mergermarkettrendreport.h12014.uk

8/10/2019 MergermarketTrendReport.H12014.UK

1/4

UK M&A Trend Report: H1 2014Overview

M&A activity targeting the United Kingdom stood at 37.5bnin H1 2014, representing the lowest half-year value since H12010 (37bn) and a 12.5% drop from H1 2013 (42.9bn)

Only one mega-deal (valued above US$ 5bn) has beenannounced in the region so far this year the 8.6bnacquisition of the Oncology division of GlaxoSmithKline by itsGerman peer Novartis. The lack of large transactions in thecountry pulled the UK M&A value down this semester

However, the second quarter of 2014 witnessed a starkimprovement compared to the previous quarter (up 156.5%,from 10.5bn to 27bn) and represented the highest quarterlyvalue in the country since Q2 2012

Pharma, Medical & Biotech (PMB) sector, driven by theNovartis/ GlaxoSmithKline deal, was the most active industrywith a 26.9% market share (10.1bn), and is in line with PMBleading Global M&A with a 16.5% market share. Theproportion of PMB M&A in the UK and globally would havebeen even larger if the 69bn proposed acquisition ofAstraZeneca by Pfizer went through

Inbound M&A in H1 2014 (26.6bn) saw a 21.8% fall in valuefrom the same period last year (34bn). Foreign investorsinvested in 237 British companies during the first six months 51.5% of them where investments from the US, the countrysfavoured trade partner

Outbound value stood at 48bn and represented the largestoutbound semi-annual value in the UK since H1 2007(119.8bn). The relocation of Liberty Global HQ from the USto London prior to its acquisition of Dutch Ziggo for 6.6bnhelped swelling the outbound figures

Industry analysis

M&A Trend: UK

Sector H1 2014 H1 2013 Change

Value(m)

MarketShare Deal count

Value(m)

MarketShare Deal count Value (%) Deal count

Pharma, Medical & Biotech 10,103 26.9% 33 816 1.9% 29 1,138.1% 4

Industrials & Chemicals 4,661 12.4% 82 830 1.9% 83 461.6% -1

Financial Services 4,222 11.2% 63 3,351 7.8% 44 26.0% 19Consumer 4,139 11.0% 70 2,193 5.1% 70 88.7% 0

Energy, Mining & Utilities 3,732 9.9% 40 8,505 19.8% 40 -56.1% 0Business Services 3,153 8.4% 109 2,548 5.9% 105 23.7% 4

Media 2,261 6.0% 31 807 1.9% 26 180.2% 5

Transport 2,040 5.4% 17 1,634 3.8% 12 24.8% 5

Technology 1,558 4.1% 60 1,418 3.3% 59 9.9% 1

Leisure 1,080 2.9% 31 2,769 6.5% 35 -61.0% -4

Construction 285 0.8% 18 2 14 0.5% 16 33.2% 2

Agricultu re 123 0.3% 4 - - 5 - -1

Real Estate 119 0.3% 5 1,227 2.9% 12 -90.3% -7

Telecommunication s 53 0.1% 7 16,361 38.1% 7 -99.7% 0

Defence 19 0.1% 1 254 0.6% 3 -92.5% -2Total 37,548 571 42,927 546 -12.5% 25

Cross-border analysis Top inbound acquirers

Goldman Sachs advised on 33 deals worth 36.4bn, includingtwo of the top five UK deals, and led the financial advisorrankings by value. Rothschild topped the league table byvolume with 42 deals, just above Goldman Sachs

Freshfields Bruckhaus Deringer and Linklaters led the legaladvisor league table by value, each with deals respectivelyworth 43.4bn and 22.8bn. Additionally, Linklaters is leadingthe table by deal count, having advised on 46 transactions.DLA Piper also worked on 46 UK transactions, but for a smallercombined value of 8.4bn


2/4

UK M&A Trend Report: H1 2014Top deals

League tables

Financial advisor league table by value

Rank H12014 2013 House Value (m)

