Merger Tracker Monthly February 2011

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<p>February 2011</p> <p>Steven M. Bernard, CFA Director of M&amp;A Market Analysis sbernard@williamblair.com +1.312.364.8221</p> <p>Table of Contents</p> <p>Commentary Global Activity Regional Transactions Middle-Market Regional Transactions Annual Transactions U.S. M&amp;A Activity Transaction Detail Annual Activity Valuation Multiples Private-Equity Transaction Analysis Transaction Breakdown Industry Breakdown Cross-Border Transaction Analysis U.S. Financing Markets Debt Capital Markets Equity Capital Markets European M&amp;A Activity Transaction Detail Annual Activity Valuation Multiples Private-Equity Transaction Analysis Emerging Markets M&amp;A Activity Select William Blair &amp; Company Transactions William Blair &amp; Company Corporate Finance Contact List William Blair &amp; Company Corporate Industry Coverage Notes Disclosures</p> <p>1 3 3 4 5 6 6 7 8 9 11 13 14 16 16 18 19 19 20 21 22 23 24 29 31 32 33</p> <p>CommentaryCommentary</p> <p>OVERVIEWFollowing a strong 2010, in which M&amp;A activity increased significantly from the prior year and posted its first annual increase in three years, the new year kicked off with somewhat mixed results. However, we continue to expect the favorable momentum from 2010 to continue through 2011, as most of the positive factors driving M&amp;A activity remain in place. Although the strength of the economic recovery continues to be somewhat of an unknown, the situation is vastly improved from 12-18 months ago, resulting in higher corporate earnings and profitability. This, in turn, has led to increased optimism among corporate officers and investors, which has helped drive equity prices to new multiyear highs. In addition, increasing liquidity in the debt markets, coupled with about $400 billion-$500 billion of committed but uninvested capital, has resulted in an acceleration of private-equity activity. To reiterate, we believe that the overall environment for transaction activity remains favorable and all signs point to another solid year for M&amp;A activity in the current year.</p> <p>GLOBAL M&amp;A HIGHLIGHTS For January, the number of announced global transactions totaled 3,058, a 7.2% decline from the corresponding period last year, which was an exceptionally strong month. However, the total disclosed dollar volume for the month was $215.1 billion, a 10.8% increase from the corresponding period last year. The number of middle-market global M&amp;A transactions for the month declined 2.4%, to 1,431, with declines in four of the five regions. However, disclosed dollar volume rose 22.5%, to $74.7 billion, as four of the five regions experienced double-digit increases.</p> <p>1</p> <p>Commentary (cont'd)Commentary (cont'd)</p> <p>U.S. M&amp;A HIGHLIGHTS There were a total of 1,004 announced U.S. transactions in January, a 6.8% decline from the corresponding period last year, although this total was mostly in line with the LTM monthly average of 1,029. The disclosed dollar volume of announced transactions was $124.2 billion, up 99.9% from the corresponding period last year and also well above the LTM monthly average of $96.1 billion. Middle-market activity for the month posted similarly mixed results, as the number of transactions declined 10.8%, while dollar volume rose a respectable 20.3%, to $27.0 billion. The upper end of the middle market experienced the most strength, with double-digit increases in both the number of transactions and the disclosed dollar volume. Overall private-equity activity continues to accelerate, with 12 straight months of increased transactions compared with the prior year. For the month, there were 182 transactions, up 38.9% and well above the LTM monthly average of 149. The disclosed dollar value of $12.4 billion was nearly double the comparable period last year, although it was well below the LTM monthly average of $21.8 billion. As the equity markets have rebounded, public companies have continued to increase their share of M&amp;A activity relative to the other market participants. Public companies currently represent 28.7% of all acquirers, compared with 28.3% for 2010 and just 21.5% for 2009. Although recent results were quite strong, the number and dollar volume of bankruptcy and distressed transactions appear to be tapering off.