Quarterly M&A Report Q1 2012

Transcription

1 John Hill (813) John McDonald (813) Quarterly M&A Report Q Keith Hodgdon Senior Vice President (813) Jeffrey Bridge Vice President (813) Michael Mariani Associate (813) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC

2 Capital Markets Overview Commentary Select Initial Public Offerings Q % 120% 115% 110% 105% 100% 95% 90% 85% 80% On March 30 th, 2012, the stock market closed out its best 1 st quarter performance in 14 years. As illustrated in the chart below, major market indices, such as the S&P 500 and Nasdaq, surged during the recently completed 1 st quarter. Specifically, the S&P 500 index increased 12.0% while the Nasdaq index rose 18.7%. The U.S. initial public offering ( IPO ) market demonstrated overall strength and investor demand in the 1 st quarter of 2012, resulting in the highest first quarter volume since Several noteworthy IPOs took place in the Technology industry sector, including the $162 million offering for ExactTarget, Inc. (NYSE:ET) a provider of targeted marketing software, and the $133 million offering for mobile advertising solutions company Millennial Media, Inc. (NYSE:MM). The M&A markets remained active in Q4 2011, with several notable transactions announced by large private equity groups such as Advent International Corp., Insight Venture Partners and The Gores Group. Public Market Performance (LTM) 11.2% 6.2% Offer Date Issuer Industry Transaction Value 03/15/12 Allison Transmission Holdings, Inc. (NYSE:ALSN) Automotive $600 03/21/12 Vantiv, Inc. (NYSE:VNTV) Financial Services $500 03/28/12 Rexnord Corp. (NYSE:RXN) Industrial $426 02/07/12 Roundy's, Inc. (NYSE:RNDY) Consumer $163 03/21/12 ExactTarget, Inc. (NYSE:ET) Technology $162 03/28/12 Millennial Media, Inc. (NYSE:MM) Technology $133 01/24/12 Guidewire Software, Inc. (NYSE:GWRE) Technology $115 03/14/12 M/A-Com Technology Solutions Holdings, Inc. (NasdaqGS:MTSI) Technology $114 02/23/12 Bazaarvoice, Inc. (NasdaqGM:BV) Technology $114 03/01/12 Yelp, Inc. (NYSE:YELP) Technology $107 Select U.S. M&A Transactions Q Announced Date Target Buyer Industry Transaction Value 02/17/12 TransUnion Corp. Advent International Corp. Financial Services $3,305 02/15/12 The Wimble Co. Kellogg Co. Consumer $2,695 03/12/12 ZOLL Medical Corp. Asahi Kasei Corp. Healthcare $2,216 03/09/12 Quest Software, Inc. Insight Venture Partners Technology $2,176 02/09/12 Taleo Corp. Oracle Corp. Technology $1,921 03/08/12 Cameron Health, Inc. Boston Scientific Corp. Healthcare $1,350 02/21/12 Prestige Brands Holdings, Inc. Genomma Lab Internacional Consumer $1,267 01/24/12 SPX Service Solutions Robert Bosch GmbH Automotive $1,150 75% Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Source : Capital IQ S&P 500 Nasdaq 01/30/12 Pep Boys - Manny, Moe & Jack The Gores Group Auotmotive $1,125 03/21/12 Solo Cup Co. Dart Container Corp. Consumer $977 2

3 Total Transaction Volume Total Transaction Value ($ in billions) M&A Market Overview Commentary Valuation Multiples: Enterprise Value / EBITDA As detailed in the annual charts below, overall U.S. M&A activity or deal volume for 2011 was at a three-year high with 2,322 closed transactions, up nearly 17% from In addition to increased deal activity, the total value of completed M&A transactions for 2011 climbed nearly 9% to $819 billion, up from $754 billion in M&A transaction pricing, defined as Enterprise Value over EBITDA, across both the middle market and the overall market remained strong from a historical perspective at 11.7x and 11.6x, respectively, in the 1 st quarter of Total Market Middle Market U.S. M&A Activity Annual Trends: VOLUME U.S. M&A Activity Annual Trends: VALUE Less than $100M $100 - $499M $500 - $999M Greater than $1 Billion Less than $100M $100 - $499M $500 - $999M Greater than $1 Billion 3

