M&A Markets Analysis Q4 213 Quarterly Overview of Global M&A Activity Mark Brady Global Head of M&A mbrady@williamblair.com +1 312 364 8853 Michael Truettner M&A Markets Analyst mtruettner@williamblair.com +1 312 364 5226
Table of Contents Commentary... 1 Global M&A Activity... 2 Regional Transactions... 2 Middle-Market Regional Transactions... 3 Annual Transactions... 4 Global Cross-Border M&A Flows... 5 213 M&A Activity by Regional Flow... 5 U.S. M&A Activity... 8 Transaction Detail... 8 Annual Activity... 9 U.S. Valuation Multiples... 1 Private Equity Transaction Analysis... 11 Transaction Participants and Considerations... 15 Industry Breakdown... 17 Cross-Border Transaction Analysis... 19 U.S. Debt Capital and Private Equity... 21 Fourth Quarter 213 Update... 21 European M&A Activity... 25 Transaction Detail... 25 European Valuation Multiples... 27 Private Equity Transaction Analysis... 28 Emerging Markets M&A Activity... 29 Recent Select William Blair Transactions... 3 William Blair Corporate Industry Coverage... 33 Disclosures... 34 Table of Contents
Commentary Dear clients and friends, 213 is in the books. While the mega-deals captured the imagination and all of us worked hard to close out our fourth quarter transactions and build a record pipeline for 214, global M&A activity overall suffered a well-hidden decline. Lost to many in the swirl of Berkshire Hathaway and 3G Capital buying Heinz for $23.3 billion and Koch Industries acquiring Molex for $7.2 billion (a transaction we were fortunate enough to lead) was the fact that the actual number of deals was off sharply close to 15% in the fourth quarter globally and nearly 3% here in North America. Also, U.S. private equity activity fell sharply vs. last year. Of course, we had a bit of an artificial comparison given that capital gains rates were raised in the U.S. effective January 1, 213. This pushed quite a few transactions which would otherwise have taken place in 213 into what was a blockbuster fourth quarter in 212. Our clients spent much of this year focused on their own operations and preparing for transactions planned to hit in 214. Nonetheless, we were fortunate enough to represent 54 clients in successful transactions aggregating $17.8 billion. We executed on behalf of clients in 13 countries. As a result of the confidence you have placed in us, we come into 214 with the largest backlog in our history as a firm. The importance of global capabilities in our business continues to increase. While inbound activity in the Americas fell sharply in 213, inbound activity in Asia-Pacific and Europe was up 1.6% and 25.4%, respectively. Buyers in the Americas alone targeted EMEA sellers with over $175 billion of flow up nearly 4% on the year. With interest rates continuing to bounce near all-time lows and liquidity at highs, all cash transactions constituted 75.6% of the total flow the highest percentage we have on record. All stock deals in 213 fell to 7.8% of the flow, down from the mid to high teens for most of the last ten years. Despite the run-up in equity markets, we continue to see our clients focused on using cash rather than shares in transaction dialogue. Thank you again for your business and friendship in 213. We look forward to working together with you to realize the opportunity presented to us by current market conditions and all of our combined efforts. Mark G. Brady Global Head of Mergers & Acquisitions +1 312 364 8853 mbrady@williamblair.com Commentary 1
Global M&A Activity Regional Transactions Overall global M&A activity in fourth quarter 213 was down across all regions in terms of number of announced transactions; disclosed transaction value also decreased among most regions while Latin America and Asia-Pacific experienced positive growth. During fourth quarter 213, the number of announced deals was down roughly 15% on average in all regions year-overyear, while deal value was down roughly 9% on average over the same period. Asia-Pacific was the top performer during this fourth-quarter slump, with activity down only 2% and deal value up 18%. Through calendar year 213, the number of deals announced decreased an average of 14% across all regions, while deal value increased 8%; again, Asia-Pacific posted the best numbers. Global M&A Activity Detail ($ in millions) Number of Deals Deal Value 211 212 213 % Chg. '13 vs. '12 211 212 213 % Chg. '13 vs. '12 4Q North America 3,1 3,796 2,731 (28.1%) $229,731 $341,71 $283,777 (17.%) Latin America 452 384 331 (13.8%) 31,232 36,431 37,624 3.3% Europe 3,341 2,863 2,568 (1.3%) 155,69 27,346 18,14 (13.2%) Africa/Middle East 285 348 263 (24.4%) 8,539 2,841 12,6 (42.4%) Asia-Pacific 3,582 3,175 3,15 (2.2%) 132,539 136,953 161,59 18.% TOTAL 1,661 1,566 8,998 (14.8%) $557,111 $743,281 $675,11 (9.2%) 2H North America 6,318 7,128 5,679 (2.3%) $465,835 $596,55 $653,144 9.5% Latin America 84 738 683 (7.5%) 66,863 49,59 66,691 34.7% Europe 7,16 6,28 5,51 (8.6%) 291,551 324,67 367,432 13.4% Africa/Middle East 529 699 516 (26.2%) 18,9 31,972 34,293 7.3% Asia-Pacific 6,997 6,118 6,37 (1.3%) 282,49 255,469 38,641 2.8% TOTAL 21,79 2,711 18,425 (11.%) $1,124,83 $1,257,567 $1,43,21 13.7% CY North America 12,782 14,216 11,78 (17.6%) $994,463 $1,18,946 $1,119,71 9.9% Latin America 1,586 1,616 1,357 (16.%) 131,813 13,618 16,18 (18.8%) Europe 14,956 13,39 1,975 (15.8%) 681,155 648,97 683,294 5.3% Africa/Middle East 1,45 1,329 1,54 (2.7%) 36,636 57,159 61,595 7.8% Asia-Pacific 13,945 12,48 11,645 (6.7%) 574,915 476,46 549,172 15.3% TOTAL 44,314 42,68 36,739 (13.9%) $2,418,983 $2,332,9 $2,519,871 8.1% Notes: Deal value limited to publically disclosed transaction value; year-to-date as of December 31, 213 2 Global M&A Activity
Middle-Market Regional Transactions The total number of global middle-market M&A transactions announced in the fourth quarter decreased by 13% year-overyear, while total deal value slightly increased by roughly 2% over the same period. Looking at the second half of 213 alone, global middle-market M&A activity experienced less of decline in number of deals, but more of a bump in deal value, indicating a particularly weak fourth quarter. Also during the latter half of 213, Latin America was the only region to experience positive growth in number of announced deals, up 8% in the period; in addition, the region experienced the most growth in terms of deal value, up 29%. As a whole, 213 illustrates a broader trend in the middle market an increasingly fewer number of transactions at higher deal values per transaction. During the year, the number of announced deals decreased 13% while deal value actually rose by a percent; Africa/Middle East as a region posted the most lackluster growth numbers. Global Middle-Market M&A Activity Detail ($ in millions) Number of Deals Deal Value 211 212 213 % Chg. '13 vs. '12 211 212 213 % Chg. '13 vs. '12 4Q North America 1,146 1,38 1,26 (25.7%) $73,752 $14,965 $94,252 (1.2%) Latin America 195 163 153 (6.1%) 15,322 12,33 13,128 9.1% Europe 1,128 942 84 (14.6%) 68,337 63,91 7,368 1.1% Africa/Middle East 147 23 139 (39.6%) 6,428 1,36 7,119 (29.1%) Asia-Pacific 2,555 2,276 2,219 (2.5%) 86,925 87,951 98,544 12.% TOTAL 5,171 4,991 4,341 (13.%) $25,763 $278,895 $283,411 1.6% 2H North America 2,529 2,679 2,135 (2.3%) $157,354 $182,667 $196,718 7.7% Latin America 341 298 321 7.7% 29,991 21,799 28,49 28.7% Europe 2,183 1,821 1,65 (11.9%) 132,551 124,685 132,689 6.4% Africa/Middle East 28 443 276 (37.7%) 13,558 17,557 14,599 (16.9%) Asia-Pacific 4,923 4,388 4,283 (2.4%) 164,516 162,61 184,279 13.7% TOTAL 1,256 9,629 8,62 (1.5%) $497,97 $58,769 $556,334 9.3% CY North America 5,481 5,393 4,329 (19.7%) $329,483 $352,638 $339,417 (3.7%) Latin America 681 672 635 (5.5%) 59,9 51,486 51,912.8% Europe 4,343 3,828 3,98 (19.1%) 289,367 253,236 243,14 (4.%) Africa/Middle East 493 795 61 (24.4%) 27,682 32,96 29,637 (7.7%) Asia-Pacific 9,789 8,742 8,28 (6.1%) 329,71 38,842 343,611 11.3% TOTAL 2,787 19,43 16,871 (13.2%) $1,34,693 $998,298 $1,7,592.9% Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million Global M&A Activity 3
