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Monthly M&A InsIder

mAy 2011

A mergermArket report on globAl m&A Activity

CONTENTS

GlobAl overvIew AmericAs: lAtin AmericA north AmericA AsiA-pAcific europe middle eAst & AfricA About MerrIll corporAtIon

01 06 11 16 22 28 33

Monthly M&A InsIder


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GLOBAL OVERVIEW
GlobAl overvIew
globAl overvieW

THE END OF APRIL BROUGHT 2011 DEAL VOLUME TO 3,593 TRANSACTIONS WORTH US$817.4BN, REPRESENTING AN 8.2% DECREASE IN VOLUME BUT A CONSIDERABLE 26.5% SPIKE IN DEAL VALUE AGAINST THE SAME PERIOD LAST YEAR. THIS JUMP IN VALUE HAS BEEN FUELLED LARGELY BY STRATEGIC M&A IN THE ENERGY SECTOR, WHICH, ON THE WHOLE, ACCOUNTS FOR ONE qUARTER OF GLOBAL DEAL VALUE, AND A FAIR SHARE OF THIS ACTIVITY IS LEANING MORE TOWARD ALTERNATIVE THAN CONVENTIONAL ENERGY SOURCES. WHEREAS LAST YEAR THE MOST HIGH-PROFILE DEALS WERE LED BY OILFIELD SERVICES GIANTS SCHLUMBERGER AND SMITH INTERNATIONAL, OR OIL PRODUCERS, INCLUDING RUSSIAS OAO RUSSNEFT AND CANADAS SYNCRUDE, THIS YEAR IS SEEING CORPORATES AND BUYOUT GROUPS EXPAND MORE AGGRESSIVELY INTO WIND, HYDRO AND RENEWABLES AREAS BY WAY OF M&A.
In one of 2011s largest strategic M&A deals so far, for example, Exelon Corporation (EXC), a leading electricity provider in the US, announced its US$10.4bn acquisition of Constellation Energy Group, a multi-faceted energy business with a growing clean energy portfolio. Two prime examples can also be found in France, where Total SA this month agreed to acquire up to 60% of SunPower Corporation, a silicon solar cell and solar panel manufacturer based in the US, and EDF announced its acquisition of a 50% stake in EDF Energies Nouvelles SA, a French renewable energy specialist. Private equity deal flow is also picking up pace. UK-based Terra Firma has been especially active in this respect, most recently in May making a 98m investment in 13 photovaltaic plants owned by Spains Sorgenia Solar. Terra Firma had previously added a group of UK wind farms valued at US$284m to its renewable energy portfolio company Infinis plc. Smaller windfarm deals are also cropping up: Irish private equity group ESB Novusmodus, which focuses on early stage cleantech and renewable investments of 5m to 20m, invested 20m in Wind Energy Direct Limited, a UKbased company that installs and operates wind turbines at business and industrial sites. Other deals include US-based private equity firm Alinda Captial Partners investment in agri. capital, announced this past March. At the same time, mergermarket intelligence has shown some of the worlds larger corporate and financial buyers preparing to scout out new alternative energy opportunities, including Japan-based conglomerate Misubishi and Canadian infrastructure investor Brookfield Asset Management of Canada. Following the creation of its Global Environment Business Development Group in 2010, Misubishi is reportedly considering wind, geothermal and other renewable investments in the near-term. Brookfield, meanwhile, is expected to bolster its portfolios for Brookfield Renewable Power Fund and Brookfield Infrastructure Partners. As for the more cutting-edge renewable areas, Gamesa Corporacion Tecnologica, the Spanish wind turbine manufacturer, launched Gamesa Venture Capital (GVC) to invest in technology developers focused on converting tidal power into electricity. Energy sector M&A is still dominated by fossil fuels. For example, the 3.5bn acquisition of Frac Tech Services led by Singapores Temasek Holdings and US-based Chesapeake Energy, currently stands as one of the 2011s largest buyouts. However, the clearly outlined initiatives in renewable energy suggests the space is one worth watching for the remainder of 2011.

head of research Elias Latsis editor Rory McNeil For advertising opportunities contact: erik wickman tel: + (1) 212 6863329 erik.wickman@mergermarket.com

