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. 4 See box on p. 5 for treatment of Dell Inc. offers.
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 $100 million or higher
regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of July 10, 2013 unless otherwise specified. “Last 12 Months” data is for the period
from July 2012 to June 2013 inclusive. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss.
By Volume (US$B)
June 2013
Last 12 Months
By Number of Deals
June 2013
Last 12 Months
$0 $30 $60 $90 $120 $150
Forestry & Paper
Oil & Gas
Computers & Electronics
Real Estate/Property
Healthcare
$9.33
$4.40
$3.79
$18.81
$13.06
$0 $30 $60 $90 $120 $150
Telecommunications
Real Estate/Property
Healthcare
Oil & Gas
Computers & Electronics $114.74
$111.70
$104.32
$101.31
$100.15
0 500 1,000 1,500 2,000 2,500 3,000
Real Estate/Property
Finance
Healthcare
Professional Services
Computers & Electronics 125
101
74
51
38
0 500 1,000 1,500 2,000 2,500 3,000
Finance
Real Estate/Property
Healthcare
Professional Services
Computers & Electronics 2,351
1,522
1,150
696
691
June 2013 Global +/- From Prior
Month
U.S. +/- From Prior
Month
Total
Volume (US$B) 224.79 35.17 67.62 (0.84)
No. of deals 2,656 (173) 673 (66)
Avg. value of deals (US$mil) 174.1 31.6 269.4 (4.4)
Avg. deal multiple1 11.0x (0.8) 10.2x (4.4)
Strategic Transactions
Volume (US$B) 186.21 44.39 52.61 16.90
No. of deals 2,350 (181) 565 (59)
Avg. value of deals (US$mil) 161.6 44.0 244.7 72.2
Avg. deal multiple1 11.2x 0.2 10.3x (2.1)
Sponsor-Related Transactions
Volume (US$B) 38.58 (9.22) 15.01 (17.74)
No. of deals 306 8 108 (7)
Avg. value of deals (US$mil) 277.6 (104.8) 417.0 (344.7)
Avg. deal multiple1 9.5x (6.5) 7.7x (9.4)
Crossborder Transactions2
Volume (US$B) 68.30 0.71 Inbound
10.04 Outbound
8.03
Inbound
(10.40) Outbound
(10.17)
No. of deals 629 (38) Inbound
82 Outbound
114
Inbound
(5)Outbound
(24)
Avg. value of deals (US$mil) 223.2 10.0 Inbound
271.5 Outbound
182.5
Inbound
(227.1) Outbound
(142.5)
Avg. deal multiple1 13.6x 3.5 Inbound
5.6x Outbound
13.9x
Inbound
(13.4) Outbound
2.0
Figure 1 Figure 2 - Most Active U.S. Target Industries3 4
July 2013, Issue 16M&A Activity
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 1
A T A G L A N C E
M&A Activity (Continued)
P A U L , W E I S S , R I F K I N D , W H A R T O N & G A R R I S O N L L P 2
A T A G L A N C E
Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions
Inbound U.S. Crossborder Transactions for June 2013 Inbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
Outbound U.S. Crossborder Transactions for June 2013 Outbound U.S. Crossborder Transactions for the Last 12 Months
By Volume (US$B) By Volume (US$B)