</p> <p>EUROPEAN M&amp;A HIGHLIGHTS The total number of announced European deals for the month was 1,146, down 10.6% from the year-ago period and also slightly below the TTM monthly average of 1,259. In addition, the total dollar volume for the month was just $56.2 billion, down 35.1% from the year-ago period and also well below the LTM monthly average of $81.0 billion. European middle-market activity was slightly stronger, with 344 announced deals in January, down a very modest 2.0% compared with the corresponding period last year. However, the dollar volume of $24.0 billion represented a 19.4% increase compared with the year-ago period, although it was far short of the LTM monthly average of $29.4 billion. The median enterprise value/EBITDA multiple for all European transactions continues to rebound from the 2009 lows and currently stands at 9.2 times for the LTM period, up from 7.2 times for all of 2009 and 9.1 times for 2010. There were a total of 121 European private-equity transactions for the month, a 13.1% increase from the comparable period last year but slightly below the LTM monthly average of 134 transactions.</p> <p>www.williamblair.com</p> <p>2</p> <p>Global ActivityGlobal Activity</p> <p>Regional Transactions The number of announced global transactions for January totaled 3,058, a 7.2% decline from thecorresponding period last year, which was an exceptionally strong month.</p> <p> Four of the five regions showed a decline in the number of deals, led by a double-digit decline inEurope.</p> <p> However, the total disclosed dollar volume for the month was $215.1 billion, up 10.8% from thecorresponding period last year.</p> <p> Three of the five regions reported increases in deal value, led by North America, which more thandoubled, and a more than 50% increase in Asia-Pacific.</p> <p>Global M&amp;A Activity DetailNUMBER OF DEALS2009 2010 1,055 118 1,133 85 905 3,296 % Chg. 2011 '11 vs. '10 1,018 132 958 73 877 3,058 (3.5%) 11.9% (15.4%) (14.1%) (3.1%) (7.2%) 2009 $99,095 $11,895 $40,219 $4,945 $21,824 $177,978</p> <p>DEAL VALUE2010 $46,444 $49,802 $64,557 $3,033 $30,424 $194,261 % Chg. 2011 '11 vs. '10 $109,820 $14,829 $40,885 $3,166 $46,449 $215,149 136.5% (70.2%) (36.7%) 4.4% 52.7% 10.8%</p> <p>JANUARYNorth America Latin America Europe Africa / Middle East Asia Pacific TOTAL 871 62 1,282 64 839 3,118</p> <p>YTDNorth America Latin America Europe Africa / Middle East Asia Pacific TOTAL 871 62 1,282 64 839 3,118 1,055 118 1,133 85 905 3,296 1,018 132 958 73 877 3,058 (3.5%) 11.9% (15.4%) (14.1%) (3.1%) (7.2%) $99,095 $11,895 $40,219 $4,945 $21,824 $177,978 $46,444 $49,802 $64,557 $3,033 $30,424 $194,261 $109,820 $14,829 $40,885 $3,166 $46,449 $215,149 136.5% (70.2%) (36.7%) 4.4% 52.7% 10.8%</p> <p>LTMNorth America Latin America Europe Africa / Middle East Asia Pacific TOTAL 10,529 1,048 14,010 980 13,998 40,565 8,943 883 13,188 795 12,760 36,569 11,945 1,239 13,249 1,059 12,810 40,302 33.6% 40.3% 0.5% 33.2% 0.4% 10.2% $973,783 $105,249 $993,760 $54,364 $513,867 $721,414 $1,001,051 $121,185 $556,982 $43,041 $492,274 $196,276 $678,332 $87,059 $605,522 38.8% 62.0% 21.8% 102.3% 23.0% 32.7%</p> <p>$2,641,023 $1,934,896 $2,568,241</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>3</p> <p>Global Activity (cont'd)MiddleMarket Regional Transactionsdeclines in four of the five regions. Global Activity (cont'd)</p> <p> The number of middle-market global M&amp;A transactions for the month declined 2.4%, to 1,431, with However, disclosed dollar volume rose 22.5%, to $74.7 billion, as four of the five regions experienceddouble-digit increases.