Global overview: Elizabeth Castro latin America: Urna Chakraborty north America: Jason Cozza Asia-pacific: Rus Beasley europe: Samuel Tedjasukmana and Damien Julliard Middle east & Africa: Otavio Machado, Yannis Papacostas & Marie-Laure Keyrouz

Monthly M&A Insider

01

TREND GRAPHS
GlobAl M&A quArterly trend
globAl overvieW
1,400 4,500 4,000 3,500

GlobAl M&A quArterly prIvAte equIty trend


400 900 800 700

1,200

350

Value (US$bn)

Value (US$bn)

1,000 3,000 800 2,500 2,000 1,500 400 1,000 200 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

300

Number of deals

Number of deals

600 250 500 200 400 150 300 100 200 100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

600

50

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

GlobAl M&A AnnuAl trend


4,000 18,000 16,000 14,000

GlobAl M&A AnnuAl prIvAte equIty trend


900 800 700 3,500

3,500

3,000

3,000

Value (US$bn)

12,000 2,,500 10,000 2000 8,000 1,500 6,000 1,000 4,000 2,000 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

Value (US$bn)

2,500 600 500 400 300 1,000 200 100 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011* 500 2,000

Number of deals

Number of deals

1,500

500

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

Monthly M&A Insider

02

TREND GRAPHS

GlobAl GeoGrAphIc breAkdown ytd 2011


globAl overvieW

VALUE
5.3%

VOLUME
4.5% 19.8%
Asia-Pacific Europe North America Middle East & Africa

1.8%

15.0%

Asia-Pacific Europe North America Middle East & Africa Latin America

2.2%

33.8%

Latin America

46.6%

31.3%

39.6%

GlobAl M&A sector breAkdown ytd 2011

VALUE
1.0% 1.7% 7.6% 0.3% 0.5% 2.6% 5.5% 16.4%
Industrials & Chemicals TMT Business Services Consumer

VOLUME
1.5% 3.4% 3.7% 8.1%
3.1% 1.0% 0.4%

19.3%

Industrials & Chemicals TMT Business Services Consumer Energy, Mining & Utilities

11.5%

17.5%

Energy, Mining & Utilities Financial Services Pharma, Medical & Biotech Construction

8.5%

14.8%

Financial Services Pharma, Medical & Biotech Construction

4.0% 6.5%

Leisure Transportation

9.6% 13.9% 12.7%

Leisure Transportation Real Estate Agriculture Defence

25.0%

Real Estate Agriculture Defence

Monthly M&A Insider

03

TREND GRAPHS

GlobAl M&A deAl sIze breAkdown


globAl overvieW

VALUE
100 90 80 70

VOLUME
0.3% 100 98 37.5% 96 94 1.0% 4.2% 0.7% 1.0% 0.7% 1.2% 0.7% 1.3% 0.6% 0.9% 3.9% 5.0% 5.5% 3.9% 4.5% 5.1% 4.7% 0.5% 0.9% 3.7% 4.8% 5.8% 0.4% 1.2% 0.8%

1.4%

28.9% 38.8% 43.9% 39.8% 42.7% 40.7%

27.8%

4.5%

Percentage

Percentage

60 50 40 30

18.6% 15.5% 16.3% 16.9% 15.0% 16.4%

20.8% 20.4%

92 90 88

4.5%

4.6% 4.7% 4.7%

24.5% 22.1% 20.4% 9.9% 8.5% 15.1% 23.0% 19.1% 20.5%

27.5% 23.7% 9.3% 7.4% 14.3% 14.6% 14.5% 10.9% YTD 2011*

86 84 82 80

90.0%

91.0% 89.2% 88.2% 90.1% 87.4% 89.0% 87.3%

20 10 0 2004 18.2%

7.3% 12.3% 2006

7.9% 12.5% 2007

8.8%

7.9%

2005

2008

2009

2010

2004

2005

2006

2007

2008

2009

2010

YTD 2011*

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

Monthly M&A Insider

04

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M E R R I L L

D A T A S I T E

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A MERgERMARkET M&A REpoRT oN