Annual Transactions Global M&A Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 6, Deal Value ($ in billions) $6, 5, 4, 36,896 42,819 41,479 36,61 41,27 44,314 42,68 36,739 $5, $4, 31,346 3, 26,755 25,67 22,933 26,148 $3, 2, $2, 1, $1, $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 343 299 295 443 583 81 1,33 595 385 67 563 589 611 Middle Market 13,29 12,435 11,98 13,849 16,933 19,157 22,121 21,941 18,594 21,288 2,785 19,43 16,871 Undisclosed 13,383 12,333 1,658 11,856 13,83 16,938 19,665 18,943 17,622 19,375 22,966 22,661 19,257 Deal Value $1,566 $1,238 $1,356 $1,945 $2,758 $3,622 $4,249 $2,683 $1,92 $2,447 $2,419 $2,332 $2,519 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 4 Global M&A Activity
Global Cross-Border M&A Flows 213 YTD M&A Activity by Regional Flow Cross-Border M&A Dollar Flows (1) ($ in billions) $33.3B (+1.8%) $177.8B (+37.1%) $32.3B (+1.4%) Americas EMEA Asia-Pacific $71.5B (-45.%) $57.8B (+8.%) $41.2B (-65.%) (1) Flows defined based on target region and acquirer region. Americas defined as North and South America. EMEA defined as Europe, Middle East, and Africa. Asia defined as Asia, Australia, and Japan. Note: Percent change of dollar flow from 212 Global Cross-Border Flow Inbound Outbound Transaction Value Number of Deals Transaction Value Number of Deals Region 212 213 % Chg. 212 213 % Chg. 212 213 % Chg. 212 213 % Chg. North America $26.9 $95.6 (53.8%) 1,35 978 (25.1%) $165.4 $26.8 25.% 1,976 1,588 (19.6%) Latin America 66.7 36.8 (44.8%) 716 1,162 62.3% 2. 23.9 19.1% 18 67 (38.%) Europe 175.1 219.5 25.4% 1,482 1,38 (6.9%) 165.9 96.5 (41.8%) 1,55 1,927 24.3% Africa/Middle East 25.8 25.6 (.6%) 534 416 (22.1%) 11.2 17. 51.1% 146 183 25.3% Asia-Pacific 59.3 65.6 1.6% 976 877 (1.1%) 171.3 99.1 (42.1%) 1,233 1,48 (15.%) Global Cross-Border M&A Flows 5
Cross-Border Middle-Market M&A Outflows North America Latin America Europe 8 7 6 5 4 69 527 599 631 553 437 4 35 3 25 2 271 2 284 338 28 228 8 7 6 5 4 744 512 61 636 591 546 3 15 3 2 1 2 1 5 1 28 29 21 211 212 213 28 29 21 211 212 213 28 29 21 211 212 213 Top Targets Out of North America Top Targets Out of Latin America Top Targets Out of Europe Target 213 212 Target 213 212 Target 213 212 United Kingdom 18.5% 18.1% United States 25.9% 29.6% United States 42.3% 43.% Japan 12.6% 12.7% Canada 19.7% 28.6% Japan 9.% 7.6% Australia 9.8% 11.9% Australia 8.8% 8.9% China 8.4% 6.4% China 7.8% 8.1% United Kingdom 6.1% 2.9% Canada 7.1% 1.5% South Korea 5.% 4.3% Japan 6.1% 7.1% Australia 5.3% 5.4% Singapore 4.3% 3.3% Spain 5.7% 3.6% Singapore 4.4% 4.4% France 4.3% 2.7% China 3.5% 2.1% Hong Kong 3.7% 2.7% Hong Kong 3.7% 3.4% France 3.1% 2.9% South Korea 3.1% 1.9% Germany 3.% 4.3% Hong Kong 3.1% 1.1% India 1.8% 2.7% Switzerland 2.7% 2.7% Italy 2.6%.4% Israel 1.6% 1.9% Africa/Middle East Asia-Pacific 3 25 2 15 1 27 157 245 228 28 199 1,2 1, 8 6 4 1,92 678 723 727 534 41 5 2 28 29 21 211 212 213 28 29 21 211 212 213 Top Targets Out of Africa/Middle East Top Targets Out of Asia-Pacific Target 213 212 Target 213 212 United States 19.6% 18.2% United States 4.% 43.3% Australia 19.1% 17.1% United Kingdom 13.4% 12.9% United Kingdom 14.1% 17.5% Canada 1.% 9.4% Canada 9.5% 12.9% France 6.6% 5.8% China 6.5% 3.6% Germany 4.6% 5.1% Japan 3.5%.4% South Africa 3.7% 2.8% South Korea 3.5%.4% Switzerland 2.9% 2.8% Netherlands 3.% 1.8% Italy 2.2% 1.1% Hong Kong 2.5% 4.6% Netherlands 2.2% 2.2% Ireland 2.5%.4% Spain 2.2%.4% 6 Global Cross-Border M&A Flows
Cross-Border Middle-Market M&A Inflows North America Latin America Europe 1,4 1,2 1, 8 6 4 2 1,29 799 1,23 1,49 853 649 7 6 5 4 3 2 1 38 38 41 41 59 24 1,2 1, 8 6 4 2 954 613 689 725 67 482 28 29 21 211 212 213 28 29 21 211 212 213 28 29 21 211 212 213 Top Acquirers Into North America Top Acquirers Into Latin America Top Acquirers Into Europe Target 213 212 Target 213 212 Target 213 212 United Kingdom 13.7% 11.7% United States 29.2% 27.1% United States 29.9% 29.8% Australia 8.8% 9.8% Canada 12.5% 25.4% India 9.8% 5.4% India 7.4% 5.9% Australia 12.5% 6.8% Australia 8.7% 9.4% France 5.9% 5.3% Spain 12.5% 1.7% Canada 7.5% 7.7% China 5.5% 6.3% China 8.3%.% China 6.4% 4.9% Brazil 5.1% 5.7% Netherlands 8.3% 6.8% Brazil 5.6% 6.4% Mexico 4.6% 3.2% Norway 4.2%.% Singapore 2.5% 2.1% Germany 4.5% 4.% Portugal 4.2% 3.4% South Africa 2.5% 3.3% Israel 3.2% 3.3% United Kingdom 4.2%.% Chile 1.9% 1.3% Spain 2.6% 1.5% Belgium 4.2%.% Hong Kong 1.5% 1.% Africa/Middle East Asia-Pacific 25 2 15 1 192 14 116 16 93 87 8 6 4 66 479 593 663 64 571 5 2 28 29 21 211 212 213 28 29 21 211 212 213 Top Acquirers Into Africa/Middle East Top Acquirers Into Asia-Pacific Target 213 212 Target 213 212 United States 17.2% 9.7% United States 3.6% 35.3% Australia 13.8% 14.% United Kingdom 11.7% 8.8% United Kingdom 1.3% 1.8% Canada 7.7% 7.3% Turkey 6.9% 1.1% Germany 5.8% 5.% India 5.7% 4.3% Brazil 4.2% 2.5% Canada 4.6% 9.7% France 3.3% 1.4% Brazil 3.4% 3.2% Spain 1.9% 1.1% Germany 3.4% 4.3% Turkey 1.8% 2.2% Russian Federation 3.4% 1.1% South Africa 1.6% 3.3% Malta 3.4%.% Sweden 1.4% 1.3% Global Cross-Border M&A Flows 7
U.S. M&A Activity Transaction Detail During fourth quarter 213, U.S. M&A activity dropped more than 26% while total disclosed transaction value dropped more than 16%; the primary contributors to this decline were deals with values less than $5 million. Looking at the second half of the year reveals a similar pattern to the global M&A, that is, fourth quarter marked downward momentum as activity fell only 19% and deal value actually rose by 18% The fourth quarter in the United States saw less mega-deals, transactions with deal values more than $75 million were down 7%, and more middle-market deals, transactions with deal values between $25 million and $75 million were up 12%. U.S. M&A activity through the 213 saw the number of announced deals decrease by 17% while disclosed transaction value increased by 17%, suggesting the year hosted more deals at a higher average deal value per transaction. Across the board, the number of middle-market transactions is declining slightly quicker than the number of overall transactions in the market as a whole. U.S. M&A Activity Detail ($ in millions) Number of Deals Deal Value 211 212 213 % Chg. '13 vs. '12 211 212 213 % Chg. '13 vs. '12 4Q < $5M 773 849 583 (31.3%) $9,952 $12,172 $8,78 (27.9%) $5M-$25M 263 335 285 (14.9%) 3,461 38,73 34,747 (8.7%) $25M-$75M 14 137 154 12.4% 43,69 6,624 63,255 4.3% Total Middle-Market 1,14 1,321 1,22 (22.6%) $83,482 $11,869 $16,782 (3.7%) > 75M 62 13 96 (6.8%) 172,71 269,232 211,543 (21.4%) Undisclosed 2,1 2,472 1,758 (28.9%) - - - - Total Deals 3,23 3,896 2,876 (26.2%) $256,192 $38,12 $318,326 (16.3%) 2H < $5M 1,767 1,751 1,23 (31.3%) $21,912 $24,355 $17,117 (29.7%) $5M-$25M 547 589 582 (1.2%) 64,864 66,977 71,847 7.3% $25M-$75M 229 247 32 29.6% 95,138 17,432 133,572 24.3% Total Middle-Market 2,543 2,587 2,15 (18.6%) $181,914 $198,764 $222,536 12.% > 75M 118 181 176 (2.8%) $367,7 $435,66 $524,68 2.4% Undisclosed 4,66 4,592 3,664 (2.2%) - - - - Total Deals 6,727 7,36 5,945 (19.2%) $548,921 $634,424 $747,145 17.8% CY < $5M 3,737 3,537 2,596 (26.6%) $46,226 $48,294 $35,859 (25.7%) $5M-$25M 1,148 1,151 1,95 (4.9%) 135,22 131,497 132,832 1.% $25M-$75M 475 467 512 9.6% 21,239 199,963 218,67 9.1% Total Middle-Market 5,36 5,155 4,23 (18.5%) $382,685 $379,753 $386,757 1.8% > 75M 262 312 312.% $791,57 $724,356 $96,75 25.2% Undisclosed 7,775 9,167 7,574 (17.4%) - - - - Total Deals 13,397 14,634 12,89 (17.4%) $1,174,192 $1,14,19 $1,293,57 17.2% Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 8 U.S. M&A Activity
