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Page 1: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Deal DriversAmericas

mergermarket.com

An Acuris Company

The comprehensive review of mergers and acquisitions in the Americas region

FY 2018

Page 3: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

The comprehensive review of mergers and acquisitions in the Americas region throughout 2018.

Contents

Foreword 04

Americas Heat Chart 05

All Sectors 06

Financial Services 18

Industrials, Manufacturing & Engineering 24

Energy, Mining, Oil & Gas 30

Consumer 36

Technology, Media & Telecom 42

Life Sciences & Healthcare 48

Canada 54

West 61

Midwest 68

South 75

Northeast 82

Latin America 89

About Merrill Corporation 97

mergermarket.com

Mergermarket 3Deal Drivers Americas FY 2018Contents

Page 4: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Foreword

Mark WilliamsChief Revenue Officer, Americas, Merrill Corporation

Welcome to the full-year 2018 edition of Deal Drivers Americas, published by Mergermarket in association with Merrill Corporation. This report provides an extensive review of M&A activity and trends across North America and Latin America.

M&A deal value climbed higher in North America last year, as acquirers took advantage of strong balance sheets and ample access to financing to get deals done. Total M&A value in the region reached US$1.61trn, representing a 13.5% increase. The picture was rather different in Latin America, where deal value fell 25.2% to US$72.6bn, amid economic and political instability.

Dealmakers have been active across sectors — the top 10 deals in North America last year included targets in six different industries. Energy, mining, oil & gas held the top spot for M&A value at US$387.6bn, thanks in part to two megadeals worth more than US$30bn each. Technology, media & telecom came in second at US$324.2bn in deal value, with the top deal being Sprint’s US$60.8bn acquisition of T-Mobile USA in April.

Economic conditions in North America appear rosy on the surface, with unemployment and interest rates low and the economy growing at a steady pace. Yet the prospects for the M&A market over the year ahead remain ambiguous. Business leaders are keeping a close eye on

global trade disputes, slowing growth in China, and the effects of Brexit, among other developments.

The ambiguity is reflected in responses to Merrill’s 2019 Corporate Development Outlook poll conducted in January. Among more than 300 respondents in the Americas, 48% said the M&A market is headed in a neutral direction, compared to 39% who said it is trending positive and 14% who see it moving down a negative track.

Evidence from the first month of the year supports this mixed view of the market. On the one hand, US equity prices fell in late January after several bellwether industrial and technology companies announced earnings below expectations, including equipment manufacturer Caterpillar and chip maker Nvidia. At the same time, a majority of companies to report earnings in the first four weeks of the year actually beat their targets.

Internationally, investors have been spooked by the increasingly chaotic situation in Venezuela, sluggish corporate performance in Europe, and the slowing pace of economic expansion in China. All three trends have the potential to affect the US economy in significant ways, and dealmaking in turn. The ongoing trade dispute between the US and China also threatens to drag down growth.

Indeed, in our corporate development survey, 54% of respondents in the Americas singled out the US-China trade war and tariffs as the business risk most likely to climb farther up due diligence checklists this year. Just over 26% said data privacy concerns emerging at Facebook and other technology giants would also become a bigger factor.

But ultimately, market participants see upside even in the recent slowdown. For instance, 47% of our poll respondents said valuations have become more sensible over the last several months — providing much-needed relief to M&A buyers amid a period of frothy prices. With plenty of investment dollars waiting to be put to work, the slump may actually push some acquirers to redouble their efforts to source deals. As always, we’ll be monitoring the market to keep you informed of the latest trends and data as they become available.

Sincerely,

Mark Williams Chief Revenue Officer, Americas

mergermarket.com

Mergermarket 4Deal Drivers Americas FY 2018Foreword

Page 5: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Americas Heat Chart

Heat Chart based on potential companies for sale

Criteria of Heat Chart: Mergermarket’s sector Heat Chart is based on companies tagged as potential targets in 2H18.

Our forward-looking Heat Chart shows the distribution of “companies for sale” stories on the Mergermarket intelligence tool across sectors and regions in 2H18. The data reveal that technology, media & telecom (TMT) had the most acquisition targets on the market in the second half of last year with 680 stories, and the West region had the highest concentration of companies for sale among regions at 710 stories.

The results reveal the ongoing strength of the tech sector in California, Washington, and other Western states. Companies in segments from fintech and adtech to blockchain and cannabis software made it known that they were on the market. Large pockets of potential deal activity in the TMT industry can also be seen in the Northeast (156 stories) and South (118 stories) regions of the US.

Life sciences & healthcare also had a robust showing in 2H18, with 444 stories regarding companies for sale in the sector. The US South had the most at 125, followed by the West and Northeast tied for second place at 111. Immunotherapy drug developers, revenue cycle management service providers, and healthcare staffing companies are among the medical and pharmaceutical targets attracting notice.

Latin America and Canada trailed all US regions in terms of companies for sale, though the tally of stories remained roughly the same as in 1H18 in both regions. This indicates that deal activity is likely to remain steady in the two geographies.

One sector to watch for potential weakness is Energy, mining, oil & gas, which placed fifth among sectors in terms of companies for sale stories in 2H18. The price of oil has rebounded somewhat since late last year, but overall commodity prices remain volatile, hampering the prospects for dealmaking.

140 80

120

100

60

40

ColdWarmHot

10

20

1

Sector West South Northeast Midwest LatAm Canada Total

Technology, Media & Telecom

253 118 156 74 48 31 680

Life Sciences & Healthcare 111 125 111 65 15 17 444

Consumer 92 58 76 54 53 14 347

Industrials, Manufacturing & Engineering

58 67 45 54 32 13 269

Energy, Mining, Oil & Gas 52 78 28 19 38 23 238

Business Services 53 75 55 16 25 5 229

Financial Services 35 36 46 12 18 13 160

Leisure 15 16 16 10 14 71

Transportation 6 10 2 11 21 2 52

Real Estate 10 20 9 2 7 3 51

Agriculture 15 3 4 5 9 11 47

Construction 5 5 2 5 5 4 26

Defense 4 6 3 7 20

Government 1 0 0 0 1

Total 710 617 553 334 285 136 2635

mergermarket.com

Mergermarket 5Deal Drivers Americas FY 2018Heat Chart

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All Sectors

Part of the Acuris reporton global M&A activity

mergermarket.com

Mergermarket 6Deal Drivers Americas FY 2018All Sectors

Page 7: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Further informationGet in touch

After a promising start to the year, North America’s M&A market looks set for moderate growth this year despite lingering macro uncertainty, with several pockets of the market likely to remain busy, advisors say.

There have been 504 deals valued at US$257.5bn so far in 2019, up 15.4% from US$223.2bn announced in the same period last year, according to Mergermarket data.

In 2018 as a whole, North America recorded 6,396 deals worth US$1.61tr, a 13.5% increase in deal value with a slight decrease in deal count from 2017.

Michael Szlamkowicz of Hogan Lovells said while deal activity may not be the “most robust comparatively,” it should nonetheless remain strong this year with steady deal flow in “areas of dislocation that strategic acquirers are looking at,” including healthcare.

Within healthcare, M&A in the life sciences & healthcare sector got off to a hot start in 2019 following Bristol-Myers Squibb’s [NYSE:BMY] US$89.5bn acquisition of Celgene [NASDAQ: CELG]. The sector is likely to remain busy throughout the year, with pharma players in a race for biotech acquisitions to “hit on the next major breakthrough,” said Szlamkowicz.

This news service has reported that after the market downturn at the end of 2018 pharma companies feel emboldened to make acquisitions of new platform technologies to

replenish their pipelines. Examples so far this year include Eli Lilly’s [NYSE: LLY] US$7.1bn buyout of Loxo Oncology in January.

Meanwhile, the financial services sector earlier this month provided the largest bank merger since the financial crisis, with the US$28.1 merger of equals between SunTrust [NYSE:STI] and BB&T [NYSE:BBT]. The deal that could act as a test case for more consolidation among regional banks, said John Stockamp of West Monroe Partners.

“It’s the fruition of what people have been hypothesizing for the last 12-18 months, given the relaxation of the regulatory burden for banks and of the attitude to bank consolidation,” he said. Looking ahead, Stockamp said other regional players in over-banked parts of the US, notably the South East and the Midwest, could look to combine.

One motivation for such combinations is to gain the necessary scale to build a strong platform that can facilitate investments of fintech assets in areas such as account opening, loan origination and CRM functions, Stockamp said.

Banks that have been reported as potential candidates for consolidation include Birmingham, Alabama-based Regions and Cleveland, Ohio-based KeyBank.

Other areas of the market set for an upturn include aerospace and defense, robotics

and electrical products, this news service has reported, while many will be watching the emerging cannabis industry for more deals.

Meanwhile, while bricks and mortar retail is floundering, direct-to-consumer retail businesses are likely to attract investment interest, Szlamkowicz noted.

Still, despite the opportunities, the wider geopolitical climate presents ample risk for a shock, which could stem from international trade tensions, Brexit or Venezuela, among other fault lines, said panelists at this month’s ACG Capital Connection conference in Atlanta.

“The broader context is there are so many different macro things moving that it’s hard to put a fine point on where value is going to be,” said Szlamkowicz.

Tom Cane

Joshua Armstrong

All SectorsOverview

mergermarket.com

Mergermarket 7Deal Drivers Americas FY 2018All Sectors

Page 8: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Top deals

AnnouncedDate

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

8-Mar-18 C Cigna Corporation Express Scripts Holding Company Business Services 67,601

29-Apr-18 P T-Mobile USA Inc Sprint Corporation Technology, Media & Telecom SoftBank Group Corp 60,806

1-Aug-18 C Energy Transfer Equity Energy Transfer Partners (97.64% stake) Energy, Mining, Oil & Gas 59,612

28-Oct-18 P IBM Corporation Red Hat Inc Technology, Media & Telecom 32,556

30-Apr-18 C Marathon Petroleum Corporation Andeavor Corporation Energy, Mining, Oil & Gas 31,327

29-Jan-18 C Keurig Green Mountain Inc Dr Pepper Snapple Group Inc Consumer 26,801

26-Mar-18 C Brookfield Property Partners General Growth Properties Inc (66.2% stake) Real Estate 26,705

2-Jul-18 P Dell Technologies Inc VMware Inc (Tracking stock shareholders) Technology, Media & Telecom 20,996

14-Oct-18 P Harris Corporation L3 Technologies Inc Defense 18,362

11-Jul-18 C Broadcom Inc CA Technologies Technology, Media & Telecom 17,987

30-Jan-18 C Blackstone Group; GIC Private Limited; and Canada Pension Plan Investment Board Refinitiv (55% stake) Business Services Thomson Reuters Corporation 17,000

3-Jan-18 C Dominion Energy Inc SCANA Corporation Energy, Mining, Oil & Gas 14,250

13-Nov-18 P Caisse de Depot et Placement du Quebec; and Brookfield Business Partners Johnson Controls International plc (Power solutions business) Industrials, Manufacturing & Engineering Johnson Controls International plc 13,244

20-Dec-18 C Altria Group Inc JUUL Labs Inc (35% stake) Consumer 12,800

21-May-18 P Wabtec Corporation GE Transportation Industrials, Manufacturing & Engineering General Electric Company 11,100

22-Jan-18 C Sanofi SA Bioverativ Inc Life Sciences & Healthcare 10,887

27-Jun-18 C ConAgra Brands Inc Pinnacle Foods Inc Consumer 10,778

26-Jul-18 C BP Plc Petrohawk Energy Corporation Energy, Mining, Oil & Gas BHP Billiton Ltd 10,500

17-May-18 C Williams Companies Inc Williams Partners (26.71% stake) Energy, Mining, Oil & Gas 10,467

1-Mar-18 C Microchip Technology Incorporated Microsemi Corporation Technology, Media & Telecom 9,836

C= Completed; P= Pending

Top 20 Announced Deals for Full Year Ending 31 December 2018 (Any North American Involvement)

mergermarket.com

Mergermarket 8Deal Drivers Americas FY 2018All Sectors

Page 9: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

29.7%

2.9%

23.4%

3%

5.8%

6.7%

23.2%

5.3%

42.8%

1.2%

17.6% 2.6%

2.8%

6.4%

21.8%

4.8%

Mix of deals by geographic regionDeal Count

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

Mix of deals by geographic regionValue

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

USA

Northern Europe

Asia-Pacific

USA

Northern Europe

Asia-Pacific

Canada

Central & Eastern Europe

RoW

Canada

Central & Eastern Europe

RoW

Western Europe

Southern Europe

Western Europe

Southern Europe

mergermarket.com

Mergermarket 9Deal Drivers Americas FY 2018All Sectors

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Num

ber

of d

eals

0

250

500

750

1,000

1,250

1,500

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

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Leis

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Tech

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edia

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om

Ener

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& E

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g

52 13 56

1,100

508

927

525 561

1,471

159 136

649

239

Valu

e (U

S$

bn)

0

50

100

150

200

250

300

350

400

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

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Life

Sci

ence

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Hea

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& E

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g

US$26.6

US$9.5

US$12.5

US$87.6

US$30.3

US$123

US$201.6

US$166.2

US$36.8

US$324.2

US$387.6

US$83.4

US$117.3

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Mergermarket 10

mergermarket.com

Deal Drivers Americas FY 2018All Sectors

Page 11: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

0

50,000

100,000

150,000

200,000

250,000

300,000

2018201720162015201420132012

Valu

e (U

S$

m)

Volum

e

0

200

400

600

800

1,000

1,200

1,400

US$257,970

US$276,850

US$254,331

US$253,516

US$163,244

US$180,149

US$297,449

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

2018201720162015201420132012

Valu

e (U

S$

m)

Volum

e0

200

400

600

800

1,000

1,200

1,400

1,600

US$128,971

US$143,664

US$172,462

US$155,864

US$176,093

US$212,255

US$219,688

Buyouts

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

Exits

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

Deal CountValue Value Deal Count

Mergermarket 11

mergermarket.com

Deal Drivers Americas FY 2018All Sectors

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Num

ber

of d

eals

0

50

100

150

200

250

300

350

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Valu

e (U

S$

m)

0

30,000

60,000

90,000

120,000

150,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

European bidder acquiring a North American target

North American bidder acquiring a European target

Total North American/European deals

European bidder acquiring a North American target

North American bidder acquiring a European target

Total North American/European deals

Transatlantic dealsDeal Count

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

Transatlantic dealsValue

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

Mergermarket 12

mergermarket.com

Deal Drivers Americas FY 2018All Sectors

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0

250

500

750

1,000

1,250

1,500

1,750

2,000

2018201720162015201420132012

Valu

e (U

S$

bn)

US$355.4

US$205.8

US$81.2US$112.3

US$248.5

US$275.6

US$85.1

US$129.7

US$269.2

US$310.3

US$106.1

US$158.4

US$237.7

US$73.3US$113.4

US$644.6

US$311

US$270.9

US$100.5

US$122.6

US$292.1

US$106.2

US$131.7

US$328.7

US$89.4

US$135.8

US$253.9

US$152.7

US$1,140.2

US$607.6

US$720.9US$

765.3

US$394.9

US$315.4

US$271.8

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2018201720162015201420132012

Num

ber

of d

eals

282

235

277

274314

299

243

206

277

231

245

340

50

87 80 98

81

2565

27

50 69 49

41

357

291

94

54

2,4042,207

2,003

2,122

2,2912,297

1,847 1,869

2,9073,201

1,953

3,4113,599 3,647

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 13

mergermarket.com

Deal Drivers Americas FY 2018All Sectors

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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2012 2013 2014 2015 2016 2017 2018

Valu

e (U

S$

m)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 14

mergermarket.com

Deal Drivers Americas FY 2018All Sectors

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League tables

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Skadden Arps Slate Meagher & Flom 422,505 163

