Download - July 2015, Issue 40
1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.2 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.3 Industries categories are determined and named by Dealogic.
Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of June 2015 unless otherwise specified. “Last 12 Months” data is for the period from July 2014 to June 2015 inclusive. Data from Dealogic and FactSet MergerMetrics june include multiple offers, as applicable, for the same target company. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
June 2015
Last 12 Months
By Number of Deals
June 2015
Last 12 Months
$0 $100 $200 $300 $400 $500 $600
Real Estate/Property
Finance
Computers & Electronics
Healthcare
Oil & Gas
$26.45
$19.58
$12.86
$75.19
$67.23
$0 $100 $200 $300 $400 $500 $600
Telecommunications
Utility & Energy
Oil & Gas
Computers & Electronics
Healthcare
$220.16
$449.18
$210.99
$154.77
$126.20
0 500 1,000 1,500 2,000 2,500 3,000
Insurance
Finance
Professional Services
Healthcare
Computers & Electronics 270
107
104
46
39
0 500 1,000 1,500 2,000 2,500 3,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics
1,565
1,034
2,564
469
631
June 2015 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 459.76 21.61 247.87 0.23
No. of deals 3,056 221 925 122
Avg. value of deals (US$mil) 299.1 (13.6) 645.5 (158.5)
Avg. deal multiple1 11.8x 0.5 12.9x 0.1
Strategic Transactions
Volume (US$B) 379.34 30.73 217.66 38.04
No. of deals 2,605 162 701 69
Avg. value of deals (US$mil) 276.5 (3.1) 673.9 (41.7)
Avg. deal multiple1 11.6x 0.1 13.7x (1.4)
Sponsor-Related Transactions
Volume (US$B) 80.41 (9.12) 30.21 (37.81)
No. of deals 451 59 224 53
Avg. value of deals (US$mil) 487.4 (94.1) 495.3 (698.1)
Avg. deal multiple1 12.6x 2.4 11.7x 2.2
Crossborder Transactions2
Volume (US$B) 105.83 (12.20) Inbound
42.21 Outbound
11.27
Inbound
27.02 Outbound
(56.48)
No. of deals 744 35 Inbound
139 Outbound
149
Inbound
36 Outbound
(6)
Avg. value of deals (US$mil) 300.7 (71.7) Inbound
639.5 Outbound
191.0
Inbound
302.1 Outbound
(1,220.3)
Avg. deal multiple1 11.2x 0.5 Inbound
7.9x Outbound
12.7x
Inbound
(14.0) Outbound
0.6
Figure 1 Figure 2 - Most Active U.S. Target Industries3
July 2015, Issue 40M&A Activity
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A T A G L A N C E
M&A Activity (Continued)
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Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for June 2015 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for June 2015 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $20 $40 $60 $80 $100