Annual Activity U.S. M&A Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 16, 14, 12,42 13,34 12,749 13,397 11,488 12, 9,934 1,87 1, 8,947 8,792 9,375 8, 6, 4, 2, 14,634 12,89 Deal Value ($ in billions) $2,4 $1,8 $1,2 $6 $ Number of Deals 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 127 147 233 281 362 46 228 156 287 262 312 312 Middle Market 4,12 4,239 4,527 4,453 4,548 4,537 4,766 4,144 6,224 5,36 5,155 4,23 Undisclosed 4,88 4,46 5,174 5,353 7,51 8,343 6,494 5,75 6,238 7,775 9,167 7,574 Deal Value $564 $688 $992 $1,297 $1,647 $1,75 $1,75 $886 $1,48 $1,174 $1,14 $1,294 U.S. Middle-Market M&A Activity Number of Deals <$5M $5-25M $25-75M Deal Value 7, 6,224 6, 4,537 5,36 4,548 5, 4,527 4,239 4,453 4,766 4,12 4,144 4, 3, 2, 1, 5,155 4,23 Deal Value ($ in billions) $6 $5 $4 $3 $2 $1 $ Number of Deals 22 23 24 25 26 27 28 29 21 211 212 213 $25-75M 286 314 42 424 536 627 417 269 457 475 467 512 $5-25M 886 1,65 1,218 1,265 1,294 1,333 1,195 791 1,138 1,148 1,151 1,95 <$5M 2,84 2,86 2,97 2,764 2,718 2,577 3,154 3,84 4,629 3,737 3,537 2,596 Deal Value $256 $292 $351 $364 $421 $466 $355 $239 $37 $383 $38 $387 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million U.S. M&A Activity 9
U.S. Valuation Multiples Within the United States, middle-market acquisition multiples as measured by enterprise value to EBITDA, which have historically trailed those of the overall market over the past decade, spiked through 213 to nearly match the overall market at 1. times. In the last 12 months, multiples found in the middle market are on par with the broader market, both returning to levels reminiscent of pre-28. The top end of the middle market has produced especially high multiples historically, and as of late has hosted a median multiple above the overall market; on the other hand, smaller deals have produced a median multiple under the overall market. Median EV/EBITDA Multiples 12.x Middle Market Overall Market 12.x 9.x 9.x 6.x 6.x 3.x 22 23 24 25 26 27 28 29 21 211 212 213 3.x Middle Market 7.5x 7.4x 8.7x 1.1x 1.x 9.5x 7.9x 6.4x 9.3x 1.x 9.1x 9.9x Overall Market 7.9x 8.x 9.1x 1.3x 11.x 11.2x 9.x 7.4x 9.9x 1.8x 9.6x 1.x Median EV/EBITDA Middle-Market Multiples 15.x 1.x 5.x < $5M $5M-$25M $25M-$75M 15.x 1.x 5.x.x 22 23 24 25 26 27 28 29 21 211 212 213 < $5M 4.1x 7.1x 6.4x 7.2x 1.2x 7.8x 4.9x 3.9x 8.8x 9.x 6.8x 8.1x.x $5M-$25M 7.5x 6.9x 8.7x 11.3x 9.5x 1.4x 9.1x 7.1x 9.3x 1.x 9.2x 11.3x $25M-$75M 9.7x 9.2x 9.1x 1.x 11.x 9.4x 8.3x 7.9x 9.7x 1.7x 1.2x 12.9x Notes: Median calculations exclude EBITDA multiples greater than 2 times; middle-market defined as deals with disclosed transactions values under $75 million 1 U.S. M&A Activity
Private Equity Transaction Analysis There were 474 announced private equity-related transactions in the fourth quarter, down 16% year-over-year; moreover, the quarter hosted $71 billion in total dollar volume, down only 8% over the same period. The middle-market produced similar but less severe results for the quarter; announced private equity-related transactions were down more than 13% while deal value was down only 4%. The fourth quarter, when compared with extended time periods like second half of 213 and full year 213, illustrates that the market has remained relatively flat over the last 12 months. When defining private equity-related transactions, we continue to exclude deals in which the private equity firm was not the controlling shareholder or where the company was publicly traded but still listed a private equity firm as a shareholder. U.S. Private Equity Activity Detail ($ in millions) Number of Deals Deal Value 211 212 213 % Chg. '13 vs. '12 211 212 213 % Chg. '13 vs. '12 4Q Middle-Market 14 148 129 (12.8%) $19,224 $24,53 $23,11 (4.%) > 75M 17 32 29 (9.4%) 33,149 53,76 48,169 (1.3%) Undisclosed 339 383 316 (17.5%) - - - - Total Deals 496 563 474 (15.8%) $52,372 $77,759 $71,27 (8.3%) 2H Middle-Market 332 39 246 (2.4%) $45,225 $41,298 $42,762 3.5% > 75M 38 57 47 (17.5%) 72,258 14,355 78,186 (25.1%) Undisclosed 659 697 592 (15.1%) - - - - Total Deals 1,29 1,63 885 (16.7%) $117,483 $145,653 $12,948 (17.%) CY Middle-Market 698 66 57 (23.2%) $89,752 $81,523 $74,612 (8.5%) > 75M 88 95 88 (7.4%) $178,942 $182,958 $27,958 13.7% Undisclosed 1,249 1,336 1,154 (13.6%) - - - - Total Deals 2,35 2,91 1,749 (16.4%) $268,694 $264,481 $282,57 6.8% Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million U.S. M&A Activity 11
U.S. Private Equity Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 2,5 2, 1,5 1, 5 1,159 1,2 1,646 1,812 2,247 2,316 Number 22 23 24 25 26 27 28 29 21 211 212 213 of Deals >$75M 24 33 61 84 16 149 64 34 94 88 95 88 Middle Market 538 626 96 859 998 826 788 742 869 698 66 57 Undisclosed 597 541 679 869 1,143 1,341 969 686 1,13 1,249 1,336 1,154 Deal Value $87.1 $12.4 $224.6 $287.6 $523.7 $644.3 $243.7 $149.3 $272.3 $268.6 $264.5 $282.6 1,821 1,462 1,976 2,35 2,91 Deal Value ($ in billions) 1,749 $7 $6 $5 $4 $3 $2 $1 $ U.S. Private Equity Exit Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 5 422 473 429 446 454 393 4 295 3 2 256 19 164 111 12 1 Deal Value ($ in billions) 45 $2 $15 $1 $5 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 11 4 12 24 47 27 63 16 11 6 48 62 56 Middle Market 6 62 16 178 22 172 187 14 88 174 152 14 119 Undisclosed 4 36 46 93 155 194 223 136 91 195 246 252 23 Deal Value $38.3 $16.2 $39.4 $83. $139.3 $84.8 $162.8 $76.1 $4.9 $141.6 $135.8 $157.7 $131. Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 12 U.S. M&A Activity
U.S. Private Equity Acquisition Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 2,5 1,988 1,844 2, 1,416 1,472 1,388 1,5 1,76 1,21 1,564 1, 752 529 619 5 1,727 Deal Value ($ in billions) 1,43 $6 $4 $2 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 8 16 24 48 47 91 18 27 15 48 42 58 4 Middle Market 259 325 375 524 67 75 592 538 437 472 412 418 36 Undisclosed 262 278 353 54 762 1,48 1,288 97 569 868 1,11 1,251 1,84 Deal Value $3.6 $59.3 $76.5 $151.1 $183. $477.8 $464.1 $98.5 $71.7 $136.2 $173.6 $153.3 $17.9 U.S. Private Equity Acquisition Activity: Platform Versus Add-on Transactions Percent of Deals Platform Acquisitions Add-on Acquisitions 2, 2, 1,5 1, 5 213 316 172 241 447 512 318 754 42 993 615 721 1223 1258 513 949 355 659 819 742 516 849 822 98 76 724 1,5 1, 5 21 22 23 24 25 26 27 28 29 21 211 212 213 Platform 59.7% 72.2% 68.% 7.3% 7.3% 66.5% 63.6% 64.9% 65.% 62.2% 52.6% 52.6% 5.6% Add-On 4.3% 27.8% 32.% 29.7% 29.7% 33.5% 36.4% 35.1% 35.% 37.8% 47.4% 47.4% 49.4% Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million U.S. M&A Activity 13
Private equity funds continued to target high-growth sectors; computers and electronics represented 22% of acquisitions through 213, while professional services represented 16% and healthcare represented 11%. Based on a disclosed dollar volume, these three sectors attracted the most activity, the aggregate of which accounted for 42% of total private equity activity through the same period. Private Equity Activity by Target Sector ($ in millions) Number of Deals Deal Value 21 211 212 213 21 211 212 213 Aerospace 6 1 9 13 $3,571 $9 $1,15 $48 Agribusiness 6 2 2 3 $9 $5 Auto/Truck 5 32 53 29 $4,377 $386 $2,24 $963 Chemicals 58 52 67 39 $7,53 $11,529 $12,955 $5,675 Computers & Electronics 37 373 421 357 $26,174 $36,477 $25,437 $33,664 Construction/Building 69 74 78 6 $4,789 $7,642 $6,65 $5,976 Consumer Products 51 53 63 47 $7,56 $4,98 $6,763 $4,254 Defense 3 2 4 4 $1,582 $225 $897 Dining & Lodging 31 31 36 31 $1,739 $2,565 $7,633 $3,271 Finance 11 9 71 67 $18,524 $11,2 $8,964 $1,782 Food & Beverage 7 48 54 43 $15,779 $2,787 $5,138 $17,583 Forestry & Paper 15 18 18 16 $1,5 $914 $1,266 $496 Government 3 1 $31 Healthcare 23 27 24 183 $41,636 $19,863 $2,532 $28,92 Holding Companies 12 1 6 7 $675 $984 $321 Insurance 26 65 7 7 $4,541 $5,539 $8,984 $4,484 Leisure & Recreation 29 25 31 2 $1,73 $5,651 $4,955 $3,89 Machinery 33 47 67 58 $2,286 $3,52 $8,841 $7,449 Metal & Steel 43 46 49 34 $5,83 $1,891 $3,12 $4,319 Mining 6 17 8 6 $525 $4,786 $789 $946 Oil & Gas 58 61 45 43 $2,264 $21,98 $19,636 $22,459 Professional Services 218 288 288 263 $16,898 $8,941 $15,18 $6,217 Publishing 33 37 24 18 $555 $6,873 $4,163 $283 Real Estate/Property 32 37 3 23 $3,687 $14,57 $2,66 $4,434 Retail 62 7 61 69 $12,711 $9,855 $17,978 $1,782 Telecommunications 8 62 86 45 $18,42 $12,98 $28,25 $11,94 Textile 17 22 1 15 $4,11 $1,53 $271 $3,591 Transportation 34 52 53 43 $2,675 $9,364 $2,212 $3,825 Utility & Energy 4 51 38 27 $4,596 $3,75 $8,77 $5,753 Total 1,795 1,883 1,946 1,633 $241,419 $29,167 $223,861 $21,966 14 U.S. M&A Activity
