october 2016, issue 55 - paul, weiss · all data is as of october 11, 2016 unless otherwise...

Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of October 11, 2016 unless otherwise specified. “Last 12 Months” data is for the period from October 2015 to September 2016 inclusive. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.

By Volume (US$B)

September 2016

Last 12 Months

By Number of Deals

September 2016

Last 12 Months

$0 $200 $400 $600 $800

Real Estate/Property

Oil & Gas

Healthcare

Computers & Electronics

Utility & Energy

$14.57

$11.29

$6.03

$49.31

$27.03

$0 $200 $400 $600 $800


Utility & Energy

Chemicals

Healthcare


$191.65

$367.29

$182.24

$166.23

$141.09

0 1,000 2,000 3,000 4,000 5,000


Finance

Healthcare

Professional Services

Computers & Electronics 203

109

77

33

26

September 2016 Global +/- From Prior

Month

U.S. +/- From Prior

Month

Total

Volume (US$B) 306.36 84.05 129.08 20.50

No. of deals 2,734 (209) 717 (11)

Avg. value of deals (US$mil) 208.8 70.2 448.2 88.7

Avg. deal multiple1 11.8x 0.8 12.2x 1.2

Strategic Transactions

Volume (US$B) 263.58 91.63 115.18 43.53

No. of deals 2,438 (208) 591 13

Avg. value of deals (US$mil) 191.8 76.5 444.7 167.0

Avg. deal multiple1 11.9x 1.2 12.2x 1.6

Sponsor-Related Transactions

Volume (US$B) 42.78 (7.58) 13.90 (23.03)

No. of deals 296 (1) 126 (24)

Avg. value of deals (US$mil) 460.1 14.3 479.2 (360.0)

Avg. deal multiple1 11.0x (1.1) 11.8x 0.5

Crossborder Transactions2

Volume (US$B) 134.57 72.74 Inbound

67.87 Outbound

20.27

Inbound

41.09 Outbound

10.15

No. of deals 668

(45) Inbound

132 Outbound

99

Inbound

16 Outbound

(34)

Avg. value of deals (US$mil) 399.3 227.1 Inbound

1,060.5 Outbound

596.3

Inbound

642.0 Outbound

385.4

Avg. deal multiple1 11.3x 1.8 Inbound

12.1x Outbound

11.5x

Inbound

2.1 Outbound

0.6

Figure 1 Figure 2 - Most Active U.S. Target Industries3

October 2016, Issue 55M&A Activity

P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 1

A T A G L A N C E

1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.2 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.3 Industries categories are determined and named by Dealogic

0 1,000 2,000 3,000 4,000 5,000


Finance

Healthcare

Professional Services


1,132

1,069

2,570

403

551

M&A Activity (Continued)


A T A G L A N C E

Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions

Inbound U.S. Crossborder Transactions for September 2016 Inbound U.S. Crossborder Transactions for the Last 12 Months

By Volume (US$B) By Volume (US$B)

By Number of Deals By Number of Deals

Outbound U.S. Crossborder Transactions for September 2016 Outbound U.S. Crossborder Transactions for the Last 12 Months

By Volume (US$B) By Volume (US$B)

By Number of Deals By Number of Deals

$0 $30 $60 $90 $120 $150

Mexico

South Korea

Germany

Spain

United Kingdom $9.27

$4.28

$2.38

$1.05

$0.85

$0 $50 $100 $150 $200 $250

France

United Kingdom

China

Germany

Canada

$96.73

$39.98

$32.14

$30.89

$118.75

0 100 200 300 400 500

France

China

Japan

United Kingdom

Canada 423

190

170

73

156

$0 $30 $60 $90 $120 $150

Spain

France

Sweden

Canada

United Kingdom

$12.73

$68.95

$11.33

$9.96

$11.24

0 100 200 300 400 500

France

Australia

Germany

United Kingdom

Canada 332

276

91

90

78

0 100 200 300 400 500

Germany

China

Japan

United Kingdom

Canada 41

15

14

13

9

0 100 200 300 400 500

Brazil and Germany4

Australia

United Kingdom

Canada

20

24

6

9

4 Each of Brazil and Germany was the country of destination for six transactions in September 2016.

$0 $50 $100 $150 $200 $250

China

Germany

Japan

United Kingdom

Canada $47.72

$10.72

$4.10

$2.89

$0.96

September 2016

Equity Value (US$B)

