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and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of November 2015 unless otherwise specified. “Last 12 Months” data is for the period from November 2014 to October 2015 inclusive. Data from Dealogic and FactSet MergerMetrics may include multiple offers, as applicable, for the same target company. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss. By Volume (US$B) October 2015 Last 12 Months By Number of Deals October 2015 Last 12 Months $0 $100 $200 $300 $400 $500 $600 Utility & Energy Retail Real Estate/Property Finance Computers & Electronics $19.62 $18.54 $10.50 $118.63 $44.06 $0 $100 $200 $300 $400 $500 $600 Finance Telecommunications Oil & Gas Computers & Electronics Healthcare $351.02 $526.08 $196.60 $152.69 $130.83 0 1,000 2,000 3,000 4,000 5,000 Real Estate/Property Finance Healthcare Professional Services Computers & Electronics 250 86 73 61 45 0 1,000 2,000 3,000 4,000 5,000 Real Estate/Property Finance Healthcare Professional Services Computers & Electronics 1,369 1,106 2,748 454 602 October 2015 Global +/- From Prior Month U.S. +/- From Prior Month Total Volume (US$B) 545.21 256.11 239.23 122.83 No. of deals 2,805 (163) 830 (55) Avg. value of deals (US$mil) 376.5 187.2 687.4 372.9 Avg. deal multiple 1 12.0x 0.9 13.6x 3.6 Strategic Transactions Volume (US$B) 405.14 165.08 118.00 19.63 No. of deals 2,441 (158) 643 (69) Avg. value of deals (US$mil) 310.9 138.2 409.7 106.1 Avg. deal multiple 1 11.8x 0.8 12.8x 3.0 Sponsor-Related Transactions Volume (US$B) 140.07 91.02 121.23 103.21 No. of deals 364 (5) 187 14 Avg. value of deals (US$mil) 966.0 608.0 2,020.5 1,628.7 Avg. deal multiple 1 12.6x 1.4 16.1x 5.5 Crossborder Transactions 2 Volume (US$B) 189.63 78.82 Inbound 16.53 Outbound 11.20 Inbound (42.92) Outbound (5.26) No. of deals 707 (42) Inbound 140 Outbound 143 Inbound (11) Outbound (6) Avg. value of deals (US$mil) 551.2 245.2 Inbound 209.3 Outbound 215.4 Inbound (594.1) Outbound (63.5) Avg. deal multiple 1 10.1x (1.5) Inbound 10.1x Outbound 9.5x Inbound (0.1) Outbound (2.6) Figure 1 Figure 2 - Most Active U.S. Target Industries 3 November 2015, Issue 44 M&A Activity PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 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.
Transcript
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 $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of November 2015 unless otherwise specified. “Last 12 Months” data is for the period from November 2014 to October 2015 inclusive. Data from Dealogic and FactSet MergerMetrics may include multiple offers, as applicable, for the same target company. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
October 2015
Last 12 Months
By Number of Deals
October 2015
Last 12 Months
$0 $100 $200 $300 $400 $500 $600
Utility & Energy
Retail
Real Estate/Property
Finance
Computers & Electronics
$19.62
$18.54
$10.50
$118.63
$44.06
$0 $100 $200 $300 $400 $500 $600
Finance
Telecommunications
Oil & Gas
Computers & Electronics
Healthcare
$351.02
$526.08
$196.60
$152.69
$130.83
0 1,000 2,000 3,000 4,000 5,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics 250
86
73
61
45
0 1,000 2,000 3,000 4,000 5,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics
1,369
1,106
2,748
454
602
October 2015 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 545.21 256.11 239.23 122.83
No. of deals 2,805 (163) 830 (55)
Avg. value of deals (US$mil) 376.5 187.2 687.4 372.9
Avg. deal multiple1 12.0x 0.9 13.6x 3.6
Strategic Transactions
Volume (US$B) 405.14 165.08 118.00 19.63
No. of deals 2,441 (158) 643 (69)
Avg. value of deals (US$mil) 310.9 138.2 409.7 106.1
Avg. deal multiple1 11.8x 0.8 12.8x 3.0
Sponsor-Related Transactions
Volume (US$B) 140.07 91.02 121.23 103.21
No. of deals 364 (5) 187 14
Avg. value of deals (US$mil) 966.0 608.0 2,020.5 1,628.7
Avg. deal multiple1 12.6x 1.4 16.1x 5.5
Crossborder Transactions2
Volume (US$B) 189.63 78.82 Inbound
16.53 Outbound
11.20
Inbound
(42.92) Outbound
(5.26)
No. of deals 707 (42) Inbound
140 Outbound
143
Inbound
(11) Outbound
(6)
Avg. value of deals (US$mil) 551.2 245.2 Inbound
209.3 Outbound
215.4
Inbound
(594.1) Outbound
(63.5)
Avg. deal multiple1 10.1x (1.5) Inbound
10.1x Outbound
9.5x
Inbound
(0.1) Outbound
(2.6)
Figure 1 Figure 2 - Most Active U.S. Target Industries3
November 2015, Issue 44M&A Activity
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 1
A T A G L A N C E
1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available.2 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality.3 Industries categories are determined and named by Dealogic.
