Southeast trend report

H1 2015

Mergermarket Regional Trend Report: Southeast, H1 2015

www.mergermarket.com

Southeast trend report, H1 2015

Overview

M&A trend

200

M&A activity targeting the US-Southeast had a relatively strong first half of
2015, reaching its highest H1 value since 2007, with 310 transactions totaling
US$ 59.1bn representing a 36% increase in deal value compared to H1 2014
(338 deals, US$ 43.4bn), despite accounting for 28 less deals. Southeastern
M&A activity accounted for 7.8% of total US activity, up slightly from 7.3% in
2014, with 2,225 deals worth US$ 753.4bn targeting the US also marking its
highest H1 value since 2007.

180

160

26.9
140

Value of deals (US$bn)

69.9
18.8
18.1

60

14.3

19.6
16.3

17.8
7.3
11.4

28.1

36.6

12.9

16.8

2008

2009

2010

0
2007

13.7
10.2
7.1
1.4

Q1

Q2

9.2

28.0
21.4

23.2

20

2011

15.8
12.9

9.8

2012

2013

Q3

49.8

19.2

15.3
2014

2015

Q4

Florida attracted the most deal activity within the region, with 114 deals
worth US$ 27.4bn marking a 75.6% increase in deal value year-on-year,
despite accounting for eight less deals. Q1 2015 was particularly strong,
reaching its highest quarterly value on Mergermarket record (50 deals worth
US$ 24.5bn). Spanning sectors from TMT to Consumer to Real Estate, the
state accounted for 46.2% of the Southeasts overall US$ 59.1bn-worth of
deals in H1 2015, compared to a 35.7% share in H1 2014.

H1 2015
14.8%

Despite this increase in deal value targeting Florida, North Carolina attracted
the most valuable deal of the half, after Canada-based Valeant beat Irelandbased Endo International in a bidding war to acquire Salix Pharmaceuticals
Ltd, a specialist in gastrointestinal pharmaceuticals, for US$ 15.5bn. The
transaction is the third highest valued deal on record targeting the regions
Pharma, Medical & Biotech (PMB) sector.

H1 2014

4.5%

40.4
80

55.8

2015

11.8%

20.2
100

40

Industry analysis

13.5%

26.4
75.0

120

Southeastern average deal size in H1 increased 46.5% year-on-year, from

US$ 128.4m to US$ 187.6m, as high deal valuations, low interest rates
and strong balance sheets have increased deal making confidence across
the region. The first half of the year saw three deals valued over US$ 5bn,
compared to just one deal in H1 2014, representing a 472.6% value increase
in this deal bracket from a total of US$ 5.7bn to US$ 32.7bn. By contrast, the
combined worth of Southeastern transactions individually valued below
US$ 5bn fell 29.5%, from 337 transactions worth US$ 37.7bn to 312 worth
US$ 26.6bn.

10.4%

23.0

45.9%

0.1%

30.1%
17.5%

PMB was the sector which attracted the highest deal value in H1 2015, with
39 deals worth US$ 17.8bn accounting for 30.1% of total market share.
This was largely as a result of the previously mentioned Valeant-Salix deal,
which comprised 87.1% of PMBs deal value for the period, and 26.2% of
total market share. Deal value targeting the PMB sector increased by 121.3%
compared to H1 2014, where 48 transactions worth US$ 8bn took up 18.5%
of market share.

11.9%
18.5%

21.0%

Other

Pharma, Medical & Biotech

TMT

Consumer

Real Estate

Industrials & Chemicals

Following a boom of activity in 2014 for both buyouts and exits, H1 2015
has seen a relative decline, with both sets of activity reaching their lowest
H1 deal values since 2009. In H1 2015, 63 buyouts
600
worth US$ 4.3bn represented a 63.9% drop from
the same period last year (61 buyouts worth US$
500
11.9bn). Despite exit count remaining consistent at
47 deals, value also saw a 64.7% drop to US$ 5.8bn,
400
down from US$ 16.3bn in H1 2014. Altogether,
buyouts and exits comprised 17.1% of total market
share, a huge decrease from H1 2014 where they
300
accounted for 65.1% (61 buyouts worth US$
11.9bn, 47 exits worth US$ 16.3bn).

