investment banking in this edition m&a insight

INVESTMENT BANKING Q3 2021

M&A INSIGHTMERGERS, ACQUISITIONS, DIVESTITURES AND VALUATIONS FOR MIDDLE-MARKET COMPANIES

FOR INSTITUTIONAL USE ONLY

IN THIS EDITION

Global M&A Commentary 3

Near-Term Leading M&A Indicator 4

U.S. Private Equity Commentary 5

U.S. Corporate Finance Commentary 6

M&A Market Statistics 7

Economic Commentary 9

About Raymond James 10

Raymond James Investment Banking Transactions 11

Q3 2021M&A INSIGHT

RAYMOND JAMES INVESTMENT BANKING 2

Raymond James Contacts

JEFF MAXWELL – ST. PETERSBURGManaging Director

Head of M&A Investment Banking 727.567.5222

[email protected]

DON BLAIR – ST. PETERSBURGManaging Director

[email protected]

BRENT KRIEGSHAUSER – ST. PETERSBURGManaging Director

[email protected]

ALLAN BERTIE – LONDONManaging Director

Head of European Investment Banking 44.20.3798.5701

[email protected]

mailto:[email protected]

Q3 2021M&A INSIGHT


0

2,000

4,000

6,000

8,000

10,000

$0

$250

$500

$750

$1,000

$1,250

3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21

U.S. Disclosed Value ($B) Europe Disclosed Value ($B)

Asia Pacific Disclosed Value ($B) Total Number of Transactions

0

5,000

10,000

15,000

20,000

25,000

30,000

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2017 2018 2019 2020 2020 YTD 2021 YTD

U.S. Disclosed Value ($B) Europe Disclosed Value ($B)Asia Pacific Disclosed Value ($B) Total Number of Transactions

(1) FactSet; Number of transactions includes those with undisclosed values; Includes transactions with disclosed values over $10MM; Data as of 09/30/21.

(2) Reuters.

Global M&A Market Commentary

HISTORICAL QUARTERLY M&A ACTIVITY

The substantial increase in Y-o-Y global deal values during the

third quarter of 2021 led to Q3 being the best quarter ever on

record when measured by total deal value(2). Notwithstanding a

historic second quarter, sequential quarter-over-quarter global

announced and completed volume and disclosed values observed

high single-digit growth, increasing ~9% and ~8%, respectively(1).

Asia Pacific deal value and volume recorded notable sequential

quarter-over-quarter improvements increasing ~59% and ~4%,

respectively. In addition to the structural macro factors described

above, the surge in M&A activity is paralleled by global vaccine

availability and distribution, helping mitigate economic concerns

related to COVID-19.

HISTORICAL ANNUAL M&A ACTIVITY

Total year-over-year (“Y-o-Y”) M&A deal counts involving targets

based in the U.S., Europe and Asia Pacific increased by

approximately 55% for the first three quarters of 2021 when

compared to the same period a year ago(1). The sustained

elevated M&A transaction volume has translated into record

disclosed deal value for the first nine months of the year(2). The

transaction market continues to demonstrate strength, as

investors and corporate buyers take advantage of inexpensive

access to financing and seek growth-oriented opportunities to

deploy capital. The expectation of near-term legislative changes,

notably the proposed tax reform, has also contributed to the

strength of this year’s transaction market as certain sellers seek to

push deals into calendar 2021.

Y-o-Y Value Change: US: +192% | EU: +129% | AP: +70% | Total: +143%

Q3 2021M&A INSIGHT


-

50

100

150

200

250

300

350

400

450

Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21

Assessing a Near-Term Leading M&A Indicator

Yearly AverageHSR Filings

Mon

thly

HSR

Fili

ngs

A Leading Indicator for Continued Strong M&A Activity Levels: HSR FILINGSNew Hart-Scott-Rodino ("HSR") regulatory filings can be a leading indicator of M&A activity. M&A markets remain robust as 3Q’21 filings were up 127% over the same period a year ago;Trailing 12 month average stands 80% higher than the historical average(1)(2).