LATIN AMERICA
LATIN AMERICAN M&A SAW A LARgE NUMBER oF dEALS CoMpLETEd dURINg ApRIL, BUT WITh A LoW ovERALL vALUE: 35 dEALS CoLLECTIvELy vALUEd AT oNLy US$5.7BN. IN ThE yEAR To-dATE, ThE ENERgy, MININg & UTILITIES SECToR hAS LEd IN TERMS oF BoTh vALUE ANd voLUME WITh 30 dEALS WoRTh US$12BN ANd IT WAS AgAIN A doMINANT SECToR IN ApRIL WITh FIvE dEALS ANNoUNCEd WoRTh AppRoxIMATELy US$1.5BN; ThIS CoMpRISEd 28% oF ToTAL dEAL vALUE ANd 19% oF ToTAL yEAR-To-dATE voLUME. ApRILS Top dEAL WAS ThE BRAzIL-BASEd INvESTMENT hoLdINg CoMpANy CIdAdE dE dEUS ACQUISITIoN oF A 4.10% STAkE IN BANCo BRAdESCo FRoM BANCo ESpIRITo SANTo FoR AppRoxIMATELy US$1.3BN.
Brazil and Mexico have seen the most dealmaking activity in the year-to-date by value. Brazil-based deals amounted to US$33.7bn, which represents 78% of the total value, and Mexico-based deals amounted US$2.9bn, or 7% by value. With predictions of Latin American growth pegged at 4.7% for this year, M&A is expected to grow considerably. The Financial Services sector has been gaining market share, currently at 5.9% by value and 7.6% by volume through the course of 2011, up from 2.2% by value and 6.8% by volume in the first half of the first quarter. Canadas Scotiabank will likely add to this growth in the coming months as it is looking to continue its expansion in the Latin American market. After an active growth period last year the acquisition of Royal Bank of Scotlands corporate and commercial banking operations in Chile and Colombia and BNp paribas panamanian wealth management business, to name a few the possibility of future acquisitions is high due to the sizeable returns Scotiabank experienced from their Latin American division. India is another Asian country interested in the rapidly growing Latin American market, with reports that the IT giant Mahindra Satyam is currently negotiating a Brazilian acquisition. With a focused interest in the banking and insurance industries, as well as in telecommunications, the company is looking for a target that also has a large presence in the countries surrounding Brazil. South korean tire manufacturers could also be looking to form a joint venture with an Ecuadorian partner to take advantage of new South American markets. The tire manufacturing industry is up and coming and could be attracting new interest from overseas. korea would provide the technology, and Ecuador would help market the products domestically and export to the Andean states. While this is a rare move, due to complicating issues such as technology transfers or exchange, if successful, it could prove to be a lucrative move for South korean tire manufacturers and contribute to growth in the Latin American market. In other news, general Electric is setting up a small team of analysts in Sao paulo, Brazil to analyze possible acquisition targets in Latin America. The US-based technology and power generation conglomerate has experienced a 30% growth in orders in the region and expects to seriously look into possible technologies that would complement gEs business. In November, gE revealed an expansion expenditure of US$500m to increase energy, transportation and healthcare manufacturing in Brazil; and with gEs 2011 Q1 revenue in its Brazilian venture up by 80%, its not going to be stopping anytime soon.

LATIN AMERICA

Monthly M&A Insider

06

Top dEALS
Top 10 LATIN AMERICAN ANNouNCEd dEALs of ThE MoNTh (ApR-11)
LATIN AMERICA
Announced Bidder company Target company Target dominant sector seller company Exit multiples (x) Revenue EBITdA p/E Bid premia 1-day before deal value (us$m)

28-Apr-11

Cidade de deus Companhia Comercial de participacoes CpFL Energia Quinenco

Banco Bradesco (4.10% stake) Energias Renovaveis Shell (most of its downstream business in Chile) Banco CSF (49.00% stake)

Financial Services

Banco Espirito Santo

n/a

n/a

10.7

-4.0%

1,276

19-Apr-11 01-Apr-11

Energy, Mining & Utilities Industrials & Chemicals Financial Services Royal dutch Shell

1,034 614

14-Apr-11 18-Apr-11

Itau Unibanco holding Atlantia

Carrefour Acciona

n/a

n/a

11.6

459 401

Construction Sociedad Concesionaria Autopista vespucio Sur (50.00% stake); Sociedad Concesionaria Litoral Central (50.00% stake); operacion y Logistica de Infraestructuras (50.00% stake) Cablemas (41.70% stake) Remora Energy International (four Llanos Basin blocks) (50.00% stake) Laboratorio Quimico Farmaceutico Bergamo Ltda hSBC AFoRE Colegio ph e Curso ph and Escolas Tecnicas do Brasil (53.00% stake) TMT Energy, Mining & Utilities