Dealcount

% Valuechange

1 1 Goldman Sachs 36,370 33 0.8%2 2 JPMorgan Cazenove 30,372 25 -5.9%3 16 Bank of America Merrill Lynch 28,605 25 395.8%4 6 Morgan Stanley 22,809 18 66.1%5 9 Citi 22,566 18 143.1%6 8 Lazard 15,791 17 55.5%7 5 Deutsche Bank 14,979 15 -3.1%8 15 Barclays 13,361 19 126.5%9 - Zaoui & Co 11,736 3 -

10 11 Rothschild 10,957 42 40.8%11 7 UBS Investment Bank 10,022 13 -24.3%12 - Arkle Associates 8,616 1 -13 43 BNP Paribas 8,012 10 1,115.8%14 12 Societe Generale 7,461 7 1.7%15 53 RBC Capital Markets 7,181 9 1,630.4%

Financial advisor league table by deal count


Dealcount

Countchange

1 4 Rothschild 10,957 42 122 8 Goldman Sachs 36,370 33 93 2 PwC 2,232 32 -24 9 JPMorgan Cazenove 30,372 25 35 15 Bank of America Merrill Lynch 28,605 25 126 1 KPMG 1,290 25 -147 5 BDO 308 25 -48 3 EY 4,477 23 -99 7 Canaccord Genuity 1,277 23 -2

10 6 Deloitte 1,103 21 -511 14 Barclays 13,361 19 612 10 Morgan Stanley 22,809 18 -213 19 Citi 22,566 18 614 22 Lazard 15,791 17 915 21 Deutsche Bank 14,979 15 5

Legal advisor league table by value


Dealcount

% Valuechange

1 4 Freshfield s Bruckhaus Deringer 43,374 45 142.9%2 1 Linklaters 22,833 46 11.8%

3 44 Skadden Arps Slate Meagher &Flom 19,490 13 1,268.7%

4 20 Slaughter and May 18,301 21 376.5%5 27 Simpson Thacher & Bartlett 17,500 14 591.2%6 11 Clifford Chance 15,016 29 11.4%7 5 Hogan Lovells Internationa l 14,866 20 -16.2%8 58 Cleary Gottlieb Steen & Hamilton 14,863 9 1,598.6%9 - Baer & Karrer 13,449 4 -

10 15 Allen & Overy 13,256 29 44.6%11 112 Blake, Cassels & Graydon 13,157 6 6,135.5%12 - Niederer Kraft & Frey 11,736 3 -13 6 Shearman & Sterling 10,209 14 -41.5%

Legal advisor league table by deal count


Dealcount

Countchange

1 3 Linklaters 22,833 46 82 1 DLA Piper 8,367 46 -33 4 Fresh fields Bruckhaus Deringer 43,374 45 104 23 Jones Day 2,187 33 185 6 Clifford Chance 15,016 29 26 9 Allen & Overy 13,256 29 47 12 King & Wood Mallesons 2,730 28 78 2 Eversheds 542 27 -129 5 Pinsent Masons 679 25 -6

10 21 Latham & Watkins 7,393 22 611 7 CMS 1,268 22 -412 29 DWF 172 22 1113 22 Slaughter and May 18,301 21 514 20 Squire Patton Boggs 1,475 21 3

Ann. Date Bidder company Target Company Seller company Bidder Advisors Target/Selle r Advisors DealValue (m)

22-Apr-14 Novartis AG GlaxoSmith Kline Plc(Oncology division)

GlaxoSmithKline Plc FA: Goldman Sachs

LA: Baer & Karrer; FreshfieldsBruckhaus Deringer; HoganLovells International; Linklaters

FA: Advising seller: ArkleAssociates; Citi; Lazard;Zaoui & Co

LA: Advising seller: Blake,Cassels & Graydon; ClearyGottlieb Steen & Hamilton;Niederer Kraft & Frey;