2017 Average: 1722016 Average: 149 2018 Average: 183 2019 Average: 166 2020 Average: 169

2021 YTD Average:

311

(1) Historical period defined as 2016-2020.(2) Federal Trade Commission; Data as of 09/30/21.Note: Effective September 27, 2021, the Bureau of Competition recommends enforcement actions for companies that fail to file a premerger notification when retirement of debt is part of the consideration for a deal; this change will increase the volume of transactions subject to the HSR Act.


Q3 2021

$590 $642

$722 $751

$424

$649

4,4704,893

5,678 5,709

3,597

4,806

Capital Invested ($B) Number of Deals

2016 2017 2018 2019 2020 YTD

2021 YTD

U.S. Private Equity Deal Flow(1)

U.S. PRIVATE EQUITY COMMENTARY

U.S. private equity activity deal value in the third quarter of2021 increased approximately 50%, when compared to thesame period a year ago. When measured by volume, over1,495 transactions closed in the third quarter of 2021,representing an increase of approximately 18% compared to3Q’20. Compositionally, deal sizes from $100M – $500Mrepresented 34% of the total count, an increase ofapproximately 12% from the same period a year ago; dealsunder $25M made up 39% of the total count, down 7% fromthe same observation period last year. $100M – $500M dealsizes also recorded increases in exit activity over 82%, upapproximately $12B to $27B from the same period a yearago. Deal sizes $1B+ remain the largest contributor of alldeal tranches, representing 75% of the total exit value.

Similar to the M&A market, the leveraged loan market is onpace for a record year when measured by total issuancevalue. Evolving demand, primarily driven by appetite forhigher yielding securities, has resulted in an unprecedentedoutstanding U.S. leveraged loan balance of ~$1.3T(3)(4). Theprimary CLO market achieved its third consecutive quarterof record-setting issuance value, reaching ~$45B. This year’srun rate is expected to surpass the incumbent issuancerecord of ~$125B by a significant margin(3). Further, overallborrower risk profiles have fundamentally changed for U.S.leveraged loan issuance, as “B-” borrowers now representover 50% of total single B issuances, the highest recordedlevel in history(3).

(1) PitchBook, “US PE Breakdown”. Data as of 09/30/21.(2) S&P LCD Report. Data as of 09/30/21.(3) S&P Global.(4) Outstanding loan balance measured via S&P / LSTA Leveraged Loan Index.

Debt Multiples of Large Corporate LBO Loans(2)

5.2x 5.5x 5.7x 5.7x 5.4x 5.4x

0.3x0.3x 0.2x 0.3x 0.4x 0.3x

5.5x5.8x 5.9x 6.0x 5.8x 5.7x

2016 2017 2018 2019 2020 2021 YTD

Bank Debt/EBITDA Non-Bank Debt/EBITDA


Q3 2021

(50.0%)

(25.0%)

0.0%

25.0%

50.0%

(50.0%)

0.0%

50.0%

100.0%

150.0%

Announced M&A Volume Y-O-Y % ChangeReal GDP, S.A.A.R.

-

1.0%

2.0%

3.0%

4.0%

10-Yr. TreasuryBAML US Corp. BBB Option-Adj. Spread5-Yr. TreasuryFed Funds Rate1-Yr. Treasury

2016 2017 2018 2019 2020 2021

Sept.Avg.

1.37%1.11%0.86%0.25%0.08%

The slowdown of GDP growth and the expectation of lessaccommodative monetary policy resulted in a modestwidening of credit spreads and a subsequent steepening ofthe yield curve in 3Q’21. Inflation has continued to placeupward price pressure on a wide basket of goods andservices domestically, contributing to a deterioration ininvestor sentiment as longer-lasting inflation could result indeflated forward-looking earnings for major indices andtheir constituent securities. As investors navigated acomplex ecosystem of mixed economic outlook, the S&Pinched higher for the quarter, gaining 0.5%; other majorindices declined by low single digits.