Transaction Participants and Considerations Acquisition activity by public companies remained unchanged through 213 as public companies share of activity represented about 29%; over the long term, it is still down compared with 4% in 26 and 52% in 21. Private companies are becoming increasingly active acquirers, recently accounting for nearly half of middle-market M&A activity in the United States. Private companies remain by far the most attractive targets, as they made up nearly 43% of activity in the last 12 months, during which divestitures continued their recent decline. Regarding transaction consideration in 213, all-cash deals account for three fourths of financing, while cash/stock mix deals account for roughly 13% and stock-only deals account for roughly 7%. U.S. Middle-Market M&A Activity by Acquirer Percent of Deals Private Public Private Equity Foreign 75.% 75.% 5.% 5.% 25.% 25.%.% 21 22 23 24 25 26 27 28 29 21 211 212 213.% Private 21.5% 21.4% 26.8% 19.3% 17.7% 22.% 22.2% 28.5% 39.4% 35.4% 32.% 41.4% 44.4% Public 52.4% 5.9% 47.% 5.7% 46.5% 4.% 39.7% 33.2% 24.4% 3.6% 34.7% 29.2% 28.9% Private Equity 8.9% 12.6% 14.3% 17.1% 18.8% 21.5% 16.6% 14.% 15.9% 13.4% 11.% 12.7% 1.3% Foreign 17.3% 15.2% 11.8% 13.% 17.1% 16.5% 21.5% 24.2% 2.3% 2.6% 22.3% 16.7% 16.4% U.S. Middle-Market M&A Activity by Target Percent of Deals Private Public Private Equity Divestiture 75.% 75.% 5.% 5.% 25.% 25.%.% 21 22 23 24 25 26 27 28 29 21 211 212 213.% Private 41.3% 38.2% 33.6% 42.% 54.5% 54.9% 56.2% 55.9% 57.2% 66.2% 59.3% 57.9% 51.% Public 14.2% 13.5% 12.3% 8.% 7.9% 9.% 1.2% 1.1% 8.3% 7.9% 6.1% 5.6% 11.3% Private Equity 4.4% 5.8% 7.4% 9.8% 8.8% 9.6% 8.2% 5.8% 6.7% 6.7% 6.1% 6.5% 7.7% Divestiture 4.2% 42.5% 46.8% 4.3% 28.8% 26.6% 25.4% 28.2% 27.8% 19.2% 28.6% 3.% 29.9% U.S. M&A Activity 15
Distressed U.S. M&A Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 5 4 3 2 1 163 323 332 197 47 51 76 125 399 278 184 171 Deal Value ($ in billions) 112 $1 $8 $6 $4 $2 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 1 1 13 13 2 2 5 13 22 12 12 11 6 Middle Market 12 23 246 132 27 23 33 5 181 123 71 84 53 Undisclosed 51 83 73 52 18 26 38 62 196 143 11 76 53 Deal Value $31.7 $49. $46. $3. $8.7 $6. $18.2 $59.3 $85.4 $9.9 $36.9 $28.1 $75.1 U.S. Take-Private Transaction Activity Number of Deals Middle Market >75M Deal Value 78 76 9 67 7 59 58 6 43 37 37 37 3 52 49 Deal Value ($ in billions) 57 $3 $2 $1 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >75M 4 5 4 12 2 33 41 7 2 19 15 1 18 Middle Market 63 54 74 31 35 37 35 3 35 39 37 39 39 Deal Value $12.5 $13.4 $12.1 $35.4 $12. $275.9 $275.2 $15.7 $12. $55.7 $45.4 $2.1 $95.2 Transaction Consideration Percent of Deals Stock Only Cash Only Cash/Stock Other 8% 6% 4% 2% 8% 6% 4% 2% Number of Deals % 21 22 23 24 25 26 27 28 29 21 211 212 213 % Stock Only 29.5% 23.1% 26.3% 2.1% 19.3% 21.7% 13.2% 13.9% 18.7% 15.2% 14.8% 11.6% 7.8% Cash Only 44.9% 57.9% 56.2% 59.2% 61.3% 65.7% 72.3% 75.3% 59.1% 66.3% 7.7% 71.4% 75.6% Cash/Stock 22.9% 13.1% 15.5% 19.5% 18.4% 11.2% 12.9% 9.5% 19.7% 14.4% 11.9% 14.9% 13.4% Other 2.7% 5.9% 2.% 1.2% 1.% 1.4% 1.6% 1.3% 2.5% 4.1% 2.6% 2.1% 3.2% Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 16 U.S. M&A Activity
Industry Breakdown The industry breakdown of U.S. M&A activity in 213 echoes that of private equity activity in that sectors such as computers and electronics, professional services, and healthcare account for a dominant portion; computers and electronics account for 2%, while professional services account for 15% and healthcare accounts for 1% of total acquisitions. Based on a disclosed dollar volume, these three sectors attracted the most activity, the aggregate of which accounted for nearly one-fourth of total private equity activity through the same period. Also notable for the year were the huge deals announced in the telecommunications sector, the dollar volume of which alone represents 18% of total acquisitions. U.S. M&A Activity by Target Sector 21 211 212 213 Transactions Mid-Mkt Total Mid-Mkt Total Mid-Mkt Total Mid-Mkt Total Aerospace 11 31 14 44 13 5 15 44 Agribusiness 15 48 8 38 1 42 15 49 Auto/Truck 49 143 46 144 35 221 35 151 Chemicals 87 178 62 183 55 252 61 19 Computers & Electronics 1,317 2,331 995 2,53 1,67 2,536 747 2,37 Construction/Building 75 269 61 273 56 399 59 32 Consumer Products 62 167 73 241 7 295 64 221 Defense 6 1 8 11 5 11 6 1 Dining & Lodging 73 133 114 198 113 25 132 255 Finance 246 661 195 583 218 72 276 695 Food & Beverage 82 213 7 215 52 262 56 236 Forestry & Paper 12 36 15 47 1 55 12 54 Government 5 18 2 13 1 1 2 3 Healthcare 819 1,263 511 1,142 528 1,235 467 1,35 Holding Companies 24 71 31 84 16 56 13 4 Insurance 47 172 29 236 26 285 23 246 Leisure & Recreation 56 144 46 147 63 216 41 155 Machinery 73 172 54 212 6 28 5 247 Metal & Steel 5 136 28 117 24 168 3 141 Mining 97 2 129 248 12 159 8 19 Oil & Gas 294 526 327 612 324 59 279 466 Professional Services 516 1,268 378 1,47 336 1,672 232 1,488 Publishing 19 236 6 236 39 222 35 185 Real Estate/Property 336 561 479 775 584 1,7 33 51 Retail 17 241 89 272 98 298 95 286 Telecommunications 175 315 12 268 124 313 17 274 Textile 13 35 17 54 11 49 16 5 Transportation 67 18 64 24 59 258 71 251 Utility & Energy 188 333 139 339 123 295 11 262 Total 5,11 1,91 4,164 1,459 4,222 12,179 3,423 9,992 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million U.S. M&A Activity 17
U.S. M&A Value by Target Sector ($ in millions) 21 211 212 213 Mid-Mkt Total Mid-Mkt Total Mid-Mkt Total Mid-Mkt Total Aerospace $385 $3,956 $93 $21,719 $2,272 $2,272 $2,587 $3,987 Agribusiness $388 $388 $41 $41 $1,3 $1,3 $1,3 $2,53 Auto/Truck $3,16 $7,189 $3,655 $9,75 $2,78 $6,567 $3,628 $5,868 Chemicals $6,199 $17,41 $3,745 $42,651 $4,321 $27,155 $6,943 $15,541 Computers & Electronics $35,253 $89,74 $42,875 $113,54 $37,859 $96,736 $38,127 $111,556 Construction/Building $6,813 $1,77 $2,783 $6,637 $3,396 $11,58 $6,6 $1,26 Consumer Products $3,858 $12,848 $4,67 $11,737 $5,881 $15,634 $5,993 $11,334 Defense $426 $1,874 $99 $99 $748 $748 $1,292 $1,292 Dining & Lodging $5,343 $15,65 $9,79 $11,565 $9,649 $14,55 $11,7 $13,334 Finance $21,434 $44,294 $13,777 $38,325 $19,327 $61,989 $22,31 $42,311 Food & Beverage $5,2 $35,39 $5,163 $6,31 $7,448 $41,932 $6,496 $53,14 Forestry & Paper $1,222 $7,22 $2,5 $11,822 $1,837 $4,19 $1,81 $1,115 Government $186 $186 $42 $42 $1 $1 $5 $5 Healthcare $37,17 $13,267 $37,38 $157,137 $33,623 $16,863 $3,62 $114,399 Holding Companies $1,684 $1,684 $2,299 $2,299 $484 $484 $369 $369 Insurance $8,111 $29,151 $4,33 $14,11 $5,465 $13,397 $3,159 $44,93 Leisure & Recreation $4,485 $6,21 $3,873 $7,238 $6,71 $2,489 $3,928 $9,68 Machinery $2,963 $15,99 $5,828 $11,574 $7,522 $24,626 $5,345 $1,227 Metal & Steel $4,939 $8,378 $4,229 $5,147 $3,56 $8,594 $2,353 $8,88 Mining $1,96 $5,993 $2,728 $13,559 $2,949 $2,949 $4,164 $6,398 Oil & Gas $31,528 $115,862 $31,974 $119,18 $4,882 $121,725 $36,425 $84,142 Professional Services $14,85 $36,56 $16,1 $21,1 $16,27 $25,31 $11,643 $21,73 Publishing $2,975 $5,78 $2,789 $6,745 $1,53 $12,598 $3,294 $3,294 Real Estate/Property $25,537 $56,879 $4,259 $83,384 $42,381 $9,73 $47,64 $123,13 Retail $5,141 $15,717 $6,856 $11,7 $7,325 $19,431 $8,675 $26,667 Telecommunications $8,641 $5,56 $8,1 $42,191 $7,52 $76,648 $8,892 $186,349 Textile $1,2 $1,2 $786 $786 $464 $464 $2,2 $4,41 Transportation $3,936 $14,762 $3,682 $12,512 $6,23 $12,882 $8,925 $3,95 Utility & Energy $19,88 $78,756 $14,569 $114,94 $13,12 $52,4 $13,354 $68,31 Total $264,576 $818,57 $276,319 $897,149 $291,585 $872,731 $297,916 $1,22,237 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 18 U.S. M&A Activity
