2017 outsell signature event - jegi digital and communications services may 2017* $3.4 7...
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JEGI: A DIFFERENTIATED INVESTMENT BANKING MODEL
2016/17: $3.4 BILLION VALUE ACROSS 32 TRANSACTIONS
SELECTIVE ENGAGEMENT PROCESSJEGI only engages when we can outperform our competition and meet or exceed client expectations – we turn down or defer consideration on numerous potential assignments
UNIQUE PARTNERSHIP STRUCTUREEvery member of JEGI’s Leadership Team has a vested interest in the performance of the firm and each transaction’s successful closing
SECTOR LEADING BANKER TENURESenior bankers average 14 years at JEGI, completing 600+ M&A transactions
30 YEARS OF M&A ADVISORY LEADERSHIPSecond longest-tenured boutique investment bank on Wall Street
DEEP & TALENTED EXECUTION TEAMGiven our unique, highly selective engagement model, 80% of the firm’s time is spent on execution, not pitching
PROOF IN THE NUMBERSEngagements
closed:
90%
Engagements where valuation exceeded
expectations:
85%
Average time to close:
SIX MONTHS
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ELEPHANT IN THE ROOM - WHAT COMPANY IS THIS?
Founded in 1994
Mentioned in 10% of all Q2 earnings calls by CEOs of other companies 2016 revenues of $136 billion with an EBITDA of only 8% 2017 revenue forecast is $173 billion, with the likelihood that the EBITDA margin may be
lower than 2016
Company invested $5.5 billion in Q2 alone in R&D Company trades at a P/E ratio of 243x and an EBITDA of 39x
WHAT COMPANY IS THIS?
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KEY TRENDS IN M&A – Q3 2017
• M&A activity remains strong across the information industry
• January - September 2017 saw nearly 1,500 announced transactions totaling almost $160 billion in value
• Pace of 2017 M&A is on track to surpass strong 2014 and 2015 levels, but may not match last year
• Jan – Sept 2017 saw 142 fewer deals than Jan – Sept 2016, but Q3 2017 saw 6 more deals than Q3 2016
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KEY TRENDS IN M&A – Q3 2017
Liquidity remains robust, with both financial and strategic buyers flush with cash
Debt markets remain strong and active across both senior and mezzanine capital
Repatriation of capital could cause spike in M&A activity
Market conditions are favorable for robust M&A to continue
Highest levels of consumer confidence since 2001
US unemployment rate of 4.4%; average hourly earnings decreased 0.1% from July to August
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PRIVATE EQUITY DRY POWDER
Strategics also have unprecedented levels of cash on hand – S&P Global estimates $1.8 trillion of total cash on the balance sheets of nonfinancial corporates
Interestingly, much of this capital is being held overseas, given the current tax laws; Trump administration discussing lowering taxes for repatriation of this capital; could significantly impact M&A and infrastructure investment
Source: Bain Capital
Buyer Seller Description Announced Date* Value ($B)
1 Sinclair Broadcast Group Tribune Media Company Media and entertainment company May 2017* $7.3
2 Pamplona Capital Management PAREXEL International Contract drug research organization June 2017* $5.3
3 INC Research Holdings inVentiv Health Pharmaceutical consulting services May 2017* $4.6
4 Cisco Systems AppDynamics IT infrastructure monitoring and analytics January 2017 $4.0
5 Gartner CEB Practice insight and technology company January 2017 $3.7
6 Vivendi Havas Advertising, digital and communications
services May 2017* $3.4
7 Moody'sBureau van Dijk Electronic
Publishing Publishes electronic business information May 2017* $3.4
8 PetSmart (Argos Holding) Chewy E-commerce portal for the pet industry April 2017 $3.4
9 Quinpario Acqusition Corp.Novitex Enterprise Solutions /
SourceHOVOutsourced IT services February 2017* $2.8
10 Hellman & Friedman Fairfax Media Digitally progressive media company May 2017* $2.5
11 Apollo Global Management West Corporation Customer care and telecom services May 2017* $2.0
12 eBay; Microsoft; Tencent Holdings Flipkart Online Services Online shopping website April 2017 $1.4
13 Oracle Moat SaaS analytics solutions April 2017* $0.9
14 First Data CardConnect Payment processing solutions May 2017* $0.8
15 Capitol Acquisition Corp. III Cision (GTCR) PR software March 2017* $0.816 Harland Clarke (MacAndrews & RetailMeNot Savings destination for online and instore April 2017 $0.717 Eurazeo; Goldman Sachs Dominion Web Solutions Digital marketing solutions May 2017 $0.7
18 FleetCor Technologies Cambridge Global Payments Online payment solutions May 2017* $0.7
19 Amazon Souq.com E-commerce platform March 2017 $0.7
20 Apollo Global Management Mood Media Creative marketing solutions April 2017* $0.6* Some deals are still pending
Sources: JEGI Transaction Database and 451 Research LLC
TOP 20 TRANSACTIONS, H1 2017
TOP 20 TRANSACTIONS, H1 2017
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TOP 20 TRANSACTIONS, H1 2017 – CASE STUDY
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acquires
TARGET RATIONALE
DEAL METRICS
$3.7 billion, 3.9x revenue, 18.4x EBITDA
CEB provides insight development and technology management
services to corporate clients; also offers management advisory services to customers in the
financial, legal, marketing and government sectors.
The acquisition of CEB allows Gartner to expand its business
portfolio in the information technology and management
insights sector in the U.S. market.
