Zephyr Monthly M&A Report

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2 The following report details mergers and acquisitions activity in Western Europe in May 2013 using data from the Zephyr database. It focuses on deal activity by target company. Click here to access the raw data in an Excel spreadsheet. Deal value halves month-on-month After a brief surge last month, mergers and acquisitions (M&A) value targeting Western European companies fell back in May, while volume also dipped. There were 1,327 transactions worth a combined EUR 44,773 million during the month compared with 1,590 worth EUR 92,176 million in April, a 17 per cent decline by volume and a 51 per cent drop in monetary terms. The result was also down on the same time last year, when 1,673 deals worth an aggregate EUR 80,379 million were recorded. One possible factor in the decrease could be that April s M&A landscape was dominated by two very large deals in the banking sector, which slightly skewed value, and in comparison deal values in May were more modest, although six transactions did top EUR 1,000 million. Highest of these was US drug maker Activis making an offer to take Irish rival Warner Chilcott private in an all-stock transaction worth EUR 6,649 million. This was followed by another US company targeting an Irish pharmaceutical maker, in which Royalty Pharma made a hostile bid for publicly-listed, Dublin-based biotechnology group Elan worth EUR 4,973 million. Deals by volume and value Announced date No of deals Total deal value May-13 1,327 44,773 Apr-13 1,590 92,176 Mar-13 1,445 39,050 Feb-13 1,586 42,863 Jan-13 1,662 38,866 Dec-12 1,823 85,983 Nov-12 1,852 61,401 Oct-12 1,892 58,945 Sep-12 1,595 31,310 Aug-12 1,371 22,981 Jul-12 1,755 57,603 Jun-12 1,907 52,839 May-12 1,673 80,379 Page 1

3 Deals by volume and value 100,000 2,500 Deal value 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 2,000 1,500 1, May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 0 Total deal value Number of deals Page 2

4 Expanded EU of 27 countries deals by volume and value Announced date No of deals Total deal value May-13 1,304 43,221 Apr-13 1,685 90,771 Mar-13 1,525 41,242 Feb-13 1,615 43,444 Jan-13 1,737 39,468 Dec-12 1,842 83,790 Nov-12 1,905 57,188 Oct-12 1,985 58,026 Sep-12 1,702 31,206 Aug-12 1,448 22,267 Jul-12 1,835 54,610 Jun-12 1,996 44,037 May-12 1,765 80,675 Page 3

5 Ireland comes out top by value After a slightly unusual result last month, when the Netherlands emerged as the number one country by transaction value, May also had a surprising outcome as Ireland took top spot in the rankings with EUR 11,841 millionworth of deal-making recorded, due almost entirely to the Warner Chilcott and Elan transactions, in its best result of the last 12 months. The UK was pushed down to number two for the second month in a row with EUR 8,160 million, down from April s figure of EUR 13,701 million, and Germany was placed third with EUR 4,307 million, again a month-on-month decrease. By volume, the UK was the number one country with 451 transactions, the second consecutive fall (March: 505; April: 503). Roughly a quarter of this was recorded for Sweden, placing it second with 123 transactions, and Spain was third with 119. Pharmaceutical deals push chemicals, rubber and plastics into top spot Given that the top two transactions by value involved drug companies, it comes as little surprise to find that the chemicals, rubber and plastics sector was the most valuable in May with EUR 13,656 million recorded, a big leap from EUR 1,095 million last month, and its best result of the last 12 months under review. Conversely, the value of deal-making in the banking sector fell sharply from EUR 48,542 million down to EUR 3,467 million; as previously mentioned, the restructuring transactions of last month artificially inflated figures, making the apparent downturn in May more defined. By volume, deals targeting companies operating in the machinery, equipment, furniture and recycling sector were the most frequent with 132 recorded, down from last month s 148. This was followed by wholesale and retail with 130 from 172 in April. Most sectors experienced a decline in volume, with only chemicals, rubber and plastics, transport, utilities and insurance increasing month-on-month. Page 4