Cross-border trend
180
160
140

Value of deals (US$bn)

120

Deal count

100

80
60

200

40
100
20
0

0
2007

2008

Inbound value

2009

2010

Outbound value

Mergermarket Regional Trend Report: Southeast, H1 2015

2011

2012

Inbound deal count

2013

2014

H1 2015

Outbound deal count

www.mergermarket.com

Southeast trend report, H1 2015

Top deals
Value
(US$m)
15,464

Deal details
Announcement date: 22-Feb-15

Advisory details
FA to sell-side: Centerview Partners; JPMorgan
LA to sell-side: Cadwalader, Wickersham & Taft; Covington & Burling;

Target: Salix Pharmaceuticals Ltd

Advising FA: Debevoise & Plimpton; Willkie Farr & Gallagher

Bidder: Valeant Pharmaceuticals International Inc

FA to buy-side: Deutsche Bank; HSBC

LA to buy-side: Osler, Hoskin & Harcourt; Skadden Arps Slate Meagher &
Flom; Sullivan & Cromwell

10,540

Announcement date: 05-Feb-15

FA to sell-side: Credit Suisse; Guggenheim Partners; PJT Partners

LA to sell-side: Debevoise & Plimpton; Advising FA: Cravath, Swaine & Moore

Target: GTE Southwest Incorporated; Verizon Florida LLC;

Verizon California Inc

FA to buy-side: Greenhill & Co; JPMorgan; Lazard

LA to buy-side: Skadden Arps Slate Meagher & Flom; Advising FA: Simpson

Bidder: Frontier Communications Corporation

Thacher & Bartlett

Seller: Verizon Communications Inc

6,680

Announcement date: 04-Feb-15

FA to sell-side: Peter J Solomon Company Limited

LA to sell-side: Blake, Cassels & Graydon; Simpson Thacher & Bartlett;

Target: Office Depot Inc

Advising FA: Kirkland & Ellis

Bidder: Staples Incorporated

FA to buy-side: Barclays
LA to buy-side: Corrs Chambers Westgarth; Davies Ward Phillips & Vineberg;
Russell McVeagh; Weil Gotshal & Manges; WilmerHale

3,100

Announcement date: 07-Jan-15

FA to sell-side: Wells Fargo Securities

LA to sell-side: Gibson Dunn & Crutcher; Weil Gotshal & Manges

Target: Gables Residential

FA to buy-side: Hodes Weill & Associates
Bidder: Teachers Insurance and Annuity Association

LA to buy-side: Fried Frank Harris Shriver & Jacobson; King & Spalding

of America-College Retirement Equities Fund; Clarion

Partners LLC; Allianz Real Estate of America

2,714

Announcement date: 23-Feb-15

FA to sell-side: Bank of America Merrill Lynch

LA to sell-side: Jones Day

Target: Polypore International Inc

FA to buy-side: Morgan Stanley
Bidder: Asahi Kasei Corporation

Mergermarket Regional Trend Report: Southeast, H1 2015

LA to buy-side: Cleary Gottlieb Steen & Hamilton; Nishimura & Asahi

www.mergermarket.com

Southeast trend report, H1 2015

Financial advisor league table by deal value
Ranking
H1
2015

H1
2014

1
2
3
4

6
12
1
2

5
6
7
8
9
10

76
10
67
4
5

H1 2015
Value
Deal
count
(US$m)

% Value
change

JPMorgan
Lazard
Goldman Sachs
Bank of America Merrill Lynch

44,199
25,046
24,486
24,006

14
7
12
18

387.5%
487.1%
28.4%
29.6%

Greenhill & Co
Deutsche Bank
Centerview Partners
HSBC
Credit Suisse
Barclays

20,175
19,949
19,501
15,464
12,799
12,164

3
11
3
1
7
8

26,446.1%
159.1%
17,628.2%
11.0%
5.6%

Company Name

Financial advisor league table by deal count

Ranking
H1
2015

H1
2014

H1 2015
Value
Deal
count
(US$m)