2 12 Wachtell, Lipton, Rosen & Katz 353,279 84

3 3 Simpson Thacher & Bartlett 352,433 141

4 7 Davis Polk & Wardwell 337,327 110

5 6 Sullivan & Cromwell 311,690 125

6 9 Latham & Watkins 311,543 267

7 8 White & Case 306,436 134

8 5 Cleary Gottlieb Steen & Hamilton 294,849 71

9 4 Cravath, Swaine & Moore 279,414 63

10 2 Kirkland & Ellis 265,143 534

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 265,143 534

2 4 Jones Day 161,190 334

3 3 DLA Piper 115,426 313

4 5 Goodwin Procter 143,394 292

5 2 Latham & Watkins 311,543 267

6 10 Cooley 44,181 182

7 7 Weil Gotshal & Manges 224,437 179

8 8 Morgan Lewis & Bockius 108,403 171

9 6 Skadden Arps Slate Meagher & Flom 422,505 163

10 16 Sidley Austin 169,344 151

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 715,571 295

2 2 JPMorgan 557,574 219

3 3 Houlihan Lokey 32,733 193

4 4 Morgan Stanley 647,265 182

5 5 Citi 398,385 168

6 8 Barclays 414,866 161

7 6 Jefferies 83,768 140

8 11 Evercore 300,988 139

9 19 Raymond James & Associates 21,402 136

10 9 Bank of America Merrill Lynch 373,227 132

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 715,571 295

2 3 Morgan Stanley 647,265 182

3 2 JPMorgan 557,574 219

4 7 Barclays 414,866 161

5 4 Citi 398,385 168

6 5 Bank of America Merrill Lynch 373,227 132

7 11 Evercore 300,988 139

8 10 Credit Suisse 293,647 121

9 6 Lazard 274,799 109

10 8 Centerview Partners 225,558 42

Financial advisors by deal countFinancial advisors by value

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

Legal advisors by value Legal advisors by deal count

mergermarket.com

Deal Drivers AmericasMergermarket 15FY 2018All Sectors

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League tables

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 7,793 65

2 2 Goodwin Procter 7,544 98

3 4 Jones Day 6,916 84

4 5 DLA Piper 6,750 89

5 3 Latham & Watkins 5,546 57

6 7 Cooley 5,267 59

7 24 Sidley Austin 4,396 35

8 12 Stikeman Elliott 4,124 47

9 25 Orrick Herrington & Sutcliffe 3,992 50

10 42 Dorsey & Whitney 3,579 42

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goodwin Procter 7,544 98

2 3 DLA Piper 6,750 89

3 2 Jones Day 6,916 84

4 5 Kirkland & Ellis 7,793 65

5 6 Cooley 5,267 59

6 4 Latham & Watkins 5,546 57

7 13 Orrick Herrington & Sutcliffe 3,992 50

8 7 Blake, Cassels & Graydon 3,093 48

9 12 Stikeman Elliott 4,124 47

10 36 Dorsey & Whitney 3,579 42

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Houlihan Lokey 4,924 56

2 4 Raymond James & Associates 3,901 48

3 5 Sandler O'Neill & Partners 3,724 45

4 7 Piper Jaffray & Co 3,667 44

5 1 Stifel/KBW 3,259 42

6 9 Deloitte 2,117 30

7 12 EY 1,579 28

8 18 Citi 3,128 27

9 11 Goldman Sachs & Co 4,086 26

10 3 KPMG 1,857 26

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Houlihan Lokey 4,924 56

2 6 Goldman Sachs & Co 4,086 26

3 9 Raymond James & Associates 3,901 48

4 7 Sandler O'Neill & Partners 3,724 45

5 15 Piper Jaffray & Co 3,667 44

6 13 Jefferies 3,664 25

7 20 William Blair & Company 3,663 25

8 4 JPMorgan 3,420 23

9 2 Stifel/KBW 3,259 42

10 23 Robert W. Baird & Co 3,202 24

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

The legal advisor mid-market league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The financial advisor mid-market league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

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

Deal Drivers AmericasMergermarket 16

mergermarket.com

FY 2018All Sectors

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2018 2017 Company Name Value (USD m)

Number of Deals

1 3 Edelman 3,097 32

2 5 FTI Consulting 3,059 31

3 1 Sard Verbinnen & Co 3,002 25

4 9 Brunswick Group 2,861 21

5 7 Kekst CNC (Publicis) 2,796 21

6 4 ICR 2,393 31

7 6 Abernathy MacGregor Group (AMO) 1,917 15

8 2 Joele Frank Wilkinson Brimmer Katcher 1,899 16

9 12 Powerscourt 1,263 11

10 33 Maitland (AMO) 1,192 11

2018 2017 Company Name Value (USD m)

Number of Deals

1 5 Edelman 3,097 32

2 3 FTI Consulting 3,059 31

3 2 ICR 2,393 31

4 1 Sard Verbinnen & Co 3,002 25

5 9 Brunswick Group 2,861 21

6 7 Kekst CNC (Publicis) 2,796 21

7 4 Joele Frank Wilkinson Brimmer Katcher 1,899 16

8 6 Abernathy MacGregor Group (AMO) 1,917 15

9 21 Citigate Dewe Rogerson 979 13

10 11 Liolios Group 730 13

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Sard Verbinnen & Co 347,287 226

2 3 Kekst CNC (Publicis) 113,046 166

3 2 Joele Frank Wilkinson Brimmer Katcher 346,563 136

4 7 Brunswick Group 198,963 104

5 6 FTI Consulting 106,562 93

6 4 Abernathy MacGregor Group (AMO) 124,508 86

7 8 Edelman 62,747 80

8 5 Finsbury Hering Schuppener GPG 183,691 77

9 11 Owen Blicksilver Public Relations 8,290 76

10 9 ICR 23,116 63

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Sard Verbinnen & Co 347,287 226

2 2 Joele Frank Wilkinson Brimmer Katcher 346,563 136

3 5 Brunswick Group 198,963 104

4 3 Finsbury Hering Schuppener GPG 183,691 77

5 7 Abernathy MacGregor Group (AMO) 124,508 86

6 4 Kekst CNC (Publicis) 113,046 166

7 6 FTI Consulting 106,562 93

8 8 Gladstone Place Partners 82,940 8

9 17 Tulchan Communications 70,971 13

10 12 Edelman 62,747 80

PR advisors by deal count PR advisors by value

League tables

The PR advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

The PR advisor mid-market league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover all sectors.

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

mergermarket.com

Deal Drivers AmericasMergermarket 17FY 2018All Sectors

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Financial Services

Part of the Acuris reporton global M&A activity

mergermarket.com

Mergermarket 18Deal Drivers Americas FY 2018Financial Services

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Further informationGet in touch

Traditional banks and payments companies should continue to see more consolidation driven by the need to keep up with new technology and add scale to cut costs, dealmakers said.

M&A among regional banks started off a strong new year, marked by Chemical Financial’s [NASDAQ: CHFC] US$3.5bn acquisition of TCF Financial [NYSE: TCF] in the Midwest, and BB&T’s [NYSE: BBT] US$28.1bn acquisition of SunTrust [NYSE: STI] in the southeast.

The BB&T/SunTrust deal underscores the value of pursuing scale to strengthen a franchise, said Mitchell Eitel, a partner at Sullivan & Cromwell, who is among the legal advisors representing SunTrust.

The deal, the largest in banking since the financial crisis of 2008, shows that banks are seeking to create efficiencies through digital channels and reducing their branch networks, said R. Lee Burrows, CEO of Atlanta-based advisory Banks Street Partners.

After the Suntrust/BB&T announcement, other banks with more than US$100bn in assets “are going to wonder who their dance partner is” in their own efforts to cut costs by closing branches.

SunTrust and BB&T noted they have about 740 branches within two miles of each other. Banks overall have shed about 3,000 branches since

2016 and the number of overall institutions has dropped by about 500.

“There’s roughly 5,500 banks; I think we’re going to get down to 2,500 in the next decade or so,” said Jeff Davis of Nashville-based financial advisor Mercer Capital.

In 2018, annual deal valuation in the financial services sector was US$87.6bn, down from US$162.5bn in 2017 and about the same size as the volume in 2016, according to Mergermarket data.

Banks have been actively building commercial partnerships or equity investments with early-stage fintech companies, which could help them gauge fintech M&A prospects down the road, said Adam Chernichaw, partner at White & Case.

Currently when banks evaluate pure technology targets, their shareholders’ worries about tangible book value dilution from an acquisition and fintech companies’ trepidation about increased regulations may deter these kinds of deals, said Sullivan & Cromwell’s Eitel.

Based on the level of private capital, deal activity in fintech will remain robust in 2019, said Jennifer Lee, vice president at Edison Partners, a technology growth equity firm. Among the attractive fintech subsectors for platform acquisitions: technology for wealth management and capital markets, she noted.

As the use of “robo” investment advisory technology is growing, traditional asset managers increasingly are facing demands to adapt their technology to attract younger customers and technology talents, she explained. Capital markets companies are compelling to PEs in that sponsors can create synergies by doing roll-up acquisitions across different technology specialties, Lee added.

In the payments space, M&A should increase around business-to-business software as larger players look to acquire automation solutions for customers, said Jamie Hamilton, director of financial technology banking at SunTrust Robinson Humphrey.

Private equity (PE) and large strategic consolidators such as Global Payments [NYSE: GPN] will continue to drive payments industry deals at a similar volume to 2018, he said. There are hundreds of opportunities for large payments companies to build out discrete verticals through M&A, he said.

One PE-backed roll-up shop in this vein is Fullsteam, a payments-focused Auburn, Alabama-based holding company created by Aquiline Capital Partners in early 2018. Fullsteam has announced eight acquisitions of software companies specializing in equipment rentals, storage, bridal shops and charitable donation management, among other categories.

Yizhu Wang

Joshua Armstrong

Financial ServicesOverview

mergermarket.com

Mergermarket 19Deal Drivers Americas FY 2018Financial Services

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Top deals

AnnouncedDate

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

18-Oct-18 P Invesco Ltd OppenheimerFunds Inc Massachusetts Mutual Life Insurance Company 5,714

21-May-18 P Fifth Third Bancorp MB Financial Inc 4,557

19-Jan-18 C Lincoln National Corporation Liberty Life Assurance Company of Boston Liberty Mutual Group Inc 3,300

1-Aug-18 C Brookfield Infrastructure Partners EnerCare Inc 3,204

24-Jul-18 C Synovus Financial Corp FCB Financial Holdings Inc 2,720

30-Apr-18 C Hellman & Friedman Financial Engines Inc 2,619

8-Aug-18 C Starwood Property Trust Inc GE Energy Financial Services Inc (Project finance debt business and loan portfolio) GE Energy Financial Services Inc 2,560

29-May-18 C Weare Health Plans Inc Meridian Health Plan of Michigan Inc; Meridian Health Plan of Illinois Inc; and MeridianRx Caidan Management Company 2,500

10-Sep-18 C United Rentals Inc BlueLine Rental Platinum Equity 2,100

22-Aug-18 P The Hartford Financial Services Group Inc The Navigators Group Inc 2,084

23-Jul-18 C FS Investment Corporation Corporate Capital Trust Inc 2,077

10-Dec-18 C Partners Group Holding AG; GSO Capital Partners; Blackstone Tactical Opportunities Fund; and Harvest Partners SCF

Acrisure ABRY Partners 2,000

31-May-18 C The Bank of Nova Scotia MD Financial Management Inc Canadian Medical Association 1,996

17-Sep-18 C Western & Southern Financial Group Inc Gerber Life Insurance Co Nestle SA 1,550

13-May-18 C Cadence Bancorporation State Bank Financial Corporation Nestle SA 1,503

C= Completed; P= Pending

Top 15 Announced Deals for Full Year Ending 31 December 2018 — North American Targets Financial Services Sector

mergermarket.com

Mergermarket 20Deal Drivers Americas FY 2018Financial Services

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Num

ber

of d

eals

0

100

200

300

400

500

600

2018201720162015201420132012

2016

30

1413

21

20

1926

14

31

133

2 1

3

9

1

8 5

4

7

16

10

33

3

7

210

274

182198

175 203

254

250

256239 240

214222

200

24

0

30

60

90

120

150

180

210

240

2018201720162015201420132012

Valu

e (U

S$

bn)

US$26.2

US$19.7

US$6.6

US$9.1

US$27.7

US$14.5

US$12.5US$10.9

US$xx

US$12.2

US$18.9

US$7.4

US$15.8

US$16.6

US$6.5

US$11.8

US$28.7

US$25.6

US$4.8

US$11.2

US$21.1

US$32.7

US$11.2

US$10US$

15.9

US$80.8

US$26.4

US$16.9

US$149.6

US$18.4 US$

41.1

US$16.6

US$12.9

US$32.1

US$12.8

US$5.7

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 21

mergermarket.com

Deal Drivers Americas FY 2018Financial Services

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0

20

40

60

80

100

120

140

160

180

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2012 2013 2014 2015 2016 2017 2018

Valu

e (U

S$

m)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 22

mergermarket.com

Deal Drivers Americas FY 2018Financial Services

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League tables

2018 2017 Company Name Value (USD m)

Number of Deals

1 8 Sullivan & Cromwell 25,564 31

2 1 Skadden Arps Slate Meagher & Flom 25,268 23

3 9 Sidley Austin 18,403 23

4 4 Kirkland & Ellis 7,607 23

5 2 Simpson Thacher & Bartlett 24,437 21

6 11 Willkie Farr & Gallagher 13,374 21

7 3 Wachtell, Lipton, Rosen & Katz 25,327 20

8 6 Alston & Bird 4,570 20

9 27 Luse Gorman Pomerenk & Schick 2,266 19

10 18 Goodwin Procter 1,172 19

2018 2017 Company Name Value (USD m)

Number of Deals

1 3 Sullivan & Cromwell 25,564 31

2 12 Wachtell, Lipton, Rosen & Katz 25,327 20

3 9 Skadden Arps Slate Meagher & Flom 25,268 23

4 2 Simpson Thacher & Bartlett 24,437 21

5 19 Sidley Austin 18,403 23

6 73 Clifford Chance 14,156 8

7 5 Davis Polk & Wardwell 14,041 11

8 11 Willkie Farr & Gallagher 13,374 21

9 13 Debevoise & Plimpton 12,414 10

10 15 Cleary Gottlieb Steen & Hamilton 9,767 5

2018 2017 Company Name Value (USD m)

Number of Deals

1 8 JPMorgan 38,350 22

2 1 Goldman Sachs & Co 36,669 26

3 10 Citi 28,583 17

4 9 Sandler O'Neill & Partners 22,034 77

5 11 Bank of America Merrill Lynch 21,607 16

6 4 Barclays 18,968 20

7 12 Stifel/KBW 12,554 62

8 18 Deutsche Bank 12,267 14

9 2 Evercore 12,099 14

10 7 Morgan Stanley 9,781 13

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Sandler O'Neill & Partners 22,034 77

2 2 Stifel/KBW 12,554 62

3 4 Goldman Sachs & Co 36,669 26

4 12 Raymond James & Associates 4,729 24

5 3 JPMorgan 38,350 22

6 9 FIG Partners 3,600 21

7 14 Barclays 18,968 20

8 8 Stephens 5,326 19

9 15 Hovde Financial 1,751 19

10 6 Citi 28,583 17

Financial advisors by deal countFinancial advisors by value

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Financial Services.

Legal advisors by value Legal advisors by deal count

mergermarket.com

Mergermarket 23FY 2018Financial Services

Deal Drivers Americas

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Part of the Acuris report on global M&A activity

Industrials, Manufacturing & Engineering

Mergermarket 24Deal Drivers Americas

mergermarket.com

FY 2018Industrials, Manufacturing & Engineering

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Further informationGet in touch

Industrial businesses are likely to continue to trade at high EBITDA multiples in 2019, with aerospace and defense, robotics and electrical products among the hot spaces for activity, according to dealmakers interviewed by Mergermarket.

The industrials, manufacturing & engineering sector had US$166.2bn in total value for deals in 2018, compared to US$127.5bn in 2017, according to Mergermarket data.

There is a likelihood that large financially driven, highly leveraged deals will be harder to do this year, such as those with 4x to 6x EBITDA worth of senior debt, as industry players fear there may be a peak in the market. “No one wants to be the guy paying full price in the fourth quarter of 2007,” said Paul Weisbrich, managing director at D.A. Davidson.

“Buyers and lenders are getting more careful on highly leveraged transactions,” Weisbrich noted. Strategics, while disciplined, are still interested in deals. But middle market multiples for industrial companies remain stubbornly high. With about 5,000 private equity (PE) groups vying for middle market companies, he said “there’s a gross imbalance between the number of buyers and available companies to be acquired.”

Industrial middle market companies are trading at multiples of 7x to 8x EBITDA. The figure has steadily risen over the decades, from 4.5x to 5.5x in the mid-1980s and 5.5 to 6.5 times in the ’90s, Weisbrich said.

Manan K. Shah, a managing partner at Focus Investment Banking, said major deals such as Harris Corporation [NYSE: HRS]/L3 Technologies [NYSE: LLL] and General Dynamics [NYSE: GD]/CSRA were a key focus in aerospace and defense. In 2019, he predicted that electronic warfare, missile defense, unmanned aerial vehicles (UAV) and intelligence will continue to drive M&A. He named SAIC [NYSE: SAIC] as one company hat could be looking to do deals in 2019. In addition, Shah said General Dynamics may continue to be on the hunt for buys on the heels of its US$9.7bn acquisition of CSRA last April.

Commercial aerospace will also continue to be a vibrant market, Shah said. Another area of interest will be technology that goes on Navy ships as the Navy adds to its fleet.