Slaughter and May;Advising FA: Skadden ArpsSlate Meagher & Flom

8,616

15-May-14 The Carphone WarehouseGroup Plc

Dixons Retail Plc FA: Deutsche Bank; UBSInvestment Bank

LA: Freshfields BruckhausDeringer; Osborne Clarke

FA: Barclays; Citi

LA: Linklaters 1,806

26-Jun-14 Alcoa Inc Firth Rixson Limited Oak Hill Capital Partners LP FA: Greenhill & Co; MorganStanley

LA: Slaughter and May;Wachtell, Lipton, Rosen & Katz;Advising FA: Weil Gotshal &Manges

FA: Barclays; Citi; Lazard

LA: Paul Weiss RifkindWharton & Garrison

1,673

27-Mar-14 Babcock Internationa l GroupPlc

Avincis Group Kohlberg Kravis Roberts &Co LP; and InvestindustrialSpA

FA: JPMorgan Cazenove;Rothschild

LA: Clifford Chance

FA: Advising seller: Bank ofAmerica Merrill Lynch;Deutsche Bank

LA: Ashurst; Advisingseller: Hogan LovellsInternational; Simpson

Thacher & Bartlett; Stibbe

1,625

23-May-14 BRS Ventures & HoldingsLimited

Travelex UK Limited Apax Partners LLP FA: Evercore Partners; StandardChartered

LA: Linklaters

FA: Goldman Sachs;JPMorgan Cazenove; SmithSquare Partners. Advisingseller: Bank of AmericaMerrill Lynch; Barclays

LA: Berwin LeightonPaisner; FreshfieldsBruckhaus Deringer;Macfarlanes; Advisingseller: Simpson Thacher &Bartlett; Steinfeld Law

1,000


3/4

UK M&A Trend Report: H1 2014

Private equity overview Private equity activity trend

Value share26.9%

20.4%

11.8%8.6%

8.3%

8.0%

5.5%

5.1%

4.4%

1.0%

Deal count share18.8%

7.7%

12.0%

12.8%

3.4%

10.3%7.7%

12.8%

1.7%

12.8%

Business Services: 2077m (22 deals)

Energy, Mining & Utilities: 1575m (9deals)

Financial Services: 908m (14 deals)

Consumer: 666m (15 deals)

Media: 638m (4 deals)

n u str a s em cas : mdeals)

Leisure: 428m (9 deals)

Technology: 394m (15 deals)

Transport: 341m (2 deals)

Other: 80m (15 deals)

Top five announced UK private equity buyout and exit deals

Ann. Date DealType Bidder company Target company Seller companyFinancial multiples (x)

Deal value (m)Revenue EBITDA P/E

26-Jun-14 Exit Alcoa Inc Firth Rixson Limited Oak Hill Capital Partners LP 2.9 - - 1,673

27-Mar-14 Exit Babcock International GroupPlc Avincis GroupKohlberg Kravis Roberts &Co LP; and InvestindustrialSpA

3.4 14.6 - 1,625

23-May-14 Exit BRS Ventures & HoldingsLimited Travelex UK Limited Apax Partners LLP 1.4 12.5 - 1,000

16-Jun-14 IBITPG Capital LP; OntarioTeachers' Pension Plan; andPAG Capital

DTZ UGL Limited 0.6 - - 673

31-Jan-14 IBI Caisse de Depot et Placementdu QuebecLondon Array 1 offshore windfarm (25% Stake) DONG Energy A/S - - - 644

Private equity buyout league table by deal count

Rank H12012 2013 House

Value(m)

Dealcount

Countchange

1 1 LDC 150 6 -32 2 Electra Partners 394 3 03 80 HgCapital 200 3 24 10 Bowmark Capital 143 3 15 5 ISIS Equity Partners 50 3 0

Private equity exit league table by deal count

Rank H12012 2013 House

Value(m)

Dealcount

Countchange

1 33 Gresham 315 5 42 - Scottish Equity Partners 49 3 -3 4 ISIS Equity Partners 45 3 04 1 3i Group 1,000 2 -35 47 Caledonia Investments 233 2 1

