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Global M&A Update First Quarter 2017 -1- Investment Banking Corporate Finance Strategy Consulting Global Mergers & Acquisitions Update First Quarter 2017
Global M&A UpdateFirst Quarter 2017
- 1 -Investment Banking Corporate Finance Strategy Consulting
Global Mergers & Acquisitions Update
First Quarter 2017
Global M&A UpdateFirst Quarter 2017
- 2 -
Historical Private Equity M&A Multiples (By Transaction Size)
Current M&A Trends:
• Middle-market private equity reported deals’ TEV/EBITDA multiples averaged 6.7x for
TEVs between US$10-250 million.
• Equity contribution for reported middle-market private equity M&A deal funding
decreased in Q1 2017 to 43.9%, down from 48.6% in Q4 2016.
• Deals involving better performers (TTM EBITDA margins and revenue growth rates both
above 10%) accounted for 52% of reported activity during Q1 2017, below the historical
average of 57%.
Selected Transactions:
• Samsung Electronics America, Inc., a recognized innovation leader in consumer
electronics design and technology, acquired Harman International Industries,
Incorporated, a global leader in connected car technology, lifestyle audio innovations,
design and analytics, cloud services, and IoT solutions, for US$8.7 billion. The
transaction value represents a multiple of 10.1x EBITDA and 1.2x Revenue.
• Technip SA, a company that provides project management, engineering, and
construction services for the energy industry, acquired FMC Technologies, Inc., a
global leader for the energy industry providing oil service equipment, for US$9.2 billion.
The transaction value represents a multiple of 17.8x EBITDA and 1.9x Revenue.
United States
US M&A Deal Value Declines while Volume Increases During Q1 2017:
With total deal value at US$293 billion, Q1 2017 saw a 46.8% decrease in deal value from Q4 2016. There were 4,915 announced transactions during Q1 2017, representing a 6.1% increase
from Q4 2016. Compared to Q1 2016, deal value decreased by 43.1% and deal volume increased 2.4%. During Q1 2017, the average deal size was approximately US$165 million. The
median TEV/EBITDA multiple of disclosed deals during the quarter was 12.9x.
U.S. M&A Transactions
Corporate M&A Activity and Equity Market Performance
Sources: Capital IQ, GF Data Resources, and Mergermarket
Quarterly Equity and Debt Contributions
M&A Trends and Transactions
Private Equity-Sponsored M&A Activity
LTM Equity Market Performance (% Change)
8.9%
3.9%4.7%
Global M&A UpdateFirst Quarter 2017
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Q1$454
$1,024
$1,370
$1,935 $2,026
Q2$507
18,13019,314
20,09820,821
9,540
0
3,000
6,000
9,000
12,000
15,000
18,000
21,000
24,000
$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
2012 2013 2014 2015 2016
Total Value (in US$ billions) Total Volume (# of deals)
Latin America
Latin American M&A Deal Value Increases while Volume Decreases during Q1 2017:
With total deal value at US$32 billion, Q1 2017 saw a 34.4% increase in deal value from Q4 2016. There were 322 announced transactions during Q1 2017, representing a 10.8% decrease
from Q4 2016. Compared to Q1 2016, deal value increased by 144.1% and deal volume decreased 5.6%. During Q1 2017, the average deal size was approximately US$246 million. The
median TEV/EBITDA multiple of disclosed deals during the quarter was 10.3x.
Latin America M&A Transactions
Corporate M&A Activity and Equity Market Performance
Sources: Capital IQ, GF Data Resources, and Mergermarket
M&A Trends and Transactions
Currency and Interest Rate Performance
LTM Equity Market Performance (% Change)
7.3%
9.1%
15.9%
12.0%
LTM Currency Market Performance relative to U.S. Dollar
5.2%
3.5%
0.0%
10.8%
Current M&A Trends:
• The most active sectors for M&A deal volume in the region were the Materials,
Consumer Discretionary, and Industrials sectors.
• In Q1 2017, there were a total of two announced transactions with a TEV greater than
US$1 billion in Latin America.
• The Top 3 most active buyers/investors in the region by total transaction value were
Vale S.A., State Grid Brazil Power Participações Ltda., and Bavaria S.A.
Selected Transactions:
• American Industrial Partners, a North American based middle-market private equity
firm, acquired Moly-Cop Adesur S.A., a Peruvian-based manufacturer of grinding steel
balls and rods used in the mining industry, for US$1.2 billion. The transaction value
represents a multiple of 7.9x EBITDA and 1.2x Revenue.
• State Grid Brazil Power Participações Ltda., an electricity distributor based in Brazil,
acquired a 54.6% stake in CPFL Energia S.A., the largest non state-owned group of
electric energy generation and distribution companies in Brazil, for US$12.0 billion. The
transaction value represents a multiple of 10.3x EBITDA and 2.3x Revenue.
Global M&A UpdateFirst Quarter 2017
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-35.0%
-25.0%
-15.0%
-5.0%
5.0%
15.0%
25.0%
35.0%
M A M J J A S O N D
England^FTSE
France^FCHI
Germany^DAXI
Russia^RTSI
Current M&A Trends:
• The Top 3 most active buyers/investors in Europe during Q1 2017 by total transaction
size were The Kraft Heinz Company, PPG Industries, Inc., and Johnson & Johnson.
