence Barometer (GCCB) mdash a survey of

almost 1600 senior executives from around

the world mdash 40 now feel their organizationrsquos

focus lies in investing over the next year up

from 32 year on year Additionally 51 feel

the economy is improving up from 22 in

October 2012 And despite lower-than-normal

MampA volumes 72 expect global deal numbers

to improve while almost a third expect to do

a deal themselves within the next 12 months

These levels of confidence are a boost for

economies worldwide as well as for companies

looking to divest assets For more on the

GCCB visit wwwcapitalinsightsinfogccb

tc

GettyImagesManpreetRomanaStringe

r

crGettyImagesKrzysztofDydynski

The changing face of risk The risks involved in cross-border MampA

transactions are changing Law firm Baker

amp Mckenziersquos Opportunities in High-Growth

Markets Trends in Cross-Border MampA report

shows that concerns over cultural barriers

are diminishing as globalization presses on

with issues over corporate compliance (46

of respondents) as the top legal or regulatory

challenge Corruption is not so high with 29

of those surveyed considering it a main issue

Only accounting or business fraud (20) is

seen as less of a threat Additionally 50

believe that pre-transaction integration plan-

ning is the biggest factor in mitigating deal-

execution risk As challenges change in cross-

border deal-making corporates competing on

foreign soil need to be aware of the changing

deal climates in these new regions

The consumer evolutionThe consumer sector is undergoing a deal-

making revolution in response to a changing

economic climate EYrsquos Consumer products deals

quarterly Q1 2013 shows that there were 347

announced consumer deals in the first three

months of this year a 9 increase on deals from

Q4 2012 Acquisitions by private equity groups

in the consumer industry fell however from 60

to 55 over the same period The US still makes

up the bulk of the sectorrsquos deal activity making

up eight of the sectorrsquos top 10 deals by value

mdash the June 2013 buyout of Heinz by private

equity firm 3G and conglomerate Berkshire

Hathaway being a prime example and the largest

deal in Q1 2013 However corporates should

keep an eye on rapidly expanding consumer

markets outside their borders as well For more

on targeting emerging markets see page 30

P r e s e r v

i n g O p t i m

i z i n g

R a i s

i n g

I n v e s

t i n g



Paumlr-Ola Hansson is EMEIA Markets Leade

Transaction Advisory Services EYFor further insight please ema

par-olacapitalinsightsinf

Deal dynamics

Paumlr-Ola Hansson

The search for growth will leadmany corporates to boldly go

where they have not gone before

In regional terms this means

moving beyond developed markets and

into rapid-growth markets (RGMs) such

as Turkey Vietnam and Chile EYrsquos Rapid-

Growth Markets Forecast published in April

expects growth in the RGMs to accelerate

from 47 in 2012 to 6 in 2014

However entering a market where your

business has no previous presence requires

corporates to make several vital decisions

When looking to penetrate new marketscorporates must decide whether to create

alliances with local firms or build the

business alone This depends on the region

sector and nature of the business

For companies in highly regulated

sectors finding a strong local partner is

often vital for establishing a business For

instance in the financial services sector

Germanyrsquos Allianz acquired Turkish insurer

Yapi Kredi for euro684m (US$894m) in March

Board member Oliver Baumlte noted that ldquothis

transaction fits perfectly into Allianzrsquos

strategy to use bolt-on acquisitions to

strengthen its position in growth marketsrdquoFor more on finding the right JV partner

visit wwwcapitalinsightsinfojvs

On the other hand some companies

choose to take a more organic approach

This has been the case for Swedenrsquos IKEA

Its plans to open 25 stores in India were

approved by the Indian Government in May

As a privately owned company IKEA

is able to take a long-term approach to

investment in a new market As Juvencio copy P a u l H e a r t f e l d

As companies strive for growth they will ndthemselves heading into uncharted watersJust how do they establish a platform for success

unknown

Maeztu IKEArsquos India Chief Executive saidldquoWe will never compromise on a good

location So even if it takes five years to

[find] it is no problemrdquo

However many listed firms canrsquot wait

that long They have reporting requirements

and responsibilities to shareholders Itrsquos

more difficult for them to think long term

Whether a company enters organically

or via a partnership another issue is finding

the right model to monitor the organization

The key argument here is centralization

versus localization Corporate development

officers who have no corporatedevelopment function in new regions

need to redefine how they work That can

mean moving decision-making power from

headquarters to where the business is

growing A prime example of this came in

September 2012 when human resources

consultancy Aon Hewitt opened a new

office in Indonesia as part of its regional

expansion strategy At the time Edouard

Merette CEO of Aon Hewitt Consulting

in Asia Pacific said ldquoThe fast-growing

economy of Indonesia offers Aon Hewitt

an important business opportunity as

we continuously develop and affirm ourpresence throughout Southeast Asiardquo

There is also increasing pressure for

corporate social responsibility Companies

need to take environmental concerns into

account and engage in the communities

and cultures they enter

Clear strategy regional accessibility

and cultural accountability are the three

key drivers when seeking growth in a brave

new world

A step into the



TransactioninsightsKey facts and gures from the world of MampA This issue the top 10corporate acquirers by volume of the last ve years Plus the biggestdeal sectors and countries since 2008

Acquisitions are key drivers behind corporate

development and growth But which companies

have been buying the most and what insights can

other acquisitive corporates gain from the broadexperience of those who are most active These

are the questions Capital Insights asks and with

data supplied by Mergermarket looks to answer In

addition we reveal the top 10 sectors and regions

by deal volume since 2008 (see figures page 9)

The breakdown of the top 10 shows a mixture of

sectors regions and corporate sizes mdash proving that

growth via acquisition is not just limited to giants

such as Google and IBM With that in mind on page

10 we talk exclusively to corporate leaders from

three of the top 10 mdash Capita Arthur J Gallagher

amp Co and Bunzl mdash to discover more about their

growth strategies their rationale for deals and

some of the challenges they face and how theyhave overcome these

Meanwhile a breakdown of the top 10 sectors

(top page 9) since 2008 shows that the industrials

and chemicals sector has seen the most deals

followed unsurprisingly by the technology media

and telecommunications industry In terms of

regions (bottom page 9) it is interesting to note

that while developed economies dominate China

is in third place and Brazil India and South Korea sit

just outside the top 10

Methodology

bull The data for the top 10 has been

gathered from the Mergermarket

database of MampA transactions

bull The table shows deals conducted

by top-level companies across

the world from January 2008

to April 2013

bull The data only includes deals by

the parent company recorded on

the Mergermarket database It

does not include private equity

deals joint ventures lapsed or

subsidiary deals As a result deal

volumes may differ from those

expressed by the corporates

themselves

bull For further Mergermarket

deal criteria please visit www

mergermarketcompdfdeal_

criteriapdf

Big dealersThe table right showsthe top 10 acquirers since2008 by deal volumeaccording to MergermarketWe have chosen this periodto show which companieshave been most acquisitive

post financial crisisThe table shows the

deal landscape of the pastfive years and the top 10 isnot just limited to corporategiants While some suchas tech companies Googleand IBM are predictableserial acquirers due to thesectorrsquos history of big namessnapping up smaller start-ups others are from sectorswhich are traditionally lessacquisitive For instanceArthur J Gallagher amp Coand Bunzl are from theinsurance and distributionindustries respectively

In terms of geographythe US can boast fourcorporates in the top 10while Europe and Japanhave three apiece

Top 10 acquirers 2008mdash2013

Company Country Sector Deal volume

1 Google US Technology 50

2 IBM US Technology 49

3 Capita UK Outsourcing 43

4 Mitsui amp Co Japan Trading house 41

5 Marubeni Japan Trading house 40

6 Mitsubishi Japan Trading house 39

7 International Finance

CorporationUS Financial services 39

8 Arthur J Gallagher amp Co US Financial services 37

9 Assa Abloy Sweden Security 32

10 Bunzl UK Distribution 31




t

S h u t t e r s t o c k E Y

b

S h u t t e r s t o c k

The top sectorsThe industrial and chemicals sector leads

the way with 12901 deals since 2008

And it is continuing this strong performanc

overall so far in 2013 with over 500 deals

in Q1 alone In second place is the

technology media and telecommunications

sector with a total of 9772 deals since2008 The sector continues to flourish

in terms of deal values In the first five

months of 2013 alone deal values came in

at US$145b from 690 deals putting the

sector first value-wise this year

Despite a downturn in consumer

spending in developed countries the

consumer sector has been remarkably

buoyant over the past five years The

industry came in third place with a total of

8532 deals since 2008 Spending has also

increased across the sector So far in 2013

there have been 565 consumer sectordeals worth US$109b putting it third in

both volume and value terms for the year

This figure has been helped by megadeals

such as the buyout of food company Heinz

by Berkshire Hathaway and 3G for US$28b

The top countriesWhile the top 10 deal countries since 2008

are dominated by developed markets with

the exception of China more recent data

shows that times are changing Europersquos

economic troubles have taken their toll on

some of the more popular MampA destinations

in the continent Italy in sixth place in 2008

USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume

Top 10 countries by total deal volume since 2008

Canada

2490 deals

France

3010 deals

Transportation

2113 deals

Technology media and

telecommunications

9772 deals

Industrials and chemicals

12901 deals

Financial services

6210 deals

Energy mining and utilities

6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals

Top 10 sectors by total deal volume since 2008

with 453 deals is now down to 10th in the

first five months of 2013 with just 98 Spain

is faring worse falling from 10th in 2008

(334 deals) to 16th so far in 2013 (80)

One of the most noticeable trends

over the last few years has been the rise of

emerging markets as preferred investment

destinations China has consolidated its

position as the third-most popular MampA

destination in the last two years mdash behind

the US and UK However Brazilrsquos rise has

been much more recent It first appeared

in the top 10 geographies in 2011 rising

to ninth in 2013




The last five years have been

turbulent for the MampA market

This period culminated with

a peak at the end of 2012

The yearrsquos final quarter saw the highest

MampA values since 2008 (US$737b from

3565 deals) according to Mergermarket

There has been a slowdown this year with

the 2789 deals in Q2 2013 comparing

unfavorably with Q2 2012rsquos 3327

However the number of megadeals takingplace such as Liberty Globalrsquos US$219b

buyout of Virgin Media combined with rising

confidence among corporates means that

there is room for increased optimism

EYrsquos Capital Confidence Barometer

(CCB) published in April shows that 72 of

respondents expected volumes to rise over

the next year Half are also more confident

about the number of opportunities available

compared with 37 in October 2012

Against this background of renewed confidence

we have looked back at the top 10 acquirers by volume

over the last half decade to uncover why they have been so

acquisitive and what other corporates can learn from their

deal strategies

Deal hungrySince 2008 those in the top 10 have done more than 400

deals between them The reasons why they have chosen

MampA for growth are as varied as the sectors they represent

Bill Bohstedt Vice President mdash MampA for US property andcasualty mergers at insurance broker Arthur J Gallagher

amp Co (AJG) believes that the rationale for acquisitions is

about finding the perfect partner to grow the business

ldquoThat was really our core vision for MampA growth finding

good merger partners who fit into our culture and wanting

to keep growing By coming together with us we grow better

together than we could if we were separaterdquo says Bohstedt

A similar sentiment is echoed by Ian West Director

of MampA for Capita the UK outsourcing group ldquoSmall

to medium-sized acquisitions that take us into new

The way

The top acquirers tell us about the strategieschallenges and keys to a successful deal

forward

GettyImagesZenSekizawa




complementary areas and strengthen our

capabilities and scale have always played

a key role in Capitarsquos growthrdquo says West

Google has also stated that acquisitions

are about finding a perfect synergy between

bidder and target ldquoThe important thing

I look for is alignment between what the

entrepreneur wants to do with their product

and their company and what Google wants

to dordquo said David Lawee Googlersquos Vice

President of Corporate Development in

an interview in 2012 ldquoIf there is perfect

alignment then it has a very high chanceof success If there is not then we should

not be doing itrdquo

For IBM second in the table one of the

key drivers is innovation ldquoSmall companies

are started around a great idea to change

the worldrdquo said Steve Mills IBMrsquos Senior Vice

President and Group Executive for Software

and Systems at an information and analytics

forum last October ldquoBig companies through

acquisitions and RampD are also driving some

part of that innovation agendardquo

Breaking new groundAccording to Bunzlrsquos Finance Director Brian

May the companyrsquos acquisition rationale is

twofold to consolidate the business as well

as to break into new territories

Since 2008 the UK distribution giant

has spent an average of pound167m (US$257m)

per year on acquisitions ldquoWersquore in a

fragmented marketplacerdquo says May ldquoWe

are an acquisitive company the only one

consolidating in our industry mdash one that is

mainly comprised of family-run businessesrdquo

Bunzl has targeted South America mdash in

particular Brazil mdash as a key area for growth

Over the past five years the company hasundertaken a targeted acquisition strategy

to build the business there As recently as

March it bought medical supply business

Labor Import based in Sao Paulo

ldquoWe identified Brazil a market of 200m

people as a place with the scale and size of

GDP that makes it interesting for us Having

then researched the market we found there

existed suitable acquisition candidates

Brazil has the need for distribution whereas

in the other BRICs there isnrsquot that level of development

in our marketrdquo says May

The three Japanese trading houses in the list mdash Mitsui

amp Co Marubeni and Mitsubishi mdash have also made overseas

acquisitions something of a priority in recent years A good

example of this has been Marubenirsquos US$26b acquisition of

US grain trader Gavilon in June this year

When the deal was first announced in May 2012 the

company stated in its annual report that ldquoThis will further

raise Marubenirsquos global profile in grain trading More

importantly it will make it possible to address expanding

demand for grains in China and other emerging countriesrdquo

Swedish lock maker Assa Abloy has also usedacquisitions to break into emerging markets mdash in particular

China where it bought two companies Shandong Guoqiang

and Sahne Metal in 2012 Speaking at the beginning of the

year Chief Executive Johan Molin stated in an interview that

the volume of deals was a

result of having to compete

in emerging markets

ldquoAs people [in emerging

markets] get wealthier they

will spend more money on

door openingrdquo he said

ldquoThere are often very low-

quality doors in emerging marketsrdquo

Family values and volumeTaking the acquisition route to growth is often going to

be fraught with challenges For the high-volume acquirers

interviewed by Capital Insights the three key issues

identified were the type of companies on offer the volume of

businesses available and the valuations that the targets set

Doing deals in Bunzlrsquos sector often involves dealing with

family businesses This brings challenges for many firms

particularly when operating in emerging markets

ldquoWhen dealing with family businesses you need to

engage and build a greater level of trust We have separate

management teams and their heads will form relationships

with businesses we would ultimately like to buy Familiesdonrsquot want their business consumed and their identity

changed significantlyrdquo says May

ldquoThe deals often come when they need more investment

But we do relatively little with the front office The customer

relationships and supplier relationships we leave with the

families who we usually tie in to stay In the main it is what

they want as well as they have often reached the point

where to go to the next level is beyond their own resourcesrdquo

Itrsquos not only the types of businesses that pose issues

There is also the dilemma of getting a decent volume of

On the webFor more on how EYrsquos Capital Confdence Barometer affects CFOs readThe CFO Perspective mdash at a glance at wwwcapitalinsightsinfoccbcfo