U.S. real GDP growth, historically an indicator of M&A activityand a barometer for overall economic health, is estimated tohave increased at an annualized pace of over 2.0% in 3Q’21,a sharp decline Y-o-Y as GDP expanded nearly 34% in 3Q’20.The marginal increase in third quarter GDP reflectedincreases in private inventory investment, personalconsumption expenditures, state and local governmentspending and nonresidential fixed investment. Real personalspending, which accounts for approximately 70% of GDP,had a positive impact on growth, increasing 1.6% in the thirdquarter of 2021. Government assistance payments in theform of forgivable loans to businesses, grants to state andlocal governments and social benefits to households alldecreased.

U.S. CORPORATE FINANCE COMMENTARY

Real

GDP

, S.A

.A.R

.

Announced M&A Volum

e

U.S. GDP Growth vs. M&A Activity(1)(2)(3) U.S. Corporate Spreads(1)

Spot Rate(9/30)

1.52%1.10%0.98%0.25%0.09%

(1) U.S. Bureau of Economic Analysis. Data as of 09/30/21.(2) Factset.(3) GDP growth based on 2012 dollars.

Q3 2021M&A INSIGHT


Consideration Offered in U.S. M&A Transactions(1) U.S. Median Quarterly EBITDA Multiples(1)

U.S. Private Equity Fundraising(3)Average Size of U.S. M&A Transactions(1)(2)

M&A Market Statistics

(1) FactSet; Data as of 09/30/21.(2) Includes transactions with disclosed values over $10MM.(3) PitchBook, “US PE Breakdown”. Data as of 09/30/21.

69% 74% 76%65% 68% 67%

54%63%

76%

23% 17% 15%23% 19% 20%

28%22%

15%

8% 9% 9% 12% 13% 13% 18% 15% 9%

3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21

Cash Combination Stock

12.3x

10.4x 10.8x

12.6x11.5x

12.4x13.2x

14.9x14.2x

3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21

Median EBITDA Multiples

$774

$600

$785

$914$831

$723

$976

2016 2017 2018 2019 2020 2020 YTD 2021 YTD

Average Disclosed Value ($MM)

$196

$256

$193

$327 $311

$241 $238

0

100

200

300

400

500

2016 2017 2018 2019 2020 2020 YTD 2021 YTD

Capital Raised ($B) Number of Funds Closed

439

508

435 509 505

202

295

Q3 2021M&A INSIGHT


$30B$66B

$276B

$19B

$134B`

United States Europe Asia Pacific$166B

Cross Border M&A Deal Activity – 2021 YTD(1)

M&A Market Statistics

(1) FactSet; Number of transactions includes those with undisclosed values; Includes transactions with disclosed values over $10MM; Data as of 09/30/21.

Q3 2021M&A INSIGHT


Economic CommentarySCOTT J. BROWN, Ph.D. November 19TH, 2021

Chief Economist, Private Client Group The New York Fed’s Weekly Economic Index edged up to +3.85% for the

week ending October 16, vs. +7.91% a week earlier (revised from 7.67%).

The WEI is scaled to Y-o-Y GDP growth (+4.9% Y-o-Y in 3Q’21).

Breakeven inflation rates (the spread between inflation-adjusted and fixed-

rate Treasuries) continue to suggest an elevated near-term inflation

outlook. The 5- to 10-year outlook remains receded in the latest week,

reflecting the belief that the Fed will raise rates sooner to keep inflation in

check.

Jobless claims fell by 10,000, to 281,000 (a pandemic low) in the week

ending October 23. Unadjusted claims are approaching the pre-pandemic

levels of 2018 and 2019, consistent with a tight labor market.