</p> <p>Global Middle-Market M&amp;A Activity DetailNUMBER OF DEALS2009 2010 446 50 283 36 651 1,466 % Chg. 2011 '11 vs. '10 436 60 267 32 636 1,431 (2.2%) 20.0% (5.7%) (11.1%) (2.3%) (2.4%) 2009 $12,061 $2,229 $16,085 $2,386 $18,210 $50,971</p> <p>DEAL VALUE2010 $19,673 $4,158 $14,850 $1,583 $20,696 $60,960 % Chg. 2011 '11 vs. '10 $24,107 $4,745 $17,233 $1,211 $27,379 $74,676 22.5% 14.1% 16.0% (23.5%) 32.3% 22.5%</p> <p>JANUARYNorth America Latin America Europe Africa / Middle East Asia Pacific TOTAL 383 26 342 31 609 1,391</p> <p>YTDNorth America Latin America Europe Africa / Middle East Asia Pacific TOTAL 383 26 342 31 609 1,391 446 50 283 36 651 1,466 436 60 267 32 636 1,431 (2.2%) 20.0% (5.7%) (11.1%) (2.3%) (2.4%) $12,061 $2,229 $16,085 $2,386 $18,210 $50,971 $19,673 $4,158 $14,850 $1,583 $20,696 $60,960 $24,107 $4,745 $17,233 $1,211 $27,379 $74,676 22.5% 14.1% 16.0% (23.5%) 32.3% 22.5%</p> <p>LTMNorth America Latin America Europe Africa / Middle East Asia Pacific TOTAL 4,638 532 5,267 542 10,396 21,375 4,122 444 4,077 426 9,540 18,609 6,302 592 4,131 538 9,329 20,892 52.9% 33.3% 1.3% 26.3% (2.2%) 12.3% $269,943 $36,486 $379,638 $36,666 $318,934 $1,041,667 $210,169 $38,275 $214,887 $22,931 $290,454 $776,717 $318,884 $47,245 $272,293 $29,257 $327,002 $994,681 51.7% 23.4% 26.7% 27.6% 12.6% 28.1%</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>www.williamblair.com</p> <p>4</p> <p>Global Activity (cont'd)Global Activity (cont'd)</p> <p>Annual Transactions</p> <p>Global M&amp;A ActivityUndisclosed Middle Market &gt;$750M Deal Value</p> <p>Number of Deals 45,000 40,000 35,000 30,802 31,108 36,560 42,483 41,265 40,587</p> <p>Deal Value ($ in billions) $4,500 $4,000 $3,500</p> <p>36,416</p> <p>30,00025,000 20,000 15,000 10,000 5,000 0</p> <p>26,670</p> <p>24,947</p> <p>25,983 22,836</p> <p>$3,000$2,500 $2,000 $1,500 $1,000 3,299 3,059 $500 $0</p> <p>Number of Deals &gt;$750M Middle Market Undisclosed Deal Value</p> <p>2000 644 15,900 14,258 $3,033</p> <p>2001 340 13,029 13,301 $1,573</p> <p>2002 296 12,428 12,223 $1,240</p> <p>2003 293 11,958 10,585 $1,357</p> <p>2004 439 13,805 11,739 $1,944</p> <p>2005 579 16,890 13,639 $2,758</p> <p>2006 798 19,114 16,648 $3,628</p> <p>2007 1,022 22,058 19,403 $4,256</p> <p>2008 595 21,864 18,806 $2,682</p> <p>2009 381 18,531 17,504 $1,917</p> <p>2010 633 20,927 19,027 $2,547</p> <p>2010 YTD 27 1,468 1,804 $194</p> <p>2011 YTD 47 1,431 1,581 $215</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>5</p> <p>U.S. M&amp;A ActivityTransaction DetailU.S. M&amp;A Activity Transaction Detail</p> <p> There were a total of 1,004 announced U.S. transactions in January, a 6.8% decline from thecorresponding period last year, although this total was mostly in line with the LTM monthly average of 1,029.</p> <p> The disclosed dollar volume of announced transactions was $124.2 billion, up 99.9% from thecorresponding period last year and also well above the LTM monthly average of $96.1 billion.</p> <p> Middle-market activity for the month posted similarly mixed results, as the number of transactionsdeclined 10.8%, while dollar volume rose a respectable 20.3%, to $27.0 billion.</p> <p> The upper end of the middle market experienced the most strength, with double-digit increases in boththe number of transactions and the disclosed dollar volume.