Cross-Border Transaction Analysis The overall market during 213 favors outbound over inbound transactions 58% to 42%, in line with historical averages of 6% to 4%. Over the same period, the middle market (excluding undisclosed transactions with undisclosed values) favors outbound over inbound transactions 54% to 46%. Through 213, North American middle-market outbound activity was primarily directed toward the United Kingdom, Japan, and Australia; conversely, North America received the most inbound interest from the United Kingdom, Australia, and India. U.S. Middle-Market Cross-Border M&A by Number of Deals Number of Deals Outbound Inbound Inbound Deal Value Outbound Deal Value Deal Value ($ in billions) 2,5 $12 2,245 2,95 2,143 1,975 1,871 $1 2, 1,439 1,652 1,475 1,67 1,438 1,461 1,373 1,479 1,455 $8 1,5 1,279 1,272 1,63 1,263 1,93 1,153 $6 1,15 1, 1,48 1, 843 617 782 $4 5 $2 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 Inbound Middle Market 57 432 358 422 526 513 622 752 552 649 728 625 517 Undisclosed 445 411 259 36 522 759 857 687 511 614 747 83 636 Value $38.3 $29.5 $23.3 $37.2 $42.2 $55.9 $64.7 $51.8 $35.8 $5.5 $53.8 $53.6 $5.5 Outbound Middle Market 675 544 514 675 723 838 1,73 1,93 741 936 918 717 63 Undisclosed 763 549 486 64 65 814 1,22 1,5 72 1,39 1,327 1,154 1,4 Value $48.2 $34.3 $37.5 $55.9 $57.4 $72.2 $13.7 $87.7 $47.6 $72.5 $74.5 $63.1 $63.4 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million U.S. M&A Activity 19
U.S. Cross-Border M&A Number of Transactions Inbound Outbound Total 211 212 213 211 212 213 211 212 213 Middle Market 728 625 517 918 717 63 1,646 1,342 1,12 > 75M 41 47 23 54 5 36 95 97 59 Undisclosed 747 83 1,327 1,327 1,154 1,4 2,74 1,984 2,331 Total 1,516 1,52 1,867 2,299 1,921 1,643 3,815 3,423 3,51 U.S. Cross-Border M&A Transaction Value Inbound Outbound Total 211 212 213 211 212 213 211 212 213 Middle Market $53,797 $53,554 $5,541 $74,469 $63,139 $63,395 $128,266 $116,693 $113,936 > 75M $11,288 $136,8 $78,85 $119,988 $98,212 $152,163 $221,276 $234,292 $231,13 Undisclosed Total $155,85 $189,633 $129,391 $194,457 $161,352 $215,559 $349,543 $35,985 $344,95 U.S. Cross-Border M&A 213 Inbound to U.S. Outbound From U.S. Target Industry Deals Acquirer Country Deals Target Industry Deals Target Country Deals Computers & Electronics 237 Canada 358 Computers & Electronics 362 Canada 35 Healthcare 134 United Kingdom 17 Professional Services 24 United Kingdom 246 Professional Services 128 Japan 124 Healthcare 145 Australia 94 Oil & Gas 87 France 55 Finance 96 Brazil 84 Real Estate/Property 65 Germany 49 Mining 74 Germany 83 Finance 54 Australia 43 Telecommunications 62 France 82 Mining 53 China 4 Machinery 61 India 72 Utility & Energy 45 Switzerland 35 Oil & Gas 57 China 58 Chemicals 39 South Korea 29 Construction/Building 54 Japan 48 Machinery 37 India 27 Consumer Products 52 Israel 45 U.S. Cross-Border M&A 212 Inbound to U.S. Outbound From U.S. Target Industry Deals Acquirer Country Deals Target Industry Deals Target Country Deals Computers & Electronics 294 Canada 386 Computers & Electronics 46 Canada 298 Healthcare 161 United Kingdom 197 Professional Services 259 United Kingdom 268 Professional Services 143 Japan 184 Healthcare 129 Australia 12 Oil & Gas 138 Germany 91 Finance 17 Brazil 112 Mining 83 France 77 Mining 92 Germany 13 Chemicals 66 Australia 77 Oil & Gas 86 France 85 Finance 55 China 46 Telecommunications 78 India 85 Machinery 52 India 44 Real Estate/Property 78 China 74 Utility & Energy 51 Switzerland 41 Machinery 76 Israel 56 Real Estate/Property 5 South Korea 31 Construction/Building 63 Italy 47 2 U.S. M&A Activity
U.S. Debt Capital and Private Equity Fourth Quarter 213 Update Interest Rates 4.% 5-Year TSY 1-Year TSY 3M LIBOR 3.% 3.4% 2.% 1.75% 1.%.25%.% Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 1 Yr Ago 6 Mos Ago 3 Mos Ago 1 Mo Ago Current 3-Month LIBOR.31%.27%.25%.24%.25% 5-Year Treasury.73% 1.4% 1.38% 1.37% 1.75% 1-Year Treasury 1.76% 2.49% 2.61% 2.75% 3.4% Source: Bloomberg as of December 31, 213 Leveraged Loan Statistics 1Q13 2Q13 3Q13 4Q13 Credit Statistics Middle-Market Corporate: Senior Leverage 4.6x 3.9x 5.2x 4.3x Total Leverage 5.1x 4.4x 5.3x 4.5x EBITDA/Cash Interest 3.2x 3.6x 3.6x 3.5x Middle-Market LBO: Senior Leverage 5.5x 3.6x 5.4x 4.1x Total Leverage 5.5x 4.5x 5.4x 4.3x EBITDA/Cash Interest 2.8x 3.x 3.3x 3.8x Middle-Market Spreads 447.9 554.4 448.9 583.3 Default Rate 12-Month Default Rate by No. of Loans 1.8% 1.5% 1.8% 1.6% Source: S&P s LCD U.S. Debt Capital and Private Equity 21
Middle-Market Leveraged Loan Volume ($ in billions) $6. $5. $4. $3. $2. $1. $.9 $1.1 $1.1 $2.2 $2.1 $4. $2.2 $3.1 $4.9 $4.7 $3. $1.7 $2. $2.6 $2.6 $3. $3.4 $3.6 $2.7 $3.8 $. Q19 Q29 Q39 Q49 Q11 Q21 Q31 Q41 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Highlighted Transactions Company Business Description Sponsor Not Your Daughter's Jeans Apparel Designs jeans, pants, and skirts for women. Crestview Partners Structure/ Pricing $12.5 million Revolver $15 million 1st Lien Term $5 million 2nd Lien Term L + 6; 1.% Floor (1st) 9.% Floor (2nd) Senior/ Total Leverage Comments 3.x / 4.1x Backs the LBO of the company by Crestview Partners and Maybrook Capital Partners from Falconhead Capital. Amneal Pharmaceuticals Develops, manufactures, and distributes prescription and over-thecounter generic drugs. Tarsadia Investments $6 million Revolver $415 million 1st Lien Term L + 475; 1.% Floor (1st) 3.8x / 4.x Backs a dividend to shareholders. TNT Crane & Rigging Engages in the rental and sale of crane and equipment for crane and rigging projects in the United States. First Reserve Corp $75 million Revolver $4 million 1st Lien Term $17 million 2nd Lien Term L + 45; 1.% Floor (1st) L + 9; 1.% Floor (2nd) 4.3x / 6.1x Backs the LBO of the company by First Reserve from Odyssey Partners. Drew Marine Provides marine services and products. Jordan Company $5 million Revolver $22 million 1st Lien Term $65 million 2nd Lien Term L + 35; 1.% Floor (1st) L + 7; 1.% Floor (2nd) 4.x / 5.5x Backs the LBO of the company by Jordan from J.F. Lehman. Source: S&P s LCD 22 U.S. Debt Capital and Private Equity
Select Fourth Quarter 213 Middle-Market Leveraged Loan Transactions ($ in millions) Senior Structure Borrower Sponsor(s) Industry Date Use Total RC 1 st Libor Spread 2 nd Libor Spread Sheridan Healthcare Hellman & Friedman Healthcare 13-Dec Acquisition $52 -- $155 $365 35 725 6.3x Answers Corporation Summit Partners Computers & Electronics Multi Packaging Solutions Madison Dearborn Partners Hostway Corp Littlejohn & Co Computers & Electronics Tropicana Entertainment Internap Network Services Corp 1 st Lien 2 nd Lien Total Leverage 13-Dec Acquisition $295 $2 $175 $1 55 1 4.3x Printing & Publishing 13-Nov Merger $452 $5 $42 -- 325 -- 4.9x 13-Nov LBO $118 $15 $68 $35 475 875 4.3x Ares Management Gaming & Hotel 13-Nov Acquisition $315 $15 $3 -- 3 -- 2.7x -- Computers & Electronics GlobalLogic Apax Partners Computers & Electronics Travel Leaders Group One Equity Partners Entertainment & Leisure 13-Nov Acquisition $35 $5 $3 -- 5 -- 5.x 13-Nov LBO $185 $25 $16 -- 525 -- 3.x 13-Nov Recap/Dividend $185 $15 $17 -- 6 -- 3.4x Transilwrap Company Jordan Company Chemicals 13-Nov LBO $16 $3 $13 -- 4 -- 4.x Arby's Restaurant Group Roark Capital Group Restaurants 13-Oct Recap/Dividend $37 $35 $335 -- 4 -- 4.1x Ascensus JC Flowers Services & Leasing 13-Oct Acquisition $215 $15 $2 -- 4 -- 4.8x P2 Energy Solutions Advent International Computers & Electronics 13-Oct LBO $5 $3 $31 $16 4 8 6.7x Plano Molding Co -- Chemicals 13-Oct Refinancing $25 $4 $21 -- 425 -- 4.8x Paradigm Precision Group Carlyle Group Aerospace & Defense 13-Oct Acquisition $33 $7 $26 -- 45 -- 4.8x High-Yield Volume Transactions Less Than $3 Million ($ in billions) $2. $15. $1. $1.2 $12.1 $12.6 $17.6 $12.3 $13.1 $14.8 $16.3 $13.7 $16.5 $1. $12.9 $17.9 $13.5 $14.8 $13.9 $1.8 $5. $1.4 $3.3 $5.2 $. 1Q9 2Q9 3Q9 4Q9 1Q1 2Q1 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Source: S&P s LCD U.S. Debt Capital and Private Equity 23