Our challenge is to cast ournet as wide as possibleand get managementspreading the messageBill Bohstedt VP mdash MampA Arthur J Gallagher amp Co

wwwcapitalinsightsinfo | Issue 7 | Q3 2013 | 1



businesses In the case of Bunzl ensuring

they have a good supply-line can sometimes

be the issue ldquoThere are the ongoing

challenges of getting a good supply of

businesses Overcoming this is all about

getting the right timing and building trust in

advancerdquo he says

For AJG the opposite is true Thereare around 38000 independent insurance

agencies in the US And the challenge is to

reach out to as many as possible in an effort

to find the most suitable partners

ldquo[To overcome] this issue we have to

have as many management people meeting

these merger partners in their areas and

at events and starting a dialoguerdquo says

Bohstedt ldquoBecause when they get ready to

sell we want them to know who we are and

consider us as a potential partner

A new perspectiveEYrsquos Pip McCrostie on what is needed to lift MampA activityfrom its lowest levels since the nancial crisis

ldquoIf we havenrsquot had that dialogue they may decide tomerge with one of our competitors Our challenge is to cast

our net as wide as possible and get management spreading

the message about the benefits of joining usrdquo

However arguably the main issue that many buyers face

is the valuation gap between themselves and their targets

In Aprilrsquos CCB 44 of respondents expected valuations to

increase over the next 12 months compared with only 31

in October 2012 For Ian West at Capita the solution is

disarmingly simple mdash stick to your guns

ldquoBeing disciplined around pricing is a critical factor for

doing the number of deals we do and for generating the

value that these acquisitions will ultimately createrdquo West

says ldquoThe biggest challenge is the temptation to becomelsquobusy foolsrsquo by chasing deals where pricing will always be

too high Itrsquos important to know when to leave well alone

or to walk awayrdquo

The high-volume acquirers all point to three key

messages when it comes to successful deals mdash find the right

partner agree on the right price and get the post-merger

integration (PMI) right (for more on this see the PMI

feature on page 20) And they should know With over

400 deals mdash many more if you include subsidiary and

joint venture deals mdash between them in the last five years

theyrsquove had the practice

What is your expectation for global MampAdeal volumesin the next 12 months

Decline

Remain the same

Improve

Return tohistoric highs

3

69

23

5

12

3

45

Itrsquos a tough time for MampA

However as wersquove seen markets

can change quickly If there is to

be an upswing in MampA this year

and beyond the following five

changes need to happen

Greater economic stability and

confidence in growth Therehas been more stability around

macroeconomic issues such as

the Eurozone but investors want

to see this translating into an

outlook for growth

Long-term stability in equity

markets This would provide

a more robust longer-term

view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of

QE and its influence

on the economy and equityindices is critical to better

understanding growth prospects

and asset prices

Greater shareholder influence

on investments Many large

corporates have big cash

piles Shareholders may want

that money to be utilized and

Pip McCrostie

is Global Vice ChairTransaction AdvisoryServices EY

inorganic growth could be part

of that equation

Bold movers Three-quarters of

big corporates expect MampA to rise

yet less than a third intend to do

a deal The lsquoyou firstrsquo sentiment

could turn into lsquome toorsquo if bold

moves are made and competitors

are seen to be establishing an

advantage via MampA

Source EY Capital Confdence Barometer

G e t t y I m a g e s A i r R a b b i t




EY expertsSteve Krouskos

(SK) is Deputy

Leader GlobalTransaction Advi-

sory Services EY

Charles Honnywill(CH) is EuropeanHead of Sell Side

Services Trans-action Advisory

Services EY

M983078A The art of

The top 10 acquirers have shown that sector region orindeed size is no barrier to acquisition activity Two EYexperts give their views on the results

What are your thoughts on the top 10

SK Itrsquos a varied list I wasnrsquot surprised by the

variation in there as there has been no over-

riding theme driving the market I also wasnrsquot

surprised by the three Japanese companies

CH I am a little surprised that there were

two UK-based businesses but not so much by

the Japanese ones I think we are seeing the

beginning of a huge outflow of capital from

Japan There arenrsquot enough good-quality

businesses in Japan to invest in for growth

Will tech firms continue to be as active

SK I think tech will be one of the more

active sectors maybe not with headline

deals but more mid-sized acquisitions Itrsquos

driven by rapid change in the sector such as

the evolution to cloud big data and mobile

applications There is a lot of disruption in

the sector and companies are placing a wide

array of bets to solidify their position

CH They will continue to acquire

high-quality services that they donrsquot have

acquiring in lieu of in-house RampD Butfor the bulk of what they need to do to

grow their businesses which is customer

acquisition and growing share of spend

they will continue to do that organically

What drives firms to be so acquisitive

CH First a number of them will need to

infill services that they cannot readily build

internally IT companies in particular need

to buy services that consumers will findattractive The second reason is that some

of these deals have been defensive mdash beating

competitors by building market share Finally

a number of these organizations have capital

and need to deploy it in new markets

SK Itrsquos hard to find a single theme A lot

of these are simply unique opportunistic

companies in search of growth In the early

portion of the last five years there were

more consolidating deals to capture cost

efficiencies But as we move forward deals

are more about access to new marketsproducts and trying to control supply chains

Which sectors will be most acquisitive

over the next 12 months

SK If you look at our most recent CCB

I think sectors standing out are automotive

life sciences technology and oil and gas

CH Therersquos also likely to be some big deals

in sectors such as defense In mining therersquos

lots for sale but few buyers The volume

will be seen in health carelife sciences and

business services Within all sectors demandfor acquisitions that enable growth will be

the highest

Which countries will be most acquisitive

in the next 12 months

SK In terms of outbound deals Japanese

companies are cash rich and looking for

opportunities to deploy capital Chinese

and US companies will also be active These

companies will look increasingly to emergingmarkets and not just the BRICs but places

like Indonesia Africa and Colombia

CH I agree The Japanese will continue to

acquire looking toward the more developed

part of the Eurozone There will be more

acquisitions out of China it will be looking fo

high-quality assets to diversify away from th

Chinese mainland The other big area is the

US I believe that their businesses will move

capital from Europe to the Americas

After a slow start to 2013 what willkickstart the MampA market

CH I do think wersquoll see an uptick and will be

quite surprised by it Confidence is returning

because the imminent disasters feared from

the fiscal cliff the collapse of the Eurozone

and the issues with Cyprus have not come

to pass Available capital on balance sheets

and the debt available to those with the righ

credit rating will create the impetus

SK I expect some small improvements in

the second half of the year Companies have

cash and access to credit However I donrsquotsee one major event that will spark the

market Corporates are still concerned with

making mistakes but confidence will return

gradually as they get more comfortable

that there wonrsquot be a catastrophic event

That said I think this market offers a great

window of opportunity

For further insight please email

editorcapitalinsightsinfo




Making themarketSAP CFO Werner Brandttells Capital Insights howsmart MampA innovativethinking and a clear capitalagenda have helped thecompany to expand itsposition as a global leader




W hen it comes to growing

a business in the ultra-

competitive technology

market companies that

want to succeed need to focus on the future

and then deliver it now

The sector is developing at a rapid rate

Global spending on information technology

(IT) products and services will grow 41 this

year to US$38t according to analyst firm

Gartner Only forward-thinking corporates

with a clear strategy will reap the rewards

This is borne out in a report from late2012 by research group International Data

Corporation which predicted that from

2013 through to 2020 technologies built

on mobile computing cloud services social

networking and big data analytics would drive

around 90 of all the growth in the IT market

This statistic highlights what Germanyrsquos

SAP the biggest technology company in

Europe and the worldrsquos largest vendor of

business applications decided to do some

years ago ldquoSAPrsquos success mdash 13 quarters

of double-digit growth in a row mdash is based

on the strategy that we laid out in 2010rdquosays CFO Werner Brandt ldquoIn addition to our

core business of applications and analytics

we chose to focus on three major areas

which will help us to double our addressable

market from US$100b to over US$200b by

2015 These areas are in-memory database

technology mobile and the cloudrdquo

Strategic moves into these three

categories alongside the continued focus

on the core businesses have helped SAP to

become one of the most valuable companies on the German

DAX index And itrsquos the only European name in the top 10

global high-tech businesses ldquoNow we are number nine but

our ambition is to rise higher in the marketrdquo says Brandt

SAP risingGrowth is the guiding principle at SAP and it is the priority

for the CFO when it comes to allocating capital ldquoAt SAP we

generate a very strong cash flowrdquo says Brandt ldquoAnd we use

cash for acquisitions to support the implementation of our

strategy The second allocation is for paying dividends to our

shareholders and the third usage is share buyback But in

the first instance we use cash to grow the businessrdquoSAPrsquos growth story is based around a mixture of a strong

MampA strategy and maximizing the potential of its existing

products in its five key market categories mdash applications

analytics cloud mobile and database technologies

In terms of organic growth the key weapon in SAPrsquos

arsenal is HANA a database evolving

into an application platform that provides

information on a real-time basis and

can analyze massive quantities of data

10000 times faster than traditional

databases It is the fastest-growing

product in the companyrsquos history

ldquoTo the end of Q1 2013 we haveaccumulated HANA revenue of euro640m (US$856m)rdquo

he says ldquoAnd through the huge potential of application

data being analyzed at high speed there will be a paradigm

shift for enterprise intelligence and an opportunity for

far greater growthrdquo

HANA is now being used by more than 1500 corporate

customers around the world in all industries ranging from

financial services to sports For example in February the

US National Basketball Association (NBA) announced that it

would be using HANA software to give fans unprecedented

access to nearly 70 years of statistical data HANA was

chosen by the NBA due to its speed flexibility and ability to

allow unlimited searches unlike more conventional products

ldquoHANA is one of our key organic growth drivers We need tostay focused and do everything we can to position HANA in the

right way so that it is adopted by all our customersrdquo he says

While HANA is driving organic growth SAP has made

some bold MampA moves in key areas of the business such as

cloud computing and mobile technology

High up in the cloudsThe cloud has long been seen as fundamental to the future

of the industry Indeed the cloud services market is forecast

to grow 185 this year to US$131b worldwide according


Preserving

Investing

Optimizing

Raising

We use cash foracquisitions to supportthe implementationof our strategy



to Gartner SAP first

entered the market

with a homegrown

product some years

ago ldquoWe initially focused on a complete

solution in the cloud via a product calledBusiness by Design However we learned

that the cloud market was not ready for such

a comprehensive approachrdquo says the CFO

ldquoSo we decided that we would invest via the

acquisition of more focused cloud solutionsrdquo

SAP bought the cloud software company

SuccessFactors in February 2012 for

US$34b and followed this up in October

2012 with the acquisition of business-to-

business trading network Ariba for US$43b

ldquoIn the cloud business these acquisitions

were bold But today we are number two in

the market and closing the gap to numberone For this year we already expect total

cloud revenue to approach US$13b We are

among the fastest-growing cloud companies

worldwiderdquo says Brandt

These acquisitions took SAPrsquos cloud

business to another level and meant it could

provide a uniquely broad offering ldquoWe are

driving the adoption of the cloud holistically

while other cloud players focus on specific

products for individual lines of businessrdquo he

says ldquoWe have offerings around all business

aspects whether related to money people

suppliers or customers and in addition we

provide a full suite in the cloud Our complete offering and

the seamless integration into on-premise solutions make us

unique and provide triple-digit growthrdquo

SAP used the same targeted approach in the mobile

space In May 2010 it acquired the mobile software provider

Sybase for US$58b ldquoIt was clear that the world was going

mobile and we had to push ourselves into that business

Therefore we bought a company that was a leader in mobilerdquo

says Brandt ldquoSybase also had great database technology

experience which fitted perfectly into HANArsquos organic

development and added significant value for usrdquo

SAP is not just making big money moves such as the

SuccessFactors and Sybase deals It is also looking at smallertuck-in acquisitions such as online ticket provider Ticket-Web

which it bought in January and insurance software provider

Camilion purchased in May to complete the portfolio

Target practiceHowever given that many of SAPrsquos acquisitions were not

on the market how does SAP target these companies

ldquoWe look to acquire when we see a business that will give

us the chance to accelerate our growth strategy in our five

market categoriesrdquo says Brandt ldquoAnd more often than not

if you want to do this you have to get the number one in a

given industry mdash and these are normally not for sale

ldquoFor example we aimed to be a leader in the cloud sowe bought SuccessFactors which was and is the leader in

human capital management [HCM] the fastest-growing cloud

segment SuccessFactors really brought the cloud DNA to

SAP and today we have 29m users using our cloud HCM

solutions Then later we bought Ariba because it was number

one in supplier relationship management and had the biggest

enterprise network in the world for business Ariba manages

a transaction volume of nearly US$500b each yearrdquo

In addition to both companiesrsquo fast-growing status Brandt

outlines two other key factors in the acquisition process ldquoYou

have to ensure that you get a company that has the right

cultural fit and which will accelerate the implementation of

your strategyrdquo he says

1 9 7 2 1 9 8 81 9 8 6 1 9 9 0

SAP becomes a publicly traded

company International subsidiaries open

in Denmark Sweden Italy and the US

SAP opens its first

international subsidiary

in Austria

Company started under the name SAP Systemanalyse

und Programmentwicklung (System Analysis and

Program Development)

SAP acquires a 50 holding in German

software company Steeb and takes

over software firm CAS outright

copy P a u l H e a r t f e l d



In some cases these companies are

already working with SAP In the ever-

evolving technology industry in particular

itrsquos often worthwhile keeping an eye on

smaller partners who have industry-specific

knowledge This helps both partners to grow

and heads off potential future rivalries

ldquoIn our industry we are working in

an eco-system comprising thousands of

partners These include hardware technology

and implementation partners Sometimes

the solutions provided by our partners

become so attractive to our customers thatwe decide to buy these companies and build

up a new business This was the case with

Camilionrdquo says Brandt

Getting togetherA deal whether transformational or tuck-in

can be judged both by figures mdash turnover

and margin mdash and by the success of the

post-merger integration (PMI) As Brandt

puts it ldquoIf you invest almost US$8b in two

companies then you have to ensure that you

get the integration rightrdquo

For larger acquisitions such asSuccessFactors Ariba or Sybase SAP uses

a bespoke PMI model ldquoIf you look at our

history of integrating companiesrdquo says

Brandt ldquowe always use the tailor-made

approach to effectively integrate these

acquired companiesrdquo

In practice this means that SAP

approaches different acquisitions from very

different angles according to the CFO

ldquoWith the Sybase acquisition we had

acquired a business that was new to us So

we decided to bring together only the market

activities of both companies in order to

capture the potential growth

and combine the solution

offeringrdquo he says ldquoWe kept

the rest separate and then

after two years having learnt

about the database business

we integrated Sybase fully

from a development and

back-office perspectiverdquo

With Business Objects

a business intelligence

software company that

SAP acquired in 2008 forUS$48b the company used

another integration model

ldquoWhile Sybase was more

a partial integration over

time with Business Objects

we had bought a company

operating in the same field

We were blending the power

of our applications with

analytical applications so

we decided to fully integrate

right from the beginning

This also helped increaseefficiencyrdquo says Brandt

For the cloud

businesses SAP used yet

another approach which

the CFO refers to as a

ldquoreverse integrationrdquo In

this case the company took

its existing cloud business

and integrated it with the

acquired SuccessFactors

business to create a new

SAP cloud unit Brandt feels

that this approach has been

1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang

SAP concludes a cooperative

agreement with the largest Russian

software company ZPS

SAPrsquos global expansion continues

as it opens its 19th international

subsidiary in Mexico

Lessons learned

1

24567 8

3

Werner Brandt explains SAPrsquos

tenets for successful growth

When it comes to organic growth you need

to stay focused on the product or service and

maximize its opportunities

Offer a complete product and services portfolio

The combination of five different market categories

is what makes SAP different from its competitors

Keep an eye on smaller partners who have an

attractive offering They can help the larger partner

to grow and head off potential future rivalries

With acquisitions always look for companies that

accelerate the implementation of your strategy and

have a good cultural fit

Ensure that you have a tailor-made integration

scenario for each acquisition and that each shares

one objective to capture top-line growth

When integrating companies ensure thatthe innovation capability of the target company