The Chicago Fed Advance Retail Trade Summary (CARTS) was up 0.2% in the

second week of October, following a 1.2% gain in the previous week.

October retail sales (ex-autos) were projected to rise 2.3% from September.

The University of Michigan’s Consumer Sentiment Index edged up to 71.7 in

the mid-month assessment for September (vs. 71.4 at mid-month and 72.8

in August). Inflation expectations rose. The report noted that “the positive

impact of higher income expectations and the receding coronavirus has

been offset by higher rates of inflation and falling confidence in government

economic policies.”

Supply Chains, Demand and Inflation

You can learn a lot by talking to people. The economy is “strong,” but also

“terrible.” Higher inflation is “transitory,” but also “likely to persist.” Fed

policy is “behind the curve,” but also “appropriately positioned.” In truth,

the outlook for growth, inflation, and monetary policy is evolving.

The argument for transitory inflation – Nonfarm payrolls are still down by

more than four million since the start of the pandemic and we would have

likely added more than three million jobs over the last 20 months if not for

the pandemic. That’s a lot of slack. The unemployment rate was 4.6% in

October, but we learned in the last cycle that labor supply is a lot more

flexible than the unemployment rate would suggest. Higher consumer price

inflation has been concentrated in restart pressures. Supply chains are slow

to recover after every downturn. It’s a matter of time before they clear up.

The argument for longer-lasting inflation – More firms are reporting

difficulties in finding and retaining workers. Job vacancies and quit rates are

at or near record highs. Wage inflation follows rather than leads price

inflation, but could reinforce higher price inflation (if firms are successful in

passing higher costs long). While higher inflation has been concentrated in

things like used motor vehicles, price increases appear to be broadening

across categories. Supply chain issues have been more severe and have

lasted longer than expected, and while there have been some signs of

improvement, strains are expected to last into 2022. Moreover, it’s not just

supply chain bottlenecks. There has been a marked shift from consumer

services to goods, a trend which has continued even as the service side of

the economy recovers. While long-term inflation expectations remain

consistent with the Fed’s long-term inflation goal, inflation expectations for

the next five years have risen a lot in recent weeks.

The Employment Cost Index (for civilian workers) rose 1.3% in the three

months ending in September, up 3.7% Y-o-Y (vs. +2.9% Y-o-Y in June and

+2.4% Y-o-Y a year earlier).

Real GDP rose at a 2.0% annual rate in the advance estimate for 3Q’21,

reflecting drags from the Delta variant and the semiconductor issue in

autos, but boosted by 2.1 percentage points due to a smaller decline in

inventories. Consumer spending rose at 1.6% annual rate, while business

fixed investment rose 1.8%.

Personal income fell 1.0% in September, reflecting a 73.2% plunge in

unemployment insurance payments. Private-sector wages and salaries rose

0.9% (+10.5% Y-o-Y). Personal spending rose 0.6% (+10.9% Y-o-Y), up 0.3%

(+6.2% Y-o-Y) adjusting for inflation. The PCE Price Index rose 0.3% in

September (+4.4% Y-o-Y), up 0.2% ex-food & energy (+3.6% Y-o-Y).

Durable goods orders fell 0.4% in September, reflecting a 27.9% decline in

civilian aircraft orders. Ex-transportation, orders rose 0.4%, with orders for

nondefense capital goods ex-aircraft up 0.8%. The U.S. merchandise trade

deficit rose to a record $96.3 billion in the advance estimate for September.

The Conference Board’s Consumer Confidence Index rose to 113.8 in

October (vs. 109.8 in September), reflecting easing concerns about the Delta

variant. Short-term inflation concerns rose to a 13-year high, but “the

impact on confidence was muted” (a contrast to the University of Michigan

survey).