By Number of Deals By Number of Deals
$0 $10 $20 $30 $40 $50 $60 $70
United Kingdom
Canada
Japan
China
India $2.41
$1.68
$1.25
$1.22
$1.19
0 50 100 150 200 250 300 350 400
Australia
France
Japan
United Kingdom
Canada 25
13
10
6
5
$0 $10 $20 $30 $40 $50
France
Germany
United Kingdom
Israel
Canada $1.96
$1.03
$0.97
$0.86
$0.69
0 50 100 150 200 250 300
Australia
Germany
France
United Kingdom
Canada 25
14
8
8
5
$0 $10 $20 $30 $40 $50 $60 $70
United Kingdom
Germany
China
Canada
Japan $54.88
$34.24
$16.53
$15.19
$8.56
0 50 100 150 200 250 300 350 400
France
Germany
United Kingdom
Japan
Canada 348
167
152
80
62
$0 $10 $20 $30 $40 $50
Germany
Italy
Ireland
Canada
United Kingdom $37.47
$18.91
$12.91
$10.17
$10.09
0 50 100 150 200 250 300
Brazil
Germany
Australia
United Kingdom
Canada 268
243
101
88
84
June 2013
Equity Value (US$B)
Last 12 Months
Equity Value (US$B)
$3,000
$9,000
$15,000
Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers
June
2013
May 20
13
April 2
013
March 2
013
Febr
uary
2013
Janu
ary 20
13
Decem
ber 2
012
Novem
ber 2
012
Octobe
r 201
2
Septem
ber 2
012
Augus
t 201
2
July
2012
$4,542.7
$2,231.6 $2,776.4
$4,882.4
$1,273.8
$5,465.1
$1,935.0$1,821.9
$7,895.3
$3,420.4
$749.9$1,327.9
$1,290.3
$1,596.1
$2,500.6
$14,022.3
$2,439.0
$9,605.8
$4,238.0
$1,401.4
$1,912.7$3,093.3
$4,299.9
$1,240.4
$0 $5 $10 $15 $20 $25 $30
Virgin Media Inc. ~ Liberty Global, Inc. (February 5, 2013)
Life Technologies Corporation ~ Thermo Fisher Scientific Inc. (April 15, 2013)
Sprint Nextel Corporation ~ Dish Network Corporation (April 15, 2013) (Offer withdrawn June 18, 2013)
H.J. Heinz Company ~ Investment Group (February 14, 2013)
Dell Inc.(multiple offers)
$23.25
$18.24 $20.51$24.90
$21.08
$12.95
$12.85
6
5
$0 $5 $10 $15 $20 $25 $30
Vanguard Health Systems, Inc. ~ Tenet Healthcare Corporation (June 24, 2013)
Colonial Properties Trust ~ Mid-America Apartment Communities, Inc. (June 3, 2013)
Cooper Tire & Rubber Company ~ Apollo Tyres Ltd (June 12, 2013)
ExactTarget, Inc. ~ salesforce.com, inc. (June 4, 2013)
Onyx Pharmaceuticals, Inc. ~ Amgen Inc.(June 30, 2013) $8.73
$2.35
$2.22
$2.17
$1.63
Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil)5
Figure 5 - Five Largest Announced U.S. Public Mergers
5 See box on p. 5 for treatment of Dell Inc. offers. 6 Members of Investment Group reported by FactSet MergerMetrics are 3G Capital and Berkshire Hathaway Inc.
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
7 Based on the highest target break fees and reverse break fees payable in a particular deal.8 Only one transaction in June 2013 involving a financial buyer had a reverse break fee.9 No transactions in June 2013 had go-shop provisions.