is preserved

When investing in a country build tight links with

that country SAP is not just there to sell but to

co-innovate to train people and bring them closer to IT

Wherever possible companies need to make

the market rather than react to what is going

on within it

1



extremely successful ldquoAfter you acquire abusiness what you normally see is a dip in

revenue for the acquired companyrdquo he says

ldquoBut if you look at SuccessFactors we grew

in triple digits from the first quarter on The

same holds true for Aribardquo

When it comes to smaller acquisitions

such as Camilion and Ticket-Web SAP has

a more standardized integration concept

ldquoFrom a back-office perspective it takes us

60 to 90 days maximum to fully integrate

and we also create a clear combination

from a go-to-market and a development

perspectiverdquo says BrandtWhy the difference between integration

models According to the CFO itrsquos a simple

matter of size and complexity

ldquoWith smaller companies we

usually buy a piece of technology

that we want to bring into the

market or a small solution that

helps us to accelerate in a given

environment or within a given

industry There is no need to

keep it separaterdquo he says

Acquisitions of any size have

a number of risks Yet Brandt

1 9 9 9 20052003 2007

SAP opens its ninth development

location outside Walldorf mdash in China

SAP announces a series of acquisitions

including strategy management provider Pilot

Software Yusa Wicom and MaXware

SAP invests nearly 15 of the yearrsquos

euro51b (US$68b) in revenue into

research and development

SAP buys several smaller companies including

retail providers Triversity and Khimetrics

feels that SAPrsquos bespoke approach helps to mitigate two key

post-merger issues mdash staff retention and innovation leakage

from the acquired company

ldquoThe first objective of an acquisition is to realize the

top-line synergies We do not buy for efficiency on the

bottom line we buy to grow And itrsquos very important that

you do everything to ensure that the growth of the acquired

company is not diminished This has a lot to do with people

The retention aspect is a very important onerdquo he says

ldquoOn the development side you have to ensure that the

innovation power within the given company is preserved

that it can develop on its own and is not diminished by the

big development organization that is SAP This is one reasonwhy we did the reverse integration of our cloud business into

SuccessFactors and then built the new SAP cloud businessrdquo

Get involvedThe company is not only looking to grow in its mature markets

such as Germany and the US it is also seeking expansion

across emerging markets in particular China Brazil and the

Middle East and North Africa (MENA) region And just as it

does with acquisitions and integration SAP takes a holistic

approach to its regional focus

ldquoIf we look at China we have more than 4000

employees there mdash 2000 of which are developers Itrsquos

not just a country where we want to sell software butalso a country where we have a huge and well-accepted

development organizationrdquo he says ldquoWe decided in 2011

that we would invest heavily in China mdash US$2b until 2015

We have increased our presence recently by hiring more than

1000 people mdash two-thirds on the sales side and one-third on

development We also decided to move our head of global

customer support to Beijingrdquo

This idea of becoming fully involved in a region to

maximize growth opportunities equally extends to both Brazil

and MENA ldquoIn Brazil four years ago we decided to take the

same approach of not only selling but also developingrdquo says

Brandt ldquoThis started with a development center for Latin

America in Satildeo Leopoldo We have about 500 people there

Being CFOWerner Brandt discusses

how his role works in SAP

There are different shades betweenthe roles of the CFO There is the

business partner role and there is the

stewardship role The business partner role helps the

company to grow and ensures that all the processes are

set up in a way that constantly improves efficiency

The stewardship role ensures that the company

fulfils all of its obligations from a governance

perspective mdash be that related to financial reporting or

adherence to business codes of conduct and compliance

copy S

A P A G



2008 2010 2 0 1 2 2 01 2

SAP announces plans to buy Sybase for US$58b

Software revenues of euro15b (US$2b) in Q4 helps

SAP to its best quarter in history

SAP acquires clou

software provide

Ariba for US$45

SAP completes the acquisition

of Business Objects

SAP acquires cloud

application provider

SuccessFactors

and are doubling our capacity by setting

up a second facility This is an area that

has one of the most prominent universities

in Brazil We are attached to this university

and can attract young talent to SAPrdquo

In MENA SAP has taken a similar

approach ldquoWe have invested in training

and development centers expanded our

customer base and hired young professionals

We have done a lot in order to capture growth

in these countriesrdquo he says

Saving the dayWhile deals get the headlines and moves to

exotic emerging locations provide a level of

pioneering glamor to a business they could

not happen without the work that goes on

behind the scenes improving efficiency and

working capital management

In terms of enhancing efficiency SAP has

invested heavily in its shared service center

(SSC) infrastructure Finance transactions

are managed out of four service centers in

EMEA the Americas and Asia Pacific Many

of the companyrsquos transactional processes

are integrated into a SSC already and SAP ismoving more and more processes on top of

purchase-to-pay order-to-cash and record-to-

report to SSCs

When it comes to the day-to-day level of

improving working capital the CFO ensures

that the two complementary angles mdash day

sales outstanding (DSO) and day payments

outstanding (DPO) mdash are very closely

monitored in order to optimize cash flow to

fund acquisitions and further growth

ldquoWe have reduced DSO from 70 to 60

days over the last four years and have a

clear focus on being close to the payment

behavior of our customersrdquo says

Brandt ldquoWe use a new HANA-

based solution that enables each

manager to look into receivables

around the world via their

mobile devices

ldquoThis starts with the global

view and then you can dig down

into a country and really go

into a specific account to seehow the customerrsquos payment

behavior developed over time

Our internal solutions help our people understand and solve

disputes with customers quickly so they can payrdquo

On the payables side Brandt feels that the best way to

optimize the process is to look at a better way of collaborating

with suppliers This helps to get the best terms and conditions

after which he feels the company needs to pay on the agreed

day ldquoI donrsquot think itrsquos the right approach not to pay on time in

order to get better cash flowrdquo he says ldquoItrsquos better to discuss

and see that you have the optimal financial supply chain in

place in order to maximize your cash flowrdquo

Unique combinationSAPrsquos success story is a lesson in how a strong acquisition

and regional strategy a pinpoint focus on maximizing the

potential of existing products and services and solid capital

management can lead to substantial growth Yet Werner

Brandt feels that there is one final factor that gives SAP

an edge over its competitors a complete offering with

customers having mobile access to all solutions no matter

whether they are deployed on premise or in the cloud

ldquoIf you look at what we offer and the combination of the

five different market categories this makes SAP uniquerdquo

says Brandt ldquoI would argue that we make the market

instead of reacting to itrdquo

The CFO

Werner Brandt

Age 59

Appointed CFO at SAP 2001

Educated University of Nuremberg-Erlangen Technical University of

Darmstadt

Previous positions Prior to becoming CFO atSAP Werner was the CFO and Labor Director

of German-American health care companyFresenius Medical Care AG From 1992 to 1999

he was VP of European operations at health carecompany Baxter Deutschland responsible for its

financial operations in Europe

SAPFounded 1972

Employees 65000

Countries 130

Market capitalization US$74b(as of H1 2013)

copy SAP AG Reto Klar

1



together

Put the pieces Deals that look goodon the surface can oftenfall apart due to poorintegration processesHow can corporatesovercome this challenge

and make the pieces t




Key insightsbull Early planning is

vital for the successof a post-merger

integration teamsneed to be set up early

preferably during the

due diligence phase

bull Companies needto work out quickly

whether the objectiveof the deal is a full or

partial integration ofthe two businesses

bull Due diligence shouldgo beyond the financial

legal and regulatoryissues and into the

organizational andcultural areas

bull One key to success is

communication withall stakeholders

especially managementand employees

bull Integration is not ashort-term activity

but a process thatcontinues over a long

period and mustbe managed actively

and monitored

The post-merger integration (PMI) phase of an MampA

deal will never grab the headlines like the deal itself

Yet in many ways successful PMI of one company

into another is the only way to evaluate a deal

Bad integration is certainly seen as a key reason for a deal

failing A 2011 survey by insurance consultants Aon Hewitt

revealed that a longer than anticipated integration process

(41 of those surveyed) and cultural integration issues (33)were identified by organizations as the top two reasons for

deal failure So how can corporates overcome these hurdles

Early birdsEYrsquos EMEIA Operational Transaction Services Leader Max

Habeck strongly believes that early preparation is the key for

an effective PMI process ldquoBetter planning leads to successrdquo

he says ldquoSuccess is based on having a good understanding

of what you are buying and why you are buying and on

effective operational due diligence That should shape

realistic expectations of synergies Early mistakes here can

create big problems later You need clarity on the degree of

integration you are seeking You need to clearly match top-down and bottom-up viewsrdquo

Schneider Electric the multinational electricity

management company that has pulled off a string of

successful acquisitions in the past decade mdash including the

purchase of full ownership of Russiarsquos Electroshield TM

Samara in March this year mdash has made early planning a key

part of the integration process

ldquoThe integration model to be used is something we

discuss at a very early stage when we consider acquiring a

companyrdquo says Cedric Collange Schneider Electricrsquos Senior

Vice President for Mergers and Acquisitions ldquoIf you look at

this at the acquisition stage it is too laterdquo

German chemical company BASF has experience as a

successful integrator One year after its December 2010acquisition of nutritional supplier Cognis Samy Jandali Vice

President of Nutrition and Health in North America said

he had been ldquovery impressedrdquo with the integration of the

two firmsrsquo differing expertise areas This was backed up by

2011rsquos Q1 figures which showed BASFrsquos reported sales of

performance products up 39 which included a significant

contribution from Cognis It was fully integrated by 2012

Dr Wolf-Dieter Starp BASFrsquos Head of Global MampA says

that the company benefits from thorough preparation ldquoFor

successful PMI planning for the integration has to

start during the due diligence phaserdquo

he explains ldquoCritical issues are identified

through a number of analyses using

external consultants where necessary

These include a wide variety of issues such

as the complexity of the business the age

and condition of production plants and

taxes Both cost and growth synergies areidentified in the due diligence phase mdash and

then regularly measured to see if they are

being achieved in the integration phaserdquo

Having the correct teams and

procedures in place early on in the lifespan

of an acquistion isnrsquot the only factor that

determines a smooth transaction process

As a company with extensive experience

of acquisitions BASF has learnt that

itrsquos beneficial to announce the targetrsquos

organizational structure and management

as soon as possible as well

ldquoTimely and regular communication iscrucialrdquo says Starp ldquoThe new and current

employees need to know where the journey

is going and what the next steps arerdquo

Samy Walleyo EYrsquos Operational

Transaction Services Markets Leader for

Southern Germany Switzerland and Austria

agrees ldquoCompanies need to plan in advance

yet often they set up integration teams just

a couple of weeks before deals close That is

far too laterdquo he says

Tailoring integrationAs well as starting early in the process

companies need to work out quicklywhether the objective of the deal is a full or

partial integration of the two businesses

ldquoThe level of integration depends on your

motivationrdquo says Habeck ldquoIf you are buying

innovation and skills it may be unwise to

integrate those into a large corporationrdquo

Therefore large corporates should

consider whether giving the company some

autonomy rather than fully assimilating it

into the business will yield better results


Optimizing

Investing



What do you believe are the principal

factors needed to ensure successful

post-merger integration

Source NetjetsMergermarketDoing the Deal 2013

Having a clear andactionable post-mergerintegration plan 46

Understandingthe strategic fit

of the target withinyour business 65 Cultural understanding 46

Retainingtalentedstaff 54

60of respondents

identified culture as

a key challenge during

the integration process

according to a survey

by Mercer

The key is to communicatewith stakeholdersespecially managementand employees

Cedric Collange Senior VP MampA Schneider Electric

Schneider Electric has three types of integration model

according to Collange ldquoThese are full integration light

integration and no integration mdash where the competencies in

the acquired company are very different from our own and we

want to learn from them rather than to integraterdquo he says

In the ldquono integrationrdquo model Collange explains there

will still be back-office integration bringing the acquired

company into Schneiderrsquos financial systems and reporting

An example of this was the acquisition of Brazilian

low-voltage product producer Steck in 2011 Steck-

manufactured products were at a lower end of the market

than Schneider Therefore Steck was set up as a separate

brand with a separate structure ldquoThere is some integrationof the back office with reporting and financial controls but

otherwise it was not suitable for integrationrdquo says Collange

For the ldquolight integration modelrdquo Collange explains

that the company needs time to understand the acquired

business and learn its culture ldquoThis means that we might

integrate after one or two years

depending on what we findrdquo

he says ldquoIn these cases you

have to make sure that the key

people are comfortable before

you push for full integration It

is more important to keep them

than to achieve full integrationWe would rather wait before we

fully integrate to make sure we

understand the differences in the acquired companyrdquo

Internet giant Yahoo also took this tailored approach in

its US$11b acquisition of social networking website Tumblr

in May 2013 In its media release the company said that

ldquoper our promise not to screw uprdquo Tumblr ldquowill continue

to be defined and developed separatelyrdquo under current CEO

David Karprsquos leadership

However for creating fiscal synergies other issues

must be considered says Habeck ldquoIf you are seeking to

lower your cost base or extend productive capacity then

questions have to be asked whether the existing operations

are scalable about regulatory constraints the practicalchallenges involved in integration and the level of investment

that will be requiredrdquo

Companies must also consider their IT systems

ldquoIT compatibility is a big question mark in some executivesrsquo

mindsrdquo he adds ldquoItrsquos not just about pulling levers to change

systemsrdquo Indeed according to EYrsquos IT as a driver of MampA

success survey only 21 of corporates and 11 of private

equity firms always undertake IT due diligence prior to

signing deals Yet IT incompatibility can destroy the

prospect of achieving synergies

Capital of cultureWalleyo says that the importance of

thorough due diligence which goes beyond

the financial legal and regulatory issues

and into the organizational and cultural

areas cannot be overestimated ldquoItrsquos not

only about culture between countries

but also between companies and within

countries for example between north and

south Italyrdquo he explains

This is borne out in the 2011 study

from Aon Hewitt It found that over 70 of

corporates believed that the top impactsof unsuccessful cultural integration include

decreased employee engagement loss of

key talent and reduced productivity

ldquoThere is no magic recipe for due

diligence there will always be something

that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we

acquire a companyfor its core

competencies

rather than for other reasons such as its

products or market sharerdquo

The issue of culture as a challenge

to PMI success is thrown into relief by

the 2012 Asia Pacific cross-border post-

merger integration survey from human

resources consultancy Mercer Almost 60

of respondents identified culture as a key

challenge during integration yet many

companiesrsquo integration plans lacked the level

of detail required to deal with the issue

ldquoMany mergers fail because companiesfocus on strategic and financial fits but

neglect the issues such as cultural and

operational fitsrdquo says Dr Mike Teng author

of the book Post Merger Integration

Improving Shareholdersrsquo Value After a

Merger ldquoTo deal with this formulate a

vision and strategy on the direction the

merger is going in and how the deal fits

as well as the clear milestones A

pre-merger process that targets the




James M Loree of Stanley Blackamp Decker explains the companyrsquos

successful integration strategy

Viewpoint Early and opencommunicationwith key stakeholders 46

Building goodrelationships withmanagement 42

Our integration capabilities enable us to pursue value-creating MampA

with confidence and conviction We have developed a rigorous

comprehensive process that we apply to all transactions

Effective planning is critical factor We spend time early on generally

before a deal closes to create the teams and plans needed to capture

synergies and implement organizational changes This typically begins

during our due diligence phase with a framework in place when a deal is

signed Plans are detailed and developed before closing where practicable

Our integration focuses on three main areas value people andprocess We define and analyze what the value-creation drivers are and

organize our process

around them Our focus on

people is all important itrsquos

critical to provide clarity on

organization structure and

roles and responsibilities

to reduce anxiety among

an understandably stressed

workforce Finally we use a

process that our employees

have seen before keeping

everyone focusedWe typically form an integration management office comprised of

corporates and business leaders from both businesses plus a steering

committee made up of senior management to help make decisions quickly

allocate resources and remove barriers to success

Our integration process has proven successful over time mdash such as our

$US4b buy of Black amp Decker in 2010 We exceeded synergy targets and

met all committed franchise targets on or ahead of schedule due in large

part to our integration process

James M Loree is President and Chief Operating Ofcer

Stanley Black amp Decker

12

3

45

ShutterstockEY

potential partner with the right capabilities should also

be established Rigorously plan and build trust with the

interested partnerrdquo

Merger managementA successful integration requires work on both sides

Donrsquot just expect the acquired firm to slot in With so many

possible pitfalls in PMI ensuring that it runs smoothly

is a tricky business C-level executives should bear the

following five tenets in mind when it comes to bringing

two companies together

Sharing is caring ldquoYou need to move people from theacquired organization into the acquiring organization not

just the other wayrdquo says Yves Doz Emeritus Professor of

Strategic Management at INSEAD ldquoMake sure the burdens

of adjustment are shared If one side has to travel a long

way and the other side just sits and waits thatrsquos an unfair

burden of adjustment This can be very dysfunctionalrdquo

Expert help ldquoItrsquos about solid project management and

having the right people available to do itrdquo says Habeck

ldquoThat is one of the issues we see most of the timerdquo He adds

that acquisitions shouldnrsquot always be seen as a merger

ldquoTherersquos this romantic view of the meeting of two mindsrdquo

he says ldquoBut sometimes itrsquos just about access to an RampDpipeline or pulling more sales through an existing asset baserdquo