Economic Monitor

Gauging the Recovery

Source: Raymond James Weekly Economic Monitor, “Supply Chains, Demand, and Inflation”. Link.

https://beacon1.rjf.com/ResearchPDF/2021-11/3a293efa-34ec-4440-b3e0-64bbfbb3dd65.pdf

Q3 2021M&A INSIGHT


RAYMOND JAMESRaymond James is one of the largest full-service investment

firms and New York Stock Exchange members headquartered in

the Southeast. Founded in 1962, Raymond James Financial,

together with its subsidiaries Raymond James Financial Services

and Raymond James Ltd., has more than 100 institutional sales

professionals and over 8,400 affiliated financial advisors, as of

09/30/21, in North America, and Europe, Raymond James boasts

one of the largest sales forces among all U.S. brokerage firms.

Industry knowledge and distribution power are central to helping

Raymond James’ investment bankers serve the needs of growth

companies in the areas of public equity and debt underwriting,

private equity and debt placement, and merger and acquisition

advisory services. Raymond James investment banking offices

are located in 21 North American cities, including Atlanta,

Baltimore, Boston, Calgary, Chicago, Dallas, Denver, Greater

Washington D.C., Houston, Los Angeles, Memphis, Nashville, New

York, Raleigh, San Francisco, St. Petersburg, Toronto and

Vancouver, along with Munich, Frankfurt and London in Europe.

Int’l Headquarters IB Office

St. Petersburg

MERGERS & ACQUISITIONSJeff MaxwellHead of Mergers & Acquisitions727.567.5222 [email protected]

BUSINESS DEVELOPMENTKen GriderHead of Business [email protected]

CONSUMERJohn BergHead of Consumer [email protected]

CONVENIENCE STORE & FUEL PRODUCTS DISTRIBUTIONScott GarfinkelHead of Convenience Store & Fuel Products Distribution [email protected]

DIVERSIFIED INDUSTRIALSAlper CetingokHead of Diversified Industrials Group [email protected]

ENERGYMarshall AdkinsHead of Energy Group713.278.5239 [email protected]

EUROPEAN ADVISORYAllan BertieHead of European Investment [email protected]

FINANCIAL SERVICESJohn Roddy Head of Financial Services [email protected]

FINANCIAL SPONSORSDavid ClarkHead of Financial Sponsors [email protected]

HEALTH CAREAndrew GitkinCo-Head of Health Care Group424.281.2094 [email protected]

Riley SweatCo-Head of Health Care [email protected]

RECAPITALIZATION & RESTRUCTURINGGeoffrey RichardsHead of Recapitalization & Restructuring [email protected]

REAL ESTATEBrad ButcherCo-Head of Real Estate [email protected]

Jamie GraffCo-Head of Real Estate Group727.567.5289 [email protected]

TECHNOLOGY & SERVICESBrendan RyanCo-Head of Technology & Services Group [email protected]

Jon Steele Co-Head of Technology & Services Group617.624.7020 [email protected]

















Q3 2021M&A INSIGHT


Raymond James Recent Advisory Transactions (07/01/21 – 09/30/21)

Past performance is not indicative of future results.