A sector banker predicted that robotics-related systems integration — or helping manufacturers install and program robots — will be a hot space for M&A this year. The current record-high

employment has made finding skilled workers a difficult task, which will push manufacturers to implement more robotics and speed up production, he explained.

As reported by this news service in January, JR Automation Technologies, a builder of manufacturing and distribution automation technology backed by Crestview Partners, is in a sale process that could value the company at a mid-to-high teens EBITDA multiple. The sector banker said this deal could spur further consolidation of North American companies in the robot systems integration space, most of them small. The deals will be driven by PE firms looking for roll-ups or buyers like Canada-based ATS Automation Tooling Systems [TSX: ATA]. If these integrators are working for a thriving industry such as medical, consumer products or clean energy — as opposed to automotive — multiples could be as high as 10x, he said.

Electrical product groups servicing power grids are also prime roll-up candidates, for majors such as ABB [NYSE: ABB] and Hubbell [NYSE: HUBB], the banker added.

Richard Tekneci

Marlene Givant Star

Sam Weisberg

Industrials, Manufacturing & EngineeringOverview

Mergermarket 25Deal Drivers Americas

mergermarket.com

FY 2018Industrials, Manufacturing & Engineering

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Top deals

AnnouncedDate

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

13-Nov-18 P Caisse de Depot et Placement du Quebec; and Brookfield Business Partners Johnson Controls International plc (Power Solutions business) Johnson Controls International plc 13,244

21-May-18 P Wabtec Corporation GE Transportation General Electric Company 11,100

6-Aug-18 P Amcor Limited Bemis Company Inc 6,709

10-Apr-18 C Tenneco Inc Federal-Mogul Icahn Enterprises 5,400

29-Jan-18 C WestRock Company KapStone Paper and Packaging Corporation 4,843

4-Jan-18 C Brookfield Business Partners Westinghouse Electric Company 4,600

20-Jul-18 C UPL Corporation Limited Arysta LifeScience Corporation Element Solutions Inc 4,200

22-Apr-18 C BC Partners Limited; and Ontario Teachers' Pension Plan GFL Environmental Inc Macquarie Group Limited; Hawthorn Equity Partners; and HPS Investment Partners 4,017

16-Jul-18 P CVC Capital Partners Limited; and Messer Group GmbH Linde AG (Gases business in North America and certain business activities in South America)

Linde AG 3,579

29-Oct-18 C Honeywell International Inc (Shareholders) Resideo Technologies Inc Honeywell International Inc 3,259

13-Sep-18 P KCC Corporation; Wonik QNC Corporation; and SJL Partners Momentive Performance Materials Inc 3,127

7-Mar-18 C Altra Industrial Motion Corp Thomson Industries Inc; Kollmorgen Corporation; Portescap; and Jacobs Vehicle Systems Inc

Fortive Corporation 2,961

15-Feb-18 C LyondellBasell Industries NV A. Schulman Inc 2,884

10-Oct-18 C GFL Environmental Inc Waste Industries USA Inc Equity Group Investments; HPS Investment Partners; PointNorth Capital Inc; and Poole family

2,825

26-Jul-18 P Novelis Inc Aleris Corporation Oaktree Capital Management; and Apollo Global Management 2,580

C= Completed; P= Pending

Top 15 Announced Deals for Full Year Ending 31 December 2018 — North American Targets Industrials, Manufacturing & Engineering Sector

Mergermarket 26Deal Drivers Americas

mergermarket.com

FY 2018Industrials, Manufacturing & Engineering

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0

100

200

300

400

500

600

700

800

900

1,000

1,100

2018201720162015201420132012

Num

ber

of d

eals

4030

3235

50

41

4127

3827

4230

2

1

6

6

7

10

6

8

8

13

81

4

42

52

516

289

452

253

302351

566 572630

677728

296

282

259

15

0

50

100

150

200

250

2018201720162015201420132012

Valu

e (U

S$

bn)

US$22.5

US$39

US$10.5US$15.3

US$40.6

US$27.1

US$12.1

US$17.6

US$23.7

US$50.5

US$14.8

US$17.7

US$10

US$14.7

US$21

US$10.7

US$34.5

US$35.6

US$9.7

US$10.8

US$17.5

US$25.4

US$50.3

US$14.7

US$38.2

US$17.6

US$16.6

US$48.1

US$36.5

US$43.8

US$29.9

US$136.4

US$53.5

US$156.2

US$6.5

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 27Deal Drivers Americas

mergermarket.com

FY 2018Industrials, Manufacturing & Engineering

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Valu

e (U

S$

m)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

0

25

50

75

100

125

150

175

200

225

250

275

300

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 28Deal Drivers Americas

mergermarket.com

FY 2018Industrials, Manufacturing & Engineering

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 23 Kirkland & Ellis 46,270 76

2 8 Cleary Gottlieb Steen & Hamilton 44,157 26

3 3 Latham & Watkins 41,562 46

4 26 Weil Gotshal & Manges 39,115 27

5 2 Davis Polk & Wardwell 38,652 15

6 24 Baker McKenzie 31,415 31

7 27 Jones Day 30,671 88

8 20 Stikeman Elliott 30,003 26

9 5 Cravath, Swaine & Moore 29,795 12

10 54 Simpson Thacher & Bartlett 25,242 20

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Jones Day 30,671 88

2 1 Kirkland & Ellis 46,270 76

3 3 Latham & Watkins 41,562 46

4 4 DLA Piper 20,185 37

5 5 Baker McKenzie 31,415 31

6 36 Paul Hastings 2,836 30

7 7 Weil Gotshal & Manges 39,115 27

8 21 Cleary Gottlieb Steen & Hamilton 44,157 26

9 13 Stikeman Elliott 30,003 26

10 11 Winston & Strawn 7,590 26

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Goldman Sachs & Co 102,358 61

2 1 Lincoln International 5,414 50

3 9 Robert W. Baird & Co 5,255 41

4 3 Houlihan Lokey 2,493 36

5 8 JPMorgan 57,240 35

6 33 Barclays 40,815 29

7 7 Lazard 34,756 29

8 6 Rothschild & Co 14,553 27

9 4 Deloitte 1,894 26

10 15 William Blair & Company 6,585 25

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 102,358 61

2 7 JPMorgan 57,240 35

3 5 Credit Suisse 45,786 22

4 21 Barclays 40,815 29

5 2 Morgan Stanley 36,994 23

6 15 Deutsche Bank 34,984 16

7 12 Lazard 34,756 29

8 3 Citi 34,494 21

9 14 HSBC 30,466 8

10 4 Bank of America Merrill Lynch 29,921 12

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials — electronics, automation and products and services; and Manufacturing — other.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and cover the following sectors: Automotive; Chemicals & Materials; Industrials — electronics, automation and products and services; and Manufacturing — other.

Mergermarket 29Deal Drivers Americas

mergermarket.com

FY 2018Industrials, Manufacturing & Engineering

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Part of the Acuris report on global M&A activity

Energy, Mining, Oil & Gas

Mergermarket 30Deal Drivers Americas

mergermarket.com

FY 2018Energy, Mining, Oil & Gas

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Further informationGet in touch

Energy businesses, particularly those involved in exploring for oil and gas, are facing a challenging and turbulent M&A environment to start 2019, investors and advisors in the space said.

A pattern of private operators leasing an area with shale potential, proving that potential, then selling to a public company bolstered energy M&A for the past 10-plus years, and indeed into the first half of 2018. But that cycle may not work in the current climate.

“We had a real active period from 2005 to now,” said Buddy Clark, partner in Houston law firm Haynes & Boone. “The market may be in a transition back to historical conditions.”

For Benjamin Dell, managing director of activist investor Kimmeridge Energy Management, companies in the shale boom have produced growth at the expense of shareholder returns, and now investors are punishing companies for it by shunning the space or building a meaningful stake and pushing for change.

Elliott Management made just that sort of push on 7 January when it offered to buy out QEP Resources [NYSE: QEP] for US$2bn, or US$8.75 per share. Elliott holds a 4.9% stake in QEP, which has said it will consider the offer and other alternatives.

Dell said exploration and production companies generally produced a 9%-10% return on capital before the emergence of costly shale and unconventional production.

Since 2008, Kimmeridge research puts the industry’s average return at 4.2%.

The US energy sector has “a lot of companies that are around but shouldn’t be, and therefore needs to see mergers and acquisitions,” said William Costello, senior portfolio manager with Westwood Holdings. The tricky part is determining a catalyst for deals this year, he said.

Should deep-pocketed super-majors look to make acquisitions, they will first opt for privately owned and private equity (PE)-backed targets, because such acquisitions are easier to close than acquisitions of public companies, Costello said.

Clark said the most likely place for buyers to step up this year is in West Texas’ Permian Basin, ground zero for US oil production. “They’re all circling around the Permian, but all these other basins are like Jan Brady.”

Dell, whose firm Kimmeridge pushed for Resolute Energy [NYSE: REN] to pursue a deal before it struck a deal to be acquired by Cimarex [NYSE: XEC], said it will fall to the investors who have stayed with the sector to push for consolidation.

He said that small and mid-cap E&P operators should look for zero-premium combinations, which would effectively lower costs and result in more efficient and profitable operators.

Costello concurred that more energy investors are starting to push on companies to realize value. Some public companies are getting the message, but shifting slowly. He predicted a gradual shift from E&P’s growth posture to an emphasis on returns.

“It’s an evolution, not a revolution,” he said.

With public operators reining in spending, the PE-backed operators that have aspired to sell to them appear stuck in a holding pattern.

Clark said he viewed the most likely buyer of a PE-backed issuer to be another energy PE fund looking to deploy its capital.

“There are a lot of interested sellers, at the right price, but not a lot of interested buyers,” said Clark.

Chad Watt

Energy, Mining, Oil & GasOverview

Mergermarket 31Deal Drivers Americas

mergermarket.com

FY 2018Energy, Mining, Oil & Gas

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Top deals

AnnouncedDate

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

1-Aug-18 C Energy Transfer Equity Energy Transfer Partners (97.64% stake) 59,612

30-Apr-18 C Marathon Petroleum Corporation Andeavor Corporation 31,327

3-Jan-18 C Dominion Energy Inc SCANA Corporation 14,250

26-Jul-18 C BP Plc Petrohawk Energy Corporation BHP Billiton Ltd 10,500

17-May-18 C Williams Companies Inc Williams Partners (26.71% stake) 10,467

8-Nov-18 P Western Gas Equity Partners Western Gas Partners (67.15% stake) 9,593

28-Mar-18 C Concho Resources Inc RSP Permian Inc 9,481

18-Sep-18 C Enbridge Inc Enbridge Energy Partners (66.06% stake) 9,201

14-Aug-18 C Diamondback Energy Inc Energen Corporation 9,116

22-Oct-18 C Enlink Midstream EnLink Midstream Partners (78% stake) 9,037

23-Apr-18 C CenterPoint Energy Inc Vectren Corporation 8,089

1-Nov-18 C Encana Corporation Newfield Exploration Company 7,654

22-Jan-18 C Enbridge Inc Spectra Energy Partners (35.68% stake) 7,347

21-May-18 C NextEra Energy Inc Gulf Power Company Southern Company 5,750

30-Sep-18 L Husky Energy Inc MEG Energy Corporation 4,860

C= Completed; P= Pending; L= Lapsed

Top 15 Announced Deals for Full Year Ending 31 December 2018 — North American Targets Energy, Mining, Oil & Gas Sector

Mergermarket 32Deal Drivers Americas

mergermarket.com

FY 2018Energy, Mining, Oil & Gas

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0

100

200

300

400

500

600

700

800

2018201720162015201420132012

Num

ber

of d

eals

14

18

95

11

8

1117

53

54

125

65

71

13

74

70

52

56

72

6142

15

72

13

19

82

14

51

10

270

12496

391

302

275

149 161 143 146

249

320302

0

50

100

150

200

250

300

350

400

2018201720162015201420132012

Valu

e (U

S$

bn)

US$34.2

US$19.5US$19.6

US$40.2

US$26.5

US$71.8

US$26.8

US$30.3

US$51

US$18.7US$21.6

US$48

US$57.5

US$25.8

US$21.1

US$15.5

US$130.8

US$18

US$21.4

US$24.5

US$20.3

US$201.4

US$161.6

US$196.9

US$185.4

US$39.1

US$85.3

US$64

US$38.5

US$67.2

US$83.9

US$49.1

US$64.3

US$57.6

US$30.2

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 33Deal Drivers Americas

mergermarket.com

FY 2018Energy, Mining, Oil & Gas

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Valu

e (U

S$

m)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

0

20

40

60

80

100

120

140

160

180

200

220

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 34Deal Drivers Americas

mergermarket.com

FY 2018Energy, Mining, Oil & Gas

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Vinson & Elkins 136,639 69

2 1 White & Case 124,417 32

3 15 Cleary Gottlieb Steen & Hamilton 118,124 9

4 4 Latham & Watkins 113,737 48

5 36 Richards Layton & Finger 98,940 15

6 7 Sullivan & Cromwell 91,838 20

7 12 Baker Botts 72,249 37

8 65 Potter Anderson & Corroon 70,410 4

9 66 Morgan Lewis & Bockius 60,506 8

10 9 Shearman & Sterling 60,124 20

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Vinson & Elkins 136,639 69

2 3 Kirkland & Ellis 45,757 58

3 2 Latham & Watkins 113,737 48

4 6 Baker Botts 72,249 37

5 4 Blake, Cassels & Graydon 19,730 35

6 7 White & Case 124,417 32

7 15 Gibson, Dunn & Crutcher 59,624 32

8 8 Bracewell 49,209 31

9 9 Locke Lord 12,215 30

10 14 Orrick Herrington & Sutcliffe 4,736 28

2018 2017 Company Name Value (USD m)

Number of Deals

1 6 Goldman Sachs & Co 120,386 51

2 3 Citi 159,360 46

3 1 Evercore 53,221 38

4 4 RBC Capital Markets 36,529 37

5 8 Barclays 155,602 33

6 2 Jefferies 33,635 30

7 5 JPMorgan 47,866 29

8 9 Scotiabank 38,028 28

9 7 Tudor, Pickering, Holt & Co 44,853 25

10 17 Credit Suisse 41,007 25

2018 2017 Company Name Value (USD m)

Number of Deals

1 5 Citi 159,360 46

2 2 Barclays 155,602 33

3 6 Goldman Sachs & Co 120,386 51

4 1 Morgan Stanley 80,451 23

5 7 Evercore 53,221 38

6 10 Bank of America Merrill Lynch 48,690 22

7 3 JPMorgan 47,866 29

8 15 Tudor, Pickering, Holt & Co 44,853 25

9 14 Credit Suisse 41,007 25

10 13 Scotiabank 38,028 28

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy; Mining; Oil; and Gas .

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals.The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Energy; Mining; Oil; and Gas .

Mergermarket 35Deal Drivers Americas

mergermarket.com

FY 2018Energy, Mining, Oil & Gas

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Part of the Acuris report on global M&A activity

Consumer

Mergermarket 36Deal Drivers Americas

mergermarket.com

FY 2018Consumer

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Further informationGet in touch

Seismic shifts in consumer behavior continue to drive an active M&A market across all sub-segments, according to sources. With a healthy economy and a broadening buyer pool, valuations are expected to remain strong throughout 2019.

Deal volume, however, may continue to slow as strategics become more discerning with quality of targets and upside potential, said Jared Stein, partner at retail-focused private equity firm Monogram Capital.

Last year, around US$123bn was spent on consumer-related deals, compared with nearly US$177.7bn in 2017, according to Mergermarket data. Total deal volume was down by 14.8% in 2018, which saw a total of 525 consumer-related deals struck, compared with 2017, which saw 616 deals.

Despite pressure from competing buyers, strategics are showing more caution after some were burned by hasty deals that did not produce as expected, said Stein. Marginal assets that would have easily traded two years ago might sit on the sidelines longer this year, or trade at lower values, he said.

Demand will remain strong for premium assets, though, as conglomerates in food, beverage and beauty re-structure outdated portfolios to align with the health-focused, sustainable and “better-for-you” values of today’s consumer. Premium assets in the growing snack space could fetch 3x to 4x revenue, Stein noted.

Unexpected bidders have made competition even stiffer, said Rich Gersten, partner at retail-focused private equity firm Tengram Capital, pointing to household products provider Colgate-Palmolive [NYSE: CL], which entered the skincare space by acquiring EltaMD and PCA Skin in December 2017. Meanwhile, after exiting its specialty beauty business via a US$12.5bn sale to Coty Inc. in 2016, Procter & Gamble [NYSE: PG] has re-emerged as a player with its late-2018 acquisition of beauty startup Walker & Company Brands, which targets men and women of color.