Last 12 Months

Equity Value (US$B)

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers

Aug 20

16

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

015

Dec 20

15

Nov 20

15

Oct 20

15

Sep 20

16

$3,253.6

$5,754.0

$3,412.3

$6,977.5

$2,361.6$3,646.6

$3,184.2$4,300.6

$3,280.5

$3,044.0$2,130.1

$2,731.6

$6,006.2

$21,432.1

$13,826.2

$18,655.8

$5,777.4

$7,264.3

$8,918.3

$16,438.5

$12,155.0

$7,615.3

$5,513.8

$8,095.7

$0 $20 $40 $60 $80 $100

Spectra Energy Corp ~ Enbridge, Inc. (September 6, 2016)

Norfolk Southern Corporation ~ Canadian Pacific Railway Ltd. (November 17, 2015) (Offer withdrawn April 11, 2016)

Monsanto Company ~ Bayer AG (May 18, 2016)

E. I. du Pont de Nemours and Company ~ The Dow Chemical Company (December 11, 2015)

EMC Corporation ~ Investment Group (October 12, 2015)

$28.29

$64.87

$61.55

$56.04

$30.71

5

$0 $20 $40 $60 $80 $100

Chemtura Corporation ~ LANXESS AG (September 25, 2016)

Intersil Corporation ~ Renesas Electronics Corp. (September 12, 2016)

BATS Global Markets, Inc. ~ CBOE Holdings, Inc.(September 26, 2016)

Cepheid ~ Danaher Corporation(September 6, 2016)

Spectra Energy Corp ~ Enbridge, Inc.(September 6, 2016)

$28.29

$3.06

$2.11

$3.88

$3.13

Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)

Figure 5 - Five Largest U.S. Public Mergers

M&A Activity (Continued)


A T A G L A N C E

5 Members of the investment group reported by FactSet MergerMetrics are Dell Inc., Silver Lake Partners and MSD Partners LP.

6 Based on the highest target break fees and reverse break fees payable in a particular deal.7 Two transactions in September 2016 involving a financial buyer had a reverse break fee. 8 Two transactions in September 2016 involved a financial buyer.9 Three transactions in September 2016 had a go-shop provision.10 Two transactions in September 2016 involving a financial buyer had a go-shop provision.11 One transaction in September 2016 involving a strategic buyer had a go-shop provision.

M&A Terms

Avg. Reverse Break Fee as % of Equity ValueAvg. Target Break Fee as % of Equity Value

Average Value of All U.S. Public Mergers with Definitive Agreements

Jun 2

016

Jul 2

016

Apr 20

16

Mar 20

16

Feb

2016

Jan 2

016

Dec 20

15

Nov 20

15

Oct 20

15

Sep 20

16

Aug 20

16

May 20

16

$5,000

(US$mil)

6%

12% $10,000

3.4

3.6 3.6

3.73.3

3.2 3.43.9

3.6

3.3

3.6 3.6

5.7

4.5

5.8

4.1

5.24.9

4.4 5.0

5.9

4.95.2

5.9

$2,367.1

$6,641.5

$3,504.0

$6,949.5

$2,361.6

$3,073.9 $3,033.1

$4,595.5

$2,749.4

$3,044.0

$2,245.2$3,010.1

Figure 6 - Average Break Fees as % of Equity Value6

Figure 7 - Average Break Fees as % of Equity Value

September 2016

Last 12 Months

Target Break Fee for All Mergers 3.6 3.5

October 2015

Last 12 Months

Reverse Break Fee for All Mergers 5.9 5.2

Reverse Break Fee for Mergers Involving Financial Buyers7

8.2 6.5

Reverse Break Fee for Mergers Involving Strategic Buyers

5.1 4.8

September 2016

Last 12 Months

% of Mergers with Go-Shops 18.8 9.6

% of Mergers Involving Financial Buyers with Go-Shops8

100.0 34.4

% of Mergers Involving Strategic Buyers with Go-Shops

7.1 4.8

Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops9

28.0 35.4

Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops10

24.5 34.2

Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops11

35.0 37.1

Figure 8 - U.S. Public Merger Go-Shop Provisions

Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at $100 million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.


