kpmg deal activity update - acg global...in 2016, total deal value and the share of financial...

KPMG Deal Activity Update

Deal Advisory - Corporate Finance

2016 full year analysis

© 2017 KPMG Advisory N.V. 2

Globally the economy continues to witness an overall improvement from prior years. This modest growth is also refl ected in the number of international M&A volumes, which increased c. 1% from 18,063 announced deals in 2015 to 18,215 in 2016. However, the M&A activity at a European level observed a slightly better increase of 6% from the previous year, where in 7,453 deals were announced for 2016.

Globally, however the deal value has seen a signifi cant decline of 17% from the prior year with the total value recorded at EUR 2,970 billion in 2016. This decrease,

however can be mainly attributed to the absence of large ticket-size multi-billion dollar deals that occurred in 2015. At a European level, a similar decrease has been observed, mirroring the decline in deal value globally.

From a sector perspective, the acquisition of tech business have risen sharply since 2009 both at a global level and on the Dutch market. These tech companies operated in either computer services, software, hardware or semi-conductors. Furthermore, acquisitions of these tech businesses have been made by non-tech organisations primarily from the Financials Services, Media and Industrial sectors.

Overall, the Dutch M&A market has witnessed an increase of c. 12% in deal activity adding up to a total of 647 deals in 2016 compared to 578 deals announced in 2015. However, in terms of deal value the Dutch market has seen a decline mirroring the decrease at a European and global level, where the total deal value dropped by 53% from EUR 179bn in 2015 to EUR 84bn in 2016. This was primarily driven by the absence of large ticket-size deals that occurred in 20151.

Though none of the two most important events of 2016 (Brexit and US election) did majorly impact the M&A market. We believe that in 2017, once the outcomes of the two events come to full maturity, the M&A activity may be hampered by the continuing process of the UK leaving the EU and the renegotiations of international trade deals under Donald Trump’s presidency. Additionally, the elections in the EU in 2017 are also likely to affect the M&A market.

Note 1: 2015 witnessed three deals of EUR >10bn each, the Shell bid for BG (EUR 74.5bn), the NXP Semiconductor takeover of Freescale (EUR 14.3bn) and the Ahold/Delhaize merger (EUR 10.6bn)Source: Mergemarket

The global M&A market

Outlook 2017

The DutchM&Amarket

Global M&A market snapshot

© 2017 KPMG Advisory N.V.Note 1: 2015 witnessed three deals of EUR >10bn each, the Shell bid for BG (EUR 74.5bn), the NXP Semiconductor takeover of Freescale (EUR 14.3bn) and the Ahold/Delhaize merger (EUR 10.6bn)Source: Economist Intelligence Unit, Mergermarket (data per 2 August 2008, based on announced deals, exclusive of IPOs), KPMG Analysis

Number of deals

Global EU Netherlands

2015 2016 Delta 2015 2016 Delta 2015 2016 Delta

18,063 18,215 0.8% 7,052 7,453 5.7% 578 647 11.9%

3,584 2,970 (17.1%) 968 847 (12.5%) 1791 84 (53.1%)

11.3x 11.1x (1.7)% 10.5x 9.9x (5.5)% 11.2x 9.6x (14.0)%

4,426 4,684 5.8% 1,931 2,091 8.3% 173 208 20.2%

707 719 1.7% 286 257 (10.3%) 48 15 (67.9%)

2.7% 2.2% 2.0% 1.7% 2.0% 3.0%

Global M&A market snapshot

Deal value in EURbn

Median EBITDA multiple

Number of fi nancial deals

Deal value fi nancial deals in EURbn

GDP growth

3

In 2016, total deal value and the share of

financial investors are in line with 2015.

In Europe, total deal volume increased

slightly to 7453 deals. The share of financial

investors was in line with 2015

Financial investors accounted for 31% of the

total deal value in Europe, indicating their

involvement in larger deals, on average,

compared to corporations

In 2016 both globally and in Europe globally

deal value has dropped in 2016

© 2017 KPMG Advisory N.V.