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 2
A T A G L A N C E
Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for October 2015 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for October 2015 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $30 $60 $90 $120 $150
Saudi Arabia
Denmark
China
Japan
Canada $3.64
$3.06
$1.76
$1.26
$0.97
$0 $30 $60 $90 $120 $150
Switzerland
Italy
India
Germany
Spain $3.29
$2.71
$1.17
$0.61
$0.59
0 100 200 300 400 500
France
Brazil
Germany
United Kingdom
Canada
20
37
11
10
8
$0 $30 $60 $90 $120 $150
Japan
Netherlands
Israel
United Kingdom
Canada $91.68
$64.69
$46.06
$37.13
$35.71
0 100 200 300 400 500
France
China
Japan
United Kingdom
Canada 420
185
156
69
99
$0 $30 $60 $90 $120 $150
Germany
Netherlands
France
Spain
United Kingdom
$30.49
$45.57
$21.23
$16.70
$18.11
0 100 200 300 400 500
Australia
France
Germany
United Kingdom
Canada 374
294
105
100
97
0 100 200 300 400 500
China and France
Australia
Japan andUnited Kingdom
Canada 36
16
9
85
4
4 Each of Japan and United Kingdom was the country of origin for sixteen transactions in October 2015.5 Each of China and France was the country of origin for eight transactions in October 2015.
October 2015
Equity Value (US$B)
Last 12 Months
Equity Value (US$B)
$0
$5000
$10000
$15000
$20000
$25000
Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers
$19,045.4
$6,391.0$6,219.7
$1,703.7
$5,089.8
$2,472.3
$1,257.0
$19,100.4
$21,262.7
$7,973.3
$22,913.7
$5,995.6
$3,330.7
$8,077.2$6,276.6
$24,402.8
$5,782.4
$7,514.4
$3,473.3
$18,145.2
$2,117.3
July
2015
June
2015
May 20
15
April 2
015
March 2
015
Febr
uary
2015
Janu
ary 20
15
Decem
ber 2
014
Novem
ber 2
014
Octobe
r 201
5
Septem
ber 2
015
Augus
t 201
5
$6,301.6
$22,476.9
$11,585.2
$0 $20 $40 $60 $80 $100
Kraft Foods Group, Inc. ~ H.J. Heinz Company(March 25, 2015)
Cigna Corporation ~ Anthem, Inc.(June 20, 2015)
Time Warner Cable Inc. ~ Charter Communications, Inc.(May 26, 2015)
EMC Corporation ~ Investment Group (October 12, 2015)
Allergan, Inc. ~ Actavis plc(November 17, 2014)
$46.07
$67.37
$64.30
$55.18
$47.22
7
$0 $20 $40 $60 $80 $100
Team Health Holdings, Inc. ~ AmSurg Corp.(October 20, 2015) (offer withdrawn November 2, 2015)
Rite Aid Corporation ~ Walgreens Boots Alliance, Inc.(October 27, 2015)
KLA-Tencor Corp. ~ Lam Research Corporation(October 21, 2015)
SanDisk Corporation ~ Western Digital Corporation(October 21, 2015)
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)
Figure 5 - Five Largest Announced U.S. Public Mergers
M&A Activity (Continued)
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 3
A T A G L A N C E
6 Members of the investment group reported by FactSet MergerMetrics are Silver Lake Partners, MSD Partners LP and Dell Inc.7 Members of the investment group reported by FactSet MergerMetrics are Silver Lake Partners, MSD Partners LP and Dell Inc.