A T A G L A N C E

12 Due to rounding, percentages may not add up to 100%.13 There were only three partial or all stock transactions in September 2016.15 This data includes both announced transactions for which a definitive merger agreement was reached

and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions).

Cash Only

Stock Only

Cash & Stock Only

Choice (Cash Election)

Other

Last 12 Months

September 2016

7.1%

62.1% 14.6%

16.2%

68.8%

12.5%

6.3%

12.5%

September 2016 100.0

Last 12 Months13 93.4

September 2016 31.3

Last 12 Months 22.7

Figure 11 - Tender Offers as % of U.S. Public Mergers

Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers15

September 2016 5.6

Last 12 Months 15.5

M&A Terms (Continued)

Figure 9 - Form of Consideration as % of U.S. Public Mergers12 Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio

A T A G L A N C E

Our Mergers & Acquisitions PracticeThe Paul, Weiss M&A Group consists of more than 30 partners and over 100 counsel and associates based in New York, Washington, Wilmington, London, Toronto, Tokyo, Hong Kong and Beijing. The firm’s Corporate Department consists of more than 60 partners and over 200 counsel and associates.

Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions.

Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions.

Recent highlights include: advising Time Warner Cable in its $78.7 billion merger with Charter Communications; representing funds affiliated with Apollo Global Management and Protection 1 in its approximately $15 billion agreement to acquire ADT Corporation; advising Automatic Data Processing in its $5 billion spin-off of ADP Dealer Services, now called CDK Global; representing Encana in its $7.1 billion acquisition of Athlon Energy; advising EXOR in its successful $6.9 billion unsolicited cash bid for PartnerRe; representing NorthStar Realty Finance in its $4 billion acquisition of Griffin-American Healthcare REIT II; advising Platform Specialty Products in its $2.3 billion acquisition of Alent; and representing Grupo Salinas in its $2.5 billion sale of Iusacell to AT&T.

Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients’ short- and long-term goals.


Matthew W. Abbott

Edward T. Ackerman

Scott A. Barshay

Angelo Bonvino

Jeanette K. Chan

Ellen N. Ching

Ariel J. Deckelbaum

Ross A. Fieldston

Brian P. Finnegan

Adam M. Givertz

Robert D. Goldbaum

Neil Goldman

Bruce A. Gutenplan

Justin G. Hamill

David K. Lakhdhir

Stephen P. Lamb

John E. Lange

Xiaoyu Greg Liu

Jeffrey D. Marell

Toby S. Myerson

Kelley D. Parker

Carl L. Reisner

Kenneth M. Schneider

Robert B. Schumer

John M. Scott

Judie Ng Shortell

Tarun M. Stewart

Steven J. Williams

Betty Yap

Kaye N. Yoshino

Tong Yu

Taurie M. Zeitzer

This publication is not intended to provide legal advice, and no legal or business decisions should be based on its content. Questions concerning issues addressed in this memorandum should be directed to:

Our M&A Partners

Ariel J. Deckelbaum Partner New York 212-373-3546 [email protected]

Scott A. Barshay Partner New York Office 212-373-3040 [email protected]

Matthew W. Abbott Partner New York 212-373-3402 [email protected]

Angelo Bonvino Partner New York 212-373-3570 [email protected]

Jeffrey D. Marell Partner New York 212-373-3105 [email protected]

A T A G L A N C E

6© 2016 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication August be considered attorney advertising. Past representations are no guarantee of future outcomes.