6 Top 20 deals by value Deal value Deal type Target Target country Acquiror Acquiror country Deal status 1. 6,649 Acquisition 100% Warner Chilcott plc IE Actavis Inc. US Pending 2. 4,973 Acquisition 100% Bid 2 - Increased Elan Corporation plc IE Echo Pharma Acquisition Ltd GB Announced offer 3. 1,557 Acquisition increased from 80% to IMC International Metalworking Companies BV NL Berkshire Hathaway Inc. US Completed 100% 4. 1,458 Minority stake 12% Snam SpA IT Institutional Investors Completed 5. 1,113 Minority stake 4% E.ON SE DE Completed 6. 1,100 IBO 100% Hochtief Airport GmbH DE Public Sector Pension Investment Board CA Pending 7. 1,082 Minority stake 3% GDF Suez SA FR Institutional Investors Completed Minority stake 9% Nielsen Holdings NV NL Completed IBO 100% Cabot Credit Management Group Ltd GB JC Flowers & Company LLC US Completed Acquisition increased from 34% to Höganäs AB SE H Intressenter AB SE Pending 100% Bid 3 - Increased offer Acquisition 60% FirstGroup plc GB Pending Minority stake Marfin Investment Group Holdings SA GR Completed Minority stake 33% Greek Organisation of Football Prognostics SA GR Emma Delta Management Ltd Pending Minority stake 8% Commerzbank AG DE Institutional Investors Completed Minority stake Alcatel-Lucent SA FR Announced Minority stake 5% Jerónimo Martins SGPS SA PT Institutional Investors ES Completed IBO 100% Xellia Pharmaceuticals AS NO Novo A/S DK Completed Minority stake 15% St. James's Place plc GB Institutional Investors Completed Acquisition increased from 50% to Mediterráneo Vida SA de Seguros y Reaseguros ES Banco de Sabadell SA ES Pending 100% Minority stake 1% GlaxoSmithKline plc GB Completed Page 5

7 Top 20 private equity deals by value Deal value Deal type Target Target country Equity provider Deal status 1. 1,100 IBO 100% Hochtief Airport GmbH DE Public Sector Pension Investment Board Pending IBO 100% Cabot Credit Management Group Ltd GB JC Flowers & Company LLC Completed IBO 100% Xellia Pharmaceuticals AS NO Novo A/S Completed IBO 100% Civica plc GB OMERS Private Equity Inc. Completed IBO majority stake The Flexitallic Group FR Bridgepoint Advisers Ltd Pending IBO 100% FTE automotive GmbH & Co. KG DE Bain Capital LLC Pending Minority stake 10% Markit Group Ltd GB Temasek Holdings (Pte) Ltd Completed Acquisition 33% The Bull Ring LP GB Canada Pension Plan Investment Board Completed IBO 100% DOC Generici Srl IT Charterhouse Capital Partners LLP Announced Acquisition increased from 19% Lonrho plc GB BIH SA Pending to 100% Minority stake Consolis Service Co SA NV BE LBO France Gestion SAS; Bayside Capital Inc. Completed Minority stake Zalora Group GmbH DE Summit Partners LP; Verlinvest SA; Investment AB Kinnevik; Tengelmann Completed Ventures GmbH Minority stake Hyperoptic Ltd GB Soros Fund Management LLC Completed IBO 78% HENT AS NO Ratos AB Pending IBO 100% Apen AG's certain assets CH Newbury Partners LLC Completed Minority stake 37% Apen AG CH GP Investments Ltd; Fortress Investment Group LLC; Newbury Partners LLC Announced Minority stake Privalia Venta Directa SL ES Sofina SA Completed Minority stake Grupotec Servicios Avanzados SA ES Baring Private Equity Partners España SA SGECR Completed Minority stake Cardio3 BioSciences SA BE Announced Minority stake 20% Axzon A/S DK The International Finance Corporation Announced Page 6