Keep talking ldquoThe key to success is communication with

all stakeholders especially management and employeesrdquo

says Collange ldquoWe are engaged in a large acquisition

and integration of Electroshield and TM Samara which

has 10000 employees in Russia and Uzbekistan all of

whom need to be informed regularly We may be over-

communicating to them but that is never a mistakerdquo

Donrsquot forget the day-to-day ldquoWhat we see very often

is that the acquirer is very focused on the targetrdquo says

Walleyo ldquoSometimes they forget their own people and they

donrsquot tell them what to expect You need these resourcestheir enthusiasm and their buy-in You need a project team

You need all the key employees for their expertise But

these key employees are also the ones who you need for the

day-to-day operations of the business The distractions for

these key employees can harm the day-to-day businessrdquo

Stay late Integration is not a short-term activity but a

process that continues over a long period that must be

actively managed and monitored Starp explains ldquoBASF

reviews the success of integrations over many years Short-

term success factors are for example harmonizing IT systems withoutdisturbing customer relations Mid-term success can be measured if key

personnel remain with BASF and the identified synergies are achieved

An extensive documentation and analysis makes it possible to learn from

each integration episode and thus do the next integration even betterrdquo

Doing the deal may well be the ldquoglamorousrdquo side of MampA but

successful integration is all about hard work So start early plan

meticulously and stay with it

For further insight please email editorcapitalinsightsinfo





India IncKey insightsbull A young population

and a growing middle

class means that Indiais ripe for investment

opportunity

bull Restrictions on foreign

ownership apply incertain sectors such

as financial servicesaviation and retail In

these cases corporatesneed to work with

established partners

bull State investmentboards can often be a

more useful source ofinformation than their

national equivalent

bull Valuations can be

relatively highBidders need to build

strong relationshipswith targets

bull Bidders should

consider building aninitial minority stake

and increase theshareholding over time

bull In terms of outboundMampA Indian companies

are looking at naturalresources technology

and marketable brandsIndian buyers generally

prefer one-to-one dealsrather than auctions

and to take 100ownership instead

of stake investments

Indiarsquos economy and population are growingCapital Insights explores how to investeffectively in this rapidly growing market

Emerging economies attract intense scrutinywhenever their GDP figures are forecast or

published These countries are after all the

motors of the new world economic order

something heightened by the current predicament of the

developed markets

So when Indiarsquos Central Statistical Organization estimated

that growth for 2012 would come in at around 5 compared

with more than 6 a year earlier there was concern that the

countryrsquos economy was running out of steam

But looking behind Indiarsquos GDP figures reveals a much

more optimistic picture Consumer demand is rising

According to figures published by investment bank Morgan

Stanley food and beverage sales rose by more than 21 in

2012 while home and personal care products rose by 17The success of Indiarsquos economy has been driving cross-

border MampA In 2012 there were 275 inbound deals valued

at US$37b an increase of 104 (volume) and 213

(value) on the previous year

Over the last few months a string of major foreign

companies have announced plans to invest in Indian

businesses Prominent acquirers include Diageo

GlaxoSmithKline (GSK) and Unilever from the UK US health

care company Mylan Japanrsquos Sony (who announced in

March that it aims to triple sales of its mobile phones in

India to INR35b (US$614m)) by March2014 as well the Qatar Foundation and

Etihad Airlines from the Middle East

The target sectors range from consumer

goods and health care products through

to the airline industry telecoms and

increasingly multimedia

Indian summerAccording to Ajay Arora Leader of EYrsquos

MampA team in India inbound transactions

traditionally account for well over half of

all cross-border mergers and acquisitions

activity in India The appetite for deals is

driven by a number of factors not least therelative buoyancy of Indiarsquos economy

ldquoWe are seeing a lot of companies

seeking to establish a base here to

capitalize on strong domestic demandrdquo

he says ldquoThatrsquos a trend across a range

of sectors including consumer products

pharmaceuticals and manufacturingrdquo

Angad Paul CEO of UK steel and

engineering firm Caparo agrees The

company entered a joint venture (JV)




with Indian automotive company MarutiSuzuki and has since expanded employing

7000 people in 26 facilities According to

Paul internal demand is huge ldquoIndia needs

everything mdash from infrastructure through to

the consumer marketrdquo

As Gunjan Bagla author of Doing

Business in 21st Century India points out

the appeal of India to overseas investors is

underpinned by demographics

ldquoIndiarsquos demographic is largely quite

young mdash half the country is younger than

25 mdash and the middle class is growing very

rapidlyrdquo he says ldquoAny sector or industrythat links to this growth over the next 20

years is ripe with opportunityrdquo

Figures from EYrsquos 2013 report Hitting

the sweet spot the growth of the middle

class in emerging markets bear this out

It projects that Indiarsquos middle class will reach

200m by 2020 compared with the current

figure of 50m

That desire to tap into the demand

created by an increasingly wealthy Indian

population can clearly be seen in a recent

raft of acquisitions and stake building UK

drinks group Diageorsquos US$34b acquisition

(534 stake) of United Spirits (USL) in Aprilis a prime example

When the company announced the plan

late last year Diageorsquos then-CEO Paul Walsh

said ldquoUSL is a very successful business

Itrsquos well positioned with its range of brands

across categories and price points to

capitalize on the very strong growth

trends that we see in India And Diageo

can now bring its skills and capabilities to

that marketrdquo

Experience countsWalshrsquos comments highlight the benefits of acquiring an

Indian company with an established position in its home

market ldquoFor an overseas company an acquisition offers

access to well-established brands a distribution network

and contacts in the marketplacerdquo says Arora ldquoThat has

a lot of valuerdquo

According to Adrian Mutton CEO of India market

entry consultancy Sannam S4 overseas companiesrsquo

push into the Indian market is both reactive and proactive

ldquoIn some cases businesses are seeing revenues fall in

their domestic or traditional markets and are looking

to India to make up the shortfall However we also seea lot of companies who are doing well at home but see

opportunities to grow their revenues on the back of strong

demand in Indiardquo

There are other factors at work too Although much

of Indiarsquos growth has been based on

the strength of its service economy

its potential as a manufacturing center

should not be underestimated

ldquoAs manufacturing costs rise in

China we believe that India presents a

terrific alternative for locating factoriesrdquo

says Bagla ldquoSo any company that is

concerned about the rising yuan andneeds Asian manufacturing to serve should consider buying

a small or mid-sized company in India that has permits

workers and good access to portsrdquo

This is borne out by the results of EYrsquos 2012 India

attractiveness survey in which 45 of investors cite the

availability of low-cost labor and inexpensive manufacturing

capabilities as a key attraction for their business

Mutton agrees adding ldquoIndia also offers not only an

educated labor force but also an increasingly deep well of

product development expertiserdquo

For instance when US healthcare products company

Mylan announced plans to buy Indiarsquos Agila Specialties for

US$18b in March this year the rationale behind the deal

was couched in terms of a broader portfolio of ldquoinjectiblesrdquoproducts as well as bigger market share ldquoAgilarsquos product

portfolio and pipeline which is complementary to Mylanrsquos

is the result of best-in-class researchrdquo said Mylan CEO

Heather Bresch ldquoAgila will bring us one of the most

state-of-the-art high-quality manufacturing platforms

in the industryrdquo

As Bresch described it the acquisition was not simply

about increasing revenues and market shares within the

Asia region but part of a strategy to create a global leader

drawing on the Indian companyrsquos products and production

India needs everythingfrom infrastructureinvestment through tothe consumer marketAngad Paul CEO Caparo

44The projected

percentage growth of

Indiarsquos internet protoco

traffic from 2012ndash17

the highest in the world

according to the Cisco

Visual Networking Index

Raising

Investing





Culture clashSeveral years of liberalization has seen India open up

to foreign investment Restrictions still apply in certain

industries mdash notably financial services (only 26 foreign

ownership is allowed in insurance companies) aviation

and multi-brand retailing (49 and 51 foreign ownershiprespectively) mdash but in most other sectors it is now possible

for foreign investors to hold 100 of an Indian company

However there are challenges not least in terms of

Indiarsquos business culture Arguably the first hurdle for

any foreign company seeking to invest in India through

an acquisition is to find a willing seller Indian businesses

tend to be family concerns They are dominated by

entrepreneurs mdash known locally as promoters mdash who have

worked hard to build their companies for the good of

themselves and their families Credit Suissersquos Asian Family

Businesses Report from late 2011 found

that India had the highest percentage

of family businesses in Asia (67) But

according to Arora they are often

reluctant sellers

If the promoter can be persuaded to

sell expectations on the price will typically

be high reflecting not only the current

strength of the Indian economy but also

the promoterrsquos perception of its future

prospects ldquoIndian and European business

owners take a very different approach to the

valuation of their respective companiesrdquosays Prashant Mara Head of the India

Practice at Law Firm Osborne Clarke ldquoIn

India the valuation is based on opportunity

for the future That contrasts with European

valuations which tend to be based on

historic performance and projections for the

next one or two yearsrdquo he says ldquoAnd in a

fast-growing economy the expectation of

rising revenues is naturally pushing seller

expectations ever higherrdquo

IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)

Source CIA World Factbook

World Bank

The lion king

Indian companies are looking

hungrily overseas mdash so what

do targets need to know

Outbound MampA by Indian companies is

arguably more talked about than the more

familiar spectacle of Western companies

investing in emerging markets According

to Mergermarket figures Indian companies

made 72 overseas acquisitions valued

at around US$11b in 2012 up from the

previous yearrsquos total of US$67b

ldquoOne of the themes for outbound

MampA is the acquisition of natural

resourcesrdquo says EYrsquos Ajay Arora ldquowhich

is a trend that reflects the requirements

of a growing and energy-hungry Indian

economyrdquo Indeed last year saw Indian

oil and gas multinational ONGC Videsh

announce a deal to acquire an 84 stakein a ConocoPhilips oilfield in Kazakhstan

Mergermarketrsquos research finds that

natural resources deals accounted for

55 of outbound MampA in 2012 But as

Arora points out Indian companies are

also seeking to acquire customers and

distribution networks in other emerging

markets ldquoThe acquisition of fast-moving

consumer goods (FMCG) companies in

emerging markets has been a themerdquo

he says

Foreign markets have become hugely

important to the growth plans of Indian

FMCG companies For instance earlier this

year it was reported that ICT company

Wiprorsquos consumer products division was

set to earn more than half of its revenues

overseas through a US$500m acquisition

program Overall it is estimated that

foreign sales account for 25ndash40 of

revenues for Indian companies in theconsumer products sector

The third trend is the acquisition of

technology and marketable brands in

Europe and North America According

to Mergermarket data the US and UK

provide a big focus for Indian companies

As Sannam S4 CEO Adrian Mutton

points out Indian investment has the

potential to transform struggling brands

C o r b i s L u c a T e t t o n i

istockPingebat

Top three completed Indian inbound deals since July 2012

Completion Target Buyer Deal value

AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket




Close encountersBidders need to build strong relationships with promoters in

India in order to overcome the pitfalls of reluctant sellers and

high valuations Or to be more precise an overseas buyer

needs to take the time to get to know potential vendors

That is often the prime factor in determining whether a deal

will take place or not ldquoUnderstanding the promoter is the key

to the dealrdquo says Amit Khandelwal National Director and

Leader Transaction Advisory Services EY India ldquoIt is the

promoter who will take the calls and make the decisions and

it is vital to establish a rapportrdquo Establishing a relationship

can take time Khandelwal counsels that foreign firms may

have to be more patient than would be the case if they wereexpanding in Europe and North America

Promoters will understandably seek to protect their own

interests ldquoA key question theyrsquoll be asking is what do I do

and what do my family members dordquo adds Khandelwal

Often they will expect a role that will retain a position

of operational control even if the strategic decisions are

made elsewhere According to Arora the sensitivities of

promoters lend themselves to deal structures that begin

with a significant minority or 51 stake for foreign investors

with the shareholding growing over time based on an agreed

ldquoWhen Tata bought Jaguar Land Rover (JLR) everyone

said the company was overpaying for a struggling brand

What Tata saw was an underinvested business with an

iconic brand that could be marketedrdquo

Tata has been proved right as JLR continues to go

from strength to strength The latest figures show that

during the first four months of 2013 JLR sold around

144000 vehicles mdash a year-on-year increase of 16

Promotion partiesFor vendors seeking to sell to Indian buyers it is once

again hugely important to understand the Indianpromoter Deals can take time to come to fruition

in part because the promoter or decision-maker will

be busy with other things such as other deals disclosures

and so on

Once again patience is required A certain amount of

straight-talking is also appreciated ldquoIndian promoters like

to negotiate on a one-to-one basis They donrsquot like getting

into auction situationsrdquo says Arora ldquoThey also prefer

100 stakesrdquo

Caparo CEO Angad Paul tells CapitalInsights about the challenges that

companies need to overcome in India

India is a sprawling democracy with a lot of diversity and power

at state level For that reason you donrsquot necessarily know what

is around the corner

In a country of Indiarsquos size and complexity of course there are

going to be some challenges Raising debt finance can be difficult The

banking system can be cliquey and in my view it really needs to open

up Interest rates are high because of government efforts to curb

inflation and that is a constraint on growth We are a US$400m

business in India but I think we would be a much bigger business ifinterest rates were lower