September 2021

Has invested in

September 2021

Has been acquired by

A portfolio company of

September 2021


September 2021



September 2021

Has merged with

September 2021

Has merged with

September 2021

Has received a majority growth capital

investment from


September 2021


September 2021



September 2021

Has acquired


September 2021


Newark Facility Management

September 2021

Has received an investment from

September 2021

Has entered into a definitive agreement to

combine with

To form

And intends to list on the NASDAQ via a

combination with

September 2021

Has acquired

September 2021


invest in

September 2021



September 2021

Has received a minority investment from

September 2021



Q3 2021M&A INSIGHT




September 2021



September 2021


September 2021

Has invested in

September 2021


Has agreed to receive a strategic growth investment from

September 2021



September 2021


September 2021

Has sold substantially all assets to


September 2021



August 2021


August 2021


A business unit of

A Dentsu Group company

August 2021

Has announced a business combination

with

MedTech Acquisition Corporation

August 2021




August 2021


August 2021

Has been acquired in a business combination

with

August 2021


Has received a strategic investment from

August 2021

Strategic advisory for Epigenomics AG

including the sale of selected assets to

August 2021


August 2021

Has entered into a definitive business

combination agreement with

Q3 2021M&A INSIGHT




August 2021


August 2021


August 2021


August 2021



August 2021


August 2021



be acquired by

August 2021



August 2021


August 2021


Has received a strategic growth investment from

August 2021

Has acquired

August 2021

&

Have acquired

August 2021


July 2021


&

July 2021


July 2021

Has sold ~300,000 acres of Timberlands

Manager of Joint Venture

August 2021



July 2021

Has merged with

July 2021

Has acquired

Q3 2021M&A INSIGHT




July 2021

Has merged with

July 2021



July 2021

Has entered into a licensing agreement for

fexuprazan with

July 2021

Has acquired

From ICM’s management team and

July 2021

Has acquired

July 2021

Has received an investment from

July 2021


Has been sold to


July 2021



July 2021

Has acquired

July 2021



July 2021



July 2021


acquire a strategic stake in

July 2021



July 2021


Q3 2021M&A INSIGHT


Raymond James Recent Capital Markets Transactions (07/01/21 – 09/30/21)


September 2021 September 2021 September 2021 September 2021 September 2021 September 2021

September 2021 September 2021 September 2021 August 2021 July 2021

July 2021 July 2021 July 2021 July 2021

September 2021

July 2021July 2021

$1,779,855,000

Initial Public OfferingPassive Bookrunner

$33,321,250

Follow-on OfferingLeft Bookrunner

$435,045,000


$63,250,000

Initial Public OfferingLeft Bookrunner

$1,128,600,000

Initial Public OfferingCo-Manager

$103,569,000

Follow-on OfferingActive Bookrunner

$883,200,000

Follow-on OfferingCo-Manager

$1,117,800,000


$3,392,500,000


$1,003,125,000


$43,253,700


$250,000,000

Follow-on OfferingPassive Bookrunner

$271,485,000


$373,880,000


$489,325,000


$60,375,000


$138,000,000

Initial Public OfferingLeft Bookrunner

$371,985,789


M&A INSIGHT Q3 2021

USAATLANTA | BALTIMORE | BOSTON | CHICAGO | DALLAS | DENVER | HOUSTON | LOS ANGELES | MEMPHIS

NASHVILLE | NEW YORK | RALEIGH | RESTON | SAN FRANCISCO | ST. PETERSBURG

EUROPELONDON | MUNICH | FRANKFURT

CANADACALGARY | TORONTO | VANCOUVER

raymondjames.com/ib

FOR INSTITUTIONAL USE ONLY

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. Raymond James® is a registered trademark of Raymond James Financial, Inc. Raymond James Financial International Limited is authorized and regulated by the Financial Conduct Authority (FRN 188244)

Raymond James Corporate Finance GmbH | Commercial Register HRB 136137.

INVESTMENT BANKING

Information obtained from third-party sources is considered reliable, but we do notguarantee that the information herein is accurate or complete. This report was preparedwithin Raymond James’ Investment Banking Department and is for information purposesonly. This report is not a product of Raymond James’ Research Department; recipients of thisreport should not interpret the information herein as sufficient grounds for an investmentdecision or any other decision. The report shall not constitute an offer to sell or thesolicitation of an offer to buy any of the securities mentioned herein; past performance doesnot guarantee future results.

This presentation includes logos or other words or devices that may be registered trademarksof their respective owners. Such use is solely for purposes of convenience in referring to thetrademark owners and their products/services. This presentation and its contents are notendorsed, sponsored or affiliated with any trademark owner. Raymond James & Associates,Inc. and its affiliates are not affiliated with any trademark owner but may provide certainfinancial services to one or more trademark owners or their affiliates.

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