Australia
Israel
Japan
United Kingdom
Canada $21.92
$9.08
$7.96
$1.19
$1.06
$0 $20 $40 $60 $80 $100
Japan
Singapore
Germany
Brazil
United Kingdom $2.56
$1.34
$1.32
$1.28
$1.01
0 100 200 300 400
France
Brazil
Australia
United Kingdom
Canada
22
29
11
10
9
$0 $20 $40 $60 $80 $100
Japan
United Kingdom
Germany
Israel
Canada $80.93
$55.07
$53.88
$35.03
$29.31
0 100 200 300 400
France& Germany
China
Japan
United Kingdom
Canada 358
193
158
73
84
2
$0 $20 $40 $60 $80 $100
Spain
France
Canada
Switzerland
United Kingdom
$50.87
$70.92
$25.98
$16.62
$17.25
0 100 200 300 400
France
Germany
Australia
United Kingdom
Canada 351
289
108
107
92
0 100 200 300 400
Australia
China
Japan
United Kingdom
Canada 40
18
14
7
10
4 Each of France and Germany was the country of origin for 73 transactions in the last 12 months.
June 2015
Equity Value (US$B)
Last 12 Months
Equity Value (US$B)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers
June
2015
May 20
15
April 2
015
March 2
015
Febr
uary
2015
Janu
ary 20
15
Decem
ber 2
014
Novem
ber 2
014
Octobe
r 201
4
Septem
ber 2
014
Augus
t 201
4
July
2014
$19,045.4
$6,385.7
$22,890.9
$1,703.7
$5,089.8
$6,275.4
$2,466.9
$1,254.6
$11,742.5
$4,355.1
$7,559.2
$25,522.4
$8,022.0
$1,802.7$3,328.0
$8,039.7
$24,326.1
$5,765.7
$25,547.3
$8,418.0
$3,458.1
$11,573.9
$4,064.7
$2,795.2
$0 $20 $40 $60 $80 $100
Cigna Corporation ~ Anthem, Inc.(June 20, 2015)
The Williams Companies, Inc. ~ Energy Transfer Equity, L.P.(June 21, 2015)
Time Warner Cable Inc. ~ Charter Communications, Inc.(May 26, 2015)
Allergan, Inc. ~ Actavis plc(November 17, 2014)
Time Warner Inc. ~ Twenty-First Century Fox, Inc.(July 16, 2014) (Offer withdrawn August 5, 2014)
$47.36
$76.12
$67.37
$55.09
$47.93
$0 $20 $40 $60 $80 $100
HCC Insurance Holdings, Inc. ~ Tokio Marine Holdings, Inc.(June 10, 2015)
Towers Watson & Co. ~ Willis Group Holdings Plc(June 30, 2015)
Altera Corporation ~ Intel Corporation(June 1, 2015)
Cigna Corporation ~ Anthem, Inc.(June 20, 2015)
The Williams Companies, Inc. ~ Energy Transfer Equity, L.P.(June 21, 2015) $47.93
$8.66
$7.46
$47.36
$16.33
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)
Figure 5 - Five Largest Announced U.S. Public Mergers
M&A Activity (Continued)
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5 Based on the highest target break fees and reverse break fees payable in a particular deal.6 The two transactions in June 2015 involving a financial buyer had a reverse break fee.7 Two transactions in June 2015 involved a financial buyer.8 The two transactions in June 2015 involving a financial buyer had a go-shop provision.9 Two transactions in June 2015 involving a strategic buyer had a go-shop provision.
M&A Terms
6%
12%
Avg. Reverse Break Fee as % of Equity ValueAvg. Target Break Fee as % of Equity Value
$6000
$12000
Average Value of All U.S. Public Mergers with Definitive Agreements
(US$mil)
3.3%
4.0%3.7%
3.4%
3.8%4.2%
5.5%
4.6%
6.7%
3.5% 3.4%
4.7%
7.1%
5.4%
10.6%
4.8%5.7%
$11,573.9
$1,876.7
$3,683.3
$5,391.8
$6,841.8
$1,254.6
$1,996.7
4.4%$4,426.4
$2,747.1
$4,255.5
3.3% 3.5% 3.5% 3.5% 3.4% 3.5%
$3,458.1
May 20
15
April 2
015
March 2
015
Febr
uary
2015
Janu
ary 20
15
Decem
ber 2
014
Novem
ber 2
014
Octobe
r 201
4
Septem
ber 2
014
Augus
t 201
4
July
2014
June
201
5
$3,652.9
Figure 6 - Average Break Fees as % of Equity Value5
Figure 7 - Average Break Fees as % of Equity Value5
June 2015
Last 12 Months
Target Break Fee for All Mergers 4.2 3.5
June 2015
Last 12 Months
Reverse Break Fee for All Mergers 4.8 5.4
Reverse Break Fee for Mergers Involving Financial Buyers6
6.4 7.4
Reverse Break Fee for Mergers Involving Strategic Buyers
3.9 4.7
June 2015
Last 12 Months
% of Mergers with Go-Shops 30.8 10.5
% of Mergers Involving Financial Buyers with Go-Shops7
100.0 37.5
% of Mergers Involving Strategic Buyers with Go-Shops
18.2 6.1
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops
31.3 35.3
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops8
32.5 37.2
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops9
30.0 33.4
Figure 8 - U.S. Public Merger Go-Shop Provisions
Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at $100 million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data from Dealogic and FactSet MergerMetrics june include multiple offers for the same target company. Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
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A T A G L A N C E
10 Due to rounding, percentages may not add up to 100%.11 There were only three partial or all stock transactions in June 2015.12 This data includes both announced transactions for which a definitive merger agreement was reached and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions).