P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P P A U L W E I S S . C O M

NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON

Counsel Frances F. Mi, associates Ryan D. Blicher, David S. Lightstone, Edy Glozman and N. Arie Abramov and law clerks Yenna Woo, David Okada and Michael Wysolmerski contributed to this publication.

https://www.paulweiss.com/professionals/partners-and-counsel/judie-ng-shortell.aspx

https://www.paulweiss.com/professionals/partners-and-counsel/judie-ng-shortell.aspx

https://www.paulweiss.com/professionals/partners-and-counsel/betty-yap.aspx

mailto:sbarshay%40paulweiss.com?subject=M%26A

Figure 1A - U.S. Deal Volume (US$B)

Figure 2A - Global Deal Volume (US$B)

M&A Activity – 12-Month Trends

P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P A - 7

Aug 20

16

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

016

Dec 20

15

Nov 20

15

Oct 20

15

Sep 20

16

Strategic TotalSponsor

$0

$50

$100

$150

$200

$250

$300

$128.01

$112.04

$17.14 $17.60 $35.41$20.01 $18.75

$48.61 $49.95$38.45 $36.92

$13.10

$95.76

$29.75

$157.07

$76.05$64.37

$51.85

$84.59

$136.67

$96.47$89.40

$71.66

$115.18

$223.77

$141.79$174.21

$93.65 $99.78

$71.86

$103.34

$185.28

$146.41$127.85

$108.58$129.08

Sep 20

16

Aug 20

16

Jul 2

016

Jun 2

016

May 20

16

Apr 2

016

Mar 20

16

Feb

2016

Jan 2

015

Dec 20

15

Nov 20

15

Oct 20

15


$0

$100

$200

$300

$400

$500

$600

$146.71

$59.87 $49.85 $35.33$64.11 $62.21 $49.77

$76.60 $77.73 $67.02$50.37 $42.78

$539.53

$346.41$409.70

$202.17

$299.21

$239.40 $232.06

$334.80$308.90

$331.28

$222.31

$306.36

$392.82

$286.54

$359.85

$166.84

$235.10

$177.18 $182.29

$258.20

$231.17$264.27

$171.94

$263.58

A T A G L A N C E

A N N E X

Figure 3A - U.S. Number of Deals

Figure 4A - Global Number of Deals


A T A G L A N C E

Aug 20

16

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

016

Dec 20

15

Nov 20

15

Oct 20

15

Sep 20

16


0

200

400

600

800

1,000

871

780740

891 891

780 759 765 788

650

728 717672

612577

709 730

637 621 604 606

520578 591

199168 163 182 161 143 138

161 182130 150 126

Aug 20

16

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

015

Dec 20

15

Nov 20

15

Oct 20

15

Sep 20

16


0

500

1,000

1,500

2,000

2,500

3,000

3,500

3,092 3,0113,110

3,3403,214 3,296

3,1483,075

3,245

2,996 2,9432,734

2,708 2,643 2,7502,949 2,838

2,9702,784 2,722

2,8712,662 2,646

2,438

384 368 360 391 376 326 364 353 374 334 297 296

A N N E X


A T A G L A N C E

Figure 5A - Inbound U.S. Crossborder Transactions

Aug 20

16

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

015

Dec 20

15

Nov 20

15

Oct 20

15

Sep 20

16

By Volume (US$B) By Number of Deals

$0

$20

$40

$60

$80

$100

100

150

200

139 143

123

145 143 142131 134

145

112 116

132

$14.25 $37.10 $40.03 $27.67 $29.40 $24.80 $16.88 $83.56 $21.54 $29.53 $26.78 $67.87

Figure 6A - Outbound U.S. Crossborder Transactions

Aug 2

016

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

015

Dec 20

15

Nov 20

15

Oct 20

15

Sep 2

016


$0

$20

$40

$60

$80

$100

50

100

150

200

99

158 161

127

150 148

115

136126 127

110

133

$13.48 $35.24 $13.37 $8.03 $24.71 $16.14 $8.56 $15.55 $8.18 $10.11 $10.12 $20.27

Figure 7A - Global Crossborder Transactions

Aug 2

016

Jul 2

016

Jun 2

016

May 20

16

Apr 20

16

Mar

201

6

Feb

2016

Jan 2

015

Dec 20

15

Nov 20

15

Oct 20

15

Sep 2

016


$0

$40

$80

$120

$160

$200

100

550

1000

$194.68 $130.45 $119.07 $64.89 $152.71 $85.79 $61.50 $133.65 $79.01 $126.01 $61.84 $134.57

789 816 779835 825 793 779

714803

715 713 668

A N N E X

october 2016, issue 55 - paul, weiss · all data is as of october 11, 2016 unless otherwise...

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