If yoursquore planning to take money out of India it is important to

fully understand the tax regime But then again that would be true

of investing anywhere

When it comes to MampA it can be very difficult to buy a business

in India While that may not necessarily be the case for large

multinational corporations small to medium-sized enterprises (SMEs)

should take time to study potential acquisition targets in detail As

an SME tread carefully and always take time to ldquolook under the

hoodrdquo so to speak

If yoursquore starting a

business from scratch

I would recommend findinggood local managers If

yoursquore acquiring an Indian

business it may be better

to do so with a local

partner Businesses with

a long history of working in India while also having strong

governance practices can be a good source for partnerships

The business culture is similar to the EMEA region but it is

extremely important to understand that the parameters

that drive negotiations are different

Itrsquos vital to understand the differences that exist at state level

Companies should go state to state and get a sense of what is

happening and choose a state that makes sense for the business

There is a lot of diversity in regulation and what is available to

businesses from one state to another State investment boards

can often be a more useful source of information than their

national equivalent

In the final analysis while there certainly are challenges these

are outweighed by the opportunities and if you have a quality product

India is wide open for business

Viewpoint

Angad Paul is Chief Executive Ofcer of Caparo




Amtek Auto Group Chairman ArvindDham reflects on going global

The Amtek Auto Group was established in 1987 and we began

by supplying components to Suzuki Motors

In 1994 we made the decision to supply other customers

In 1999 we began to look at ways to grow Amtek from a US$100m to

a US$1b company and we did that by acquisition At the time there was

relatively little MampA activity in India and valuations were quite low

In 2002 we began to look at the possibilities for making acquisitions

in the global environment We identified a US company and that first

deal took four months to negotiate Since then we have made 18 globalacquisitions The latest German company Neumayer Tekfor which

makes steel parts for the automotive industry was completed in May

As a company we are now in a position where 45 of our revenue is

generated outside India

Searching for talent is important Traditionally India has excelled

in service industries and banking but not necessarily manufacturing

where there is something of a talent vacuum

As such the acquisitions wersquove made have been in our own

sector to date The companies we are looking for are those where

we can add value and have

acquirable technology and

strong management

We seek to acquire100 of the target

company For us in

negotiations itrsquos very

important that both sides

put their ldquorulesrdquo on the

table while keeping the negotiating process flexible

and open ended

Our acquisition strategy provides us with a number of different

integration challenges When we make an acquisition we integrate the

overseas managers into the Indian operation We incentivize managers

through bonuses mdash not through equity

There is a lot of interchange between the Indian and global

management We have a 90-day integration plan to tie together

management at every level However we are also respectful of local

management culture

Making overseas acquisitions has been a learning process

particularly on pricing One thing that Indian companies have

traditionally looked for are low valuations mdash Amtek has itself acquired

stressed and distressed companies mdash however over the years wersquove

changed our attitude on valuations

Viewpoint

Arvind Dham is Chairman of the Amtek Auto Group

roadmap as the parties get to know and trust

each other In addition foreign companies

will also seek to raise their holdings as the

importance of the Indian market grows One

example is Unilever which is seeking to raiseits holding in Hindustan Unilever by 22 to

75 Commenting on the deal the Anglo-

Dutch companyrsquos CEO Paul Polman said the

move reflected Indiarsquos status as a ldquostrategic

priorityrdquo for the group as a whole

Indian firms arenrsquot necessarily averse

to European or US ones taking a larger

controlling stake For instance Caparorsquos

Indian operation started as a JV with a niche

in Maruti Suzukirsquos supply chain The normal

structure for such JVs was a three-way

ownership split mdash in this case with Maruti

holding a third the partner holding a thirdand the rest in public hands ldquoThey knew we

were more comfortable with ownershiprdquo

says Paul ldquoIt was on their suggestion that

we took a 75 controlling stakerdquo

If patience is required during the

preliminary negotiations it may also be a

pre-requisite for the due diligence process

ldquoSmall or mid-sized companies in India often

have more complex financial structures that

would be expected in the Westrdquo says Bagla

ldquoMany Western acquirers wish to disentangle

these complexities in conjunction with an

investment or acquisition Tolerance is

needed along with support from advisorswho understand the local marketrdquo

Indiarsquos growing economic importance has

created opportunities for corporates that are

looking to buy and sell And while there are

regulatory and cultural hurdles the current

scale of MampA activity indicates that these

are far from insurmountable



Top three completed Indian outbound deals since July 2012


DEC

2012Houghton

International (US)Gulf Oil Corp US$1b

MAR2013

Azeri-Chirag-

Guneshli Oil Field

(272 stake)Baku Tblisi Ceyhan

Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels

and Resortsrsquo Plaza

Hotel New York

(75 stake) (US)

Sahara India Pariwar US$575m

Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive

Private equity fund investors remain supportive of the asset classbut buyout houses need to work hard to attract their capital

Most of the private equity (PE)

industryrsquos capital providers

its limited partners (LPs)

remain positive about the

industry This is reflected in the recovery

in the amount of capital being committed

to funds According to EYrsquos Global privateequity watch 2013 report PE funds globally

increased in size by 10 in 2012 year on

year to US$256b

This is set to continue A Preqin survey

found 86 of LPs planned to commit either

the same amount of capital or more to PE in

2013 than they did in 2012 An example of

this is The Los Angeles County Employees

Retirement Association which said it would

commit up to US$18b to PE funds in 2013

a 140 increase on 2012rsquos US$737m

This is encouraging as it shows that LPs

feel the industry can deliver good returns

if other asset classes can not Accordingto Cambridge Associates data over the

10-year period to the end of 2012 US PE

funds provided annual net returns of 1406

to LPs with the Dow Jones Small Cap Index

coming in second place at 1098

And LPs expect outperformance to

continue As many as 80 believe that PE

will deliver annual net returns of 11 or more

over the next three to five years according

to the Coller Capital Global private equity

barometer Winter 2012-2013 By contrast

the latest Barclays Equity gilt study expects

equities to hover at 3 to 4 in that period

However LPs are becoming more

discerning in choosing their funds leading

to regional variations in fund-raising While

European LPs remain committed to fundingEuropean managers sentiment about the

region from US investors and some sovereign

wealth funds has cooled EYrsquos Global

private equity watch 2013 report shows

that as a percentage of global numbers

unused capital among general partners

outside the US and European markets has

increased as LPs have looked further afield

for outperformance In 2003 the rest of

the world had just 3 of global PE capital

unused By 2012 this had risen to 15

LPs are concentrating their capital

on PE funds that can demonstrate past

performance a strong strategic directionhave successfully implemented succession

planning and that provide proof of

genuine value creation in the companies

they back Increasingly they are also

seeking co-investment rights to help

boost overall PE returns A Preqin

study from April 2012 found that

43 of LPs were seeking co-investment

rights when committing to funds and

a further 11 were considering this

Environmental social and governance

(ESG) factors are also rising up LPsrsquo

agendas Some funds have established

procedures for managing these issues

devising processes to ensure that sound

environmental practice is accretive to

portfolio companiesrsquo bottom line TheCarlyle Grouprsquos latest annual report

shows that environmental initiatives have

saved or are planning to save portfolio

companies a total of US$7m ESG factors

are important not only to help LPs meet

their socially responsible investing aims

but also in selling companies to corporates

which are focusing on this particular area i

acquisition due diligence

Firms must pay as much attention

to selling as they do to buying to attract

capital This will help them to continue

delivering value to their current investors

and demonstrate to LPs that they have theskills to exit even in difficult markets

LPs are highly supportive of PE and

continue to commit significant capital to

the asset class However it is becoming

clear that there will be winners and losers

And in the future only the best funds will

be the recipients of this capital

Sachin Date is the Private Equity Leader for EMEIAat EY For further insight please emailsachincapitalinsightsinfo



Getty ImagesWestend61

Key insightsbull Companies that are

being left behind in

emerging markets (EMs)need a more targeted

MampA approach

bull Entry into EMs can helpachieve growth and also

defend a companyrsquosdomestic position

bull Screen your locationprecisely Just because

countries such as Indiaand China are on the

rise it does not meanthat they are right for

your business

bull Valuations in EMs aremore complex than in

developed marketsDo the due diligence

establish the weightedcost of capital and

quantify the risks

For corporates with limited scope at home rapid-growthmarkets can boost growth abroad But competition iserce and the need to target effectively is paramount

Taking aim

G rowth figures in emerging economies from

Argentina to Zambia are attracting corporates

from developed economies at a rapid pace

MampA in emerging markets (EMs) has been

on the rise since 2004 as corporates in the West seek to

access this new growth According to data compiled byMergermarket EM MampA deal value came in below US$150b

in 2004 accounting for less than 10 of global MampA

value However by the end of 2012 EM deal value totaled

US$5119b which was more than a fifth of global MampA

value And in EYrsquos latest Capital Confidence Barometer

three of the BRIC countries (China India and Brazil) made

up the top three investment destinations for corporates

The statistics seem clear However the realities of

entering an EM are far more opaque While numerous

corporates have strong EM strategies and profiles many

still hesitate to spend more in developing

economies or enter a new market at all

Even huge players such as Apple have

been tentative about emerging economies

At present all of its stores are in advanced

economies with the exception of ChinaIndeed only 23 of those surveyed in

Clifford Chancersquos 2012 Cross-border MampA

Perspectives on a changing world report

expected to raise MampA spending in high-

growth markets over the next two years

In EMs this means being more targeted

ldquoWorking through a more rational process

would help companies focus on what they

want to pursuerdquo says Harry Nicholson

Transaction Strategy Partner at EY UK




Investing

Corporates need to ask themselves why they are

entering the market what the optimum location is and

how they can get value for money at a time when valuations

in many EMs are rising rapidly

Growing painsIn Europe this imperative to explore new markets is

strengthened by anemic domestic growth Recent figuresfrom Eurostat show that Eurozone GDP has fallen for six

consecutive quarters up to the first quarter of 2013

ldquoMature markets are going through an unexciting period

of low growth and they are expected to remain like that for

the foreseeable futurerdquo says Nicholson ldquoThere is a strategic

imperative to invest in EMs because they are far more

attractive growth prospects Also just in terms of size they

have been growing so fast for so many years now that they

are decent-sized markets in their own rightrdquo

French company Danone has acted on this In May

it formulated a joint venture and invested a 4 stake worth

US$417m in Chinese dairy producer Mengniu This came

after Euromonitor International estimated that Danonersquos

sales in Chinarsquos yogurt market will grow 57 to US$117bby 2015

Home defenseGrowth however is not the only reason why companies in

the West have made investing and acquiring in EMs such a

priority Adrian Gibb Transaction Strategy Partner at EY UK

believes that an emerging economy MampA strategy is also

vital for defending a companyrsquos home turf

ldquoIf you take a long-term strategic view EM opportunities

are not just important offensively but also defensivelyrdquo he

says ldquoIf you are not pushing into your competitorsrsquo markets

you can be sure that they are pushing into yours Companies

in EMs are cash-rich and eager to move their businesses into

developed economies

and win market share

Companies that stand

still are not only missing

out on growth in EMsthey are also leaving the

door open for corporates

based in emerging

economies to move in on their local marketsrdquo

By the end of May this year rapid-growth market

corporates had ploughed nearly US$351b into 111 deals

in developed economies Asia was particularly busy with

Mainland China and Hong Kong (44 deals) South Korea (11)

and India (9) the most acquisitive in developed markets The

biggest deal came in May when China-based foods business

Shuanghui International announced a deal with US-based

Smithfield Foods Inc worth US$71b

Industry spreadsIn some sectors investment opportunities have presented

themselves only as EMs have diversified And corporates

need to be set up to take advantage ldquoCompanies are not

investing in EMs in the same way they did Over the last

10 to 15 years investment has evolved from targeting

infrastructure resources and industrials into a much broader

range of sectorsrdquo says Anna Faelten Deputy Director of

Cass Business Schoolrsquos MampA Research Centre

Indeed Mergermarketrsquos Emerging Markets MampA survey

shows that corporates see the top three sectors in EMs as

In the strategy of theluxury goods sector

emerging markets arenow crucialAnna Faelten Deputy Director MampA Research Centre




On the webFor more information on entering rapid-growth markets read EYrsquoslatest Rapid-growth markets forecast at wwwcapitalinsightsinfoemergingmarkets

energy (50) consumer (47) and financial

services (27)

ldquoIn the strategy of the luxury goods

sector for example EMs are crucial the

need for investment is a matter of urgency

Markets for consumer goods health care

and to some extent technology have

opened up toordquo adds Faelten

This importance is highlighted in the

case of Burberry The UK fashion label saw

sales rise 11 to US$772m in Q1 2013

thanks in part to strong demand from China

Looking long termRob Conn Founder of Innova Capital a

private equity firm operating in Central

and Eastern Europe says an EM strategy

is also essential for securing long-term

sustainability in a globalizing world

ldquoIn 2050 people will see this as a time

when large EMs re-integrated into the world

economyrdquo he says ldquoEMs can no longer

be ignored Even if yoursquore investing in a

local company with local growth prospects

you must have an understanding of how

developments in EMs will impact uponthat business If you invest without that

perspective you will make mistakesrdquo

This integration is underlined by the

growing middle class in EMs According to

EYrsquos 2011 Innovating for the next three

billion report the expected three billion rise

in people considered middle class over the

next 20 years will come almost exclusively

from the emerging world In contrast

according to EYrsquos Hitting the sweet spot

report from 2013 the proportion of middle

class people globally who will be from North

America and Europe is expected to contract

from 18 and 36 in 2009 to just 7 and14 respectively in 2030

Location location locationAdopting a systematic approach to EMs

not only helps conservative companies

in developed markets to become more

comfortable with the new risks involved

in emerging MampA mdash it also allows them to

select the most appropriate countries in

which to invest

While Mergermarket figures show that the BRICs remain

the most popular EMs for MampA raw deal data alone isnrsquot

enough to inform these investment decisions According

to EYrsquos Rapid-Growth Markets Forecast 2013 companies

ldquocommitted to rapid-growth markets do not have to succeed

in a BRIC economy before rolling out their products or

services elsewhererdquo

Indeed the aforementioned Emerging Markets MampA

survey shows that smaller markets such as Turkey

Indonesia and Chile are where investors see the best

opportunities Forty percent of respondents view these

three countries as the joint-top non-BRIC EM destinations

most likely to see MampA increase this year This is particularlysalient with Turkey which saw deal values rise 33 in 2012

year on year with 68 coming from foreign investors

The appetite for investment in Turkey has continued

into 2013 For example French company Danone signed a

partnership agreement with Turkish bottled water company

Sirma in May However it remains to be seen whether the

current protests in Istanbul change the pace of investment

Target screeningCompanies should understand differences between markets

and then make an informed choice about where to invest

ldquoA company needs to know what type of consumer itrsquos

looking for where it can find them which markets are mostsimilar to their home market and what it needs to do to

change or adaptrdquo says Faelten ldquoIt has to have a clear idea

of the threats and opportunities in different markets and find

suitable acquisition targets accordinglyrdquo

Nicholson believes that this screening has two stages

ldquoYou want to work through some macro factors looking

at things like the size of population demographic profile

economic growth and infrastructurerdquo he says ldquoThat is

the first part of your screening But the interesting factors

23The percentage of

2012rsquos global MampA

value that came fromdeals in emerging

economies according

to Mergermarket

Top three completed DM into EM deals in 2013


(US$m)