4 Total Transaction Volume Total Transaction Value ($ in billions) Quarterly M&A Activity Commentary In Q1 2012, total M&A market transaction volume decreased 21% compared to the prior year period, while overall deal value declined 10% to $153 billion. Consistent with the first quarter of prior years, Q experienced a seasonal dip in transaction volume; however, M&A activity is expected to pick back up for the remainder of The total number of completed middle market deals, defined as transactions valued at less than $1 billion, reached 344 in Q1 2012, down 23% compared to the prior year period. The total deal value of middle market transactions declined approximately 23% in Q to $52 billion, down from $67 billion in Q Transactions valued at less than $100 million represented 53% of the total number of closed deals in Q4 2011, consistent with the year prior. U.S. M&A Activity Quarterly Trends: VOLUME ($ in billions) U.S. M&A Transactions by Deal Size Deal Size Volume Value Volume Value Volume Value Less than $100M 262 $ $10 (24%) (24%) $100 - $499M 156 $ $27 (21%) (24%) $500 - $999M 27 $19 21 $15 (22%) (19%) Total Middle Market 445 $ $52 (23%) (23%) Greater than $1 Billion 26 $ $101 15% (3%) Total Market 471 $ $153 (21%) (10%) % of Total Market % Change Less than $100M 55% 8% 53% 7% $100 - $499M 33% 20% 33% 17% $500 - $999M 6% 11% 6% 10% Total Middle Market 94% 39% 92% 34% Greater than $1 Billion 6% 61% 8% 66% Total Market 100% 100% 100% 100% U.S. M&A Activity Quarterly Trends: VALUE Less than $100M $100 - $499M $500 - $999M Greater than $1 Billion Less than $100M $100 - $499M $500 - $999M Greater than $1 Billion 4

5 Quarterly M&A Activity by Industry U.S. M&A Activity by Industry Sector: VALUE % Change ($ in billions) Consumer $12 $53 77% Financial Services $3 $20 NM Healthcare $16 $28 75% Industrials $11 $19 42% Technology / Telecom $26 $30 13% $0 $10 $20 $30 $40 $50 $60 U.S. M&A Activity by Industry Sector: VOLUME % Change Consumer % Financial Services % Healthcare % Industrials % Technology / Telecom % *Excludes Energy, Real Estate, Utilities and Other transactions, as defined by Capital IQ. 5

6 Total Transaction Volume Total Transaction Value ($ in billions) Recent Private Equity Activity Commentary Select Private Equity Transactions Q With financing markets cooperating, financial sponsors remained active across a number of industry sectors in the 1 st quarter of 2012, announcing a number of significant buyouts, as shown in the table on the right. In total, financial sponsors participated in approximately 40% of the completed deals during Q Several notable sponsor led transactions were announced during the 1 st quarter, including Advent International Corp. s acquisition of TransUnion Corp. for $3.3 billion, Insight Venture Partners buyout of Quest Software, Inc., a leading provider of enterprise systems management solutions, for nearly $2.2 billion, and The Gores Group acquisition of Pep Boys Manny, Moe & Jack for approximately $1.1 billion. Financial Sponsors vs. Strategic Buyers $250 Announced Date Target Buyer Industry Transaction Value 02/17/12 TransUnion Corp. Advent International Corp. Financial Services $3,305 03/09/12 Quest Software, Inc. Insight Venture Partners Technology $2,176 03/27/12 Los Angeles Dodgers, Inc. Guggenheim Partners Consumer $2,000 01/30/12 Pep Boys - Manny, Moe & Jack The Gores Group Automotive $1,111 03/28/12 Physiotherapy Associates, Inc. Court Square Capital Partners Healthcare $510 02/13/12 Associated Asphalt, Inc. Goldman Sachs Group Industrials $400 02/17/12 Nixon, Inc. Trilantic Capital Management Consumer $285 03/19/12 Flanders Corp. Insight Equity Industrials $192 01/20/12 Neways, Inc. Z Capital Management Consumer $177 03/06/12 Arnold Magnetic Technologies Corp. Compass Diversified Holdings Industrials $129 Profiled Private Equity Transaction Advent International Corp. to acquire TransUnion Corp. Announced Feb. 17, % % $200 $150 $100 $171 71% $153 84% Financial Profile Transaction Analysis LTM Income Statement 12/31/11 Purchase Price (Equity) $1,630.2 Revenue $1,024.0 EBITDA $352.1 Net Assumed Liabilities $1,493.4 Net Income $41.3 Implied Enterprise Value $3, % 40% $50 $0 29% 16% As of Balance Sheet 12/31/11 Implied Purchase Multiples Cash $107.8 Revenue 3.1x Financial Sponsor Strategic Buyer Financial Sponsor Strategic Buyer Debt $1,601.2 EBITDA 8.9x Net Debt $1,493.4 Net Income NM 6

7 Integrity Expertise Results Recent Transactions John Hill (813) has been recapitalized by John McDonald (813) has been recapitalized by has been acquired by & & Harbert Mezzanine Partners has been acquired by ADG Acquisition Holdings, LLC has been acquired by Keith Hodgdon Senior Vice President (813) Jeffrey Bridge Vice President (813) has acquired has been acquired by has been acquired by has been acquired by has been recapitalized by Michael Mariani Associate (813) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: has merged with Member FINRA/SIPC has been recapitalized by has acquired has been recapitalized by has been acquired by Sage Compliance Services