Cash Only
Stock Only11
Cash & Stock Only
Choice (Cash Election)
Other
Last 12 Months
June 2015
15.4%
14.0%
50.3%
17.5%
18.1%
61.5%15.4%
7.7%
June 2015 100.0
Last 12 Months 90.2
June 2015 15.4
Last 12 Months 23.4
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers12
June 2015 23.5
Last 12 Months 13.9
M&A Terms (Continued)
Figure 9 - Form of Consideration as % of U.S. Public Mergers10 Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio
A T A G L A N C E
Our Mergers & Acquisitions PracticeThe Paul, Weiss M&A Group consists of 30 partners and over 100 counsel and associates based in New York, Washington, Wilmington, London, Toronto, Tokyo, Hong Kong and Beijing. The firm’s Corporate Department consists of 60 partners and more than 200 counsel and associates.
Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, hedge funds, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions.
Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions.
Recent highlights include: advising Time Warner Cable in its $78.7 billion merger with Charter Communications; representing Automatic Data Processing in its $5 billion spin-off of ADP Dealer Services, now called CDK Global; advising Encana in its $7.1 billion acquisition of Athlon Energy; representing NorthStar Realty Finance in its $4 billion acquisition of Griffin-American Healthcare REIT II; representing Grupo Salinas in its $2.5 billion sale of Iusacell to AT&T; advising GENCO Distribution System in its $1.38 billion acquisition by FedEx; and advising Oak Hill Capital Partners in its $1.43 billion acquisition of Berlin Packaging.
Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients’ short- and long-term goals.
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 5
Matthew W. Abbott
Edward T. Ackerman
Angelo Bonvino
Jeanette K. Chan
Yvonne Y. F. Chan
Ariel J. Deckelbaum
Ross A. Fieldston
Brian P. Finnegan
Adam M. Givertz
Robert D. Goldbaum
Neil Goldman
Bruce A. Gutenplan
Justin G. Hamill
David K. Lakhdhir
Stephen P. Lamb
John E. Lange
Xiaoyu Greg Liu
Jeffrey D. Marell
Edwin S. Maynard
Toby S. Myerson
Kelley D. Parker
Marc E. Perlmutter
Carl L. Reisner
Kenneth M. Schneider
Robert B. Schumer
John M. Scott
Tarun M. Stewart
Steven J. Williams
Tong Yu
Taurie M. Zeitzer
This publication is not intended to provide legal advice, and no legal or business decisions should be based on its content. Questions concerning issues addressed in this memorandum should be directed to:
Our M&A Partners
Ariel J. Deckelbaum Partner New York 212-373-3546 [email protected]
Matthew W. Abbott Partner New York 212-373-3402 [email protected]
Angelo Bonvino Partner New York 212-373-3570 [email protected]
Jeffrey D. Marell Partner New York 212-373-3105 [email protected]
Counsel Frances F. Mi and associates Joseph S. Friedman, Yashreeka Z. Huq, Samuel J. Welt and Ryan D. Blicher and law clerk Alison E. Gurr contributed to this publication.
A T A G L A N C E
6© 2015 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication may be considered attorney advertising. Past representations are no guarantee of future outcomes.
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