As M&A in cosmetics cools down, activity in skincare is heating up, said Gersten, pegging valuations around 3x revenue. A bellwether target to watch this year, he noted, is skincare brand Drunk Elephant, which is exploring a sale, Mergermarket first reported in December. The asset could fetch a US$1bn valuation, he said, just as makeup company Anastasia Beverly Hills did in its mid-2018 stake sale to investment firm TPG.

Stiffer strategic competition holds true in the beverage space, too, said Nicole Fry, a managing director with investment bank Cascadia Capital, who noted global brewery AB InBev [NYSE: BUD] as an alcohol strategic that aims to increase its non-alcohol presence, as beer sales continue to fall.

Pepsi [NASDAQ: PEP] and Coca-Cola [NYSE: KO] face similar issues amid falling carbonated

soda sales, said Fry, noting Pepsi’s whopping US$3.2bn acquisition last year of at-home soda-maker SodaStream. “Functional” health-oriented brands with US$30m to US$50m in revenue will attract strategics, she said, with valuations around 2x revenue and as high as 4x in a price-war. Sparkling seltzers, cold brew coffee and kombucha (a fermented tea drink) are on-trend segments prime for M&A action this year, she said. Additionally, the industry is watching stalwart Constellation Brands [NYSE: STZ], a major beer and spirits producer, this year to see how it responds to the nascent cannabis industry.

Meanwhile, brick-and-mortar retail and apparel continues to face headwinds and weak valuations, said Janki Gandhi, a managing director with investment bank Lincoln International. Nonetheless, hot areas that could draw interest this year are sports apparel, technology apparel, outerwear and athleisure, she said, noting growing brands Alo Yoga and Carbon38 as companies to watch.

Dayna Fields

ConsumerOverview

Mergermarket 37Deal Drivers Americas

mergermarket.com

FY 2018Consumer

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Top deals

AnnouncedDate

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

29-Jan-18 C Keurig Green Mountain Inc Dr Pepper Snapple Group Inc 26,801

20-Dec-18 C Altria Group Inc JUUL Labs Inc (35% stake) 12,800

27-Jun-18 C ConAgra Brands Inc Pinnacle Foods Inc 10,778

23-Feb-18 C General Mills Inc Blue Buffalo Pet Products Inc The Invus Group 7,935

7-May-18 C Nestle SA Starbucks Corporation (Consumer packaged goods and foodservice distribution business) Starbucks Corporation 7,150

20-Feb-18 L Albertsons Companies Inc Rite Aid Corporation 5,537

26-Jul-18 C United Natural Foods Inc SuperValu Inc 2,816

16-Jan-18 C Ferrero SpA Nestle SA (US confectionery business) Nestle SA 2,800

19-Jun-18 C Bain Capital Varsity Brands Inc Charlesbank Capital Partners; and Partners Group Holding AG 2,500

20-Aug-18 C Tyson Foods Inc Keystone Foods Marfrig Global Foods SA 2,160

5-Feb-18 C EG Group The Kroger Co (Convenience store business) The Kroger Co 2,150

4-Apr-18 C The J.M. Smucker Company Ainsworth Pet Nutrition L Catterton; and Lang Family 1,900

15-Nov-18 P CJ Cheiljedang Corp Schwan's Company (80% stake) Irrevocable Trust for Grandchildren; and Marvin M. Schwan 1992 Great Great Grandchildren’s Trust 1,844

4-Apr-18 C The Pritzker Group C.H. Guenther & Son Inc 1,400

27-Jun-18 C Centric Brands Inc Global Brands Group Holding Limited (North American kids and accessories businesses); and Global Brands Group Holding Limited (Majority of West Coast and Canadian fashion businesses)

Global Brands Group Holding Limited 1,380

C= Completed; P= Pending; L= Lapsed

Top 15 Announced Deals for Full Year Ending 31 December 2018 — North American Targets Consumer Sector

Mergermarket 38Deal Drivers Americas

mergermarket.com

FY 2018Consumer

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Valu

e (U

S$

bn)

US$7.7

US$25

US$8.9

US$7.7

US$10.7

US$9

US$10.7

US$7.4

US$7.9

US$9

US$8.1

US$7.6

US$10.5

US$8.5US$

3.9

US$44.9 US$

59.1

US$84

US$116.8

US$28.7

US$104.5

US$65.5

US$28.4

US$23.8

US$27.4

US$26.6

US$19.5

US$30.4

US$13.3 US$

9

US$30.5

US$24.6

US$14.3

US$27.9

US$12.4

0

100

200

300

400

500

600

700

2018201720162015201420132012

Num

ber

of d

eals

3

5

7

64

3

4

9

58

524

22

156

26

24

1921

29

23

21

109

5

32

22

5

169

122126

132

169

172

329

387400423

339

277 261

25 25

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 39Deal Drivers Americas

mergermarket.com

FY 2018Consumer

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20

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

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2012 2013 2014 2015 2016 2017 2018

Valu

e (U

S$

m)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 40Deal Drivers Americas

mergermarket.com

FY 2018Consumer

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 3 Skadden Arps Slate Meagher & Flom 58,267 14

2 19 White & Case 36,312 8

3 7 Jones Day 30,189 30

4 67 Morgan Lewis & Bockius 27,770 5

5 103 McDermott Will & Emery 27,522 16

6 77 Sidley Austin 27,101 5

7 10 Cleary Gottlieb Steen & Hamilton 26,742 8

8 31 Gibson, Dunn & Crutcher 23,710 14

9 23 Fried Frank Harris Shriver & Jacobson 22,104 6

10 2 Kirkland & Ellis 21,112 47

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 21,112 47

2 2 Jones Day 30,189 30

3 3 DLA Piper 1,704 22

4 4 Latham & Watkins 5,113 20

5 5 Weil Gotshal & Manges 4,997 18

6 14 McDermott Will & Emery 27,522 16

7 8 Goodwin Procter 3,163 16

8 13 Stikeman Elliott 2,366 16

9 11 Paul Weiss Rifkind Wharton & Garrison 7,623 15

10 6 Ropes & Gray 4,484 15

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Goldman Sachs & Co 87,215 31

2 1 Houlihan Lokey 3,277 26

3 5 JPMorgan 58,666 19

4 14 Bank of America Merrill Lynch 38,542 17

5 3 Lazard 15,952 17

6 13 Deloitte 10,046 17

7 7 KPMG 4,722 15

8 8 Robert W. Baird & Co 974 15

9 9 Morgan Stanley 37,431 13

10 4 Barclays 7,639 13

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 87,215 31

2 3 JPMorgan 58,666 19

3 9 Credit Suisse 52,396 7

4 8 Bank of America Merrill Lynch 38,542 17

5 7 Morgan Stanley 37,431 13

6 18 Duff & Phelps 26,801 4

7= - AFW 26,801 1

7= 32 BDT & Company 26,801 1

9 6 Centerview Partners 22,524 8

10 16 Rothschild & Co 21,930 10

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer — retail, food and other.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sector: Consumer — retail, food and other.

Mergermarket 41Deal Drivers Americas

mergermarket.com

FY 2018Consumer

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Part of the Acuris report on global M&A activity

Technology, Media & Telecom

Mergermarket 42Deal Drivers Americas

mergermarket.com

FY 2018Technology, Media & Telecom

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Further informationGet in touch

Technological advancements that enhance industries like manufacturing and automotive will drive technology, media & telecom (TMT) deals in 2019, as will the continued growth of artificial intelligence, cloud computing and advanced security solutions, said dealmakers.

“Between AI, robotics, quantum and cloud computing, VR, gaming, 5G, and cybersecurity there are a lot of players and places to make investments,” said Andrew Sherman, partner at Seyfarth Shaw LLP.

Sherman and others also anticipate investments in fintech and business-to-business and business-to-consumer software, particularly from financial sponsors.

“Software is still king. It has size, it has growth,” adds Brad Gevurtz, managing director at D.A. Davidson. Private equity sees solid bets in software plays because of recurring revenue and quick scalability, he adds.

The cloud and security should continue to drive dealmaking. Bellwethers here include Cisco’s [NASDAQ: CSCO] purchase of privately held cloud-based security tech business Duo Security for US$2.4bn in August 2018 and Thoma Bravo’s October 2018 US$1.8bn acquisition of Imperva [NASDAQ: IMPV].

“Most people may have been hacked or compromised. I think that investment and deal flow is fueled by this recognition,” said

chairman and CEO Jim Miller of biometrics tech company ImageWare Systems.

Miller expects continued investments from both telecom and enterprise software players in specialized security technologies like biometrics as data grows exponentially.

Business-to-business software companies, particularly in marketing and consumer analytics, should see interest this year after two high profile transactions in 2018, according to Ted Smith, president at Union Square Advisors. Those two deals were SAP’s [NYSE: SAP] purchase of consumer survey tech business Qualtrics for US$8bn in November and Adobe’s [NASDAQ: ADBE] acquisition of cloud-based B2B marketing engagement company Marketo for US$4.8bn in September.

Large software acquirers will show interest in targets that help enterprise customers interact with clients more intelligently through displays and dashboards curated with advanced analytics.

“We think that that is absolutely a frontier, it’s an area that a lot of the large software acquirers care about,” Smith said.

Richard Milam, CEO of EnableSoft, a robotic process automation company, adds enterprise companies are using AI to speed up back-office processes. Growing companies providing such solutions should see buyer attention, he said.

Advancements in edge computing, AI and machine learning, as well as security and enterprise technology, will also fuel deals in the industrials, automotive and manufacturing sectors, adds Smith.

“We are seeing a lot of interesting activity around the idea of machine identity protection to make sure that when new devices are interconnected in an IoT world, they don’t represent new threat vectors,” said Smith.

Smith adds industrial companies like General Electric [NYSE: GE] should continue to invest in tech solutions in 2019 to help secure infrastructure like oil and gas assets, power plants and railroads. This will be pushed by advancement of networking technology generally, as in the expansion of 5G, making connectivity for complex data faster and more reliable.

The interest extends to automotive companies and other logistics players looking for technology plays to continue developing driverless vehicles.

Investments by both Softbank, which invested US$2.3bn in General Motors’ [NYSE: GM] self-driving car unit in May 2018, and Honda [NYSE: HMC], which announced a US$2.8bn investment in the venture in October the same year, areseen by Smith and others as representative of viable support for driverless vehicles. It also should spur dealmaking in adjacent areas like freight shipments and trucking.

Thomas Zadvydas

Technology, Media & TelecomOverview

Mergermarket 43Deal Drivers Americas

mergermarket.com

FY 2018Technology, Media & Telecom

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Top deals

AnnouncedDate

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

29-Apr-18 P T-Mobile USA Inc Sprint Corporation SoftBank Group Corp 60,806

28-Oct-18 P IBM Corporation Red Hat Inc 32,556

2-Jul-18 C VMware Inc (Tracking stock) Dell Technologies Inc 20,996

11-Jul-18 C Broadcom Inc CA Technologies 17,987

1-Mar-18 C Microchip Technology Incorporated Microsemi Corporation 9,836

31-Jan-18 L FUJIFILM Holdings Corporation Xerox Corporation (50.1% stake) 8,600

11-Nov-18 C SAP SE Qualtrics Accel; Sequoia Capital; and Insight Venture Partners 8,000

4-Jun-18 C Microsoft Corporation GitHub Inc Sequoia Capital; Institutional Venture Partners; Andreessen Horowitz; SV Angel; and Thrive Capital 7,500

8-Nov-18 P CommScope Holding Company Inc ARRIS International plc 7,176

11-Sep-18 P Renesas Electronics Corporation Integrated Device Technology Inc 7,004

3-Dec-18 P Nexstar Media Group Inc Tribune Media Company 6,112

20-Mar-18 C Salesforce.com Inc MuleSoft Inc New Enterprise Associates; and Lightspeed Venture Partners 5,905

12-Nov-18 C Veritas Capital Fund Management Athenahealth Inc (91% stake) 4,943

20-Sep-18 C Adobe Systems Incorporated Marketo Inc Vista Equity Partners 4,750

25-Jun-18 C Gray Television Inc Raycom Media Inc 3,547

C= Completed; P= Pending; L= Lapsed

Top 15 Announced Deals for Full Year Ending 31 December 2018 — North American Targets Technology, Media & Telecom Sector

Mergermarket 44Deal Drivers Americas

mergermarket.com

FY 2018Technology, Media & Telecom

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0

250

500

750

1,000

1,250

1,500

2018201720162015201420132012

Num

ber

of d

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479

64

57

11

11

496

4541 45

67

408

522

57

47

3435

467

40

384

63

55

4

7

6

11

9

14 13

5

18

135

28

477

599 595

413

46

419

849801

722

0

50

100

150

200

250

300

350

400

450

2018201720162015201420132012

Valu

e (U

S$

bn)

US$31

US$56.5

US$36.5

US$16.5

US$30.9

US$90.7

US$16.7US$25.8

US$42.1

US$48.5

US$19.6

US$29.9

US$26.4

US$37.3

US$23.4

US$34.8

US$48.3

US$21.9

US$39.4

US$19.7US$28.2

US$13.8

US$12.6

US$170.2

US$121.1

US$262.6

US$190.4

US$21.3

US$68.6

US$33.5

US$169.7

US$107.9

US$62.4

US$67.3

US$56.9

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 45Deal Drivers Americas

mergermarket.com

FY 2018Technology, Media & Telecom

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

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Valu

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 46Deal Drivers Americas

mergermarket.com

FY 2018Technology, Media & Telecom

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (m)

Number of Deals

1 2 Skadden Arps Slate Meagher & Flom 160,287 30

2 6 Simpson Thacher & Bartlett 130,332 18

3 27 Morrison & Foerster 123,413 25

4 23 Wachtell, Lipton, Rosen & Katz 118,759 14

5 19 Latham & Watkins 108,882 41

6 9 Allen & Overy 105,891 18

7 8 Hogan Lovells International 96,821 44

8 4 Cravath, Swaine & Moore 83,399 12

9 40 Goodwin Procter 82,772 135

10 10 Fried Frank Harris Shriver & Jacobson 82,185 20

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Kirkland & Ellis 58,536 149

2 1 Goodwin Procter 82,772 135

3 4 Cooley 21,355 104

4 3 DLA Piper 69,269 101

5 9 Wilson Sonsini Goodrich & Rosati 51,075 80

6 8 Jones Day 24,296 66

7 6 Morgan Lewis & Bockius 5,236 62

8 12 Gunderson Dettmer Stough Villeneuve Franklin & Hachigian 22,015 61

9 18 Fenwick & West 21,409 57

10 7 Orrick Herrington & Sutcliffe 9,717 51

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 171,274 53

2 2 Morgan Stanley 249,083 52

3 10 Raymond James & Associates 5,196 51

4 3 JPMorgan 213,712 41

5 7 William Blair & Company 14,745 37

6 9 Evercore 160,431 36

7 5 Houlihan Lokey 3,351 33

8 6 Jefferies 11,375 27

9 20 Bank of America Merrill Lynch 109,845 25

10 8 Citi 44,689 22

2018 2017 Company Name Value (USD m)

Number of Deals

1 6 Morgan Stanley 249,083 52

2 2 JPMorgan 213,712 41

3 1 Goldman Sachs & Co 171,274 53

4 8 Evercore 160,431 36

5 13 Barclays 125,677 19

6 22 PJT Partners 112,797 5

7 7 Credit Suisse 110,103 21

8 17 Bank of America Merrill Lynch 109,845 25

9 5 Deutsche Bank 99,656 16

10 4 Centerview Partners 71,955 9

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer — software, hardware and semiconductors; Telecommunications — hardware; Internet/e-Commerce; Media; and Telecommunications — carriers.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Computer — software, hardware and semiconductors; Telecommunications — hardware; Internet/e-Commerce; Media; and Telecommunications — carriers.

Mergermarket 47Deal Drivers Americas

mergermarket.com

FY 2018Technology, Media & Telecom

Page 48: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Part of the Acuris report on global M&A activity

Life Sciences & Healthcare

Mergermarket 48Deal Drivers Americas

mergermarket.com

FY 2018Life Sciences & Healthcare

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Further informationGet in touch

Pharma’s appetite for biotechnology companies as well as consolidation in the healthcare delivery sector is expected to fuel more healthcare M&A activity this year, industry experts said.

Pharma M&A got off to a roaring start this year, with Bristol-Myers Squibb’s [NYSE: BMY] US$84.5bn acquisition of Celgene [NASDAQ: CELG], creating a large pharma player with a significant product portfolio across cardiology, oncology and immunology therapeutic areas.

“Their checkbooks are open,” said one sector banker, referring to large pharma, “they’re starting to look. They feel in this market that the environment has changed enough that they can get some deals done,” he said, citing the stock market pullback in December.