FEB

2013Amil Participacoes

(Brazil) mdash 90 stake

UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation

Company (Turkey) mdash

50 stake

EON (Germany) US$39b

APR

2013

United Spirits

Limited (India) mdash

534 stake

Diageo (UK) US$34b

To July Source Mergermarket




2

1

3

developed economies But

corporates should be aware

of some nuances

Do the diligence ldquoIt is all

about good due diligence

practice which you would do

on any company whether it

is in a mature market or an

emerging onerdquo says Gibb

ldquoThink through what the

assumptions are on revenue

growth profitability growthand cash flow and make

sure that you rigorously

validate those assumptions

against the market and operational benchmarksrdquo

Test your weight ldquoIt then comes down to establishing

your weighted cost of capitalrdquo Gibb adds This refers to the

blended rate that a company is expected to pay to all of its

investors in order to finance its assets often adjusted to

reflect potential additional risk in EMs ldquoCompanies can be

over-cautious on that and they use a high cost of capital

which means a value becomes too low and they canrsquot

compete Sometimes they become too aggressive andhave a very low cost of capital and that puts the valuation

high You need to make sure you think through the risks

associated with the deal and come to a balanced view of

what the cost of capital should berdquo

Complexity ldquoIn an EM context there are numerous factors

that need to be taken into account when deciding whether

to investrdquo says Piers Prichard-Jones a Corporate Partner at

law firm Freshfields ldquoThere are a range of state transaction

and operational risks that need to be assessed and which

are inevitably more complex than on a non-EM dealrdquo

Despite the risks involved in moving into these

territories companies in Europe cannot afford to ignorethe huge opportunities that EMs offer Breaking into these

places is risky But the risk is even greater for companies

that do not take up the challenge and are left behind

ldquoWhether companies like it or not having an EM strategy is

imperativerdquo says Faelten ldquoDoing MampA deals in EMs is for

many industries the only way to grow It is where the growth

in consumersrsquo income is and companies cannot afford to

miss the boatrdquo


are the customer demand profile and the

competition for supplyrdquo he says

ldquoCompanies need to ask themselves

the following questions is there demand

for what you are offering If there is

supply from local competitors do you

have the wherewithal to compete either

through more advanced technology

proven brands or scale advantages that

you can bring into that marketplace That

should give you a sense of whether the

location is right for yourdquo

This can be seen with Americanquick service restaurant McDonaldrsquos In

February it announced plans to expand

in Russia by adding 150 new restaurants

over the next three years This move came

at a time when the fast-food industryrsquos

turnover in Russia reached US$64b in

2012 providing 45 of the countryrsquos food

catering market growth

Companies that have succeeded in EMs

are ones that have paid close attention to

these micro factors UK pharmaceutical

giant GlaxoSmithKline for example

studied its Indian consumersrsquo diets Whenit found that they did not consume enough

iron it changed the formulation of its

Horlicks product accordingly

Value for moneyValuing acquisition targets can often be

more complex in developing economies

High growth rates mean that vendors in

EMs are demanding top prices In India for

example Thomson Reuters data shows that

EBITDA multiples are running at 147x

significantly higher than the global average

of 118x

Higher prices are putting off acquirersEYrsquos latest Capital Confidence Barometer

published in April polled 1500 senior

executives in 41 countries A quarter of

respondents would not do a deal because

of the gap between the price expectations of

vendor and buyer This has clear implications

for businesses looking to expand and EM

corporates aiming to sell

Establishing an accurate valuation

in EMs involves similar steps to those in

0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs

Biggest impact on emerging markets MampA over the next year

Answer by percentage of respondents

47

33

13

7

Source Mergermarke




The big issuance

Bond markets arebooming But is their

growth sustainableand healthy orwill the end of

quantitative easingchange the funding

cycle once more

Bonds are back Last year saw

the highest recorded amount of

corporate bond issuance US$54t

worth of bonds were issued around

the world representing a 131 increase

on 2011 according to Thomson Reuters

Already 2013 has seen the biggest ever

corporate bond issue (Apple raising US$17bin April) and the biggest ever emerging

market issue (Petrobras of Brazil raising

US$11b in May)

By contrast corporates have seen

bank funding recede Lending to emerging

markets fell by 20 in 2012 according

to Cordiant the emerging market fund

managers while in the UK the Bank of

England revealed in April that business

lending fell by pound5b (US$77b) in the three

Key insightsbull Companies should

explore bonds as

an alternative or inaddition to traditional

bank lending

bull Products such as

hybrid bonds can givecorporates a greater

level of flexibility

bull An advantage of bondsover loans is that the

terms and conditionstend to be less onerous

bull Ensure that a bond isthe right vehicle for

you prepare your teamtalk to investors and

watch the costs

months to February The Basel II and III

accords have forced banks to hold more

capital on their balance sheets

ldquoLast year was a crossover mdash there was

more activity in the bond market than in the

syndicated loan market Thatrsquos encouraging

but itrsquos slowrdquo says Luke Reeve Partner in EY

UKrsquos Capital and Debt Advisory Group ldquoTheratio of FTSE 100 bank-to-bond borrowing

is still in the high 70s or low 80s and that

needs to continue moving to a more US-like

arrangement of 6040 or even 5050rdquo

Corporate lending is now expensive

for banks mdash a key factor behind its decline

ldquoGiven that our cost of capital has increased

and the way that we have to capitalize

ourselves since the crisis has become more

conservative it has become much more




expensive to make loans to corporatesrdquo says Barry Donlon

EMEA Head of Corporate and Capital Syndicate at UBS

Banks have had to shrink their balance sheets

considerably to return to more normalized profitability by

not distributing every asset that they originate ldquoWhat you

have seen is a normalizationrdquo says Reeve ldquoThere is a shift

from an exceptional situation of over-bank liquidity to a more

normal alignment of debt capital Increasingly companies

are taking only their short-term capital requirements from

banks and seeking to place the more core elements of

indebtedness on their balance sheets in the capital marketsrdquo

Other issues are driving the revival ldquoThese issuances

are in part attributable to the current extremely low levelsof interest rates and to corporatesrsquo concerns they will not

last indefinitelyrdquo says Ehud Ronn Professor of Finance at the

University of Texas at Austin ldquoAt the same time investors

have an appetite for yield and so corporates pay reasonable

spreads compared with very low Treasury yieldsrdquo

In search of yieldWith volatility defining major asset classes since the financial

crisis investors have been looking for yield at reduced risk

This played to the strengths of the corporate bond market

ldquoItrsquos clear that volatility is back Certainly in government

bond markets but also in equity and credit marketsrdquo says

Brendon Moran Global Co-Head of Corporate Debt CapitalMarkets at Socieacuteteacute Geacuteneacuterale ldquoAs the market comes to

terms with the removal of central bank liquidity it is a timely

reminder that markets do not always go up and safer haven

investments such as corporate bonds are likely to come

back in vogue mdash they may offer more modest returns but are

very predictable and ultimately offer capital preservationrdquo

However appetite for more yield mdash and by definition

risk mdash has driven greater growth in high-yield bonds ldquoThere

is a tremendous search for yield from both institutional and

retail investorsrdquo says Chris Lowe Partner in EYrsquos UK Capital

and Debt Advisory Group ldquoTo find more yield you either go

out to maturity or more commonly now you move down the

credit quality spectrum So now you see absolutely rampant

high-yield bond market issuance and eminently high-yieldcredits issuing in the retail bond marketrdquo

For instance in the week ending 1 May 2013 investors

ploughed US$22b into high-yield bond funds This was

the largest amount in almost seven months according to

tracking firm EPFR Global ldquoThe value of the incremental

yield from investing in something a little bit riskier has

increasedrdquo says Alix Stewart Head of UK Corporate Bonds

at Schroders ldquoSo therefore demand is there for companies

that would have found it much more difficult to come to

public markets in the pastrdquo

This has changed the dynamic between

bank and bond borrowing with bonds now

being perceived as a more reliable option

than bank finance ldquoWhen we speak to

high-yield companies they tell us about

the bad experiences they had with their

banks in 2009rdquo says Chetan Modi EMEA

Head of Leveraged Finance in the corporate

finance group at Moodyrsquos Investor Services

ldquoSupposedly the model then was that the

high-yield

market was

fickle and thebank market

would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies

realized that they needed to diversify their

debt funding structure On top of that a lot

of companies have had to question whether

their banks will even be around or willing to

provide fundingrdquo

Options for SMEsThese changes have big consequences

particularly for small and medium-sized

enterprises (SMEs) Governments have

introduced schemes to encourage banks to

lend to companies but these loans donrsquot

appear to be entering the SME space

In the UK for example the Funding for

Lending scheme which allows banks access

to cheap capital if they hit certain lending

targets is increasing the concentration of

lending with the largest customers ldquoFor the

larger investment grade corporates it is

unlikely that they will change their bank-to-bond mix significantly because bank finance

is still more efficient when undrawnrdquo says

Donlon ldquoBut if you take a small unrated

name in the UK that might have 100

bank financing you are going to see large

numbers of those corporates beginning to

diversify their funding sources and issue

directly into the capital marketsrdquo

This is already happening in Germany

where in 2010 the Stuttgart Boumlrse set up

Demand is there for companiesthat would have found it muchmore difcult to come to public

markets in the pastAlix Stewart Head of UK Corporate Bonds Schroders



Raising



a bond platform for SMEs called Bondm

offering issues between euro25m (US$33m)

and euro150m (US$196m) To date 23

companies have issued bonds on the

platform And it is proving popular with

investors too For example in November

2012 developer IPSAKrsquos seven-year bond

was oversubscribed in less than two hours

The popularity of the Bondm has inspired

similar SME bond platforms in Frankfurt

Hamburg Duumlsseldorf and Munich

Germany Switzerland and the US have

long had active retail bond markets wherecompanies issue bonds directly to members

of the public ldquoItaly and other European

countries particularly Germany have seen

vast expansion of SME finance into the bond

marketrdquo says Lowe ldquoWe are following suit

with the Order Book of Retail Bonds (ORB)

market on the London Stock Exchange (LSE)

where we are seeing private placements go

into sub-investment grade in what was pre-

crisis an investment grade asset classrdquo

This is a viable option for companies

with recognizable brand names and

understandable business models Amongthe companies that have issued bonds on

the LSErsquos ORB in the past 12 months are

water company Severn Trent Tesco Personal

Finance Lloyds TSB Bank energy suppliers National Grid

Royal Bank of Scotland and HSBC Elsewhere in Europe

retail bond markets could prove an essential source of

finance for companies in the Eurozonersquos more troubled

economies ldquoIn the peripheral regions there are perfectly

good companies who will find it difficult to get funding so

accessing a domestic investor base would be beneficialrdquo

says Donlon

The cost of flexibilityBond markets are also seeing new products such as

hybrid bonds After a number of false dawns the market

is emerging for a new class of structured bond that issubordinated to normal senior unsecured finance and has

both equity and debt characteristics A key advantage is that

hybrid bonds can be issued without affecting a companyrsquos

credit rating because the bond is effectively open-ended

and can be treated as permanent capital Companies issuing

hybrid bonds in 2013 include environmental services group

Veolia energy companies EDF and National Grid and steel

and mining giant ArcelorMittal

The terms and conditions tend to be less onerous for

bonds compared with loans ldquoBond markets used to ask for

a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart

ldquoBut at times like this when people are desperate to get

money invested the market has been a bit lax on asking for

these types of protections From a company point of view

that is attractive because you are less restrictedrdquo

For smaller issuers however bonds are not necessarily

a cheap option For a start smaller corporates are likely to

be unrated high-yield issuers so will have to pay a coupon

considerably higher than the prevalent rate of interestThe second expense surrounds the fixed costs in terms of

fees that go into an issue These can escalate in retail bond

issues where there are arrangers and private client brokers

between the borrower and the eventual holder of their debt

The known unknownsThe future for the bond market does hold uncertainties

There are concerns that a ldquogreat rotationrdquo will see a shift of

funds out of bonds and into equities However few investors

and bankers see signs of this happening in the near future

A lot of companies realizedthat they needed to diversifytheir debt funding structureAlix Stewart Head of UK Corporate Bonds Schroders

Global annual bond issuances and proceeds 2008-2013

2013

2012

2011

2010

2009

2008

Number of issuesProceeds Up to June 2013 Source Thomson Reuters

US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022

pound5b(US$77b) fall in bank

business lending in

the UK in the threemonths to February

2013 according to

the Bank of England




The bond ladder

2

3

1

4

5

Five steps to take beforeissuing a bond

Validate the offeringThe corporate treasurer needs to start

at the point of validation Establish the

corporate strategy and identify the

capital products that suit it A bond

may or may not be the most suitableform of financing and in some

instances a rush to take advantage

of open markets may lead to finance

that is not fit for purpose For example

businesses in cyclical sectors such as

housebuilding or retail may not suit

long-term debt finance

Prepare your teamDoes your company have the skills

and capacity to handle a bond

issue and the associated reporting

requirements Issuing a bond is time-

consuming The issue itself typicallytakes place on an accelerated 12-week

timetable and then there is the time it

takes to report to investors and ratings

agencies

Talk to investorsSuch is investor demand for new credits

particularly those further along the risk

spectrum that it is easy for companies

to get meetings with potential investors

Unlike in the past it is not the case

that holding meetings commits you to

a transaction

Watch the costsIssuing bonds is not a cheap process

particularly for smaller companies

Typically fees will account for 15ndash2

of the capital raised For many

companies particularly large borrowers

who enjoy privileged relationships

with their banks bank debt may becheaper Many bonds trade down in the

immediate aftermath of issuance

Need the moneyHow will you use the money raised

A big question is whether the capital

can be invested for a decent return

Companies should ask if there is a

market for their expanded output

with most arguing that the market is in good

health ldquoAs long as wersquore selling reasonable

companies in the right sectors at the right

prices this should be a market that develops

slowly as it is developing nowrdquo says Donlon

ldquoWersquore seeing a slow gradual rebalancing of

the market in a healthy wayrdquo

Assets under management in high-

yield bond funds continue to grow across

Europe and higher-yielding bond funds have

continued to perform well ldquoI donrsquot see any

particular trading out of those bond funds

into equity fundsrdquo says Lowe ldquoTo the extentthat the relative value game begins to shift

down there is a threat mdash but I donrsquot think

thatrsquos a big issue What could be an issue is

that we do not know what the unwinding

of quantitative easing (QE) looks like My

expectation is that it will be a very slow

gradual process that will most likely create

a very low and long-term drag on economic

performance and global markets You cannot

correct that scale of activity in short orderrdquo

Both bond supply and demand have been

driven by record-low interest rates and QE

When interest rates rise and QE ends the bondmarket could be in for a shock ldquoThere has