Yields of New Issue Senior Unsecured Bonds 14% BB B 12% 1% 8% 6% NA due to little market activity NA 7.33% 5.2% 4% Dec-6 Jun-7 Dec-7 Jun-8 Dec-8 Jun-9 Dec-9 Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Note: Jan-12 B-rated data not available due to limited market activity Recent High-Yield Transactions Less Than $3 Million ($ in millions) Date Name Industry Purpose SP Moody s Size Issue Market Years YTM Spread Sep-13 Artesyn Technologies Computers & Electronics LBO B B3 $25 Senior Secured Notes 144a 7 9.75% 773 Sep-13 GEO Group Services & Leasing Refinancing B+ B1 $25 Senior Notes 144a 8 5.88% 343 Sep-13 Springleaf Financial Funding Services & Leasing Refinancing CCC+ Caa1 $3 Senior Notes 144a 1 8.25% 541 Sep-13 Building Materials Holding Retail Refinancing B- Caa1 $25 Senior Secured Notes Sep-13 Ancestry.com Computers & Electronics Aug-13 ACI Worldwide Computers & Electronics Recap/Dividend CCC+ Caa1 $3 Senior PIK Toggle Notes 144a life 5 9.13% 742 144a life 5 9.88% 815 Refinancing BB- B2 $3 Senior Notes 144a life 8 6.38% 421 Aug-13 Multi Packaging Solutions Printing & Publishing LBO CCC+ Caa1 $2 Senior Notes 144a life 8 8.5% 628 Jul-13 Dana Holding Corp Automotive Recap/Stock Repurchase BB B2 $3 Senior Notes Public 1 6.% 34 Jul-13 Flexi-Van Leasing Services & Leasing Recap/Dividend BB- B3 $25 Senior Notes 144a life 5 8.% 658 Source: S&P s LCD 24 U.S. Debt Capital and Private Equity
European M&A Activity Transaction Detail European M&A activity dropped for the second year in a row in terms of number of announced transactions. The fourth quarter witnessed a 13% decline in European M&A dollar volume, primarily due to a 2% decrease in dollar volume stemming from transactions less than $5 million; total middle-market dollar volume remained relatively unchanged as the number of deals was down 15% across all transaction sizes. The European M&A landscape in 213 posted an overall 16% decline in number of transactions announced and a 9% gain in deal value. European M&A Activity Detail ($ in millions) Number of Deals Deal Value 211 212 213 % Chg. 13 vs. '12 211 212 213 % Chg. 13 vs. '12 4Q < $5M 999 785 634 (19.2%) $9,991 $9,39 $7,516 (2.%) $5M-$25M 285 277 247 (1.8%) 32,52 33,232 31,172 (6.2%) $25M-$75M 113 115 12 4.3% 46,997 48,338 51,62 6.8% Middle-Market 1,397 1,177 1,1 (15.%) $89,49 $9,96 $9,38 (.7%) > 75M 62 79 78 (1.3%) 116,259 199,632 161,216 (19.2%) Undisclosed 2,454 2,15 1,974 (8.2%) - - - - TOTAL 3,913 3,46 3,53 (1.4%) $25,749 $29,592 $251,524 (13.4%) 2H < $5M 1,896 1,563 1,291 (17.4%) $2,856 $17,776 $15,466 (13.%) $5M-$25M 581 521 466 (1.6%) 68,73 62,745 58,36 (7.1%) $25M-$75M 216 212 223 5.2% 9,15 9,71 96,899 6.8% Middle-Market 2,693 2,296 1,98 (13.8%) $178,944 $171,231 $17,671 (.3%) > 75M 18 128 138 7.8% 197,686 29,39 445,368 53.4% Undisclosed 5,43 4,68 4,339 (7.3%) - - - - TOTAL 8,24 7,14 6,457 (9.1%) $376,63 $461,621 $616,39 33.5% CY < $5M 3,73 3,292 2,538 (22.9%) $42,913 $35,829 $29,99 (18.8%) $5M-$25M 1,193 996 883 (11.3%) 139,644 119,277 18,856 (8.7%) $25M-$75M 473 42 397 (5.5%) 24,16 186,825 173,398 (7.2%) Middle-Market 5,369 4,78 3,818 (18.9%) $386,573 $341,931 $311,353 (8.9%) > 75M 249 239 252 5.4% 519,55 575,43 69,678 2.1% Undisclosed 11,516 1,236 8,749 (14.5%) - - - - TOTAL 17,134 15,183 12,819 (15.6%) $96,78 $916,974 $1,2,31 9.3% Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million European M&A Activity 25
European M&A Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 2, 17,134 16,238 13,848 15,574 14,957 15,413 14,85 15, 13,252 12,859 11,741 1,36 1,643 1, 12,819 Deal Value ($ in billions) $2,5 $2, $1,5 $1, 5, $5 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >75M 163 26 149 198 289 391 537 334 171 247 249 239 252 Middle Market 5,733 5,142 4,662 4,929 5,953 6,256 6,671 6,556 5,15 5,16 5,369 4,33 3,818 Undisclosed 7,356 6,339 5,225 5,516 6,617 7,21 8,366 9,348 9,771 1,6 11,516 1,236 8,749 Deal Value $679 $638 $625 $84 $1,226 $1,7 $2,279 $1,371 $695 $954 $96 $918 $1,2 European Middle-Market M&A Activity Number of Deals <$5M $5-25M $25-75M Deal Value 8, Deal Value ($ in billions) $8 7, 6, 5, 4, 5,733 5,142 4,662 4,929 5,953 6,256 6,671 6,556 5,15 5,16 5,369 4,78 3,818 $7 $6 $5 $4 3, $3 2, $2 1, $1 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 $25-75M 36 295 29 4 494 626 79 58 311 425 473 42 397 $5-25M 896 866 93 1,151 1,392 1,578 1,864 1,566 939 1,112 1,193 996 883 <$5M 4,531 3,981 3,442 3,378 4,67 4,52 4,17 4,41 3,765 3,623 3,73 3,292 2,538 Deal Value $275 $265 $267 $35 $421 $59 $611 $493 $284 $346 $387 $342 $311 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 26 European M&A Activity
European Valuation Multiples European multiples follow those of the United States in that middle market slightly trails the overall market historically; however, they differ in that multiples produced by Europe are generally slightly lower than that of the United States. Similarly, the prices being paid abroad continue to improve as the region rebuilds after its recent financial woes. Middle-market valuation multiples continued to experience an expanded valuation range, as smaller transactions marked the largest declines. Median EV/EBITDA Multiples 15.x 12.x Middle Market Overall Market 15.x 12.x 9.x 9.x 6.x 6.x 3.x 22 23 24 25 26 27 28 29 21 211 212 213 3.x Middle Market 7.7x 7.8x 8.3x 9.1x 9.2x 1.4x 9.3x 7.x 8.1x 9.x 7.1x 8.5x Overall Market 8.x 8.x 8.5x 9.7x 9.7x 11.5x 9.8x 7.x 8.2x 9.1x 7.5x 8.8x Median EV/EBITDA Middle-Market Multiples 15.x 12.x 9.x 6.x 3.x < $5M $5M-$25M $25M-$75M 22 23 24 25 26 27 28 29 21 211 212 213 15.x 12.x 9.x 6.x 3.x Size < $5M 6.5x 6.9x 7.5x 7.8x 8.6x 8.3x 8.7x 6.1x 7.4x 8.1x 7.2x 7.4x $5M-$25M 8.8x 8.4x 9.1x 1.3x 9.4x 11.3x 7.6x 7.9x 9.5x 9.5x 7.3x 8.4x $25M-$75M 1.6x 1.3x 9.5x 1.8x 1.8x 12.2x 11.5x 8.5x 8.2x 9.2x 6.3x 9.7x European Middle-Market Median Acquisition Premiums 4% 1-Week Premium 4-Week Premium 4% 3% 3% 2% 2% 1% 21 22 23 24 25 26 27 28 29 21 211 212 213 1% 1-Week Premium 23.4% 22.9% 19.7% 18.6% 17.5% 18.1% 19.1% 27.% 25.3% 23.6% 28.4% 25.% 23.6% 4-Week Premium 26.5% 26.2% 23.2% 19.5% 21.5% 21.3% 21.5% 28.2% 29.% 26.% 31.1% 27.9% 26.% Notes: Median calculations exclude EBITDA multiples greater than 2 times; middle-market defined as deals with disclosed transactions values under $75 million European M&A Activity 27
Private Equity Transaction Analysis European Private Equity Activity Number of Deals 2, 1,5 1,45 1, Undisclosed Middle Market >$75M Deal Value 1,88 1,595 1,668 1,662 1,538 1,423 1,222 1,153 988 1,23 1,23 1,227 Deal Value ($ in billions) $3 $2 5 $1 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 16 22 26 43 57 66 96 51 19 42 51 37 4 Middle Market 542 538 517 67 683 665 716 583 43 449 454 376 394 Undisclosed 487 428 48 572 855 937 1,68 1,28 731 932 1,33 817 793 Deal Value $55.2 $68.5 $85.8 $141.9 $185.2 $234.9 $275.3 $159.8 $72.7 $134.3 $154.9 $18.6 $12.5 European Private Equity Exit Activity Number of Deals 6 5 4 Undisclosed Middle Market >$75M Deal Value 573 547 522 528 384 391 32 395 Deal Value ($ in billions) $2 472 $15 3 241 251 $1 2 1 16 167 $5 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 5 7 5 23 44 35 74 29 12 36 43 35 46 Middle Market 97 97 146 184 275 232 252 143 12 17 192 122 157 Undisclosed 58 63 9 113 228 255 247 212 137 185 293 238 269 Deal Value $15.4 $19.9 $26.1 $74. $113.3 $114.7 $188.7 $69.4 $36.3 $116.4 $125.3 $9.7 $91.9 Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million 28 European M&A Activity
Emerging Markets M&A Activity Latin American M&A Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 2, 1,75 1,349 1,688 1,5 1,285 1,25 1,163 1, 887 98 75 614 449 523 575 568 5 25 1,762 Deal Value ($ in billions) $3 1,447 $25 $2 $15 $1 $5 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 9 13 9 13 12 29 34 36 29 58 42 45 36 Middle Market 36 198 287 326 31 44 678 64 467 642 729 752 671 Undisclosed 299 238 227 236 246 418 573 523 412 649 917 965 74 Deal Value $47.9 $38.3 $3. $59.5 $46.8 $126.1 $17.1 $112. $9.3 $242.5 $142.1 $157.1 $132. Asian M&A Activity Number of Deals Undisclosed Middle Market >$75M Deal Value 18, 16,12 15,766 15,388 14,434 15, 13,813 12,784 13,947 Deal Value ($ in billions) $1,2 13, $1, 12, 1,183 $8 9, 6, 5,248 5,967 5,362 7,232 $6 $4 3, $2 $ Number of Deals 21 22 23 24 25 26 27 28 29 21 211 212 213 >$75M 5 5 47 86 15 145 194 133 19 158 159 14 154 Middle Market 3,254 3,777 3,595 5,75 7,241 9,28 11,755 11,426 1,116 1,29 1,563 9,528 8,99 Undisclosed 1,944 2,14 1,72 2,71 2,837 3,359 4,63 4,27 3,588 4,67 4,666 4,279 3,856 Deal Value $253.2 $198.7 $323.5 $397.9 $579.2 $744.3 $917. $746.3 $546.8 $693. $757. $679.6 $66. Notes: Deal value limited to publically disclosed transaction value; middle-market defined as deals with disclosed transactions values under $75 million Emerging Markets M&A Activity 29