GlaxoSmithKline’s [NYSE: GSK] US$4.3bn acquisition of Tesaro in late November and Eli Lilly’s [NYSE: LLY] US$7.1bn buyout of Loxo Oncology in January illustrate pharma’s need to acquire new platform technologies and replenish their pipelines. With Tesaro, GSK gains a PARP inhibitor that can treat different forms of cancer, while Loxo gives Eli Lilly a new platform of drugs targeting cancerous tumors based on genetic profile rather than location in the body.

Those deals may have convinced other large drugmakers that they now have cover from investors to explore deals, according to a

second sector banker. “I’m sure that has emboldened some people to see if they can get a deal now,” he said, referring to the scrutiny drugmakers often face in making pricey acquisitions for experimental technologies.

Merck [NYSE: MRK] CEO Ken Frazier said last month at the 2019 J.P. Morgan Healthcare Conference that the company is “very active” in evaluating later-stage assets, adding, “it’s very healthy that valuations have come down.”

Ben Isgur, health research institute leader for PriceWaterhouseCoopers US, noted that as large deals close it could put pressure on others to follow suit. “You have board members looking at execs saying, ‘I saw this in the paper, what are we doing? Are we going to be prepared?’ In a way it does bring up the pressure a bit.”

Large pharma, he said, has showed significant interest in companies that serve clearly-defined niches, such as rare diseases. “Overall drug spending isn’t going up that much, but it is in small niche areas, namely in specialty areas — and oncology is a big piece of that,” Isgur said.

Yet 2018 was largely known for its transformative deals in healthcare services. Namely, Cigna’s [NYSE: CI] tie-up with Express Scripts and CVS’ [NYSE: CVS] acquisition of Aetna, combining two of the nation’s largest insurers with leading pharmacy benefit managers.

Andrew Bhak, managing director and group head of healthcare investment banking at BMO Capital Markets, predicted 2019 will bring more consolidation in the healthcare delivery sector. “We believe that companies operating in and around the healthcare delivery system are primed for dealmaking activity, where the disruptive forces are most directly impacting the business models and traditional value proposition,” he said.

One of the largest healthcare delivery deals of 2018 was the buyout of Kindred Healthcare by Humana [NYSE: HUM] and private equity (PE) firms Welsh, Carson, Anderson & Stowe and TPG Capital for US$4bn. Kindred operates long-term acute care hospitals and rehab centers in the US.

One PE executive who invests in contract research organizations and doctor groups stated that there is potential for a strong year ahead, “We’re seeing a lot of previews and talking to bankers. It seems there’s a very healthy pipeline of assets out there.”

Kevin McCaffrey

Life Sciences & HealthcareOverview

Mergermarket 49Deal Drivers Americas

mergermarket.com

FY 2018Life Sciences & Healthcare

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Top deals

AnnouncedDate

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

22-Jan-18 C Sanofi SA Bioverativ Inc 10,887

11-Jun-18 C Kohlberg Kravis Roberts & Co Envision Healthcare Corporation 9,432

22-Jan-18 C Celgene Corporation Juno Therapeutics Inc (90.37% stake) 8,845

9-Apr-18 C Novartis AG AveXis Inc 7,436

23-Jul-18 C RCCH HealthCare Partners LifePoint Health Inc 5,413

3-Dec-18 C GlaxoSmithKline Plc TESARO Inc 4,297

19-Nov-18 P Colfax Corporation DJO Global Inc Blackstone Group 3,150

21-Sep-18 P Fortive Corporation Advanced Sterilization Products Division Ethicon US Ethicon Inc 2,700

28-Sep-18 C UnitedHealth Group Inc Genoa Healthcare Advent International Corporation; and Nautic Partners 2,500

7-Jan-18 C Celgene Corporation Impact Biomedicines Inc Medicxi Ventures 2,500

14-May-18 C Aurora Cannabis Inc MedReleaf Corp 2,194

21-Apr-18 C Summit Partners; and Optum Inc Sound Inpatient Physicians Inc Fresenius Medical Care AG & Co KGaA 2,150

12-Jun-18 C Platinum Equity LifeScan Inc Johnson & Johnson 2,100

9-Mar-18 C Danaher Corporation Integrated DNA Technologies Inc Summit Partners 2,100

18-Oct-18 C Novartis AG Endocyte Inc 1,937

C= Completed; P= Pending

Top 15 Announced Deals for Full Year Ending 31 December 2018 — North American Targets Life Sciences & Healthcare Sector

Mergermarket 50Deal Drivers Americas

mergermarket.com

FY 2018Life Sciences & Healthcare

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2018201720162015201420132012

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5

3211

2828

27

36

30

231

1922

20

232

25

24

45

11

2

5

8

5

9

12

7

7

58

209250

366352

298311

24

31

206

257256

182

213

214

0

25

50

75

100

125

150

175

200

225

250

2018201720162015201420132012

Valu

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S$

bn)

US$31.3

US$35.1

US$25.2

US$13.2

US$10.2

US$23.1

US$10.4US$14

US$52.2

US$14.9

US$11.2

US$60.7

US$13

US$42.5

US$12.6

US$38.8

US$8.4

US$7.9

US$57.7

US$11.9

US$15.3

US$7.7

US$9.8

US$152.4

US$42

US$25.9

US$24.4

US$23.7

US$33 US$

28US$19.1

US$19.2

US$158.8

US$109.2

US$15

Mergermarket.com

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 51Deal Drivers Americas

mergermarket.com

FY 2018Life Sciences & Healthcare

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Moving average trend lineDeal Value Moving average trend lineDeal Count

Mergermarket 52Deal Drivers Americas

mergermarket.com

FY 2018Life Sciences & Healthcare

Page 53: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 8 Simpson Thacher & Bartlett 28,014 11

2 1 Skadden Arps Slate Meagher & Flom 26,777 14

3 18 Kirkland & Ellis 25,886 39

4 4 Cravath, Swaine & Moore 25,322 6

5 27 Hogan Lovells International 23,379 11

6 5 Sullivan & Cromwell 17,285 6

7 24 Paul Weiss Rifkind Wharton & Garrison 16,450 10

8 6 Freshfields Bruckhaus Deringer 16,285 10

9 3 Fried Frank Harris Shriver & Jacobson 16,204 8

10 20 Weil Gotshal & Manges 15,731 16

2018 2017 Company Name Value (USD m)

Number of Deals

1 5 McDermott Will & Emery 3,443 58

2 1 Goodwin Procter 8,789 56

3 3 Latham & Watkins 9,794 42

4 4 Jones Day 5,964 41

5 2 Kirkland & Ellis 25,886 39

6 12 McGuireWoods 154 38

7 7 DLA Piper 1,185 32

8 8 Cooley 11,918 31

9 6 Ropes & Gray 11,096 31

10 9 Morgan Lewis & Bockius 5,002 24

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 JPMorgan 55,506 30

2 2 Goldman Sachs & Co 45,367 24

3 3 Jefferies 10,808 23

4 7 Houlihan Lokey 1,265 18

5 4 Piper Jaffray & Co 4,945 15

6 24 Kaufman, Hall & Associates 124 14

7 8 Credit Suisse 9,350 12

8 16 Cain Brothers/KBCM 1,363 12

9 17 Rothschild & Co 8,180 11

10 15 William Blair & Company 2,190 11

2018 2017 Company Name Value (USD m)

Number of Deals

1 4 JPMorgan 55,506 30

2 1 Goldman Sachs & Co 45,367 24

3 15 Guggenheim Partners 23,200 8

4 6 Morgan Stanley 22,842 9

5 11 Centerview Partners 18,893 10

6 9 Barclays 14,322 10

7 5 Lazard 12,709 5

8 14 Evercore 11,045 6

9 68 PJT Partners 10,932 4

10 12 Jefferies 10,808 23

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a North American (US & Canada) bidder, target or vendor and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.

Mergermarket 53Deal Drivers Americas

mergermarket.com

FY 2018Life Sciences & Healthcare

Page 54: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

CA

Part of the Acuris report on global M&A activity

Canada

Mergermarket 54Deal Drivers Americas

mergermarket.com

FY 2018Canada

Page 55: An Acuris Company The comprehensive review of mergers and … · 2019. 6. 28. · ACG Capital Connection conference in Atlanta. “The broader context is there are so many different

Further informationGet in touch

After a lackluster fourth quarter, Canadian deal flow has started 2019 on an upward curve. As of mid-February, there have been 44 deals worth US$18.1bn, according to Mergermarket data, compared to 86 deals worth US$15.1bn for the same period last year.

In total, there were 591 deals worth a combined US$91.3bn in 2018, down 6.4% by value with 37 fewer deals compared to 2017. Disruptive sectors such as technology and cannabis took the spotlight in 2018, whereas activity in traditionally dominant industries for deal flow such as energy and mining and industrials and chemicals dropped by a combined 15.3% by value, with six fewer deals year-on-year.

Looking forward, dealmakers expect continued deal flow in the fast-growing cannabis sector, following its legalization in Canada last year. In a recent interview with Mergermarket, Stewart Sutcliffe of Canadian law firm Stikeman Elliott said a range of industry players are looking at the evolving sector, notably retail, beverage and other consumer companies.

As Mergermarket recently reported in an analysis of cannabis M&A, Victor, New York-based Constellation Brands [NYSE: STZ] has been active, acquiring a significant minority stake in Smith Falls, Ontario-based Canopy Growth [TSE: WEED, NYSE: CGC], one of the industry’s leading lights.

Tobacco acquirers are also expected to feature prominently, as illustrated by cigarette major Altria’s [NYSE: MO] ongoing US$1.8bn acquisition of a 45% stake in Toronto-based Cronos [TSE: CRON], another of the industry’s leading players. Meanwhile, the recent distribution deal between Nanaimo, British Columbia-based Tilray and Swiss pharma giant Novartis’s [SWX: NOVN] Sandoz division is seen as a precursor of things to come.

Outside of cannabis, M&A in the mining sector, a traditional mainstay of Canadian deal activity, got off to an auspicious start this year with Greenwood Village, Colorado-based Newmont Mining’s [NYSE: NEM] US$12.8bn acquisition of Vancouver-based Goldcorp [NYSE: GG]

In October, this news service reported that Barrick Gold’s [NYSE/TSX: ABX] proposed acquisition of Randgold [LON: RRS] could lead to a wave of M&A in the gold mining space.

“It’s been like a school dance and everyone was waiting to see who is the first to ask someone to dance,” Paul Benson, CEO of Vancouver-based SSR Mining [NASDAQ: SSRM] said in an interview at the time.

The likeliest candidates for consolidation are intermediates producing between 200,000 and 1m ounces of gold, according to the previous Mergermarket report, which pointed

to UK-based, Toronto-listed Endeavour Mining [TSX: EDV] as well-positioned to drive consolidation.

Elsewhere, Canada’s technology sector has also seen strong growth, with 100 deals worth a combined US$4.2bn in 2018, according to Mergermarket’s Trend Report for the country. By deal count, M&A activity in the sector has increased by 69.5% since 2013, with 2018 being the highest level on record. Canadian fintech and SaaS assets were the main targets last year, including PayPal’s acquisition of Hyperwallet Systems for US$400m; Warburg Pincus’ acquisition of Assent Compliance for US$100m; and TD Bank’s acquisition of Layer 6 for US$100m.

Last year, cross-border M&A was another area with record-breaking activity, the Trend Report noted. In 2018 Canadian firms made 391 global investments worth US$115.6bn, the highest number of outbound deals for the country on Mergermarket record. The largest deal was the acquisition of Johnson Controls’ Power Solutions business by CDPQ and Brookfield Business Partners for US$13.2bn, the fourth-biggest outbound deal for Canada on record.

Philip Segal

Tom Cane

CanadaOverview

Mergermarket 55Deal Drivers Americas

mergermarket.com

FY 2018Canada

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Top deals

Top 15 Announced Deals for Full Year Ending 31 December 2018 — Canada All Sectors (Based On Target)

AnnouncedDate

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

30-Sep-18 L Husky Energy Inc MEG Energy Corporation Energy, Mining, Oil & Gas 4,860

15-Feb-18 C Choice Properties Real Estate Investment Trust Canadian Real Estate Investment Trust (CREIT) Real Estate 4,589

22-Apr-18 C BC Partners Limited; and Ontario Teachers' Pension Plan GFL Environmental Inc Industrials, Manufacturing & Engineering Macquarie Group Limited; Hawthorn Equity Partners; and HPS Investment Partners

4,017

15-Aug-18 C Constellation Brands Inc Canopy Growth Corporation (32.05% stake) Agriculture 3,879

18-Sep-18 C Enbridge Inc Enbridge Income Fund Holdings Inc (80.1% stake) Energy, Mining, Oil & Gas 3,612

29-May-18 C Government of Canada Trans Mountain Pipe Line Company Ltd Energy, Mining, Oil & Gas Kinder Morgan Canada Ltd 3,464

4-Jul-18 C A consortium led by Brookfield Infrastructure Partners Enbridge Inc (Natural gas gathering and processing business in Montney, Peace River Arch, Horn River and Liard basins)

Energy, Mining, Oil & Gas Enbridge Inc 3,274

1-Aug-18 C Brookfield Infrastructure Partners EnerCare Inc Financial Services 3,204

9-Jan-18 C Blackstone Property Partners Pure Industrial Real Estate Trust Real Estate 2,863

14-May-18 C Aurora Cannabis Inc MedReleaf Corp Life Sciences & Healthcare 2,194

31-May-18 C The Bank of Nova Scotia MD Financial Management Inc Financial Services Canadian Medical Association 1,996

24-Apr-18 C Searchlight Capital Partners Mitel Networks Corporation Technology, Media & Telecom 1,937

7-Dec-18 P Altria Group Inc Cronos Group Inc (45% stake) Agriculture 1,773

12-Jul-18 C Compagnie Generale des Etablissements Michelin SA Camso Inc Industrials, Manufacturing & Engineering 1,610

18-Jun-18 C Baytex Energy Corp Raging River Exploration Inc Energy, Mining, Oil & Gas 1,430

C= Completed; P= Pending; L= Lapsed

Mergermarket 56Deal Drivers Americas

mergermarket.com

FY 2018Canada

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20

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60

80

100

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2018201720162015201420132012

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US$24.7

US$20.7

US$12.4

US$8

US$18.4

US$7.6

US$29.4

US$37.3

US$9.9

US$23.2

US$13.3

US$19.6

US$24.2

US$4.6

US$19.1

US$7.4

US$18

US$35.2

US$22.2

US$30.4

US$12.6

US$14.4

US$14.5

US$12.8

US$14.1

US$7.7

US$33.6

US$36

US$9.3

US$9.4

US$14.8

US$25

US$21.5

US$26.8

0

100

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Num

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$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 57Deal Drivers Americas

mergermarket.com

FY 2018Canada

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S$

bn)

0

5

10

15

20

25

30

35

40

Agr

icul

ture

Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

spor

tatio

n

Leis

ure

Tech

nolo

gy, M

edia

& T

elec

om

Ener

gy, M

inin

g, O

il &

Gas

Con

sum

er

Bus

ines

s S

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Fina

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Indu

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ngin

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US$N/D

US$0.8US$

2.3US$0.2

US$1.7

US$11

US$7.2

US$3.9

US$6.1

US$38.2

US$8.5 US$

6.9US$4.6

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Mergermarket 58Deal Drivers Americas

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FY 2018Canada

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25

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75

100

125

150

175

200

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

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of d

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2012 2013 2014 2015 2016 2017 2018

Valu

e (U

S$

m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Moving average trend lineDeal Value Moving average trend lineDeal Count

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Mergermarket 59Deal Drivers Americas

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FY 2018Canada

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Osler, Hoskin & Harcourt 61,204 76

2 10 Torys 54,017 45

3 21 Weil Gotshal & Manges 48,541 19

4 3 Stikeman Elliott 47,613 132

5 19 Sullivan & Cromwell 43,186 17

6 1 Blake, Cassels & Graydon 41,783 121

7 35 Simpson Thacher & Bartlett 39,449 13

8 11 Norton Rose Fulbright 38,064 36

9 54 Wachtell, Lipton, Rosen & Katz 38,044 6

10 8 McCarthy Tetrault 29,823 57

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Stikeman Elliott 47,613 132

2 2 Blake, Cassels & Graydon 41,783 121

3 3 Osler, Hoskin & Harcourt 61,204 76

4 4 McCarthy Tetrault 29,823 57

5 7 Torys 54,017 45

6 5 Davies Ward Phillips & Vineberg 25,590 43

7 14 Gowling WLG 2,721 38

8 8 Norton Rose Fulbright 38,064 36

9 13 Kirkland & Ellis 23,511 35

10 11 Cassels Brock & Blackwell 5,242 35

2018 2017 Company Name Value (USD m)

Number of Deals

1 4 BMO Capital Markets 53,700 44

2 2 Deloitte 6,796 41

3 10 Scotiabank 71,251 39

4 3 TD Securities 73,598 38

5 7 CIBC World Markets 47,707 36

6 1 RBC Capital Markets 48,403 30

7 6 KPMG 5,537 29

8 22 Citi 62,778 24

9 16 Barclays 48,526 23

10 8 National Bank Financial 11,786 23

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Goldman Sachs & Co 77,698 22

2 4 TD Securities 73,598 38

3 9 Scotiabank 71,251 39

4 5 Bank of America Merrill Lynch 64,296 20

5 11 Citi 62,778 24

6 12 BMO Capital Markets 53,700 44

7 6 Barclays 48,526 23

8 3 RBC Capital Markets 48,403 30

9 1 JPMorgan 48,161 16

10 7 CIBC World Markets 47,707 36

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a Canadian bidder, target or vendor.