been a positive self-reinforcing cycle whereby

certain investors responding to attractive

returns want to put money into corporate

bonds making it easy for companies to issue

and refinance which in turn reduces default

risk and results in further positive returns

for investorsrdquo says Professor Lucie Tepla at

INSEAD ldquoBut it could take just a few months

of negative returns on the asset class for

bond mutual fund or exchange-traded fund

investors to start pulling money out and it

could unravel in the opposite directionrdquo

In 2011 European bond marketswobbled as the global financial community

questioned whether European policy-makers

could address sovereign credit quality issues

This started with a focus on banks but

followed on to companies with heavy debt

levels Investors were concerned whether

they would be able to do simple things like

renew their bank facilities ldquoThe European

bond market was the mirror for confidence

of the global financial system in European

13increase in the value

of bonds issued

around the world lastyear which totaled

US$54t according to

Thomson Reuters

politics and its ability to address the issuesrdquo says Reeve

ldquoThe boom in bonds is as sustainable as quantitative easingrdquo

Looking at future bond issuance two clouds loom on the

horizon continued economic uncertainty and the eventual

winding down of QE Corporate earnings have been robust

and default rates on bonds remain low while yield-hungry

investors create demand QE is the great uncertainty but

the consequences of a disorderly end go far beyond the

bond market For corporates bonds will remain a viable and

effective financing tool





Key insightsbull Asset management

is one sector of the

financial servicesindustry that has come

through the crisis withits reputation still

relatively sound

bull Investment in

innovative productsand services is vital

to the continued healthof the industry

bull Innovation must

concentrate oncustomer needs

bull The industry needs toinvest in products that

can meet the needsof todayrsquos and

tomorrowrsquos retirees

bull The asset managementindustry must harness

information technologyto meet its customersrsquo

changing needs

bull Increased regulation

in the sector meansasset managers

must deal a lotmore closely at a

corporate level withthe relevant regulators

bull The industry must lookat macroeconomic andmicroeconomic events

and be nimble inaddressing short- and

long-term changes inthe economy

The asset management sector has emerged relatively unscathedfrom the nancial crisis But to reach its full potential the industrymust boost innovation and work within tough new regulations

businessof Taking care

G e t t y I m a g e s I m a g n o




Lofts UK Head of Asset Management at EY ldquoOver 50 of

money invested in Europe 2012 went into newly launched

funds and of this over half went into newly launched foreign

investment funds In addition more than 50 of emerging

market debt funds in Europe were launched in the last three

years which demonstrates the speed with which the industry

is reacting to global economic conditions and opportunitiesrdquo

Emerging market debt is not the only new asset class

into which the industry is seeking to move A number of

new areas are emerging such as farmland funds new over-

the-counter (OTC) instruments such as variance swaps and

distressed assets Overall the industry is offering investors

an increasingly diversified range of products and regions

The customer is always rightYet innovation in the industry is no longer just about creating

new products ldquoThe industry has woken up to a need for

greater consumer focus over the last few yearsrdquo says Ed

Dymott Head of Business Development at Fidelity the global

financial services group ldquoAsset managers are increasingly

looking at how to tailor offerings to provide clients with the

best possible solutions for their needs So while a few years

ago asset managers might have provided a single part of an

investorrsquos portfolio now they are looking at providing holistic

solutions with an integrated service model in support It is no

longer product led Leading asset managers are instead noworientating around customer and solutionsrdquo

EYrsquos Innovation for asset management survey 2012 backs

this up It found that devising ldquocreative solutionsrdquo to investor

needs was the highest-ranking definition of innovation

provided by asset managers Technological development

underpins this trend It allows asset managers to develop

ways of helping investors to understand the products they are

buying Technology was joint second as the most important

driver of innovation in the EY innovation study

ldquoThere is a lot of work going into ensuring that clients

understand what they are buying into and paying forrdquo

explains Fleming ldquoThe digitization of communications and

documentation is helping this as is the internet and the

creation of apps They are being designed to help peoplemake the right choicesrdquo

Successful innovation requires dedicated capital for

investment as well as embedding a product development

culture throughout the organization

ldquoWe spend our own capital to fund new pilot productsrdquo

says Dymott ldquoMany of these may not reach the market but

this approach lets us drive a culture of innovation We do have

product development and strategy roles but we encourage

innovation throughout our organization Ultimately a lot of

good ideas actually come from the customersrdquo

W ith the quest for high-yield products

continuing and with greater need for

retirement products in developed countries

as their populations grow older the asset

management (AM) industryrsquos role in the economy is becoming

ever more vital

Indeed a November report by TheCityUK a financial

services industry body said that the value of conventional

assets (excluding assets such as hedge funds and private

equity) was expected to reach US$852t by the end of 2012

up from the US$841t calculated for the first nine months of

that year Furthermore Eurozone asset manager assets under

management (AUM) increased by 116 in 2012 accordingto EYrsquos latest Outlook for financial services report and is

expected to increase again by 83 this year

Much of this rise in AUM comes from market performance

But new cash inflows into multi-asset funds mdash which grew by

30 in 2012 mdash and German French and Italian bond funds

have been strong ldquoGlobally the asset management industry

is in good shaperdquo says Roy Stockell Leader of EYrsquos Asia

Pacific and EMEIA Asset Management practice ldquoThe fact that

equity markets are coming back strongly is helping to push

investors out of cash-based products and into equities and

fixed incomerdquo

Investing in innovationThe industry appears to be emerging strongly from the

financial crisis Campbell Fleming CEO of Threadneedle

Investments agrees ldquoAM is one of the few areas of financial

services that escaped with most of its reputation products

and structures intactrdquo he says

But the industry faces challenges In particular increased

regulation and a growing demand for more diverse products

is adding to the complexity of managing the worldrsquos wealth

One of the key ways in which asset managers are

attempting to meet investorsrsquo changing needs is through

product and service innovation mdash investors are becoming more

demanding In addition the persistently low interest rates we

have seen over recent years and the recognition that investor

behavior is highly correlated to financial shocks have meantthat investors are searching for new products and asset

classes that will generate higher returns and reduce volatility

One beneficiary of the quest for new investments has

been the European high-yield bond market which has had a

record year to date Dealogic figures suggest that issuance to

the start of May 2013 was US$571b mdash twice the amount for

the same period in 2012 Companies have taken advantage

of investor appetite for higher risk in the search for yield

ldquoFund managers have to innovate constantly and create

new products to keep up with investor demandrdquo says Gillian

On the webFor more on asset management read EYrsquos latest Innovation for asset

management survey at wwwcapitalinsightsinfoam


Optimizing

Investing



of asset

allocators that

are overweight in

equities compared

with a net 41 in MaySource Bank of America Merrill Lynch

48of respondents see

adopting regulation as their

main challenge in 2013Source Linedata

expected growth in

assets under

management

in 2013Source EY

8of asset managers who

say the current financial

climate means they

need to differentiate

from competition but

will continue to investSource Linedata

34

16of asset managers who predict

ldquocontinued volatilityrdquo to be a

theme through 2013Source Linedata

48Asset management in numbers

l c

s h u t t e r s t o c k

Post-pension bluesNowhere is innovation more necessary in todayrsquos market

than in the growing decumulation space mdash the conversion of

pension assets built up during a personrsquos working life into an

income-providing product ldquoWe are seeing a wave of retirees

from the baby-boomer generationrdquo says Elizabeth Corley

CEO of Allianz Global Investors ldquoThey are switching their

savings needs from the accumulation stage to decumulation

and they need stable income in retirementrdquo

One of the issues here is that people in the developed

world in particular need to save more over their lifetimes

to generate sufficient income to support retirement Figures

from Aviva suggest that across Europe there is a euro19t(US$25t) annual pensions gap (the difference between the

amount needed for retirement and the amount being saved)

For those retiring today this issue has been compounded

by a difficult economic

backdrop ldquoOne of the

key challengesrdquo says

Corley ldquois the

low returns being

achieved in an era

of financial repression

The low interest rate

environment means

that the incomes they can buy often provide them withsignificantly less than they would needrdquo

The challenge for the industry is to devise products or

solutions that can meet the needs of todayrsquos retirees and

tomorrowrsquos It is far from an easy task but it is one that

would unlock significant growth for the AM space

ldquoPeople need an income capital protection and yield

without significant risk mdash and these are forces that all push

and pull against each otherrdquo says Lofts ldquoAt the same

time the products have to provide asset managers with a

reasonable return Itrsquos here that we will need to see true

innovation from the industry Asset managers really need to

start looking at how they can benefit from growth in this part

of the marketrdquo

An issue for asset managers is handling risk indecumulation products Given their long-term nature and the

need for guaranteed income they must find ways of meeting

the marketrsquos needs without taking the risk onto their balance

sheets A way of doing this could be developing joint ventures

and partnerships with banks and insurance companies ldquoThe

issue here is how asset managers can package products that

would be attractive to banks and insurance companies which

would then wrap the product for the end userrdquo says Lofts

But this can be challenging says Massimo Tosato

Executive Vice Chairman and Global Head of Distribution

at Schroders The AM firm has spent three

years researching a new product with a

20-year horizon featuring growth in the

early years followed by decumulation later

on ldquoThis is not offered by insurersrdquo explains

Tosato ldquoThatrsquos because it is very hard to find

distribution for it Insurers donrsquot want to lock

this in their balance sheet for 20 yearsrdquo

Changing channelsAs a result of this and other trends there

are signs that the distribution channels for

many asset managers are changing One ofthe most important factors is the shifting

of responsibility for welfare provisions

such as pensions and health care away

from the state and toward the individual A

dramatic example of this is the move away

from defined benefit to defined contribution

pension schemes This shifts risk to

individuals and people must now self-direct

investment decisions more than ever before

Defined benefit pension schemes also

known as final salary continue to disappear

from workplaces In the US between 1975

and 2007 the number of defined benefitscheme participants fell by a third to 19

million according to the US Department of

Labor figures while the number of people in

defined contribution plans increased sixfold

to 67m The picture is similar across Europe

Regulation is also affecting the

distribution of products and services The

Retail Distribution Review (RDR) in the UK

for example is leading to a greater separation

of advice and investment management

There are similar Europe-

wide proposals in the

latest Markets in Financial

Instruments Directive (MiFID)II The advisors banks

and insurers that are the

traditional distributors of

asset managersrsquo products

will now need to charge for

any advice they give And

that may result in end-users

bypassing their services

Therefore asset

managers need to work

Increased regulationwill further polarize thewinners and losers in theasset management sector Ed Dymott Head of Business Development Fidelity

852testimated value of

conventional AUM

globally at the end

of 2012

Source TheCityUK

US$




Up with the AMWhat other sectors canlearn from asset managers

2

1

3 5

hard on improving their communication with customers

ldquoThis means asset managers will focus more on addressing

business-to-consumer as well as business-to-business

audiencesrdquo says Hugh Young Managing Director Aberdeen

Asset Management Asia And technology will be key to this

ldquoThe internet as a source of information is transforming

the way investors relate to fund information their advisors

and self-selection criteriardquo says Young ldquoTechnologies will

mean wraps and platforms become even more accessible

Institutional channels in many countries guided by consulting

actuaries will also have to become more retail as the shift

away from defined benefit schemes continuesrdquo

Play by the rulesYet possibly the biggest factor in all the activities that asset

managers undertake is the tide of increasing regulation they

face From RDR in the UK to MiFID II across Europe asset

managers are having to cope with a raft of new standards

This affects all areas of business and is ultimately leading to

increased costs While consolidation has always been a feature

of the market some believe that the pace is quickening

ldquoIncreased regulation will further polarize the winners

and losersrdquo adds Dymott ldquoThe winners will be those that are

broad and big and those that are small niche and nimble

The challenge is for those firms who are caught in the middle

The cost of regulatory capital will make the space in-betweena far from easy place to be Ultimately though those best

placed to cope with increasing regulation will be the ones that

focus on providing exceptional customer outcomesrdquo

Indeed increased regulation could help the industry

mdash as long as it is well drafted and achieves the right outcomes

ldquoNo sensible manager should object to the principles behind

the regulatorsrsquo aimsrdquo says Fleming ldquoEveryone wants a level

playing field transparency around pricing and an industry of

professional players that are well capitalized and operating to

the highest standards The problems creep in when there is a

politicization of the regulation and differing interpretations of

the rules by different statesrdquo

Thus far the industry has been a little slow to react

to the new environment Some also suggest that theresponse from the industry has not been as productive

as it might have been ldquoWhatrsquos needed is engagement with

policy-makers in a thoughtful wayrdquo says Corley ldquoManagers

need to provide the wider world with insight so that

people understand the importance of the industry and how

customers behaverdquo

Yet there are signs that asset managers are changing

their approach ldquoOne of the key differences over the last

five years has been a shift in the way that asset managers

have engaged with regulators and legislatorsrdquo says Corley

ldquoWhere previously this had been left to the public affairs function

now the CEO or CIO of an asset manager will be involvedrdquo

Overall AM is in healthy shape ldquoThe future is bright for the industryrdquo

says Stockell ldquoThe world needs strong and transparent asset managers

Both the regulators and asset managers need to recognize this and act by

educating clients and demonstrating the value they bring Asset managers

need to get back to what they do best mdash they exist to generate wealth and an

income stream for their clients in old agerdquo


4

Create innovative products that

customers want It might seem

simple enough but providers

need to create solutions that help

customers achieve their ambitionsand needs

Listen to customers ldquoSuccessful

product development requires

spending time with customers

to get to grips with what they

want and needrdquo says Ed Dymott

from Fidelity ldquoMoving away from

product-led to customer-led can

really drive innovationrdquo

Choose your partners wisely

For certain products JVs maywork well but think carefully

before signing ldquoWe have tended

to steer clear of JVs and prefer

to keep full ownershiprdquo says

Hugh Young of Aberdeen Asset

Management Asia ldquoWe feel that

it is important to have purity

and control over the investment

processes We then have to win

over distributors by the quality of

our offering service and supportrdquo

Engage with regulators earlyIf your industry is facing

increased regulation ensure that

communication is both timely

and suitably senior ldquoEngagement

rather than lobbying is what gets

resultsrdquo says Roy Stockell Leader

of EYrsquos Asia Pacific and EMEIA Asse

Management practice ldquoAnd that

engagement needs to come from

the C-suiterdquo

Watch micro and macro events

closely Events affect assetmanagement profoundly but

other industries are affected by

these too For example the rise

of younger and more affluent

populations in emerging markets

is leading to enormous opportunity

for businesses in all sectors of the

economy Being nimble enough

to react to short- and long-term

changes in the economy is essentia

in todayrsquos business environment





Moellerrsquos corner

Prof Scott Moeller

Dealno deal

or

Professor Scott Moeller is Director of the

MampA Research Centre at Cass Business School

copy P a u l H e a r t f

e l d

An acquisition is often a risky proposition

But spotting the warning signs when a deal isgoing wrong and knowing how to react canhelp corporates avoid expensive mistakes

shipping business MISC Berhad Minority

shareholders rejected the deal and

after revised terms were issued the deal

eventually expired in April after it didnrsquot

get enough acceptances

Leaked information can also be a

sign that not all is right Intralinksrsquos MampA

Confidential report conducted by Cass

Business School and Mergermarket andpublished in April shows that risks can

increase when deal details are leaked

Leaked deals take on average 124 days

to complete whereas non-leaked deals

take 116 days According to a partner of a

German law firm interviewed for the study

leaks can cause bidders to change strategy

And they can prove fatal Between 2010 and

2012 leaked deals had a lower completion

rate (80) than non-leaked deals (88)

However before you halt a deal

consider ways to head-off potential

problems For instance built-in ldquostop or gordquo

decision points allow you to haul in a dealbefore it gets past the point of no return

Betting exchange Betfair for instance set a

deadline for buyout house CVC to convince

its management of Betfairrsquos proposed

management strategy When it did not the

deal was pulled with both parties agreeing

to go their separate ways

A second tenet to bear in mind is to

constantly challenge the perceived wisdom

As most deals start at the CEO level

confirmation bias can ensue This means that

you only look for information that backs up

what you believe and discount as irrelevant

data that points in the other direction A

2012 study by the University of Washingtonrsquos

Adam Kolasinki and Xu Li of Lehigh University

found that strong and independent boards

can help prevent CEOs from making honest

mistakes when they attempt to acquire otherfirms This is also important in the long run