Recent Select William Blair Transactions Close Date William Blair Client Client Description Transaction Description ($ in millions) Pending PayPros Provider of payroll services primarily for small businesses 2/7/14 Newmarket International 1/3/14 CMG Mortgage Insurance & CMG Mortgage Assurance Provider of hospitality relationship management (HRM) software Provider of mortgage-guarantee services and mortgage-assurance services Sale to Global Payments, a provider of electronic payments transaction processing services Sale to Amadeus, a Spain-based provider of transaction processing power and technology solutions Sale to Arch Capital Group, a provider of reinsurance and capital to insurance companies 1/28/14 Solana Surgical Developer of orthopedic products Sale to Wright Medical Group, a specialty orthopedic company Deal Value $42. $5. $9. 12/23/13 Snap Fitness Operator of franchises fitness centers in New Zealand, United States, Australia, Mexico, Canada, India, and United Kingdom. 12/23/13* Jung-Feintechnik Manufacturer of ultra-sharp microtome razor blades used for medical purposes 12/19/13 Omnitracs Provider of software-as-a-service (SaaS)-based fleet management solutions for trucking industry Sale to TZP Group, a New York-based private equity firm Sale to Leica Microsystems, a manufacturer of microscopes and scientific instruments Acquisition of Roadnet Technologies, a provider of fleet management software tools 72.5 12/18/13 Certara Provider of predictive science and informatics solutions that enable cross-disciplinary and translational approaches to drug development Sale to Arsenal Capital Partners, a New Yorkbased private equity firm 12/18/13 Dixie Electric Operates as an electrical contracting company Sale to First Reserve, an energy-focused private equity firm based in Greenwich, Connecticut 12/9/13 Molex Provider of electronic components and solutions Sale to Koch Industries, an industrial conglomerate operating a diverse range of businesses $7,2. 12/9/13 Quotient Clinical Provider of early stage and specialist drug development services 12/5/13 Paragon Medical Designer and manufacturer of custom and standard cases and trays, surgical instrumentation, and implantable components 11/29/13 North State Acceptance Provider and insurer of sub-prime consumer vehicle loans 11/2/13 Pharm-Up Health-logistics company focused on pharmaceutical and medical device companies that operate in Israel 11/19/13* AHT Cooling Systems Developer and manufacturer of commercial cooling systems 11/15/13* Satellite Logistics Group Provider of supply chain solutions for the beverage industry 1/17/13 NexTraq Provider of GPS fleet tracking and vehicle management solutions for the telematics industry 11/15/13 Vocalocity Provider of voice-over-internet-protocol solutions for small businesses 11/13/13 Echopass Application service provider offering Web-based telephone and Internet customer support services Sale to Bridgepoint Development Capital, a London-based private equity firm Sale to Beecken Petty O Keefe & Company, a Chicago-based private equity firm Sale to Pine Tree Equity Partners, a Miami-based private equity focused on small cap companies Sale to First Israel Mezzanine Investors (FIMI), an Israel-based private equity firm Sale to Bridgepoint, a London-based private equity firm focused on buyouts Sale to Germany-based JF Hillebrand, a provider of logistics services to the beverage industry Sale to FleetCor Technologies, a provider of specialized payment products and services Sale to Vonage, a provider of communications services that connect individuals through cloudconnected devices Sale to Genesys, a provider of contact center solutions 585. $13. * Represents cross-border transaction. Transaction value not disclosed. 3 Recent Select William Blair Transactions
Close Date William Blair Client Client Description Transaction Description ($ in millions) 11/5/13 Official Payments Provider of electronic payment solutions to the IRS, states, municipalities, colleges, and universities Sale to ACI Worldwide, a provider of solutions that facilitate electronic payments and banking Deal Value $148.8 11/1/13 Paradigm Tax Group Provider of outsourced property tax management services to commercial property owners Sale to The Riverside Company, a New York-based private equity firm 1/31/13* Swift Worldwide Resources Supplier of skilled manpower resources to the global oil and gas industry Sale to Wellspring Capital Management, a New York-based private equity firm 1/31/13 McKesson Corporation (McKesson Automation) Provider of integrated solutions to automate the supply and medication-use processes in community and university hospitals 1/23/13 Addison Group Provider of professional staffing and permanentplacement services for candidates and clients 1/21/13 BI-LO (certain assets) Operator of a chain of supermarkets in the southeastern part of the United States 1/11/13 Mitchell International Provider of property-and-casualty claims technology solutions in North America 1/1/13 Titan International Manufacturer and seller of wheels, tires, and undercarriage systems and components 9/3/13 Specialty Professional Products 9/23/13 Longwood Industries (a Norwest portfolio company) Distributer of specialty pesticides that are used in forestry, vegetation management, and other industries Designer and manufacturer of rubber, plastic, and specialty products 9/2/13* 4Refuel Canadian mobile refueller that provides fuel logistics services Sale to Francisco Partners, a San Francisco-based private equity firm Sale to Trilantic Capital Partners, a private equity firm focused on control and significant minority investments in North America and Europe Sale of seven BI-LO-branded stores in North and South Carolina to Publix, an operator of retail food supermarkets Sale to KKR, a New York-based private equity firm Debt placement of senior secured notes used to finance the purchase of the company's other notes Sale to KODA Distribution Group, a distributer of specialty chemicals in the United States Sale to Wabtec Corporation, a provider of solutions for the freight rail and passenger transit industries Sale to Kelso & Company, New York-based private equity firm $59. $4. 9/4/13* Carfinco Financial Group Operator of an unincorporated open-end mutual fund trust in Canada Acquisition of Persian Acceptance Corporation, an automobile finance company 8/3/13 Zotec Partners Developer of medical billing, practice management, and radiology information software 8/3/13 Zotec Partners Developer of medical billing, practice management, and radiology information software 8/27/13 Met-Pro Corporation Provider of product recovery, pollution control, fluid handling, and filtration and purification technologies 8/15/13 AmTrust Financial Services Underwriter and provider of property and casualty insurance Debt placement of senior unsecured notes $26. Acquisition of Medical Management Professionals, a provider of billing, financial, and strategic management services to physicians Sale to CECO Environmental Corporation, a provider of air-pollution control technology products and services $2. $27.3 Debt placement of senior unsecured notes $25. 8/15/13 Isotrak Provider of vehicle tracking and fleet management software 7/4/13 CliniSys Group Specialized developer of laboratory information systems 6/28/13 Full Circle Capital Business development and non-diversified closedend management investment company * Represents cross-border transaction. Transaction value not disclosed. Sale to Lyceum Capital Partners, a private equity firm specializing in acquisitions of middle market businesses Sale to Montagu Private Equity, a European private equity firm specializing in leveraged management buyouts in middle-market companies Debt placement of senior unsecured notes used to repay Distribution Notes and pay down a credit facility $18.8 Recent Select William Blair Transactions 31
