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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
© 2017 KPMG Advisory N.V.
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
© 2017 KPMG Advisory N.V. Source: Mergermarket – data per 13/02/2017, KPMG Analysis
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
© 2017 KPMG Advisory N.V. Source: Mergermarket – data per 13/02/2017, KPMG Analysis
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
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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
© 2017 KPMG Advisory N.V. Source: Mergermarket – data per 13/02/2017, KPMG Analysis
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
© 2017 KPMG Advisory N.V.
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
© 2017 KPMG Advisory N.V.
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: bosker.danny@kpmg.nl, 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.
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