• The most active sectors for M&A deal volume in the region were the Real Estate,
Industrials, and Consumer Discretionary sectors.
• The most active buyers/investors in Europe during Q1 2017 by total number of
transactions were M7 Real Estate LLP (10), Real I.S. AG (10), and Catella Real Estate
AG (9).
Selected Transactions:
• Atotech B.V., a Dutch manufacturer of graphite lubricants, was acquired by American
private equity firm The Carlyle Group, for US$3.2 billion. The transaction value
represented a multiple of 11.9x EBITDA and 3.2x Revenue.
• Sumitomo Corporation, a leading integrated trading company engaged in diverse
businesses based on its global network, purchased Fyffes plc, an Irish fruit and fresh
produce company, for US$907.4 million. The transaction value represents a multiple of
15.3x EBITDA and 0.8x Revenue.
Europe
M&A Activity Decreases while Total Deal Value Increases During Q1 2017:
With quarterly deal value totaling US$437 billion, Q1 2017 saw a 29.4% increase in deal value from Q4 2016. There were 5,133 announced transactions during Q1 2017, representing a 2.0%
decrease from Q4 2016. Compared to Q1 2016, deal value nearly doubled, realizing a 98.7% surge, while deal volume increased 2.3%. During Q1 2017, the average deal size was
approximately US$343 million. The median TEV/EBITDA multiple for disclosed deals during the quarter was 12.3x.
Europe M&A Transactions
Corporate M&A Activity and Equity Market Performance
Sources: Capital IQ, GF Data Resources, and Mergermarket
LTM Currency Market Performance relative to U.S. Dollar
M&A Trends and Transactions
Currency and Interest Rate Performance
LTM Equity Market Performance (% Change)
4.0%
-4.4%
2.1%
5.1%
2.1%
9.2%
1.7%
2.2%
Selected Short and Long-Term Interest Rates
3-month 10-year 3-month 10-year
Britain 0.34% 1.28% 0.57% 1.54%
France -0.33% 0.99% -0.24% 0.48%
Germany -0.33% 0.31% -0.24% 0.16%
Russia 11.28% 8.27% 12.25% 9.09%
*USD denominated bonds
Current 1 Year Ago
Selected Short and Long-Term Interest
RatesAs of June 30, 2017
Global M&A UpdateFirst Quarter 2017
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Current M&A Trends:
• The top Asia/Pacific M&A sectors during Q1 2017 included Information Technology,
Industrials and Consumer Discretionary.
• The Top 3 most active buyers/investors in the current quarter by number of transactions
were Matrix Partners China (18), 500 Startups (16), and SMBC Venture Capital Co. Ltd
(14).
• The Top 3 most active regional buyers/investors in Q1 2017 by total transaction size
were China Development Bank Corporation., Sino IC Capital Co. Ltd. and IS DongSeo
Co. Ltd.
Selected Transactions:
• PAG Asia Capital, the private equity arm of PAG, acquired Yingde Gases Group
Company Limited, a company that produces, supplies, and distributes various
industrial gas products, for US$3.1 billion. The transaction value represents a multiple of
7.3x EBITDA and 2.4x Revenue.
• KKR & Co. L.P, a private equity and real estate investment firm specializing in direct
and fund of fund investments, acquired Hitachi Koki Co. Ltd., a company that
manufactures and sells power tools and life-science instruments, for US$1.1 billion. The
transaction value represents a multiple of 13.0x EBITDA and 0.8x Revenue.
Asian M&A Activity and Total Deal Value Decline in Q1 2017:
With total deal value at US$223 billion, Q1 2017 saw a 13.8% decrease in deal value from Q4 2016. There were 3,704 announced transactions during Q1 2017, representing a 15.4%
decrease from Q4 2016. Compared to Q1 2016, deal value increased by 36.8% and deal volume increased by 3.6%. During Q1 2017, the average deal size was approximately US$96 million.
The median TEV/EBITDA multiple for disclosed deals during the quarter was 13.8x.
Asia/Pacific M&A Transactions
Corporate M&A Activity and Equity Market Performance
Sources: Capital IQ, GF Data Resources, and Mergermarket
LTM Currency Market Performance relative to U.S. Dollar
M&A Trends and Transactions
Currency and Interest Rate Performance
LTM Equity Market Performance (% Change)
-0.7%0.0%
-2.6%-0.5%
Asia/Pacific
12.7%
-1.1%
11.7%
6.3%
Global M&A UpdateFirst Quarter 2017
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Seale & Associates is a global investment banking firm with extensive experience in
mergers and acquisitions (M&A), corporate finance advisory, and enterprise level strategy
consulting. Our professionals are trusted advisors maintaining a high level of quality and
integrity while presenting innovative ideas and solutions to address our clients’ most
complex dealings. All securities related transactions are cleared through Seale Capital,
Inc., an affiliate company, registered broker dealer and FINRA and SIPC member.
Seale & Associates, Inc.
950 N. Glebe Rd. | Suite 950
Arlington, Virginia 22203 | United States
Phone: +1 (703) 294-6770
Fax: +1 (703) 294-6790
www.sealeassociates.com
Washington, D.C. Mexico City, Mexico
Leadership Team
James A. Seale
President
Brett M. Carmel
Senior Managing Director
Robert E. Whitney
Managing Director
Felipe Bueno Viesca
Managing Director – Latin America
Sergio Garcia del Bosque
Managing Director