Company Name

Count
change

Bank of America Merrill Lynch

24,006

18

2
3
4
5
6
7
8
9
10

13
11
2
19
3
9
4
23
21

Sandler O'Neill & Partners

JPMorgan
Goldman Sachs
Deutsche Bank
Raymond James & Associates
Morgan Stanley
Barclays
Harris Williams & Co
William Blair & Company

1,649
44,199
24,486
19,949
716
11,581
12,164
1,108
410

16
14
12
11
11
9
8
8
8

7
4
-3
5
-3
-2
-5
2
2

Legal advisor league table by deal value

Ranking
H1
2015

H1
2014

H1 2015
Value
Deal
count
(US$m)

Company Name

% Value
change

Skadden Arps Slate Meagher & Flom

39,111

13

261.2%

2
3
4
5
6
7
8
9
10

26
6
22
7
83
41
3
30
8

Sullivan & Cromwell

Debevoise & Plimpton
Cravath, Swaine & Moore
Simpson Thacher & Bartlett
Cadwalader, Wickersham & Taft
Osler, Hoskin & Harcourt
Willkie Farr & Gallagher
Covington & Burling
Wachtell, Lipton, Rosen & Katz

37,312
28,849
25,744
25,069
18,604
17,385
15,489
15,464
15,002

11
10
6
8
4
6
6
2
13

1,346.8%
189.7%
646.6%
158.1%
3,841.5%
1,109.0%
29.0%
569.7%
81.4%

Legal advisor league table by deal count

Ranking
H1
2015

H1
2014

H1 2015
Value
Deal
count
(US$m)

Company Name

Count
change

Kirkland & Ellis

12,562

35

-7

2
3
4
5
6
7
8
9
10

3
13
5
12
39
17
22
8
10

Jones Day
King & Spalding
Latham & Watkins
Greenberg Traurig
Troutman Sanders
Skadden Arps Slate Meagher & Flom
Wachtell, Lipton, Rosen & Katz
Alston & Bird
Akerman

12,483
14,973
14,095
12,810
2,773
39,111
15,002
4,584
375

27
21
14
14
14
13
13
12
12

7
9
0
2
8
3
4
-2
-1

Mergermarket Regional Trend Report: Southeast, H1 2015

www.mergermarket.com

Southeast trend report, H1 2015

Mergermarket criteria
Top deals: Based on the dominant geography of the target company being
the South-East. FA refers to financial advisor and LA refers to legal advisor.
Excludes lapsed and withdrawn bids.

All data is based on transactions over US$ 5m and is based on the

Mergermarkets M&A deals database. Deals with undisclosed deal values are
included where the targets turnover exceeds US$ 10m.
Deals where the stake acquired is less than 30% will only be included if the
value is greater than US$ 100m. Click here for the full deal criteria.

Industry analysis: Based on the dominant geography of the target company

being the South-East. Industry sectors represent the primary industry sector
of the target company only. Excludes lapsed and withdrawn bids.

M&A trend: Based on the dominant geography of the target company being
the South-East. Excludes lapsed and withdrawn bids.

League tables: Based on the dominant geography of the target, bidder or

seller company being the South-East. The financial advisor tables exclude
lapsed and withdrawn bids and the legal advisor tables include lapsed and
withdrawn bids.

Cross-border M&A:
Inbound refers to cross-border M&A where the dominant geography of
the target company is the South-East, and the dominant geography of the
bidder is any other region excluding the South-East.
Outbound refers to cross-border M&A where the dominant geography of
the bidder company is the South-East, and the dominant geography of the
target is any other region excluding the South-East. Excludes lapsed and
withdrawn bids.

South-East includes: Alabama, Florida, Georgia, Mississippi, North Carolina,

South Carolina, Tennessee
All values are in US$.
Data correct as of 20-Jul-2015.

Contacts

PR
Chrissy Carney
T: +1 646 378 3118

Deal submissions

Research
Analyst
Elizabeth Lim
T: +1 212 686 3016

Lissa Campos
T: +1 212 686 6521

Commercial
Kurt Viehl
T: +1 212 390 7812

Global research editor

Kirsty Wilson
T: +44 203 741 1281

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Mergermarket Regional Trend Report: Southeast, H1 2015

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