Global - Deal volume

Global - Deal value

EU - Deal volume

EU - Deal value

Strategic deals

Strategic deals

Strategic deals

Strategic deals

Financial deals

Financial deals

Financial deals

Financial deals

The Global and European M&A market

Source: Mergermarket – data per 13/02/2017, KPMG Analysis

M&A MARKET

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

78%

22%

25% 26% 24%24%

25% 25% 26%

75% 74% 76% 76%75% 75% 74%

9,88

5 12,5

23

13,4

70

13,8

81

14,5

92 17,4

00

18,0

63

18,2

15

1,21

4 1,57

9

1,63

3

1,79

5

1,66

7

2,48

4

86%

14%22% 25%

23% 23%

23%

20%

24%

78% 75% 77% 77%77%

80%

76%

3,58

4

2,97

0

25%

75%

27%28% 24% 25%

27% 27%28%

73% 72% 76% 75% 73% 73% 72%

3,85

4

5,04

8 5,71

2

5,56

2

5,88

6 6,80

5

7,05

2

7,45

3

70%

16%

84%

28% 28% 30% 26%

25%

30%

30%

72% 72% 74%

75% 70%70%

338

497

509

521

481

845

968

847

EURbn EURbn

4

The Netherlands has seen an increase of

12% in deal activity. The share of financial

investors, roughly 29%, is in line with 2015

The peak in deal volume in 2015 in the

Netherlands was primarily driven by large

deals such as the Shell bid for BG (EUR

74.5bn), the NXP Semiconductor takeover

of Freescale (EUR 14.3bn) and the Ahold/

Delhaize merger (EUR 10.6bn)

Financial investors accounted for 18% of

the total deal value in the Netherlands


EU - Deal volume

EU - Deal value

Netherlands - Deal volume

Netherlands - Deal value

Strategic deals

Strategic deals

Strategic deals

Strategic deals

Financial deals

Financial deals

Financial deals

Financial deals

The European and Dutch M&A market

M&A MARKET

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

75%

25% 22%27%

28% 24% 25%

27% 27% 28%

73% 72% 76% 75%73% 73% 72%

3,85

4 5,04

8

5,71

2

5,56

2

5,88

6 6,80

5

7,05

2

7,45

3

78%

26%26%

23%23%

30% 30%32%

74% 74% 77% 77% 70% 70% 68%

371

481 54

2

502

461

562

578 64

7

179

84

EURbn EURbn

84%

16%

28% 28% 30% 26%

25%

30%

30%

72% 72% 70% 74%

75% 70%70%

338

497

509

521

481

845

968

847

79%93%

53%

30%

21%16%

18%

27%

18%

47% 70%

84% 82%

73%

82%

36

60

25

46

61

51

7%

5Source: Mergermarket – data per 13/02/2017, KPMG Analysis

© 2017 KPMG Advisory N.V. Source: Mergermarket – data per 13/02/2017, KPMG Analysis

Global EV/EBITDA multiples observedVALUATIONS

North America

Asia

Rest of the World

Europe

Valuation levels have further increased in North America and the Rest of the world, while they decreased slightly in Europe and Asia

MultiplesworldwideEV/EBITDA multiple

y.o.y. growth

6


The looming Brexit caused a surge in IPO activity, but did not appear to have significantly impacted the Dutch deal activity

THE BREXIT

IPOs and stock market performance in 2016

Deal activity in the Netherlands in 2016

AEX performance over 2016

Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dec

Sif

12 May

ForFarmers

24 May

Philips Lighting

27 May

Coco-ColaEuropean Partners

31 May

Basic-Fit

10 June

ASR Nederland

10 June

Takeaway.com

30 September

510

490

470

450

430

410

390

370

350

120%

60%

-%

(60%)

(120%)