M&A Terms
6%
10%
Avg. Reverse Break Fee as % of Equity ValueAvg. Target Break Fee as % of Equity Value
June
2013
May 20
13
April 2
013
March 2
013
Febr
uary
2013
Janu
ary 20
13
Decem
ber 2
012
Novem
ber 2
012
Octobe
r 201
2
Septem
ber 2
012
Augus
t 201
2
July
2012
Average Value of All U.S. Public Mergers with Definitive Agreements
4.8%
3.3%3.4%
7.1%
3.1%
3.9%
3.7%
3.6%
3.3%3.2%
3.5%3.4%
5.0%5.1%
6.7%
$1,632.8
$807.8
$1,221.1$1,320.9
$753.1 $914.1
$1,232.2
4.1%
6.4%
$1,935.0
(US$mil)$6,000
6.6%
5.0%
6.1%
5.3%
4.0%
$5,436.2
$1,803.0
$1,401.4
3.4%
$1,708.6$2,000
$4,000
8.6%
Figure 6 - Average Break Fees as % of Equity Value7
Figure 7 - Average Break Fees as % of Equity Value7
June 2013 Last 12 Months
Target Break Fee for All Mergers 3.4 3.5
June 2013 Last 12 Months
Reverse Break Fee for All Mergers 4.8 5.9
Reverse Break Fee for Mergers Involving Financial Buyers8
7.5 6.7
Reverse Break Fee for Mergers Involving Strategic Buyers
4.2 5.4
June 2013
Last 12 Months
% of Mergers with Go-Shops9 0.0 12.5
% of Mergers Involving Financial Buyers with Go-Shops
0.0 35.7
% of Mergers Involving Strategic Buyers with Go-Shops
0.0 6.9
Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops9
N/A 35.5
Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops
N/A 34.3
Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops
N/A 37.0
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
Our Mergers & Acquisitions PracticeThe Mergers & Acquisitions Group at Paul, Weiss is among the most experienced and effective 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 and historical experience in advising corporations and private investors in a variety of
transactions enable us to identify new opportunities for our clients to realize value. In particular, we have
experience in assisting clients as they engage in proxy battles, company-altering and market-
consolidating transactions or capital market transactions.
In the past year, we have helped clients across industries and continents, in transactions ranging from
the largest deal for a domestic healthcare REIT to one of the largest international investment projects in
China. A sampling of recent engagements includes advising Rockstar Bidco in its acquisition of Nortel’s
$4.5 billion patent portfolio; assisting consumer products giant Reckitt Benckiser in its $1.4 billion
acquisition of Schiff Nutrition International; counseling KPS Capital Partners in the sale of its portfolio
company North American Breweries to Cerveceria Costa Rica; representing investment funds affiliated
with Apollo Global Management, LLC in an agreement to acquire McGraw-Hill Education for $2.5
billion; and advising Time Warner Cable in its $3 billion acquisition of Insight Communications.
10 Due to rounding, percentages may not add up to 100%.11 There were only three partial or all stock transactions in June 2013.12 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
June 2013
66.7%
6.3%
68.1%
15.3%
0.7%
9.7%
33.3%
June 201311 100.0
Last 12 Months 91.7
June 2013 11.1
Last 12 Months 20.1
Figure 11 - Tender Offers as % of U.S. Public Mergers
Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers12
June 2013 16.7
Last 12 Months 15.6
© 2013 Paul, Weiss, Rifkind, Wharton &
Garrison LLP.
In some jurisdictions, this publication
may be considered attorney advertising.
Past representations are no guarantee of
future outcomes.
M&A Terms (Continued)
NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON
5
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.
ContactsAriel J. Deckelbaum Partner New York 212-373-3546
Frances Mi Counsel New York 212-373-3185 [email protected]
Associates Elana D. Bensoul, Jonathon A.
Zytnick, Samuel J. Welt and Joseph S.
Friedman contributed to this publication.
Figure 9 - Form of Consideration as % of U.S. Public Mergers10 Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio
A T A G L A N C E
Note on the Treatment of the Multiple Dell Inc. Offers: For Figure 2, with data reported by Dealogic, the “Last 12 Months” category includes the February 2013 management buyout of
Dell Inc. by Michael Dell and Silver Lake Management LLC, reported at $20.72 billion, and two March 2013 offers for Dell Inc., one from The Blackstone Group LP, reported at $25.68
billion, and one from Icahn Enterprises L.P., reported at $18.90 billion. For Figures 4, 5 and 12, with data reported by FactSet MergerMetrics, February 2013 includes the management
buyout of Dell Inc. by Michael Dell and Silver Lake Management LLC, reported at $20.51 billion, and March 2013 includes two subsequent offers, one from The Blackstone Group LP,
Insight Venture Partners and Francisco Partners at $24.90 billion, and another from Icahn Enterprises L.P., reported at $18.24 billion. Excluding the March 2013 offers, the Average
Value of all U.S. Public Mergers for March 2013 would be $863.8 million, and the Average Value of Five Largest U.S. Public Mergers for March 2013 would be $1,116.2 million.