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1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.2 No data is available for ratio of enterprise value to EBITDA, trailing 12 months, for U.S. Sponsor-Related transactions in January 2015.3 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.4 No data is available for ratio of enterprise value to EBITDA, trailing 12 months, for Crossborder Transactions in January 2015.5 Industries categories are determined and named by Dealogic.
Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of February 2015 unless otherwise specified. “Last 12 Months” data is for the period from February 2014 to January 2015 inclusive. Data from Dealogic and FactSet MergerMetrics may include multiple offers, as applicable, for the same target company. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
January 2015
Last 12 Months
By Number of Deals
January 2015
Last 12 Months
$0 $100 $200 $300 $400
Finance
Computers & Electronics
Forestry & Paper
Healthcare
Utility & Energy
$10.79
$7.17
$6.97
$21.16
$12.81
$0 $100 $200 $300 $400
Oil & Gas
Computers & Electronics
Telecommunications
Utility & Energy
Healthcare $313.76
$183.61
$164.70
$161.02
$146.65
0 500 1,000 1,500 2,000 2,500 3,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics 179
175
95
53
36
0 500 1,000 1,500 2,000 2,500 3,000
Oil & Gas
Finance
Healthcare
Professional Services
Computers & Electronics 2,414
1,746
958
488
638
January 2015 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 241.34 (55.26) 76.12 (20.58)
No. of deals 2,982 (324) 854 153
Avg. value of deals (US$mil) 190.9 20.1 286.2 (65.5)
Avg. deal multiple1 11.4x (1.2) 19.0x 6.2
Strategic Transactions
Volume (US$B) 211.97 (6.36) 65.12 8.76
No. of deals 2,562 (309) 676 136
Avg. value of deals (US$mil) 186.8 46.2 286.9 35.3
Avg. deal multiple1 11.5x (1.3) 19.0x 5.6
Sponsor-Related Transactions
Volume (US$B) 29.36 (48.90) 11.00 (29.34)
No. of deals 420 (15) 178 17
Avg. value of deals (US$mil) 227.6 (200.1) 282.0 (508.9)
Avg. deal multiple1 11.4x 0.0 N/A2 N/A2
Crossborder Transactions3
Volume (US$B) 65.79 (19.29) Inbound16.27
Outbound
8.57
Inbound
(10.27)Outbound
(3.55)
No. of deals 710 (94) Inbound106
Outbound
149
Inbound
(7) Outbound
12
Avg. value of deals (US$mil) 232.5 21.9 Inbound361.7
Outbound
204.0
Inbound
(96.0) Outbound
(24.6)
Avg. deal multiple1 10.4X (3.7) InboundN/A4
Outbound
11.5x
Inbound
N/A4 Outbound
(0.2)
Figure 1 Figure 2 - Most Active U.S. Target Industries5
February 2015, Issue 35M&A Activity
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M&A Activity (Continued)
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Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for January 2015 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for January 2015 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $20 $40 $60 $80 $100
China
Spain
Switzerland
United Kingdom
Canada $8.82
$5.59
$1.12
$0.28
$0.19
$0 $20 $40 $60 $80 $100
India
Belgium
RussianFederation
Mexico
United Kingdom $2.13
$1.88
$1.47
$1.20
$0.40
0 50 100 150 200 250 300 350 400
France
Brazil
Germany
United Kingdom
Canada 28
24
10
8
12
$0 $20 $40 $60 $80 $100
Switzerland
Japan
United Kingdom
Canada
Germany $70.45
$48.55
$33.58
$20.29
$15.69
0 100 200 300 400
Germany
France
Japan
United Kingdom
Canada 365
210
146
74
78
$0 $20 $40 $60 $80 $100
Mexico
Belgium
France
Canada
United Kingdom
$27.41
$55.29
$17.70
$8.72
$9.67
0 50 100 150 200 250 300 350 400
Brazil
Australia
Germany
United Kingdom
Canada 309
291
116
103
86
0 100 200 300 400
Japan, Switzerland and France
India
United Kingdom
Canada
16
36
8
76
6 Each of Japan, Switzerland and France was the country of origin for seven transactions in January 2015.
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January 2015
Equity Value (US$B)
Last 12 Months
Equity Value (US$B)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers
Janu
ary 20
15
Dece
mber
2014
Nove
mber
2014
Octo
ber 2
014
Sept
embe
r 201
4
Augu
st 20
14
July
2014
June
2014
May 2
014
April
2014
March
2014
Febr
uary
2014
$2,010.8
$2,389.0$6,365.2
$22,851.6
$1,878.2
$5,062.6
$12,830.3
$4,341.3
$2,043.7
$7,531.4
$25,417.1
$8,003.2
$1,797.5 $3,316.0
$14,821.7$15,757.6
$13,696.2
$5,138.6$7,445.3
$7,891.8
$5,500.8
$11,742.5
$4,058.9
$2,690.2
$0 $20 $40 $60 $80 $100
Baker Hughes Incorporated ~ Halliburton Company(November 17, 2014)
Time Warner Cable Inc.(multiple offers)
DIRECTV ~ AT&T Inc.(May 18, 2014)
Allergan, Inc.(multiple offers)
Time Warner Inc. ~ Twenty-First Century Fox, Inc.(July 16, 2014) (Offer withdrawn August 5, 2014)
$44.55 $37.35
$34.91
$76.12
$67.37 $61.09
$47.86
7
8
$0 $20 $40 $60 $80 $100
MWI Veterinary Supply, Inc. ~ AmeriSourceBergen Corporation (January 12, 2015)
NPS Pharmaceuticals, Inc. ~ Shire Plc (January 11, 2015)
City National Corporation ~ Royal Bank of Canada (January 22, 2015)
MeadWestvaco Corporation ~ Rock-Tenn Company (January 26, 2015)
Regency Energy Partners LP ~ Energy Transfer Partners, L.P. (January 26, 2015) $11.05
$4.93
$2.45
$8.22
$5.18
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)
Figure 5 - Five Largest Announced U.S. Public Mergers
7 Data reported by FactSet MergerMetrics includes the November 17, 2014 offer by Actavis plc, reported at $67.37 billion, and the April 22, 2014 offer by Valeant Pharmaceuticals International, Inc., reported at $61.09 billion.8 Data reported by FactSet MergerMetrics includes the February 13, 2014 offer by Comcast Corporation, reported at $44.55 billion, and the January 13, 2014 offer by Charter Communications, Inc., reported at $37.35 billion.