23 June 2016Brexit

45 3649 38

49 4759 57 59

3660 68 80 68

34 3153 64

47 41 49 3763 55

Total Dutch deals 2016 Monthly growth in deal volume 2016

Monthly growth in deal volume 2015Total Dutch deals 2015 7

483


Looking at Europe, the Brexit referendum did not seem to have any significant impact on deal activity, similarly the elections had little aff ect on the US deal activity in 2016

THE BREXIT AND ELECTION OF TRUMP

Deal activity Europe - total deals Deal activity Europe - fi nancial deals

Monthlygrowth in

deal volume

Monthlygrowth in

deal volume

50%

-%

(50%)

30%

-%

(30%)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec




623

585

140

182

588

607

160

197

557

516

151

163

675

594

188

189

653

632

194

207

750

649

216

206

682

534

198

183

462

596

135

204

640

626

178

204

532

594

168

204

601

566

159

192

690

513

204

174

Deal North America - fi nancial dealsDeal activity North America - total deals

Compared to the prior year, the Brexit referendum did not have any signifi cant impact on the number of deals in Europe specifi cally around June 2016, when the referendum was held. This was observed for the total deals as well as the fi nancial deals in 2016

In North America, no apparent impact of the election is witnessed. Both for the total number of deals and fi nancial deals

Brexit & Trump

Deals in 2016 Monthly growth in deal volume 2016

Monthly growth in deal volume 2015Deals in 2015

Month of the Brexit referendum

Month of the American elections

Legend

8

50%53% 18%9%

4%

7%6%

3%3%2%

7%

14%24%

9552,031

Top 5 development (global)

The development of the top 5 most active sectors acquiring technology companies in the past 8 years

Tech deals as a share of total deals (global) Tech deals as a share of total deals (Netherlands)

Who is acquiring tech companies (global)

Total deals Total deals

Of which tech deals Of which tech deals

Global tech volume Dutch tech volume

Global tech deal volume Dutch tech deal volume

Delta 2009 Delta 2009

84% 74%

156% 164%

Non-tech deals as % of total Non-tech deals as % of totalTech deals as % of total Tech deals as % of total

Acquiring tech companies: Most active bidders according to their sector

Acquiring tech companies: Data as to the left, excluding tech bidders acquiring other tech companies

TechnologyIndustrials

TechnologyIndustrials

Financial ServicesBusiness Services

Financial ServicesBusiness Services

MediaChemicals & Pharma

MediaOther

The share of tech deals, where the acquired

entity is involved in computer services,

software, hardware or semiconductors, as a

percentage of total deals has steadily risen

from 2009 onwards, both globally as well

as in the Netherlands. Currently, c. 11%

(globally and in the Netherlands) of all M&A

activity involves a tech business

Compared to 2009, the number of tech deals

increased 156% globally and 164.3% in the

Netherlands

Of all tech deals in 2016, c.47% of the

bidders were not active in the sector

emphasising that they see technology as a

driver for growth in their respective

organisations

Furthermore, we witnessed more non-tech

companies acquiring tech businesses, in

which the Financial Services, Media and

Industrials sectors being the most dominant

players

Tech focus globally and in the Netherlands


9,885 12,523 13,470 13,881 14,592 17,400 18,063 18,215 371 481 542 502 461 562 578 647