01-Apr-11 20-Apr-11

grupo Televisa parex Resources

Remora Energy International -

394 255

08-Apr-11

Amgen

pharma, Medical & Biotech Financial Services Business Services grupo Financiero hSBC paulo henrique (private investor); Leonardo henrique (private investor); Alessandra henrique (private investor)

2.7

215

11-Apr-11 16-Apr-11

principal Financial group Abril Educacao

n/a

n/a

200 189

Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Latin America data correct as of 13-May-11

Source: mergermarket

Monthly M&A Insider

07

TRENd gRAphS
LATIN AMERICAN M&A quARTERLy TRENd
LATIN AMERICA
Value (US$bn) Value (US$bn)
70 180 160 140 50 120 40 100 80 60 20 40 10 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11* 1,000 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

LATIN AMERICAN M&A quARTERLy pRIvATE EquITy TRENd


4,500 4,000 3,500 16

60

14

12

Number of deals

Number of deals

Value (US$m)

3,000 10 2,500 8 2,000 6 1,500 4

30

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

LATIN AMERICAN M&A ANNuAL TRENd


180 160 500 140 600

LATIN AMERICAN M&A ANNuAL pRIvATE EquITy TRENd


8,000 50 45 40 6,000

7,000

Number of deals

Number of deals

120 100

400

Value (US$m)

35 5,000 30 25 20 15 2,000 10 1,000 5 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

300 80 60 40 100 20 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011* 0 200

4,000

3,000

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

Monthly M&A Insider

08

TRENd gRAphS

LATIN AMERICAN M&A gEogRAphIC BREAkdowN yTd 2011


LATIN AMERICA

vALUE
2.7% 3.4% 0.5% 7.0% 0.2% 0.1% 3.0% 4.9%
Brazil Chile Colombia Dominican Republic Ecuador El Salvador Mexico Peru Argentina

voLUME

10.6% 1.3% 6.3% 0.6% 8.1% 1.3% 1.3% 1.3% 6.9% 52.5%

Brazil Chile Colombia Dominican Republic Ecuador El Salvador Mexico Panama Peru Venezuela

72.7%

10.0%

Argentina

LATIN AMERICAN M&A sECToR BREAkdowN yTd 2011

vALUE
1.0% 1.2% 0.7%
Energy, Mining & Utilities

voLUME
1.3% 1.3% 3.1% 5.0% 5.0% 5.6% 1.3% 18.8%
Energy, Mining & Utilities Consumer Industrials & Chemicals Business Services Financial Services

18.9%

28.0%

Consumer Industrials & Chemicals Business Services Financial Services TMT Transportation

6.9%

16.9%

TMT Transportation Construction

9.8% 27.2% 4.1% 5.9% 2.9%

Construction Pharma, Medical & Biotech Agriculture

7.5%

Pharma, Medical & Biotech Agriculture

11.9%

15.6%

Leisure Defense Real Estate

Monthly M&A Insider

09

TRENd gRAphS

LATIN AMERICAN M&A dEAL sIzE BREAkdowN


LATIN AMERICA

vALUE
100 90 80 70 38.5% 17.9% 16.2% 30.5% 7.2% 46.9% 10.8% 29.5% 41.8% 9.2% 31.3%

voLUME
0.8% 100 3.3% 6.1% 1.2% 0.3% 4.1% 7.1% 0.3% 1.0% 5.4% 7.4% 1.0% 0.2% 5.3% 6.4% 0.7% 0.6% 4.7% 5.3% 1.2% 0.3% 7.0% 5.2% 6.4% 80 1.8% 1.4% 2.1% 1.3% 1.9%