M&A Activity (Continued)
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9 Based on the highest target break fees and reverse break fees payable in a particular deal.10 No transactions in January 2015 involving a financial buyer had a reverse break fee.11 No transactions in January 2015 involved a financial buyer.12 No transactions in January 2015 had a go-shop provision. 13 No transactions in January 2015 involving a financial buyer had a go-shop provision.14 No transactions in January 2015 involving a strategic buyer had a go-shop provision.
M&A Terms
$2,000
$6,000
$10,000
$14,000
Average Value of All U.S. Public Mergers with Definitive Agreements
$2,742.4
(US$mil)
Avg. Reverse Break Fee as % of Equity ValueAvg. Target Break Fee as % of Equity Value
Janu
ary 20
15
Dece
mber
2014
Nove
mber
2014
Octo
ber 2
014
Sept
embe
r 201
4
Augu
st 20
14
July
2014
June
2014
May 2
014
April
2014
March
2014
Febr
uary
2014
8%
6%
4%
2%
3.3%
5.5%
4.4%
3.7%4.4%
3.1%
4.2%
3.4%
3.3%
3.6%
4.2%
4.6% 4.9%
7.6%
3.2%
3.1%
3.4%
$12,830.3
$1,972.7
$3,671.3
$2,080.5
$2,386.6
$8,034.8
$1,990.9
7.1%
$2,217.1
$4,449.2
$4,391.2
3.5%
3.0%
3.3%3.5% 3.5% 3.5%
$6,155.4
Figure 6 - Average Break Fees as % of Equity Value7
Figure 7 - Average Break Fees as % of Equity Value9
January 2015
Last 12 Months
Target Break Fee for All Mergers 3.5 3.4
January 2015
Last 12 Months
Reverse Break Fee for All Mergers 3.7 4.9
Reverse Break Fee for Mergers Involving Financial Buyers10
N/A 6.8
Reverse Break Fee for Mergers Involving Strategic Buyers
3.7 4.4
January 2015
Last 12 Months
% of Mergers with Go-Shops 0.0 6.8
% of Mergers Involving Financial Buyers with Go-Shops11
N/A 28.6
% of Mergers Involving Strategic Buyers with Go-Shops
0.0 4.5
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops12
N/A 34.1
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops13
N/A 36.5
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops14
N/A 32.5
Figure 8 - U.S. Public Merger Go-Shop Provisions
Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at $100 million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data from Dealogic and FactSet MergerMetrics may include multiple offers for the same target company. Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
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Our Mergers & Acquisitions PracticeThe Mergers & Acquisitions Group at Paul, Weiss is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, hedge funds, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions.
Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions.
A sampling of recent engagements includes: advising Time Warner Cable in its pending $45 billion merger with Comcast; representing SAP in its $8.3 billion acquisition of Concur Technologies; representing Automatic Data Processing in its $5 billion spin-off of ADP Dealer Services, now called CDK Global; advising Encana in its $7.1 billion acquisition of Athlon Energy; representing NorthStar Realty Finance in its $4 billion acquisition of Griffin-American Healthcare REIT II; representing Grupo Salinas in its pending $2.5 billion sale of Iusacell to AT&T; advising Oak Hill Capital Partners in its $1.43 billion acquisition of Berlin Packaging; and representing IMAX Corporation in its sale of a 20 percent stake in its Greater China business.
15 Due to rounding, percentages may not add up to 100%.16 This data includes both announced transactions for which a definitive merger agreement was reached and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions).
Cash Only
Stock Only
Cash & Stock Only
Choice (Cash Election)
Other
Last 12 Months
January 2015
33.3%
12.8%
50.7%
18.2%
18.2%
22.2% 11.1%
33.3%
January 2015 100.0
Last 12 Months 90.7
January 2015 33.3
Last 12 Months 22.3
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers16
January 2015 10.0
Last 12 Months 14.8
© 2015 Paul, Weiss, Rifkind, Wharton &
Garrison LLP.
In some jurisdictions, this publication
may be considered attorney advertising.
Past representations are no guarantee of
future outcomes.
M&A Terms (Continued)
NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON
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Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and
financial institutions in the United States and throughout the world. Our firm is widely recognized for
achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and
their most critical strategic transactions. We are keenly aware of the extraordinary challenges and
opportunities facing national and global economies and are committed to serving our clients’ short- and
long-term goals.
ContactsAriel J. Deckelbaum Partner New York 212-373-3546
Frances Mi Counsel New York 212-373-3185 [email protected]
Associates Joseph S. Friedman,
Yashreeka Z. Huq, Samuel J. Welt
and law clerks Ryan D. Blicher,
Alison E. Gurr and David C. Rothman
contributed to this publication.
Figure 9 - Form of Consideration as % of U.S. Public Mergers15 Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio
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