8 Based on the highest target break fees and reverse break fees payable in a particular deal.9 3 transactions in October 2015 involving a financial buyer had a reverse break fee.10 3 transactions in October 2015 involved a financial buyer.11 1 transaction in October 2015 had a go-shop provision.12 No transactions in October 2015 involving a financial buyer had a go-shop provision.13 1 transaction in October 2015 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
(US$mil)
3.4%
4.0%
5.3%
3.4%
3.8%4.2%
5.5%
3.6%
6.6%
3.3%3.5%
5.3%5.4%
10.5%
4.6%
5.6%
$11,585.2
$7,096.8
$3,686.3
$5,393.2
$6,861.8
$1,257.0
$1,876.7
5.7%
$8,496.9
$2,319.7
3.7%
3.5% 3.5% 3.4% 3.4%3.5%
$3,473.3
May 20
15
June
2015
April 2
015
March 2
015
Febr
uary
2015
Janu
ary 20
15
Decem
ber 2
014
Novem
ber 2
014
Octobe
r 201
5
Septem
ber 2
015
Augus
t 201
5
July
2015
$4,870.4
6%
12%
$6,000
$12,000
$8,443.5
6.2%
Figure 6 - Average Break Fees as % of Equity Value8
Figure 7 - Average Break Fees as % of Equity Value
October 2015
Last 12 Months
Target Break Fee for All Mergers 3.4 3.5
October 2015
Last 12 Months
Reverse Break Fee for All Mergers 5.7 5.6
Reverse Break Fee for Mergers Involving Financial Buyers9
6.4 7.4
Reverse Break Fee for Mergers Involving Strategic Buyers
5.5 5.0
October 2015
Last 12 Months
% of Mergers with Go-Shops 5.6 10.7
% of Mergers Involving Financial Buyers with Go-Shops10
0.0 34.8
% of Mergers Involving Strategic Buyers with Go-Shops
6.7 7.1
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops11
60.0 36.9
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops12
N/A 35.9
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops13
60.0 37.7
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.
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 4
A T A G L A N C E
14 Due to rounding, percentages may not add up to 100%.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
October 2015
11.1%
10.2%
52.5%
16.4%
20.3%
50.0% 33.3%
5.6%
0.6%
October 2015 87.5
Last 12 Months 92.3
October 2015 5.6
Last 12 Months 22.6
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers15
October 2015 18.2
Last 12 Months 12.2
M&A Terms (Continued)
Figure 9 - Form of Consideration as % of U.S. Public Mergers14 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 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 60 partners and more than 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, hedge funds, 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 Automatic Data Processing in its $5 billion spin-off of ADP Dealer Services, now called CDK Global; advising Encana in its $7.1 billion acquisition of Athlon Energy; advising EXOR in its $6.9 billion unsolicited cash bid for PartnerRe (pending); 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 (pending); 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.
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 5
Matthew W. Abbott
Edward T. Ackerman
Angelo Bonvino
Jeanette K. Chan
Yvonne Y. F. Chan
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
Marc E. Perlmutter
Carl L. Reisner
Kenneth M. Schneider
Robert B. Schumer
John M. Scott
Tarun M. Stewart
Steven J. Williams
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:
Counsel Frances F. Mi, associates Joseph S. Friedman, Yashreeka Z. Huq, Samuel J. Welt, Ryan D. Blicher and Alison E. Gurr and law clerks N. Arie Abramov and Tyler P. Cohen contributed to this publication.