Mergermarket 60Deal Drivers Americas

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FY 2018Canada

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W

Part of the Acuris report on global M&A activity

West

Mergermarket 61Deal Drivers Americas

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FY 2018West

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Further informationGet in touch

Nate Trela

The ongoing population boom, companies flush with cash and the growth of emerging industries are combining to set the stage for another strong year in M&A for the western US, according to dealmakers.

Valuations have been high across most sectors in the region, according to John Kellogg, a partner at the Denver-based law firm Moye White. As a result, he anticipates that more emphasis will be placed on reducing the up-front cash in deals by including earn-ins, secondary contingency payments and management participation language.

The real estate market in the population centers of the West as well as the booming cannabis industry should all see more investment, he added. And a significant driver of M&A in the utility space he predicted is the bankruptcy of northern California’s PG&E, which he said should lead to an uptick in distressed M&A of its assets and projects that had been expected to supply it.

“PG&E as we know it today is probably gone but they have millions of customers,” Kellogg said. “And that infrastructure cannot go anywhere.”

Warren Lazarow, firmwide co-chairman of O’Melveny’s corporate department based in the law firm’s Silicon Valley office, said the biggest deals will continue to be found in the tech sector. Companies are flush with cash from tax law changes and the return of assets from overseas that they want to deploy.

Two of the biggest West Coast deals in 2018 touched the semiconductor space, he noted. CA Technologies was acquired by Broadcom for about US$18bn while Lazarow worked with Aliso Viejo, California-based Microsemi on its US$9.8bn sale to Chandler, Arizona-based Microchip Technology.

While those deals relied on cash, the gains seen by most public companies in their share prices in 2018 opens the door to more transactions built around equity in 2019, he said.

Semiconductor, social media, AI and cybersecurity deal flow was strong last year and should continue into 2019. In many cases, smaller companies are looking to scale up in response to activity by competitors or are pursuing sales in response to the valuations competitors are realizing, Lazarow noted.

“They see companies they think are inferior sold for good prices and they don’t want to be the last one standing,” he said.

An improved relationship with China would also open the door to more cross-border M&A for companies on the West Coast, which have shied away from such deals in the current trade environment, he added.

Tom Hayes, a managing director with investment bank D.A. Davidson in Montana, said the consolidation wave that has been sweeping through western US banks shows no sign of slowing down.

The number of individual banks has fallen significantly in recent years but the number of deals each year has remained largely flat because banks are attracted to the region’s rapid growth and the relaxed regulatory environment in many states.

“If you want to buy a quality franchise, some states are running out of the right targets,” Hayes said.

The deal flow is particularly strong with large community banks with between US$2bn and US$5bn in assets, Hayes noted. Public buyers have been more acquisitive, he added, with the region’s Glacier Bancorp and First Interstate BancSystem arguably two of the three busiest in the country.

WestOverview

Mergermarket 62Deal Drivers Americas

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FY 2018West

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Top deals

Top 15 Announced Deals for Full Year Ending 31 December 2018 — West (Based On Target)

AnnouncedDate

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

2-Jul-18 P Dell Technologies Inc VMware Inc (Tracking stock shareholders) Technology, Media & Telecom 20,996

20-Dec-18 C Altria Group Inc JUUL Labs Inc (35% stake) Consumer 12,800

1-Mar-18 C Microchip Technology Incorporated Microsemi Corporation Technology, Media & Telecom 9,836

22-Jan-18 C Celgene Corporation Juno Therapeutics Inc (90.37% stake) Life Sciences & Healthcare 8,845

29-Apr-18 C Prologis Inc DCT Industrial Trust Inc Real Estate 8,060

11-Nov-18 C SAP SE Qualtrics Technology, Media & Telecom Accel; Sequoia Capital; and Insight Venture Partners 8,000

4-Jun-18 C Microsoft Corporation GitHub Inc Technology, Media & Telecom Sequoia Capital; Institutional Venture Partners; Andreessen Horowitz; SV Angel; and Thrive Capital

7,500

7-May-18 C Nestle SA Starbucks Corporation (Consumer packaged goods and foodservice distribution business)

Consumer Starbucks Corporation 7,150

11-Sep-18 P Renesas Electronics Corporation Integrated Device Technology Inc Technology, Media & Telecom 7,004

20-Mar-18 C Salesforce.com Inc MuleSoft Inc Technology, Media & Telecom New Enterprise Associates; and Lightspeed Venture Partners 5,905

20-Sep-18 C Adobe Systems Incorporated Marketo Inc Technology, Media & Telecom Vista Equity Partners 4,750

9-Oct-18 P Antero Midstream GP Antero Midstream Partners (52.86% stake) Energy, Mining, Oil and Gas Antero Resources Corporation 4,401

10-Oct-18 P TransDigm Group Inc Esterline Technologies Corporation Defense 3,993

16-Jul-18 P CVC Capital Partners Limited; and Messer Group GmbH Linde AG (Gases business in North America and certain business activities in South America)

Industrials, Manufacturing & Engineering Linde AG 3,579

9-Nov-18 P II-VI Incorporated Finisar Corporation Technology, Media & Telecom 3,474

C= Completed; P= Pending

Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming

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FY 2018West

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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2018201720162015201420132012

Num

ber

of d

eals

71

5569

7376

66

4712 52

9

5644

65

80

4

14

8

12

14

28

90

77

21

9

15

22 16

22

468

529

478

571

714

619

727

546 482

819

950

554566

901

0

50

100

150

200

250

300

350

400

450

500

2018201720162015201420132012

Valu

e (U

S$

bn)

US$24.9US$29.3

US$68.8

US$69

US$27.5

US$51.8

US$27.6

US$38.3

US$58.6

US$26.5

US$23.1

US$35.7

US$46.9

US$15.9

US$171.2

US$165.3

US$15.3

US$95.5

US$36.9

US$39.5

US$283

US$67

US$69.4

US$33.4

US$20.6

US$90.2

US$70.9

US$60.4

US$41.2

US$72.4

US$62

US$90

US$28.3

US$38.6

US$75.1

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 64Deal Drivers Americas

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FY 2018West

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0

50

100

150

200

250

300

350

400

450

500

550

600

Agr

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5735 315 19

54

226

87

216

14191

187

570

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

70

80

90

100

110

Agr

icul

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Def

ense

Real

Est

ate

Con

stru

ctio

n

Life

Sci

ence

s &

Hea

lthca

re

Tran

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tatio

n

Leis

ure

Tech

nolo

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edia

& T

elec

om

Ener

gy, M

inin

g, O

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Gas

Con

sum

er

Bus

ines

s S

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ces

Fina

ncia

l Ser

vice

s

Indu

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ls, M

anuf

actu

ring

& E

ngin

eerin

g

US$4US$

8.8

US$4.8

US$0.9

US$4.2

US$28.1

US$34.6

US$22.2

US$10.4

US$23.8

US$38.2

US$8.4

US$105.7

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Mergermarket 65Deal Drivers Americas

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FY 2018West

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350

400

450

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

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2012 2013 2014 2015 2016 2017 2018

Valu

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S$

m)

0

25,000

50,000

75,000

100,000

125,000

150,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Moving average trend lineDeal Value Moving average trend lineDeal Count

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Mergermarket 66Deal Drivers Americas

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FY 2018West

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 6 Morgan Stanley 215,878 72

2 2 JPMorgan 208,041 65

3 1 Goldman Sachs & Co 187,695 87

4 13 Credit Suisse 132,884 35

5 4 Deutsche Bank 105,871 30

6 8 Evercore 103,901 43

7 3 Centerview Partners 79,318 19

8 10 Barclays 77,848 49

9 30 PJT Partners 71,329 7

10 9 Citi 70,760 40

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 187,695 87

2 2 Houlihan Lokey 13,744 75

3 5 Morgan Stanley 215,878 72

4 3 JPMorgan 208,041 65

5 16 Raymond James & Associates 8,942 63

6 12 Barclays 77,848 49

7 8 William Blair & Company 18,609 47

8 4 Jefferies 20,776 46

9 6 Evercore 103,901 43

10 14 Bank of America Merrill Lynch 65,827 42

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 74,499 216

2 2 Goodwin Procter 92,584 164

3 5 Cooley 25,988 131

4 4 DLA Piper 72,891 125

5 3 Latham & Watkins 138,321 124

6 6 Jones Day 34,142 103

7 9 Wilson Sonsini Goodrich & Rosati 51,063 95

8 7 Morgan Lewis & Bockius 7,921 73

9 22 Fenwick & West 22,750 70

10 8 O'Melveny & Myers 18,482 67

2018 2017 Company Name Value (USD m)

Number of Deals

1 25 Wachtell, Lipton, Rosen & Katz 149,334 28

2 2 Skadden Arps Slate Meagher & Flom 144,669 55

3 18 Latham & Watkins 138,321 124

4 3 Simpson Thacher & Bartlett 135,872 49

5 30 Morrison & Foerster 117,355 43

6 1 Cleary Gottlieb Steen & Hamilton 103,029 19

7 32 Goodwin Procter 92,584 164

8 23 Sidley Austin 88,576 49

9 6 Cravath, Swaine & Moore 87,066 19

10 7 Hogan Lovells International 87,021 50

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor. States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a West Coast bidder, target or vendor. States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.

Mergermarket 67Deal Drivers Americas

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FY 2018West

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MW

Part of the Acuris report on global M&A activity

Midwest

Mergermarket 68Deal Drivers Americas

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FY 2018Midwest

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Further informationGet in touch

Ongoing competition between strategic and financial buyers for the best assets coming to market will continue to drive Midwest M&A, investment professionals said.

Add motivated sellers to the mix, seeking to take advantage of historically high valuations and low interest rates, and the table is set for record or near-record levels of M&A in the nation’s heartland in 2019.

“No one wants to miss the window on this cycle,” said Nick P. Jachim, managing director and head of the investment banking group for Stout. The volume of deals being managed by the Chicago-based investment bank has grown by more than 50% year over year, “and we expect that trend to continue. The debt markets continue to be wide open for good, consistently growing, profitable companies and we’re seeing this play out across multiple industries including industrials, healthcare, TMT and consumer,” he said.

While conventional wisdom holds that a large strategic can generally outbid all but the largest and most aggressive private equity (PE) firms in a process, the dynamic could be shifting. “Strategic buyers are still doing deals, but PE is driving the market,” Jachim said. “Three-quarters of our sell-side clients are being acquired by PE or PE-backed businesses.”

Chicago-based Cook M&A Advisory Services specializes in finding platform buys, add-ons and executives for PE firms. Managing Director

Sven Kins also sees favorable cost of capital benefiting financial buyers in 2019. “Conditions are still very ripe for PE groups to deploy plenty of capital between new platform opportunities and add-ons,” he said, with packaging, med-tech and industrial controls/technology attractive sectors for PE in the Midwest.

John R. Thornburgh, a partner with the Indianapolis, Indiana-based law firm Ice Miller, said there are still many owners of middle- and lower-middle-market firms in the Midwest who are intent on selling their companies in 2019, which could “unleash a very strong buyer’s market for PE firms and a high level of deal activity.”

Yet strategics aren’t conceding the field to financials, said Charles V. Aquino, managing director for Cleveland-based Western Reserve Partners, a division of Citizens Capital Markets. “Both groups, strategics and financial buyers, are very hungry and highly motivated,” he said, resulting in rising prices. Aquino said 61% of deals completed in 2018 exceeded 10x enterprise value/EBITDA, the highest on record.

Selling non-core assets is another way to take advantage of the same high multiples and buy-side demand. Cincinnati, Ohio-based Kroger [NYSE: KR] sold its 762 convenience stores in 18 states to EG Group, giving the UK-based retailer its first exposure to the US. EG Group subsequently acquired 225 Minit Mart c-stores from Westlake, Ohio-based TravelCenters of

America [NASDAQ: TA], with the two transactions totaling US$2.5bn.

“A very nice business in the Midwest is a great foothold to have in the US market,” Aquino said.

Andy Jessen, managing director and head of North American M&A for William Blair, said approximately 40% of the firm’s 2018 deal activity was cross-border, with European, Chinese and Japanese buyers the most active in the Midwest and beyond. Jessen said Chinese investment in the US tapered in the 2H18 due to regulatory issues and slowing Chinese economic growth, while Middle Eastern and South American interest in US assets has been “muted by lower energy prices.” However, Middle Eastern sovereign wealth funds are increasingly looking to the Midwest and other US regions for non-energy assets, in a bid to diversify, he said.

With the current economic expansion approaching nine years, no one expects boom times to last forever. Thornburgh said higher interest rates, volatile equity markets, trade policy concerns and even worker shortages represent gathering clouds on the horizon. If those factors don’t dampen the expectations of sellers, “it could result in difficulty for buyers and sellers to agree on price and other terms.”

Jeff Sheban

MidwestOverview

Mergermarket 69Deal Drivers Americas

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FY 2018Midwest

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Top deals

Top 15 Announced Deals for Full Year Ending 31 December 2018 — Midwest (Based On Target)

AnnouncedDate

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

8-Mar-18 C Cigna Corporation Express Scripts Holding Company Business Services 67,601

29-Apr-18 P T-Mobile USA Inc Sprint Corporation Technology, Media & Telecom SoftBank Group Corp 60,806

26-Mar-18 C Brookfield Property Partners General Growth Properties Inc (66.2% stake) Real Estate 26,705

13-Nov-18 P Caisse de Depot et Placement du Quebec; and Brookfield Business Partners Johnson Controls International plc (Power Solutions business) Industrials, Manufacturing & Engineering Johnson Controls International plc 13,244

21-May-18 P Wabtec Corporation GE Transportation Industrials, Manufacturing & Engineering General Electric Company 11,100

31-Jul-18 C Brookfield Asset Management Inc Forest City Realty Trust Inc Real Estate 9,480

23-Apr-18 C CenterPoint Energy Inc Vectren Corporation Energy, Mining, Oil and Gas 8,089

9-Apr-18 C Novartis AG AveXis Inc Life Sciences & Healthcare 7,436

6-Aug-18 P Amcor Limited Bemis Company Inc Industrials, Manufacturing & Engineering 6,709

11-Jun-18 P Gebrueder Knauf Verwaltungsgesellschaft KG USG Corporation (89.42% stake) Construction 6,304

3-Dec-18 P Nexstar Media Group Inc Tribune Media Company Technology, Media & Telecom 6,112

11-Jan-18 C SS&C Technologies Holdings Inc DST Systems Inc Business Services 5,483

10-Apr-18 C Tenneco Inc Federal-Mogul Industrials, Manufacturing & Engineering Icahn Enterprises 5,400

29-Jan-18 C WestRock Company KapStone Paper and Packaging Corporation Industrials, Manufacturing & Engineering 4,843

21-May-18 P Fifth Third Bancorp MB Financial Inc Financial Services 4,557

C= Completed; P= Pending

Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin

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100

200

300

400

500

600

700

800

900

1,000

1,100

2018201720162015201420132012

Num

ber

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eals

13

13

56

4512

71

8 13

87

127

15

7

49

31

40

3255

58

372533

44

50

3017

295290

652656

301

623605

308

511

367

291

397

275

421

0

50

100

150

200

250

300

350

400

2018201720162015201420132012

Valu

e (U

S$

bn)

US$18.6

US$15.7

US$41.4

US$50.2

US$18.5

US$18.7

US$19.7

US$23.3

US$20.3

US$32.8

US$16.8

US$27.7

US$17.4

US$41.8

US$11

US$11.6

US$11.6

US$11.7

US$8.6

US$6.5

US$253

US$94.9

US$50.9

US$140.3

US$45.1

US$86.9

US$37.6

US$53.1

US$53.9

US$35.6

US$161.9

US$234.5

US$39.2

US$60.8

US$21.2

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Mergermarket 71Deal Drivers Americas

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FY 2018Midwest

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US$18.5

US$0.9

US$8.3 US$

N/D

US$2.3 US$

1.2

US$18.6

US$23

US$13.8

US$78.5US$

74.6

US$88.6

US$40.4

Num

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of d

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0

50

100

150

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Agr

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18 23

82

52

8 81

49

112

159

292

108

157

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Mergermarket 72Deal Drivers Americas

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

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Num

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2012 2013 2014 2015 2016 2017 2018

Moving average trend lineDeal Value Moving average trend lineDeal Count

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Mergermarket 73Deal Drivers Americas

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League tables

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Skadden Arps Slate Meagher & Flom 192,813 56

2 6 Cravath, Swaine & Moore 190,795 21

3 9 Wachtell, Lipton, Rosen & Katz 159,195 19

4 5 Cleary Gottlieb Steen & Hamilton 146,118 24

5 17 Weil Gotshal & Manges 126,914 45

6 25 Simpson Thacher & Bartlett 123,228 27

7 24 Fried Frank Harris Shriver & Jacobson 117,330 19

8 4 Davis Polk & Wardwell 111,568 26

9 2 Sullivan & Cromwell 110,728 28

10 16 Paul Weiss Rifkind Wharton & Garrison 103,518 37

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 88,602 169

2 2 Jones Day 92,020 115

3 3 DLA Piper 78,674 69

4 5 Sidley Austin 80,408 59

5 8 McDermott Will & Emery 5,653 57

6 6 Skadden Arps Slate Meagher & Flom 192,813 56

7 13 Winston & Strawn 8,259 50

8 7 Goodwin Procter 90,731 46

9 9 Weil Gotshal & Manges 126,914 45

10 28 Paul Hastings 7,830 45

2018 2017 Company Name Value (USD m)

Number of Deals

1 3 Goldman Sachs & Co 271,342 77

2 1 Houlihan Lokey 6,602 55

3 9 Robert W. Baird & Co 4,877 47

4 11 Barclays 96,100 45

5 4 Morgan Stanley 217,615 43

6 10 Lincoln International 2,727 42

7 2 JPMorgan 127,939 39

8 15 Raymond James & Associates 5,726 39

9 7 William Blair & Company 11,825 37

10 14 Moelis & Company 45,555 35

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Goldman Sachs & Co 271,342 77

2 1 Morgan Stanley 217,615 43

3 16 Centerview Partners 178,806 13

4 3 JPMorgan 127,939 39

5 9 Deutsche Bank 120,696 18

6 5 Credit Suisse 104,380 25

7 10 Lazard 102,525 28

8 23 Evercore 98,125 27

9 7 Barclays 96,100 45

10 6 Bank of America Merrill Lynch 94,426 30

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a Midwest bidder, target or vendor. States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.