792 1,137 1,214 1,232 1,330 1,814 1,971 2,031 28 42 42 45 44 55 61 74

2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

92%

8% 8%9% 9%9% 8%9% 9%9% 10%10% 10%11% 11%11% 11%

91% 91%91% 92%92%91% 91%91% 90%90% 90%89% 89%89% 89%

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100

70%

14%

3%4%2% 4% 3% 3% 3% 3% 2% 3%

3% 3% 4% 4% 4% 4% 3%5% 7% 8% 7% 6% 6%5%

14% 18% 15%20% 18% 20% 24%

67% 65% 66%57% 60% 58% 53%

9

TECH DEALS

In 2016, 208 financial transactions have been

announced in the Netherlands

64% of the transactions were acquired by a

financial investor

In 2016, Dutch financial buyers acquired a

total of 133 companies. Since 2009 financial

investors have not made such significant

number of entry investments. Almost 80%

of the entry investments concerned a Dutch

financial investor acquiring a Dutch target

company

In 2016, a total of 50 exits were acquired

locally, by a Dutch organisation. The

remaining 54% were acquired by foreign

players illustrating the attractiveness of

Dutch assets


Split by type of deal

Entry: Origin of the target

Financial deals split by type of deal

Exit: Origin of the buyer

Strategic

NL

Entry

NL

Financial

Non-NL

Exit Secondary

Non-NL

The role of financial buyers in the Netherlands

Source: Mergermarket – data per 13/02/2017, KPMG Analysis

2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016

70%

30%

24%22%

26%20%

20%

25%

23%

76% 78%

74%80%

80%

75%

77%

56

76

80

54

61

93

75

133

71%

71%

29% 62%

37% 29%

45%

35%

54%

46%

38%

63%55%

65% 46%54%

14

34

43 41

33

54

78

50

647 208

32%

68%64%

24%

12%

10

DUTCH FOCUS

Classification of financial deals:Entry: Financial investor acquires a company from a non-financial investorExit: Financial investor sells a portfolio company to a strategic buyer (excluding IPOs)Secondary: Financial investor sells a portfolio company to another financial investor

About KPMG Deal Advisory


acted as fi nancial advisor to a consortium of Lone Star and JP Morgan on

the acquisition of Propertize B.V.

KPMG Deal Advisory

acted as exclusive fi nancial advisor to the shareholders

of Corins on the sale to a.s.r.

KPMG Deal AdvisoryKPMG Deal Advisory

acted as exclusive fi nancial advisor to the shareholders of ISDC on the sale of the

company to Endava Limited

With over 10,000 Deal Advisory professionals in 87 countries working from more than 170 offi ces across the world KPMG

Deal Advisory is one of the leading advisors and we consistently

rank in the top 3 of advisors by number of deals globally

We distinguish ourselves by our global reach and deep sector expertise in combination with local presence and

an integrated deal advisory offering consisting of M&A,

capital structure, valuation, due diligence, and integration

and separation advice

In the Netherlands our practice consist of almost

200 professionals and we serve a broad clientele of

listed and private corporate clients, fi nancial investors, as well as governmental institutions

A selection of recent accomplishments include:

For more info please contact: Danny Bosker – Partner, email: [email protected], phone: +31 (0)20 656 7767

acted as fi nancial advisor to the selling partners of DTZ

Zadelhoff on the sale of their interests to Cushman &

Wakefi eld

KPMG Deal Advisory

acted as exclusive fi nancial advisor to the shareholders

of PCI on the sale of the company to ABN-Amro

Participaties

KPMG Deal Advisory

acted as exclusive fi nancial advisor to the shareholders of Scholt Energy Control on

the sale of the company to Waterland

KPMG Deal Advisory

Professionals

Countries

AMERICAS

2,480

13

Professionals

Countries

ASIA PACIFIC

2,013

12

Professionals

Countries

EMEA

5,589

62

KPMG Deal Advisory

acted as fi nancial advisor to Five Degrees on growth

capital investments by Karmijn Kapitaal, 5square

and Velocity Capital

acted as exclusive fi nancial advisor to Toyota Industries

Corporation on the acquisition of

KPMG Deal Advisory

11

The information in this presentation is based upon publicly available information. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of any information available from public sources and third parties.

No one should act upon the information included in this presentation without appropriate professional advice after a thorough examination of the particular situation. KPMG Corporate Finance accepts no responsibility or liability to any party in connection with the information or views in this presentation.

© 2017 KPMG Advisory N.V., registered with the trade register in the Netherlands under number 33263682, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved.

The KPMG name and logo are registered trademarks of KPMG International.

KPMG appKPMG on social media

KPMG

kpmg deal activity update - acg global...in 2016, total deal value and the share of financial...

Documents