</p> <p>U.S. M&amp;A Activity DetailNUMBER OF DEALS2009 2010 327 83 25 435 347 13 629 1,077 786 % Chg. 2011 '11 vs. '10 275 82 31 388 502 24 592 1,004 1,029 (15.9%) (1.2%) 24.0% (10.8%) 44.9% 84.6% (5.9%) (6.8%) 30.9% 2009 $3,769 $5,538 $5,587 $14,895 $28,108 $88,124 $103,018 $91,900</p> <p>DEAL VALUE2010 $3,770 $9,184 $9,493 $22,446 $20,207 $39,671 $62,117 $69,851 % Chg. 2011 '11 vs. '10 $3,590 $9,987 $13,421 $26,998 $30,596 $97,194 $124,192 $96,067 (4.8%) 8.7% 41.4% 20.3% 51.4% 145.0% 99.9% 37.5%</p> <p>JANUARY&lt; $50M $50M-$250M $250M-$750M Total Middle-Market Monthly Average &gt; 750M Undisclosed Total Deals Monthly Average 311 54 14 379 391 9 541 929 927</p> <p>YTD&lt; $50M $50M-$250M $250M-$750M Total Middle-Market &gt; 750M Undisclosed Total Deals 311 54 14 379 9 541 929 327 83 25 435 13 629 1,077 275 82 31 388 24 592 1,004 (15.9%) (1.2%) 24.0% (10.8%) 84.6% (5.9%) (6.8%) $3,769 $5,538 $5,587 $14,895 $88,124 $103,018 $3,770 $9,184 $9,493 $22,446 $39,671 $62,117 $3,590 $9,987 $13,421 $26,998 $97,194 $124,192 (4.8%) 8.7% 41.4% 20.3% 145.0% 99.9%</p> <p>LTM&lt; $50M $50M-$250M $250M-$750M Total Middle-Market &gt; 750M Undisclosed Total Deals 3,164 1,134 392 4,690 209 6,223 11,122 3,075 811 274 4,160 158 5,113 9,431 4,474 1,096 459 6,029 308 6,008 12,345 45.5% 35.1% 67.5% 44.9% 94.9% 17.5% 30.9% $45,097 $126,693 $165,502 $337,292 $765,506 $1,102,798 $38,141 $92,620 $111,727 $242,487 $595,727 $45,041 $128,339 $193,778 $367,158 $785,641 18.1% 38.6% 73.4% 51.4% 31.9% 37.5%</p> <p>$838,214 $1,152,799</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>www.williamblair.com</p> <p>6</p> <p>U.S. M&amp;A Activity (cont'd)U.S. M&amp;A Activity (cont'd)</p> <p>Annual Activity</p> <p>U.S. M&amp;A ActivityUndisclosed Middle Market &gt;$750M Deal Value</p> <p>Number of Deals 15,000 12,717 10,082 10,000 8,927 8,776</p> <p>Deal Value ($ in billions) $2,400</p> <p>13,27412,369 11,404 9,905 12,346 $1,800</p> <p>10,059</p> <p>9,271$1,200</p> <p>5,000 $6001,077 0 1,004 $0</p> <p>Number of Deals &gt;$750M</p> <p>2000 275</p> <p>2001 190 4,626 5,266 $871</p> <p>2002 128 4,007 4,792 $567</p> <p>2003 146 4,231 4,399 $687</p> <p>2004 233 4,521 5,151 $992</p> <p>2005 281 4,459 5,319 $1,298</p> <p>2006 361 4,535 7,473 $1,645</p> <p>2007 462 4,514 8,298 $1,753</p> <p>2008 229 4,742 6,433 $1,086</p> <p>2009 154 4,103 5,014 $879</p> <p>2010 297 6,038 6,011 $1,098</p> <p>2010 YTD 13 435 629 $62</p> <p>2011 YTD 24 388 592 $124</p> <p>Middle Market 6,781 Undisclosed 5,661 Deal Value $1,609</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>U.S. Middle-Market M&amp;A Activity 750M Undisclosed Total Deals 862 50 1,067 1,979 776 40 705 1,521 847 99 917 1,863 9.1% 147.5% 30.1% 22.5% $3,119 $2,850 $5,969 $4,360 $1,869 $6,230 $6,749 $5,665 $12,414 54.8% 203.0% 99.3%</p> <p>LTMMiddle-Market &gt; 750M Undisclosed Total Deals 862 50 1,067 1,979 776 40 705 1,521 847 99 917 1,863 9.1% 147.5% 30.1% 22.5% $86,453 $108,441 $194,894 $67,635 $109,169 $176,804 $102,499 $191,391 $293,890 51.5% 75.3% 66.2%</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>U.S. Private-Equity ActivityUndisclosed Middle Market &gt;$750M Deal Value</p> <p>Number of Deals 2,500 2,0001,500</p> <p>2,491 1,842 2,068</p> <p>2,503 1,979 1,521 1,863</p> <p>Deal Value ($ in billions) $700 $600 $500 $400 $300 $200 131 182 $100 $0</p> <p>1,304 1,056</p> <p>1,117</p> <p>1,362</p> <p>1,000 500 0</p> <p>Number of Deals &gt;$750M Middle Market Undisclosed Deal Value</p> <p>2000 29 769 506 $133</p> <p>2001 21 554 481 $86</p> <p>2002 26 613 478 $97</p> <p>2003 34 700 628 $132</p> <p>2004 74 991 777 $249</p> <p>2005 92 974 1,002 $333</p> <p>2006 120 1,101 1,270 $582</p> <p>2007 164 909 1,509 $651</p> <p>2008 50 862 1,067 $215</p> <p>2009 40 776 705 $176</p> <p>2010 99 847 917 $289</p> <p>2010 YTD 1 55 75 $6</p> <p>2011 YTD 5 55 122 $12</p> <p>Sources: Dealogic and William Blair &amp; Company, L.L.C. Mergers and Acquisitions market analysis</p> <p>9</p> <p>U.S. M&amp;A Activity (cont'd)PrivateEquity Transaction Analysis (contd)U.S. M&amp;A Activity (cont'd)</p> <p> Computers and electronics, which w...</p>