TOP 20 TRANSACTIONS, H1 2017 – CASE STUDY
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acquires
TARGET RATIONALE
DEAL METRICS
$3.4 billion, 11.3x revenue, 22.0x EBITDA
Bureau van Dijk publishes private company information and corporate ownership structures through Orbis
database, providing information on 220 million private companies globally.
The acquisition of Bureau van Dijk enables Moody’s to gain a stronger position as a leader in financial risk
data and analytical insight.
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BENEFITS OF INORGANIC GROWTH
Acquisitions can:
Turbo-Charge Revenue Growth
Boost Talent
Expand Market Map
Cultivate Innovation
Offer Immediate Scale …with concurrent benefits
…challenging for large companies to do effectively
…helping with often difficult market penetration
…efficiently
…in a marketplace with slow organic revenue growth
RATE OF RETURN: 15.1%
RECENT HIGH-PROFILE TRANSACTIONS THAT CREATED SUBSTANTIAL VALUE FOR THE ACQUIRER
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Story: “OpenTable is a premium online brand with significant global potential, and we couldn't be more excited to welcome the team to The Priceline Group family. We look forward to supporting OpenTable's growth, through both enriched restaurant partnerships and innovative experiences for our collective customers.”
Darren Huston, President & CEO of Priceline Group
acquires
Share price at close: $1,236.73
Share price as of September 29: $1,830.82
Transaction Closed: July 24, 2014 Price: $2.5 billion
Revenue: 12.6x EBITDA: 41.6x
RECENT HIGH-PROFILE TRANSACTIONS THAT CREATED SUBSTANTIAL VALUE FOR THE ACQUIRER
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Story: “The addition of Aegis represents a massive step toward realizing our vision of a client-centric, collaborative global network of the best-in-class brand, digital and media agencies. We look forward to the value this will add to our clients’ businesses, wherever they may be, and look forward to growing with them as their partner of choice.”
Tadashi Ishii, President & CEO, Dentsu
acquires
RATE OF RETURN: 15.6%
Share price at close: $2,900
Share price as of September 29: $4,940
Transaction Closed: March 26, 2013 Price: $4.8 billion
Revenue: 2.6x EBITDA: 14.8x
RECENT HIGH-PROFILE TRANSACTIONS THAT CREATED SUBSTANTIAL VALUE FOR THE ACQUIRER
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Share price at close: $93.74
Story: “We are enthusiastic about SNL because it is a fast growing, highly complementary subscription based business that will enable use to accelerate our strategy to be the leading provider of transparent and independent benchmarks, analytics, data and research across the global capital, commodity and corporate markets.”
Douglas Peterson, President & CEO, McGraw Hill Financial
acquires
RATE OF RETURN: 32.1%
Share price as of September 29: $156.26
becomes
Transaction Closed: September 1, 2015 Price: $2.2 billion
Revenue: 9.9x EBITDA: 43.6x
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THE FUTURE LOOKS BRIGHT M
AR
KET
CO
ND
ITIO
NS
AD
MIN
ISTR
ATI
ON
TAX+ Proposed lower corporate tax rates+ Repatriation of capital = greater investment/M&A
APPOINTMENTS + Reflect a business-friendly environment
FAVORABLE CREDIT MARKET
+ Low interest rate environment- Projected future rate increases
PRESSURE TO IMPROVE PROFITS
+ Slow growth economy encourages inorganic growth+ Acquisitions add talent, scale and synergies+ Divestiture of slow-growth assets = more M&A
STOCK MARKET PERFORMANCE
+ Dow 20,000+ = CEO confidence+ Strong strategic valuations+ Lots of cash on balance sheets
SMALL BUSINESS CONFIDENCE
+ Small Business Optimism Index near 10-year high+ Small Business Owners: 18% plan to increase
employment; 27% feel now a good time to expand
Source, small business data: National Federation of Small Businesses
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GLOBAL LEADERSHIP TEAM
AMIR AKHAVAN
Managing Director
WILMA JORDAN
Founder & CEO
TOLMAN GEFFS
Co-President
RICHARD MEAD
Managing Director
DAVID CLARK
Managing Director
New York / Boston
MARCUS ANSELM
Partner
PAUL COOPER
Partner
BEN TOLLEY
Partner
London / Sydney
JOSEPH SANBORN
Managing Director
JEFF BECKER
Managing Director
JONATHAN DAVIS
Managing Director
SAN DATTA
Managing Director
JON GOODALE
BD Director
VICTORIA JEROME
COO
RICHARD VAUGHAN
Director
KATHLEEN THOMAS
Managing Director
SAM BARTHELME
Managing Director
STEPHEN SHANKMAN
Vice President
NICOLE GINSBERG
Vice President
ADAM GROSS
CMO
BILL HITZIG
COO
DOUG STOWE
EVP
JAMES NALLY
Director
MICHAEL HIRSCH
Managing Director
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CONTACT US
BOSTONJEGI, One Liberty Square 11th FloorBoston, MA 02109+1 617 294 6555www.jegi.com
LONDONClarity, 90 Long AcreLondon, WC2E 9RA+44 20 3402 4900www.claritycp.com
NEW YORKJEGI, 150 East 52nd Street 18th Floor New York, NY 10022+1 212 754 0710www.jegi.com
SYDNEYClarity, 100 Barangaroo AvenueSydney NSW 2000+61 2 8046 6840www.claritycp.com