Close Date William Blair Client Client Description Transaction Description ($ in millions) 6/19/13 Overseas Commerce Provider of marine logistics services Sale to First Mezzanine Investors, a private-equity firm specializing in mezzanine financing Deal Value 6/13/13 Asset Acceptance Capital Purchaser and collector of charged-off consumer accounts receivable portfolios 6/11/13 HG European supplier of specialist consumer cleaning and maintenance solutions Sale to Encore Capital Group, a provider of debt, management, and recovery solutions for consumers and property owners Sale to Glide Buy Out Partners, a European middle market private equity investment fund $438.6 5/15/13 Cabot Credit Management Acquirer and manager of consumer debt in the United Kingdom Sale to J.C. Flowers & Co., a private equity firm focused on the financial services sector 5/1/13 Saratoga Investment Business development company specialized in leveraged and management buyouts 4/24/13 Aepona Holdings Ireland-based provider of cloud computing and network services 4/16/13 Telenav Provider of personalized navigation and locationbased services 4/11/13* Riverside Products Manufacturer and seller of wear parts for the automobile shredding industry 4/4/13* Althea Technologies Provider of product development services to the biopharmaceutical industry 3/28/13* Kienle+Spiess European developer and manufacturer of custom components for electric motors and generators 3/15/13 Spirit Foodservice Products Manufacturer of high-quality foodservice disposables to quick-service restaurants and retail chains 3/12/13 Titan International Global provider of wheel, tire, and undercarriage industrial group services 2/26/13 Sound Surgical Technologies Manufacturer and distributer of market-leading surgical and non-invasive body shaping products Debt placement of senior unsecured notes used to repay a credit facility and make investment in middle-market companies Sale to Intel Corporation, a manufacturer and seller of integrated digital technology platforms Sale to FleetCor Technologies Operating Company, a global provider of fuel cards and workforce payment programs Sale to Danieli, a designer and manufacturer of capital equipment Sale to Ajinomoto Co., a global manufacturer of pharmaceuticals and specialty chemicals Sale to Sumitomo Corporation, which engages in multifaceted business activities selling a variety of domestic products and services Sale to Pactiv, a supplier of packaging to the consumer and food service packaging industry Deft offering of senior secured notes used to repay a portion of debt in the recent acquisition of Titan Europe Sale to Solta Medical, a provider of energy-based medical device systems for aesthetic applications $42. $175. $325. 2/2/13 GWC Warranty Corporation Provider of vehicle service contracts and related finance and insurance products Sale to Stone Point Capital, a private equity firm focused on the financial services sector 1/25/13* Coveright Surfaces South American Operations Independent producer of decorative surfacing materials for the furniture, flooring, building, woodworking, and automotive industries 1/1/13* LML Payment Systems Provider of financial payment processing solutions for e-commerce and traditional businesses Sale to Schattdecor, a manufacturer of printed decor papers Sale to Digital River, a manager of online businesses for software and game publishers $12.8 1/7/13 Zacharon Pharmaceuticals Development and marketer of oncology drugs Sale to BioMarin Pharmaceuticals, a developer of biopharmaceuticals * Represents cross-border transaction. Transaction value not disclosed. 32 Recent Select William Blair Transactions
William Blair Corporate Industry Coverage Brent Gledhill Global Head of Investment Banking +1 312 364 5475 bgledhill@williamblair.com Mark Brady Global Head of Mergers & Acquisitions +1 312 364 8853 mbrady@williamblair.com Brent Felitto Head of North America Investment Banking +1 312 364 813 bfelitto@williamblair.com Matthew Gooch Head of European Banking +44 2 7868 4478 U.S. voicemail: +1 312 364 5425 mgooch@williamblair.com Industry Groups Business & Commercial Services Consumer & Retail Financial Services Healthcare Industrials Technology Accounts Receivable Management Business Process Outsourcing Consulting Discount Stores Distribution Drugstores Education Services E-commerce Energy Services Fitness Clubs Environmental Food & Beverage Services Food Retailing Facility Services Gaming & Lodging Fire & Security Services Hard Goods Government IT Home Furnishings Services Leisure HR Services Power Sports Information Services Private Label Infrastructure Services Restaurants Legal Services Specialty Retail Marketing and Sporting Goods Advertising Services Parking Services Professional Services Quality Assurance Services & Solutions Rental Services Residential Services Route-Based Services Staffing & Search Transportation & Logistics Utility & Industrial Services Apparel Branded Consumer Products Cruise Lines & Resorts Toys & Games Asset Management Brokerage Commercial Finance Consumer Finance Specialty Insurance & Insurance Services Trust Services Aesthetics and Dermatology Animal Health Biotechnology Contract Research Organizations Dental Products & Services Diagnostic Products & Services Healthcare Distribution Healthcare IT Healthcare Services Imaging Technology & Services IT-Enabled Services Medical Devices Payer IT Services Pharmaceutical Outsourcing Pharmaceuticals Revenue Cycle Management Automotive & Transportation Products Building Products, Technologies & Automation Capital Goods Mfg. Chemicals Contract & Electronics Mfg. Infrastructure Products Environmental Technology & Services Material Handling Metal Processing Paper & Plastics Packaging Process Controls & Technology Pumps, Valves & Filtration Thermal Management Water & Waste Water Application Software Barcode/Auto Identification Computer/Telephony Digital Media E-commerce Infrastructure Electronic Components Electronics Manufacturing Services ERP Software Financial Technology HR Outsourcing IT Services Payroll Services Semiconductor Capital Equipment Software as a Service (SaaS) Telecom Equipment Telecom Services Transaction Processing Global Reach North America South America Europe GCC/India East Asia Chicago (Headquarters) Boston New York San Francisco São Paulo Frankfurt London Tel Aviv Zurich Bahrain Mumbai Hong Kong Seoul Shanghai Tokyo Beijing William Blair Corporate Industry Coverage 33
Disclosures William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Services Authority ("FSA") in the United Kingdom. William Blair & Company only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated within the United States and are not offered to persons or institutions outside of the United States. This material has been approved for distribution in the United Kingdom by William Blair International Limited, and is directed only at, professional clients and eligible counterparties (as defined in COBS 3.5 and 3.6 of the FSA Handbook). This advertisement is not intended to be investment advice. William Blair & Company 222 West Adams Street Chicago, Illinois 666 +1 312 236 16 williamblair.com February 13, 214 34 Disclosures
About William Blair Investment Banking William Blair s investment banking group combines significant transaction experience, rich industry knowledge, and deep relationships to deliver successful advisory and financing solutions to our global base of corporate clients. We serve both publicly traded and privately held companies, executing mergers and acquisitions, growth financing, special situations and restructuring, and general advisory projects. This comprehensive suite of services allows us to be a long-term partner to our clients as they grow and evolve. In 212, the investment banking group completed 76 merger-and-acquisition transactions worth more than $13.8 billion in value, involving parties in 21 countries and five continents, and was an underwriter on over 2% of all U.S. initial public offerings.