The research points out value-destroying

deals by CEOs were more likely to be followed

by less-costly ones in the future as they

become more cautious

In the aftermath break fees may

occur for companies who pull the plug on

an acquisition This may be painful but

it can be a small price to pay for averting

future losses For example this January

US express parcel delivery service UPS paid

TNT US$200m after withdrawing its bid

for the Dutch distribution company over

regulatory issues In contrast 2012 sawUS$14b-worth of writedowns at mining

company Rio Tinto following failed deals

in aluminum and coal

While spotting the symptoms can save

a deal knowing when to walk away can not

only save face but capital as well The best

deals are often those that you didnrsquot do

A ccording to an old Chinese

proverb ldquoof all the

stratagems knowing when to

quit is the bestrdquo Perseverance

can be rewarding but walking away from

a deal instead of chasing a lost cause can

help corporates save themselves a world

of trouble

The first signal that a deal is headingin the wrong direction can come in the

due diligence phase If the process shows

issues that went unnoticed on initial

inspection this could be a clear red flag

However the difficulty of due diligence

was outlined in the RR Donnelley and

Mergermarket 2013 MampA Outlook survey

in which 46 of respondents stated that

it was the most complex stage in the MampA

process In the past three years there

have been numerous examples of due

diligence failures costing corporations

millions of dollars At the end of 2011

a report from the UK Financial ServicesAuthority stated that ldquolimited due

diligencerdquo was one of the reasons for the

failure of a deal between Royal Bank of

Scotland and Dutch bank ABN Amro

Changes in the deal terms can also

cause alarm bells to ring For instance

this January Malaysiarsquos Petroliam

Nasional Berhad announced a near-US$3b

takeover offer for the remaining shares

that it did not already own in compatriotFor further insight please email scottcapitalinsightsinfo



Capital Insights on the move

Welcome to the website

Find every article from

every issue of Capital

Insights at the click of a

mouse Plus regular news

updates and EY publications

and thought leadership

On the web

Exclusive videos

At wwwcapitalinsights

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exclusive video content

from EY partners and

experts on all aspects of

the capital agenda

European private

equity exits

How can private

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create value for the

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back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before

venturing into brave

new worlds beat

the pack with Julyrsquos

EY forecast

All tied up 2013

Companies needto use effective

working capital

strategies to fund

growth Discover

the top performers

in EYrsquos new working

capital report

Further insights

Thought leadership and capital agenda-focused reports available at wwwcapitalinsightsinfo

Growing BeyondGrowing Beyond

E rn st amp Yo un g Ra pi d- Gr ow th M ar ke ts Fo re ca st J ul y2 01 3

Rapid-growthmarkets

Myths and challengesHowdo privateequityinvestorscreatevalue

Astudyof 2012Europeanexits

Apps

Take your tablets

For insights on raising investing optimizing

and preserving capital download the Capital

Insights app for tablets and phones Apps feature

exclusive articles and video as well as the latest

transactions news



In times gone by when youneeded new funds you only

had to talk to one person

Today there are many ways to raise capital

But more choice brings greater complexity

Whether yoursquore disposing of assets going

public or tapping the capital markets you can

dra on the e perience and insight of EYrsquos




For EYMarketing Director Leor Franks(lfranksukeycom)

Program Director Nathaniel Hass(nhassukeycom)Consultant Editor Richard HallCompliance Editor Jwala PoovakattCreative Manager Laura HodgesCreative Executive Jess CowleyDesign Consultant David HaleSenior Digital Designer Christophe MenardDeployment Executive Angela Singgih

For RemarkEditor Nick CheekAssistant Editor Sean LightbownHead of Design Jenisa PatelDesigner Anna ChouProduction Managers Daniela SchichorDavid SwettenhamEMEA Director Simon Elliott

Capital Insights is published on behalf of

EY by Remark the publishing

and events division of Mergermarket Ltd

80 Strand London WC2R 0RL UK

wwwmergermarketgroupcomevents-publications

EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance tax transactionand advisory services The insights and qualityservices we deliver help build trust and condence

in the capital markets and in economies the worldover We develop outstanding leaders who team todeliver on our promises to all of our stakeholdersIn so doing we play a critical role in building a betterworking world for our people for our clients and forour communities

EY refers to the global organization and mayrefer to one or more of the member rms of EY

Global Limited each of which is a separate legalentity EY Global Limited a UK company limited byguarantee does not provide services to clients Formore information about our organization please

visit eycom

About EYs Transaction Advisory Services How organizations manage their capital agendatoday will dene their competitive position

tomorrow We work with our clients to helpthem make better and more informed decisionsabout how they strategically manage capitaland transactions in a changing world Whetheryoursquore preserving optimizing raising or investingcapital EYrsquos Transaction Advisory Services bringtogether a unique combination of skills insightand experience to deliver tailored advice attunedto your needs mdash helping you drive competitiveadvantage and increased shareholder returnsthrough improved decision-making across allaspects of your capital agenda

copy 2013 EYGM Limited

All Rights Reserved

EYG no DE 0433

ED 1013

This material has been prepared for general

informational purposes only and is not intended to be

relied upon as accounting tax or other professional

advice Please refer to your advisors for specic advice

The opinions of third parties set out in this publication

are not necessarily the opinions of the global

EY organization or its member rms Moreover

they should be viewed in the context of the time

they were expressed

wwweycomServicesTransactions

ContributorsCapital Insights would like to thank the following

business leaders for their contribution to this issue

A l l d a t a i n C a p i t a l I n s i g h t s i s c o r r e c t a t 1 J u l y 2 0 1 3 u n l e s s o t h e r w i s e s t a t e d

copy P


Helping businesses raise invest

preserve and optimize capital

P r e s e r v

i n g O

p t i m i z

i n g

R a i s

i n g

I n v e s

t i n g

Gunjan Bagla

Author Doing

Business in 21st

Century India

James M Loree

President and

COO

Stanley Black amp

Decker

Wolf-Dieter

Starp

Head of Global

MampA

BASF

Hugh Young

Managing

Director

Aberdeen Asset

Management Asia

Alix Stewart

Head of UK

Corporate

Bonds

Schroders

Mike Teng

CEO

Corporate

Turnaround

Centre

Bill Bohstedt

Vice President mdash

MampA Arthur J

Gallagher amp Co

Cedric Collange

Senior Vice

President for

MampA Schneider

Electric

Rob Conn

Founder

Innova Capital

Elizabeth

Corley

CEO Allianz

Global Investors

Arvind Dham

Chairman

Amtek Auto

Group

Barry Donlon

Managing

Director DCM

EMEA

UBS

Yves Doz

Professor

of Strategic

Management

INSEAD

Ed Dymott

Head of

Business

Development

Fidelity

Anna Faelten

Deputy Director

MARC

Cass Business

School

Campbell

Fleming

CEO

Threadneedle

Investments

Ehud Ronn

Professor of

Finance

University of

Texas at Austin

Prashant Mara

Head of India

Practice

Osborne Clarke

Chetan Modi

EMEA Head

of Leverage

Finance

Moodys

Brian May

Finance Director

Bunzl

Massimo Tosato

Global Head of

Distribution

Schroders

Adrian MuttonCEO

Sannam S4

Angad PaulCEO

Caparo

Piers

Prichard-Jones

CorporatePartner

Freshelds

Brendon Moran

Co-head

CorporateOriginations

Socieacuteteacute Geacuteneacuterale

Werner Brandt

CFO SAP





Joachim Spi






































14SAP













8Top 10 acquirers

WINNER 2012








copy P





Q 3 2 0 1 3





for your business










capital management

30MampA targeting

India 24

Corporate bonds34



































































tc


r






































P r e s e r v

i n g O p t i m

i z i n g

R a i s

i n g

I n v e s

t i n g






Deal dynamics

Paumlr-Ola Hansson









from 47 in 2012 to 6 in 2014




























unknown



































new world

A step into the






























Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














Joachim Spi






































14SAP













8Top 10 acquirers

WINNER 2012








copy P





Q 3 2 0 1 3





for your business










capital management

30MampA targeting

India 24

Corporate bonds34



































































tc


r






































P r e s e r v

i n g O p t i m

i z i n g

R a i s

i n g

I n v e s

t i n g






Deal dynamics

Paumlr-Ola Hansson









from 47 in 2012 to 6 in 2014




























unknown



































new world

A step into the






























Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












14SAP













8Top 10 acquirers

WINNER 2012








copy P





Q 3 2 0 1 3





for your business










capital management

30MampA targeting

India 24

Corporate bonds34



































































tc


r






































P r e s e r v

i n g O p t i m

i z i n g

R a i s

i n g

I n v e s

t i n g






Deal dynamics

Paumlr-Ola Hansson









from 47 in 2012 to 6 in 2014




























unknown



































new world

A step into the






























Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














for your business










capital management

30MampA targeting

India 24

Corporate bonds34



































































tc


r






































P r e s e r v

i n g O p t i m

i z i n g

R a i s

i n g

I n v e s

t i n g






Deal dynamics

Paumlr-Ola Hansson









from 47 in 2012 to 6 in 2014




























unknown



































new world

A step into the






























Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news









































































tc


r






































P r e s e r v

i n g O p t i m

i z i n g

R a i s

i n g

I n v e s

t i n g






Deal dynamics

Paumlr-Ola Hansson









from 47 in 2012 to 6 in 2014




























unknown



































new world

A step into the






























Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news















Deal dynamics

Paumlr-Ola Hansson









from 47 in 2012 to 6 in 2014




























unknown



































new world

A step into the






























Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news







































Methodology







to April 2013









themselves




criteriapdf





















t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












t


b
































USA

18762 deals

Germany

3186 deals

Australia

1995 deals

UK

5280 deals

Top three countries

by deal volume

Netherlands

1596 deals

Italy

1741 deals

China

3532 deals

Japan

2038 deals

Other top countries

by deal volume


Canada

2490 deals

France

3010 deals

Transportation

2113 deals


telecommunications

9772 deals


12901 deals

Financial services

6210 deals


6667 deals

Consumer8532 deals

Leisure

2330 deals

Pharma

medical

and biotech

4744 deals

Business services

7936 deals

Construction

2583 deals















to ninth in 2013




























deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news




































deal strategies














The way


forward





































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












































































in emerging markets












































































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news























































Decline

Remain the same

Improve


3

69

23

5

12

3

45












outlook for growth




view on valuations

and prices

Clarification on

QE unwinding The

complex impact of

the withdrawal of




and asset prices






Pip McCrostie



of that equation








advantage via MampA







(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news













(SK) is Deputy


sory Services EY



Services EY

M983078A The art of






















































the highest


























































































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news






























































































Preserving

Investing

Optimizing

Raising





entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news













entered the market

with a homegrown

product some years






























































1 9 7 2 1 9 8 81 9 8 6 1 9 9 0




SAP opens its first


in Austria






































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news








































































For the cloud












1 9 9 1 1 99 4 1 9 9 4 1 9 9 8

SAP acquires

a 52 stake in

DACOS Software

SAP is listed on th

New York Stoc

Exchang







Lessons learned

1

24567 8

3



















is preserved






on within it

1




























1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news





































1 9 9 9 20052003 2007

























































copy S

A P A G



2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












2008 2010 2 0 1 2 2 01 2




SAP acquires clou

software provide

Ariba for US$45


of Business Objects

SAP acquires cloud


SuccessFactors


























report to SSCs
















mobile devices




























The CFO

Werner Brandt

Age 59



Darmstadt





SAPFounded 1972

Employees 65000

Countries 130



1



together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












together










due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news
















due diligence phase













and monitored


















































































Optimizing

Investing











60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news




















60of respondents





by Mercer


































































that takes you by

surpriserdquo says

Collange ldquoThe

due diligence

must identify the

key employees

especially if we


competencies



























































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














































12

3

45

ShutterstockEY
























































opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news
















opportunity








national equivalent




bull Bidders should














developed markets






























































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news
































figure of 50m















that marketrdquo






a lot of valuerdquo










































44The projected







Raising

Investing























reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news































reluctant sellers


















IndiaPopulation

12b (2013)

FDI

US$3565b (2012)

GDP

US$19t (2012)


World Bank

The lion king





























he says




















istockPingebat



AUG

2012

Delhi Mumbai

Industrial Corridor

Development Corp

(26 stake)

Government of

Japan Japan Bank

of International

Cooperation

US$45b

JAN

2013

United Spirits

Limited

(534 stake)

Diageo (UK) US$34b

JAN

2013

GSK Consumer

Healthcare

(3184 stake)

GSK (UK) US$14b

Source Mergermarket





































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














































and so on





100 stakesrdquo







































national equivalent




Viewpoint

























strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news

































strong management


company For us in





and open ended








management culture






Viewpoint










































DEC

2012Houghton


MAR2013

Azeri-Chirag-

Guneshli Oil Field


Pipeline Co (236

stake) (Azerbaijan)

ONGC Videsh US$1b

NOV

2012

Fairmont Hotels


Hotel New York

(75 stake) (US)


Source Mergermarket




The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news













The PE perspective

Sachin Date

copyPaul Hearte

partnersPositive










year to US$256b



















































































MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news
















MampA approach






your business




quantify the risks


Taking aim


































Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












Investing






























developed economies






based in emerging



























services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















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Investing



of asset

allocators that

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expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















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low returns being

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conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














services (27)










































which to invest
































23The percentage of



economies according

to Mergermarket



(US$m)

FEB



UnitedHealth Group

(US)US$5b

APR

2013

EnerjiSA Power

Generation


50 stake


APR

2013

United Spirits


534 stake

Diageo (UK) US$34b





2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












2

1

3



of some nuances






































miss the boatrdquo




































of 118x











0 10 20 30 40 50

Eurozone

crisis

Health of

advanced

economies

Health of

developing

economies

Slowing

growth in BRICs



47

33

13

7

Source Mergermarke




The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












The big issuance




cycle once more










US$11b in May)









explore bonds as


bank lending








watch the costs












































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news



































































high-yield

market was


would support

you mdash but

that wasnrsquot

proven to be

the case A lot

of companies
































Raising





































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














































says Donlon













a lot more

in terms of

covenantsand the

high-yield

market

obviously

doesrdquo says

Stewart


















2013

2012

2011

2010

2009

2008


US$39t

9644

US$53t

US$50t

US$48t

US$54t

11236

14498

11819

US$28t

6847

13022


business lending in


2013 according to

the Bank of England




The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












The bond ladder

2

3

1

4

5




















agencies







a transaction






























































of bonds issued


US$54t according to

Thomson Reuters



















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news
















relatively sound

bull Investment in










changing needs

































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news































































ever more vital

















fixed incomerdquo



























Optimizing

Investing



of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news












of asset

allocators that

are overweight in

equities compared





expected growth in

assets under

management

in 2013Source EY



climate means they




34





l c



















Corley ldquois the

low returns being

achieved in an era



environment means













of the marketrdquo






















































Therefore asset




conventional AUM

globally at the end

of 2012

Source TheCityUK

US$





2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news













2

1

3 5
























































4



































the C-suiterdquo


















Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news














Prof Scott Moeller

Dealno deal

or




e l d





































































of trouble


































On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news




















On the web

Exclusive videos






the capital agenda

European private

equity exits

How can private

equity investors


businesses they

back in Europe Find

out the answers in

the latest EY study

Rapid-growth

market forecast

Emerging markets

are the new engines

of growth Before


new worlds beat


EY forecast

All tied up 2013


working capital

strategies to fund

growth Discover

the top performers


capital report

Further insights




Rapid-growthmarkets



Apps

Take your tablets





transactions news










capital inside

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