Mergermarket 74Deal Drivers Americas

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S

Part of the Acuris report on global M&A activity

South

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Further informationGet in touch

Persisting, and possibly worsening, macroeconomic headwinds will weigh on M&A in the US South in 2019, but deal flow in services-driven sectors may be insulated, dealmakers said. Ongoing trade disputes undercut an expected tax reform-fueled “M&A bonanza” in 2018 and continue to hinder investment from Asia and Europe, said Tony Balloon, partner at Alston & Bird in Atlanta.

US trade policy and the Brexit process are driving global uncertainty, and that may soften demand for many US exports, Balloon said. He pointed to Apple’s recent letter detailing reduced revenue guidance because of weaker demand in emerging economies, specifically noting China. Export-reliant sectors such as agriculture and manufacturing, particularly the automotive industry, are most likely to feel the squeeze in the South, he said.

Deal volume in the South dropped to 409 in 4Q, its lowest level since the 1Q15 and down from 443 in 4Q17. Deal value, on the other hand, rose to US$128bn from US$84.5bn in the same quarter a year ago. This included IBM’s pending US$32.6bn purchase of Raleigh, North Carolina-based cloud services provider Red Hat.

While sectors such as healthcare and technology are not immune to macroeconomic twists, they are somewhat insulated by a base level of demand, Balloon said.

Middle-market technology M&A, for one, is generally shielded from the macro environment,

said Scott Green, managing director in Raymond James’ Atlanta office. Green said he expects volume to remain consistent and valuations to dampen in 2019. Computer services and computer software accounted for nearly 14% of all 2018 targets in the South, in deals worth US$59.4bn in total.

The number of acquisitions should remain consistent as global systems integrators aim to increase scale or capabilities via M&A, Green said. Four years ago, buyers were asking about growth and revenue bases before seeking details on what the company actually does. That situation has flipped, with capability being the most important factor. Scale was a large factor in Forsythe’s sale to Sirius Computer Technologies in 2017, for example, said Green, who advised the target company on the deal.

In healthcare, industry trends are the largest factor for M&A, said LA Galyon, managing director at Brentwood Capital. An increase in high-deductible insurance plans with health savings accounts is putting pressure on hospitals and health systems to become more efficient as patients seek treatment in the lowest-cost setting.

Other than the largest players such as Nashville, Tennessee-based HCA, these systems will be looking to offload assets to adapt, Galyon said. Deals in medical care were about 9% of the South’s M&A volume in 2018, with an overall value of US$25.1bn. Galyon expects Texas and

Florida will be key areas of activity in 2019. Also, solo physician practices are expected to sell to roll-up shops at an accelerated pace after years of margin pressure, Galyon said.

Overall, private equity activity is in a “weird no man’s land” with borrowing costs rising, but not enough to stymie demand, and asset values dropping, but not enough to push companies to sell at enticing valuations or consider a fire sale, Balloon said. Strategics, on the other hand, are more likely to slow their pace of acquisitions because of uncertainty in the global economy.

But that may not be the case in all sectors. With strategic factors driving the market, PE’s role in the IT M&A landscape may be “a touch smaller,” Green said. A couple of years ago, financial sponsors were the most aggressive players in the market. “That paradigm has really shifted in the past year and a half,” he said.

Alongside IBM’s deal for Red Hat, several global firms found software and computer services targets in the South in the past two years. Ireland-based Accenture purchased two Virginia-based computer services businesses, Phase One Consulting Group and iDefense; France-based Capgemini acquired Columbia, South Carolina-based TCube Solutions; UK-based Deloitte picked up Norcross, Georgia-based ATADATA; and New Jersey-based Cognizant Solutions bought Atlanta-based Softvision.

Joshua Armstrong

SouthOverview

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Top deals

AnnouncedDate

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

1-Aug-18 C Energy Transfer Equity Energy Transfer Partners (97.64% stake) Energy, Mining, Oil & Gas 59,612

28-Oct-18 P IBM Corporation Red Hat Inc Technology, Media & Telecom 32,556

30-Apr-18 C Marathon Petroleum Corporation Andeavor Corporation Energy, Mining, Oil & Gas 31,327

29-Jan-18 C Keurig Green Mountain Inc Dr Pepper Snapple Group Inc Consumer 26,801

3-Jan-18 C Dominion Energy Inc SCANA Corporation Energy, Mining, Oil & Gas 14,250

26-Jul-18 C BP Plc Petrohawk Energy Corporation Energy, Mining, Oil & Gas BHP Billiton Ltd 10,500

17-May-18 C Williams Companies Inc Williams Partners (26.71% stake) Energy, Mining, Oil & Gas 10,467

12-Feb-18 C General Dynamics Corporation CSRA Inc Business Services 9,679

8-Nov-18 P Western Gas Equity Partners Western Gas Partners (67.15% stake) Energy, Mining, Oil & Gas 9,593

28-Mar-18 C Concho Resources Inc RSP Permian Inc Energy, Mining, Oil & Gas 9,481

11-Jun-18 C Kohlberg Kravis Roberts & Co Envision Healthcare Corporation Life Sciences & Healthcare 9,432

18-Sep-18 C Enbridge Inc Enbridge Energy Partners (66.06% stake) Energy, Mining, Oil & Gas 9,201

14-Aug-18 C Diamondback Energy Inc Energen Corporation Energy, Mining, Oil & Gas 9,116

22-Oct-18 C Enlink Midstream EnLink Midstream Partners (78% stake) Energy, Mining, Oil & Gas 9,037

1-Nov-18 C Encana Corporation Newfield Exploration Company Energy, Mining, Oil & Gas 7,654

C= Completed; P= Pending

Top 15 Announced Deals for Full Year Ending 31 December 2018 — South (Based On Target)

Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

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0

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2018201720162015201420132012

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7484

10185

108

73

79

84

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321517 19

16

22

7

722

19

2931

88

114

31

23

62682

502

644

522

693

687

936872

507

537

563

1,0971,058967

114

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2018201720162015201420132012

Valu

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bn)

US$68.5

US$82.3

US$26.3

US$38

US$37.2

US$35.7

US$273.4

US$29.8

US$45.3

US$27.5US$35.5

US$25.5US$35.7

US$31.8

US$35.4

US$64

US$69.2

US$80.8

US$65.1

US$63.2

US$81

US$26.1US$33

US$91.4

US$110.4

US$253.2 US$

222

US$309.5

US$100.3

US$96

US$93.3

US$177.6

US$87

US$111.8

US$111.4

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Deal Drivers AmericasMergermarket 78

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304

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199

74

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US$0.5

US$27.9US$

15.5US$13

US$4.5

US$4.2US$

17.6

US$36.2 US$

20.8

US$51.6 US$

38.2

US$75.4

US$276.2

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Deal Drivers AmericasMergermarket 79

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

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Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

Moving average trend lineDeal Value Moving average trend lineDeal Count

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Deal Drivers AmericasMergermarket 80

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League tables

2018 2017 Company Name Value (USD m)

Number of Deals

1 10 Latham & Watkins 190,295 104

2 8 White & Case 166,665 45

3 4 Simpson Thacher & Bartlett 147,615 57

4 9 Sullivan & Cromwell 145,692 40

5 2 Skadden Arps Slate Meagher & Flom 139,483 52

6 18 Vinson & Elkins 136,699 85

7 11 Cleary Gottlieb Steen & Hamilton 135,962 24

8 1 Kirkland & Ellis 122,182 232

9 12 Gibson, Dunn & Crutcher 118,320 76

10 16 Wachtell, Lipton, Rosen & Katz 110,579 40

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 122,182 232

2 2 DLA Piper 20,349 132

3 4 Jones Day 65,214 121

4 3 Latham & Watkins 190,295 104

5 18 McGuireWoods 19,659 95

6 6 Vinson & Elkins 136,699 85

7 7 Goodwin Procter 17,613 79

8 11 Gibson, Dunn & Crutcher 118,320 76

9 16 McDermott Will & Emery 32,355 74

10 5 Weil Gotshal & Manges 27,898 72

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 305,020 97

2 3 JPMorgan 239,370 88

3 2 Houlihan Lokey 22,707 81

4 8 Jefferies 47,156 73

5 7 Citi 194,832 69

6 6 Barclays 215,227 63

7 15 Raymond James & Associates 11,137 59

8 4 Evercore 122,589 58

9 9 Morgan Stanley 202,622 56

10 5 Piper Jaffray & Co 8,010 56

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Goldman Sachs & Co 305,020 97

2 1 JPMorgan 239,370 88

3 5 Barclays 215,227 63

4 3 Morgan Stanley 202,622 56

5 8 Citi 194,832 69

6 7 Evercore 122,589 58

7 12 Bank of America Merrill Lynch 122,204 54

8 11 Credit Suisse 116,545 47

9 4 Lazard 114,510 43

10 6 UBS Investment Bank 65,260 30

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a South bidder, target or vendor.States: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia.

Deal Drivers AmericasMergermarket 81

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

mergermarket.com

FY 2018South

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NE

Part of the Acuris report on global M&A activity

Northeast

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FY 2018Northeast

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Further informationGet in touch

Uncertainty over when a possible recession could hit is likely to have a bigger impact on M&A activity in the Northeast than the rest of the nation, said experts interviewed by Mergermarket.

If the economy slows, M&A activity overall will likely decline, as many companies will shrink and therefore not be as desirable as they once were, said James Rybakoff, president and CEO of New York City-based investment bank Akin Bay. However, he said, a recession would affect the Northeast more than other regions, like the West Coast, because of its profile of companies.

There are more legacy companies, those that have been around for many decades, as well as more manufacturing companies and retail companies with a larger focus on brick-and-mortar locations in the Northeast than in areas like the West. Companies in the Northeast also tend to have more debt and are more cyclical in nature than those elsewhere in the country, he added. Many of these companies, Rybakoff said, are likely to be more vulnerable during a downturn.

From a middle-market viewpoint, two things could happen as the US anticipates a recession, he said: Companies that think they may be hit harder will look to sell beforehand, increasing activity in the short-term, or they may try and wait it out.

“If a company has recovered from financial crisis and is thinking there will be a slowdown over the next couple of years and doesn’t have the capital to invest and ride that wave, they should definitely look to sell now,” Rybakoff said.

The economy has been humming along for years and the threat of a downturn could reduce the potential pool of transactions, said Alan Klein, partner at New York City-based law firm Simpson Thacher & Bartlett. It is difficult to forecast when a recession could hit, but many believe it could be late this year or in 2020, Klein said.

“As a result, I think people are getting warier about entering into transactions that don’t have a chance of being accretive right away or in short order,” he said.

The economy’s steady growth and moderate inflation led to more confidence in M&A transactions and large companies more willing to do large deals, Klein said.

But the S&P 500 Index dipped into bear market territory in December 2018 and it is unclear how long it will take for it to recover, Klein said. A bear market could result in decreased valuation multiples, Klein added. When a market downturn hits, business growth usually slows, another factor that could decrease multiples, he noted.

In 2018, there were 1,175 deals announced involving companies based in the US states of New Jersey, New York, Pennsylvania, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont, according to Mergermarket data.

Richard Kestenbaum, partner and co-founder of New York City-based investment bank Triangle Capital Partners, noted that retail sales dipping 1.2% in December 2018 and a report of a record 7% of people being 90 days or more behind on their car payments have led to a decline in consumer confidence and a change in the outlook for M&A.

“That is raising some questions about the eagerness of the M&A market capital sources to continue to fund,” he said.

Alan Burdziak

NortheastOverview

Deal Drivers AmericasMergermarket 83

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FY 2018Northeast

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Top deals

AnnouncedDate

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

14-Oct-18 P Harris Corporation L3 Technologies Inc Defense 18,362

11-Jul-18 C Broadcom Inc CA Technologies Technology, Media & Telecom 17,987

30-Jan-18 C Blackstone Group; GIC Private Limited; and Canada Pension Plan Investment Board Refinitiv (55% stake) Business Services Thomson Reuters Corporation 17,000

22-Jan-18 C Sanofi SA Bioverativ Inc Life Sciences & Healthcare 10,887

27-Jun-18 C ConAgra Brands Inc Pinnacle Foods Inc Consumer 10,778

31-Jan-18 L FUJIFILM Holdings Corporation Xerox Corporation (50.1% stake) Technology, Media & Telecom 8,600

23-Feb-18 C General Mills Inc Blue Buffalo Pet Products Inc Consumer The Invus Group 7,935

9-May-18 C Wyndham Worldwide Corporation (Shareholders) Wyndham Hotels & Resorts Inc Leisure Wyndham Destinations Inc 6,594

8-Aug-18 C Consortium for Dun & Bradstreet Dun & Bradstreet Inc Business Services 6,524

18-Oct-18 P Invesco Ltd OppenheimerFunds Inc Financial Services Massachusetts Mutual Life Insurance Company 5,714

20-Feb-18 L Albertsons Companies Inc Rite Aid Corporation Consumer 5,537

12-Nov-18 C Veritas Capital Fund Management Athenahealth Inc (91% stake) Technology, Media & Telecom 4,943

4-Jan-18 C Brookfield Business Partners Westinghouse Electric Company Industrials, Manufacturing & Engineering 4,600

7-May-18 C Blackstone Group Gramercy Property Trust Inc Real Estate 4,422

3-Dec-18 C GlaxoSmithKline Plc TESARO Inc Life Sciences & Healthcare 4,297

C= Completed; P= Pending; L= Lapsed

Top 15 Announced Deals for Full Year Ending 31 December 2018 — Northeast (Based On Target)

Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

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Valu

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0

100

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2018201720162015201420132012

US$19.2

US$17.6

US$19.8

US$75.8

US$29

US$14.1

US$18.5

US$15.2

US$18

US$59.2

US$53

US$25.4

US$59

US$48

US$26.2

US$61.5

US$54.5

US$25

US$33.5

US$53

US$48.4

US$56.8

US$49.8

US$72.2

US$28.5

US$61.7

US$59.6

US$101.8

US$25

US$15.9

US$203.6

US$401.9

US$166.6

US$203.4

US$22.7

0

200

400

600

800

1,000

1,200

1,400

2018201720162015201420132012

Num

ber

of d

eals

51

22

53

48

47

388

55

46

396

53

41

304

62

41

330

54

68

3

7

8

8

11

19

15

7

16

21

362

6419

9

662

424

417

629696 696

17

457 433

540

59

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Deal Drivers AmericasMergermarket 85

mergermarket.com

FY 2018Northeast

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Num

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0

50

100

150

200

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300

350

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icul

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ate

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n

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s &

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2414 6

4 2

38

138

303

54

103

186

130

173

Valu

e (U

S$

bn)