By value, the UK private equity industry has significantlyincreased compared to H1 2013, both in terms ofacquisition and of disposals. Private equity backed buyoutsin H1 2014 rose 27.2%, from 6.1bn to 7.7bn. At the sametime, private equity exits increased 54.1%, from 6.8bn to10.4bn

The three largest private equity transactions announced in

the country have all seen their private equity investorsexiting their UK investments. The combined value of thesethree exits amounted to about 4.3bn, representing 41.3%of the total exits value in the country, and has clearly driventhe exit trend last semester

On the other hand, the lack of buyout valued above 1bn -the largest buyout announced in the region in was the673m acquisition of DTZ by TPG Capital, PAG Capital andOntario Teachers' Pension Plan did not affect too muchthe total buyout value as it was balanced by numerous mid-market private equities acquisitions.

Deal count wise, the number of buyouts went up to 117,11.4% higher than on the same period last year (105deals). With 81 private equity exits announced so far thisyear, the activity is just be low the 82 exits announced in H12013.

Business Services was the most targeted industry byprivate equity investors. With 22 buyouts worth 2bn, thesector represented 18.8% to the total number of privateequities acquisitions and 26.9% of the total buyout activityin the country.

The local LDC, part of the Lloyds Banking Group, led theprivate equity market by deal count in its home country,backing six buyouts with a combined value of 150m. Thefirm was also leading the table on the same period lastyear, but was even more active being involved in nineacquisitions.

The exit activity table was led by Gresham Private Equity,which exited 5 portfolio companies worth 315m.

Private equity buyout industry analysis by value


4/4

UK M&A Trend Report: H1 2014Notes

All data is based on announced transactions over US$ 5m. Deals with undisclosed deal values are included where the targets turnover exceedsUS$ 10m. Deals where the stake acquired is less than 10% will only be included if their value is greater than US$ 100m. Activities excluded includeproperty transactions and restructurings where the ultimate shareholders interests are not changed. All data excludes minority stake deals (10% -30%) where the dominant target geography is Asia-Pacific and the deal value is less than US$ 100m.

M&A Trend: Based on the dominant geography of the target company being UK. Excludes lapsed and withdrawn bids

Cross-border M&A: Inbound refers to cross-border M&A where the dominant geography of the target company is UK. Outbound refers to

cross-border M&A where the dominant geography of the bidder company is UK. Excludes lapsed and withdrawn bids Top Announced Deals: Based on the dominant geography of the target company being UK. Excludes lapsed and withdrawn bids. FA

refers to Financial Advisor and LA refers to Legal Advisor

Industry Analysis: Based on the dominant geography of the target company being UK. Industry sectors represent the primary industrysector of the target company only. Excludes lapsed and withdrawn bids. In the private equity industry breakdown, Other includesAgriculture, Construction, Pharma, Medical & Biotech, Real Estate, and Telecommunications

League Tables: Based on the dominant geography of the target, bidder or seller company being UK. The Financial Advisor tables excludelapsed and withdrawn bids and the Legal Advisor tables include lapsed and withdrawn bids. Previous period changes refer to the periodH1 2013 unless specified otherwise

PE Trend: Based on the dominant geography of the target company being UK and deals announced as buyout or exit. Excludes lapsedand withdrawn bids

Buyout Industry Analysis: Based on the dominant geography of the target company being UK and deals announced as buyout. Industrysectors represent the primary industry sector of the target company only. Excludes lapsed and withdrawn bids

Top PE deals: Based on the dominant geography of the target company being UK and deals announced as buyout or exit. Excludeslapsed and withdrawn bids

All values are in

Criteria

All data correct as of 07-Jul-2014

PR contacts

Europe Flora Wilke +44 207 010 6348 Americas Chrissy Carney +1 646 378 3118 Asia Elizabeth Chu +852 2158 9706

Commercial contacts

Europe en !u"ble +44 207010 6100

Americas #auren $eterson +1 212 500 7537

Asia %&ay 'aran( +852 2158 9764

Research contacts Analyst )a"ien *ulliar +44 207 059 6117Editor ,irsty Wilson +44 207 010 6271

mergermarkettrendreport.h12014.uk

Documents