8 Sharp fall in private equity value Still more disappointing than the general M&A picture was private equity investment targeting Western European companies, as value fell 69 per cent from EUR 18,532 million in April to EUR 5,804 million. However, in a 12-month comparison the result is better, as EUR 3,722 million of dealmaking was recorded in May Volume was down by a third month-on-month, from 213 to 142 transactions, and was 40 per cent lower than a year ago (May 2012: 236 transactions). The decrease in volume is highlighted in the fact that just a single deal surpassed the EUR 1,000 million-mark, which was a German buyout in which Public Sector Pension Investment Board of Canada agreed to acquire Essenbased Hochtief Airport from Hochtief Concessions for EUR 1,100 million. This was one of nine institutional buyouts to feature in the month s top 20 transactions by value, two-thirds of which took the top six rankings. Crossborder deal-making also featured prominently, with buyers hailing from the US, Singapore, Israel and Bermuda as well as Canada. Private equity deals by volume and value Announced date No of deals May ,804 Total deal value Apr ,532 Mar ,618 Feb ,994 Jan ,418 Dec ,785 Nov ,143 Oct ,323 Sep ,264 Aug ,360 Jul ,882 Jun ,101 May ,722 Page 7

9 Private equity deals as a percentage of total volume Announced date Private equity volume Total volume Percentage May , Apr , May , Private equity deals as a percentage of total value Announced date Private equity value Total value Percentage May-13 5,804 44, Apr-13 18,532 92, May-12 3,722 80,379 5 Page 8

10 Private equity deals by volume and value Deal value 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 0 Total deal value Number of deals Page 9

11 Deal types by volume in May Deal types by volume Acquisition Minority stake IBO MBO Merger MBI MBI / MBO Deal type May-12 Apr-13 May-13 Acquisition Minority stake IBO MBO Merger MBI MBI / MBO Deal types by value in May Minority stake Acquisition IBO MBO Deal types by value Deal type May-12 Apr-13 May-13 Minority stake 39,828 36,667 20,624 Acquisition 38,752 41,788 19,819 IBO 1,604 13,674 4,326 MBO Page 10

12 Target sectors by volume Target sectors by value Target sector May-12 Apr-13 May-13 Target sector May-12 Apr-13 May-13 Other services Machinery, equipment, furniture, recycling Wholesale & retail trade Banks Chemicals, rubber, plastics Construction Food, beverages, tobacco Transport Education, health Metals & metal products Primary sector Gas, water, electricity Publishing, printing Hotels & restaurants Insurance companies Textiles, wearing apparel, leather Wood, cork, paper Post and telecommunications Public administration and defence Chemicals, rubber, plastics 2,645 1,095 13,656 Other services 19,026 13,498 9,068 Machinery, equipment, furniture, recycling 4,442 5,693 4,282 Banks 27,610 48,542 3,467 Transport 571 5,059 3,044 Gas, water, electricity 6, ,626 Construction 4, ,322 Wholesale & retail trade 982 3,743 1,494 Insurance companies ,263 Metals & metal products 9, ,092 Primary sector 992 1, Food, beverages, tobacco 1,639 9, Education, health Publishing, printing Wood, cork, paper Textiles, wearing apparel, leather Hotels & restaurants Post and telecommunications Public administration and defence Page 11

13 Top countries by volume Top countries by value Target country May-12 Apr-13 May-13 Target country May-12 Apr-13 May-13 UK Sweden Spain Germany Finland Turkey Netherlands France Norway Italy Denmark Belgium Switzerland Ireland Portugal Austria Greece Cyprus Gibraltar Luxembourg Ireland 11, ,841 UK 14,524 13,701 8,160 Germany 7,318 7,260 4,307 France 861 5,833 3,572 Italy 9,729 3,387 3,513 Netherlands 1,677 16,427 3,433 Sweden ,867 Norway 494 2,407 1,619 Greece 12 10,740 1,315 Spain 26,770 18,689 1,228 Belgium 724 6, Portugal 1, Switzerland Denmark 2,140 1, Finland Austria Cyprus Turkey 1, Luxembourg 363 2, Malta Page 12

14 Notes to editors Activity is based on the activity of the target company Deal status is announced within the time period The sector breakdown uses targets activities as defined to be Major Sectors by Zephyr The Western Europe region covers target companies in Andorra, Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Gibraltar, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Monaco, Netherlands, Norway, Portugal, San Marino, Spain, Sweden, Switzerland, Turkey and the United Kingdom Data refers to target companies based in Western Europe except where specified as expanded EU of 27 countries on page 3 The date range is 01/05/ /05/2013 inclusive Page 13