0

10

20

30

40

50

60

Agr

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Def

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US$N/D

US$0.6

US$3.5

US$58.4

US$27.7

US$22.1

US$30.7

US$20.7

US$37.6

US$18.4

US$8.1

US$32.9

US$10.4

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Deal Drivers AmericasMergermarket 86

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FY 2018Northeast

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Valu

e (U

S$

m)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

0

50

100

150

200

250

300

350

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2012 2013 2014 2015 2016 2017 2018

Moving average trend lineDeal Value Moving average trend lineDeal Count

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Deal Drivers AmericasMergermarket 87

mergermarket.com

FY 2018Northeast

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League tables

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Skadden Arps Slate Meagher & Flom 245,414 84

2 7 Davis Polk & Wardwell 240,235 65

3 1 Simpson Thacher & Bartlett 204,603 91

4 12 Wachtell, Lipton, Rosen & Katz 175,444 44

5 31 Paul Weiss Rifkind Wharton & Garrison 170,252 76

6 5 Sullivan & Cromwell 143,397 66

7 6 Cravath, Swaine & Moore 141,875 33

8 22 Weil Gotshal & Manges 107,384 108

9 8 Kirkland & Ellis 104,708 278

10 17 Freshfields Bruckhaus Deringer 92,142 36

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Kirkland & Ellis 104,708 278

2 3 Goodwin Procter 50,024 173

3 4 Jones Day 62,687 168

4 2 Latham & Watkins 61,910 134

5 5 DLA Piper 28,820 120

6 6 Weil Gotshal & Manges 107,384 108

7 8 Morgan Lewis & Bockius 40,107 93

8 10 Simpson Thacher & Bartlett 204,603 91

9 7 Skadden Arps Slate Meagher & Flom 245,414 84

10 12 Ropes & Gray 39,865 83

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Goldman Sachs & Co 334,716 160

2 2 JPMorgan 243,182 109

3 3 Morgan Stanley 382,177 104

4 4 Houlihan Lokey 20,481 102

5 5 Citi 164,626 85

6 8 Barclays 149,268 82

7 10 Jefferies 39,573 75

8 11 Evercore 106,553 74

9 6 Credit Suisse 124,860 71

10 12 William Blair & Company 25,267 67

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Morgan Stanley 382,177 104

2 1 Goldman Sachs & Co 334,716 160

3 3 JPMorgan 243,182 109

4 5 Bank of America Merrill Lynch 220,166 59

5 9 Lazard 167,271 58

6 4 Citi 164,626 85

7 8 Barclays 149,268 82

8 6 Centerview Partners 129,671 28

9 7 Credit Suisse 124,860 71

10 11 Evercore 106,553 74

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a US (Northeast) bidder, target or vendor. States: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont.

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a US (Northeast) bidder, target or vendor. States: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont.

Deal Drivers AmericasMergermarket 88

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

mergermarket.com

FY 2018Northeast

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LA

Part of the Acuris report on global M&A activity

Latin America

Deal Drivers AmericasMergermarket 89

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FY 2018Latin America

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Further informationGet in touch

Dealmaking in Latin America is expected to pick up this year as the region leaves behind a major election cycle, which brought people to vote for president in no fewer than six countries, including Brazil, Mexico and Colombia.

Political and economic uncertainty surrounding the presidential elections led to a 25.3% year- on- year decline in regional dealmaking with total deal values falling to US$72.5bn in 2018 from US$97bn in 2017, according to Mergermarket data.

BrazilA flurry of M&A deals and initial public offerings are expected in Brazil as the country’s economic agenda becomes clearer, said Luis Gelinski, partner at M&A advisory firm A3 Capital. Economy Minister Paulo Guedes has vowed to cut the country’s public debt via a series of privatizations, simplify its tax rules, and overhaul its pension system.

Optimism, however, is cautious as most of these moves require congressional approval, Gelinski said. Dealmaking, for instance, could take a while to heat up as several companies that survived Brazil’s two-year economic recession hold off on closing deals until bolstering turnover and increasing their valuations, he said.

The technology sector is once again likely to see strong M&A activity, particularly among fintech and big data companies, and those that provide technological solutions to the

logistics healthcare, and education industries, said Eduardo Grytz, partner at venture capital firm Performa Investimentos.

The growth of e-commerce, on the other hand, will lead to a consolidation of the local distribution and logistics industry, he added. And as Brazilians spend more on their pets, this sector is also expected to experience consolidation, Gelinski said.

MexicoIncreased activity is also expected in Mexico following a dismal 2018, said Hernan Silva, head of corporate finance at BBVA Bancomer. Last year, the country saw its lowest deal value in nine years, according to Mergermarket data.

Silva said a relevant M&A pipeline has been building from transactions halted in the last 12–18 months partly due to the presidential election. And while some investors remain cautious, many others are still interested in Mexico’s strong macroeconomic fundamentals, he added.

M&A activity, he noted, is expected in the healthcare sector given Mexico’s growing awareness on health issues and its relatively low health expenditure. The country spends only about 5.9% of its US$1.2trn-GDP on healthcare, compared with 6.2% in Colombia and 8.9% in Brazil, according to the World Bank.

BBVA Bancomer advised Grupo Diagnostico Proa, owner of the diagnostic-lab chain

Laboratorios Medicos del Chopo, on the sale of a 32% stake to local private equity firm LIV Capital and Singapore’s state investment firm Temasek for an undisclosed amount in June 2018, said Silva. The process attracted a lot of investors, he noted.

Dealmaking is also expected in the retail and consumer sectors, and the telecommunications industry as mobile operators start rolling out the new wireless network technology 5G, Silva said.

ColombiaM&A activity is expected to rebound after a long hiatus following the 2016 peace agreement with Colombia’s communist guerillas and the polarizing presidential election, said Lorenzo Garavito, local head of investment banking at Scotiabank.

Colombia’s electricity market, in particular, could see an uptick in dealmaking, he noted. Last year’s landslide at the 2.4-gigawatt Ituango hydroelectric dam prolonged the country’s dependence on thermal power, which in turn, led to a “rearrangement” of the industry, said the banker.

Almost 30% of Colombia’s electricity is generated by thermal power plants.

This news service reported on 31 January that Brookfield Infrastructure Partners [NYSE: BIP] mandated Credit Suisse as it prepares to explore the sale of Colombian electric transmission utility Empresa de Energia de Boyaca.

Carlos Martinez

Bruna Maia Carrio

Latin AmericaOverview

Deal Drivers AmericasMergermarket 90

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FY 2018Latin America

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Top deals

AnnouncedDate

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

16-Mar-18 P Suzano Papel e Celulose SA Fibria Celulose SA Industrials, Manufacturing & Engineering Banco Nacional de Desenvolvimento Economico e Social; and Votorantim SA

15,326

17-May-18 C Tianqi Lithium Industries Inc Sociedad Quimica y Minera SA (23.77% stake) Industrials, Manufacturing & Engineering Nutrien Ltd 4,066

20-Apr-18 L Neoenergia SA AES Eletropaulo Energy, Mining, Oil & Gas 3,076

17-Apr-18 C Enel SpA AES Eletropaulo Energy, Mining, Oil & Gas 3,064

16-Feb-18 C Enel Chile SA Enel Generación Chile (33.57% stake) Energy, Mining, Oil & Gas 2,739

12-Jun-18 C Louis Dreyfus Company BV Biosev SA (78.47% stake) Consumer 2,075

5-Apr-18 L Energisa SA AES Eletropaulo Energy, Mining, Oil & Gas 1,938

24-Sep-18 C Brookfield Asset Management Inc; and Digital Realty Trust Inc Ascenty Data Centers e Telecomunicacoes SA Business Services Great Hill Partners 1,800

23-Apr-18 C Kroton Educacional SA SOMOS Educacao SA (73.35% stake) Business Services Tarpon Investimentos SA 1,710

19-Oct-18 P Canada Pension Plan Investment Board; and Votorantim Energia Ltda Companhia Energetica de Sao Paulo (Cesp) (97.75% stake) Energy, Mining, Oil & Gas Government of Brazil 1,266

4-Dec-18 P Sumitomo Corporation; and Sumitomo Metal Mining Co Ltd Compania Minera Teck Quebrada Blanca SA (30% stake) Energy, Mining, Oil & Gas Teck Resources Limited 1,200

24-Apr-18 P Nidec Corporation Whirlpool Corporation (Embraco compressor business) Industrials, Manufacturing & Engineering Whirlpool Corporation 1,080

22-Oct-18 C State Grid Corporation of China CPFL Energias Renovaveis SA (48.39% stake) Energy, Mining, Oil & Gas 1,077

7-Oct-18 C Millicom International Cellular SA Cable Onda SA (80% stake) Technology, Media & Telecom 1,002

24-Apr-18 C Raizen Energia SA Shell Compania Argentina De Petroleo SA; and Energia Compania Argentina de Petroleo SA

Energy, Mining, Oil & Gas Royal Dutch Shell Plc 916

C= Completed; P= Pending; L= Lapsed

Top 15 Announced Deals for Full Year Ending 31 December 2018 — Latin America (Based On Target)

Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands

Deal Drivers AmericasMergermarket 91

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FY 2018Latin America

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0

20

40

60

80

100

120

140

2018201720162015201420132012

Valu

e (U

S$

bn)

US$17.1

US$14.1

US$25.3

US$7.1

US$27.2

US$8.9

US$14

US$10.5

US$14.3

US$28.2

US$29.2

US$13.3

US$13.2

US$41.4

US$13.6

US$16.6

US$38.9

US$16

US$10.5

US$20

US$22.4

US$12.5

US$20

US$19

US$16.8

US$16.1

US$40.8

US$30.8

US$15.6

US$20.1

US$15.3

US$15.8

US$13.2

US$15.7

0

100

200

300

400

500

600

700

2018201720162015201420132012

Num

ber

of d

eals

6

25

53

2

2

3

5

530

2724

28

37

38

46

37

39

45 31

31

275254

1

246 242

280

179 4

38

254

290

334331

297300285290

236

$5m - $250m

$2,001m - $5,000m

Value not disclosed

$501m - $2,000m

$251m - $500m

> $5,001m

$5m - $250m

$2,001m - $5,000m

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

> $5,001m

M&A split by deal sizeValue

M&A split by deal sizeDeal Count

Deal Drivers AmericasMergermarket 92

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FY 2018Latin America

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0

10

20

30

40

50

60

70

80

90

100

Agr

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24

9N/D

71

94

44

66

76

98

21

56

22

30

Valu

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S$

bn)

0

5

10

15

20

25

Agr

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Def

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Real

Est

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US$0.6 US$

1.5

US$2.3 US$

1.4

US$0.9

US$N/D

US$4.7

US$1.8

US$20.1

US$23

US$3.9

US$5.5

US$6.9

Mix of deals by industry sectorDeal Count

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

Mix of deals by industry sectorValue

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

Deal Drivers AmericasMergermarket 93

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FY 2018Latin America

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Valu

e (U

S$

m)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q12012 2013 2014 2015 2016 2017 2018

0

20

40

60

80

100

120

140

160

180

200

220

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

Num

ber

of d

eals

2012 2013 2014 2015 2016 2017 2018

Moving average trend lineDeal Value Moving average trend lineDeal Count

Quarterly M&A activityValue

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

Quarterly M&A activityDeal Count

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

Deal Drivers AmericasMergermarket 94

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FY 2018Latin America

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League tables

2018 2017 Company Name Value (USD m)

Number of Deals

1 33 Barbosa, Mussnich & Aragao 24,801 32

2 2 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 23,825 49

3 44 Davis Polk & Wardwell 22,577 5

4 14 Cescon, Barrieu, Flesch & Barreto Advogados 21,230 41

5 7 Machado Meyer Sendacz e Opice 20,764 27

6 17 White & Case 19,441 13

7 37 Cleary Gottlieb Steen & Hamilton 18,367 8

8 24 Tozzini Freire Teixeira e Silva Advogados 16,682 17

9 5 Carey y Cia 8,560 10

10 6 Lefosse Advogados 7,535 23

2018 2017 Company Name Value (USD m)

Number of Deals

1 1 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados 23,825 49

2 2 Pinheiro Neto Advogados 4,747 49

3 9 Cescon, Barrieu, Flesch & Barreto Advogados 21,230 41

4 12 Barbosa, Mussnich & Aragao 24,801 32

5 8 Demarest Advogados 6,038 31

6 4 Machado Meyer Sendacz e Opice 20,764 27

7 7 Philippi Prietocarrizosa, Ferrero DU & Uria 2,742 24

8 15 Lefosse Advogados 7,535 23

9 16 DLA Piper 3,951 23

10 10 Veirano Advogados 3,412 20

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Banco BTG Pactual 11,782 35

2 1 Banco Itau BBA 23,166 32

3 3 Banco Bradesco BBI 24,060 20

4 13 Credit Suisse 3,188 19

5 4 Bank of America Merrill Lynch 25,667 15

6 6 Morgan Stanley 17,121 13

7 12 JPMorgan 6,899 13

8 5 Santander Global Corporate Banking 3,509 13

9 10 Goldman Sachs & Co 7,308 12

10 26 Oaklins 484 12

2018 2017 Company Name Value (USD m)

Number of Deals

1 2 Bank of America Merrill Lynch 25,667 15

2 15 Banco Bradesco BBI 24,060 20

3 8 Banco Itau BBA 23,166 32

4 7 Morgan Stanley 17,121 13

5 3 Banco BTG Pactual 11,782 35

6 5 Goldman Sachs & Co 7,308 12

7 4 JPMorgan 6,899 13

8= - CLSA 4,066 1

8= - Sinolink Securities 4,066 1

10 19 BR Partners 3,615 11

The financial advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and exclude lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.

The legal advisor league tables by value and volume have been run from 01/01/2018 to 12/31/2018 and include lapsed and withdrawn deals. The tables are based on advice to a Central and South American bidder, target or vendor. Excludes: Bahamas, Belize, Dominica, French Guyana, Guyana, Haiti, Puerto Rico, Saint Kitts, Surinam, Turks & Caicos, US Virgin Islands.

Deal Drivers AmericasMergermarket 95

Legal advisors by deal countLegal advisors by value

Financial advisors by deal countFinancial advisors by value

mergermarket.com

FY 2018Latin America

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About Merrill Corporation

Contacts

Merrill Corporation is a leading global SaaS provider for participants in the M&A lifecycle. Clients trust Merrill’s innovative applications, excellent customer service and deep subject expertise to successfully navigate the secure sharing of their most sensitive content. Their flagship product, DatasiteOne, helps dealmakers in over 170 countries close more deals, faster.

To learn more, visit www.merrillcorp.com or contact us:

AMERICAS: +888 311 4100

EMEA: +44 (0)20 3031 6300

APAC: +852 2536 2288

email: [email protected]

About Merrill Corporation

97Mergermarket Deal Drivers Americas

mergermarket.com

FY 2018

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

ContactsCriteria

The following notes pertain to data contained in this publication:

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

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

North America = US & Canada.

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

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

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

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

All data included is correct as of 3 January, 2019.

League Tables correct as of 22 January, 2019.

Top deals correct as of 4 January, 2019.

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

Head of Research Giovanni Amodeo

AmericasLana Vilner

All SectorsTom Cane, Joshua Armstrong

Financial ServicesJoshua Armstrong, Yizhu Wang

Industrials, Manufacturing & EngineeringRichard Tekneci, Marlene Givant Star, Sam Weisberg

Energy, Mining, Oil & Gas Chad Watt

ConsumerDayna Fields

Technology, Media & Telecom Thomas Zadvydas

Life Sciences & HealthcareKevin McCaffrey

CanadaTom Cane, Philip Segal

WestNate Trela

MidwestJeff Sheban

SouthJoshua Armstrong

NortheastAlan Burdziak

Latin AmericaCarlos Martinez, Bruna Maia Carrio

Deal Drivers AmericasMergermarket 98FY 2018

mergermarket.com

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In M&A, information is the most valuable currency. Mergermarket reports on deals 6-24 months before they become public knowledge, giving our subscribers a powerful competitive advantage. With the largest network of dedicated M&A journalists and analysts, Mergermarket offers the most comprehensive M&A intelligence service available today. Our reporters are based in 67 locations across the Americas, Europe, Asia-Pacific, the Middle East and Africa.

Mergermarket is an Acuris company

Americas1501 Broadway 8th Floor New York, NY 10036 USA

+1 646 921 0257

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