8.3%

6.9% 6.9%

90

Percentage

60 50 40 30 20 10 0 2004 14.7% 9.6% 21.9%

25.8% 31.3% 8.3% 21.3% 21.8% 16.2%

Percentage

20.3% 18.3% 36.8% 24.5%

70

23.2%

60 88.6% 50 88.1% 85.1% 87.4% 88.2% 85.8% 81.8% 83.1%

24.2% 24.2%
40

10.3% 27.8% 25.5% 12.7% 2005 2006 2007

10.0%

9.6% 6.6% 14.8%

9.9% 11.3%

30

15.4%

14.7%

9.1% 2010

20

2008

2009

YTD 2011*

2004

2005

2006

2007

2008

2009

2010

YTD 2011*

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

Monthly M&A Insider

10

A mergermArket m&A report on

nortH AmerICA
EnErgy, MInIng & UtIlItIEs tAkE top DEAls In AprIl
NORTH AMERICA

In nortH AmerICA, tHe energy, mInIng & UtIlItIes seCtor mAde Up foUr of tHe top 10 deAls AnnoUnCed by vAlUe for tHe montH of AprIl. notAble trAnsACtIons In tHe spACe InClUded A Complex tAngle of HostIle megA-deAls InvolvIng mInmetAls resoUrCes (mmr), eqUInox mInerAls, lUndIn mInIng And bArrICk gold.
In early April, mmr made an unsolicited Us$6.4bn bid for Canada-based equinox minerals. Industry bankers initially speculated that a higher offer price would be necessary to successfully reach a deal (mmr had offered CAd7.00 per share). mmr was looking to acquire equinox on the condition that it drop its offer to acquire mining rival lundin mining. the deal eventually lapsed after barrick gold submitted a bid to acquire equnox for CAd8.15 per share. following barricks bid, mmr has reportedly not ruled out a revised bid for equinox, and equinox has called off its bid to acquire lundin after signing a definitive agreement to be acquired by barrick. the transactions underscore continued interest by the Chinese in Canadas natural resources and defensive consolidation among domestic rivals. In total, the energy, mining & Utilities sector has announced 133 deals valued at Us$110.6bn in the year-to-date, representing 29% of aggregate deal value in north America. the largest deal in the space was announced in late April when Constellation energy signed a definitive agreement to be acquired by exelon Corporation through a merger share swap with an implied equity value of Us$7.7bn.

north America sees steady rise in Buyouts


over the past three years, private equity buyouts in north American have seen a steady increase in deal value. the first month into q2 2011 had an average deal value size of Us$213m; the largest average deal value since q3 2007. the steady increase in deal size signals a gradual return to confidence among private equity firms; however, north America buyouts remain distant from the historic high set prior to the financial crisis - q2 2007 had an aggregate value of Us$203bn, while q1 2011 had Us$27.5bn. the largest buyout in 2011 remains blackstones Us$9.4bn stock purchase agreement to acquire the Us operations of Australia-based Centro properties group, announced in march. the transaction is in line with Centros strategy to cut out Us$8bn in debt, and is expected to close in the middle of 2011.

tMt leads Deal Count


the tmt sector leads deal count with 217 deals valued at Us$77.9bn, representing 18.3% of total deal count for ytd 2011. Consolidation among semiconductor companies has heated up this year as corporates seek to capitalize on a fragmented market. In the beginning of April, texas Instruments made Us$6.5bn bid to acquire national semiconductor. the deal is not expected to draw much regulatory scrutiny since both companies do not draw significant revenues from analog chips. Industry analysts suspect other semiconductor equipment makers outside of the analog space could be attractive targets in the wake of the sectors m&A momentum. following the tmt sector deal count, north America has seen a balance spread of deals across Industrials & Chemicals (16.6%), business services (13.2%), pharma, medical & biotech (12.1%), energy, mining & Utilities (11.2%) and financial services (10.4%).

Monthly M&A Insider

11

top deAls & expeCted deAls


top 10 north AMErICAn AnnoUnCED DEAls of thE Month (Apr-11)
NORTH AMERICA
Announced Bidder company target company target dominated sector seller company Exit multiples (x) revenue EBItDA p/E Bid premia 1-day before Deal value (Us$m)

28-Apr-11 25-Apr-11 *03-Apr-11 04-Apr-11 20-Apr-11 13-Apr-11 29-Apr-11 27-Apr-11 11-Apr-11 05-Apr-11

exelon Corporation barrick gold Corporation minmetals resources limited texas Instruments Incorporated Aes Corporation silgan Holdings enterprise products partners Centurylink American medical systems Holdings diamond foods

Constellation energy group equinox minerals (98.00% stake) equinox minerals limited

energy, mining & Utilities energy, mining & Utilities energy, mining & Utilities

0.7 8.0 6.8 4.4 2.5 1.6 2.9 2.9 4.7 procter & gamble Company 1.8

15.5 13.2 15.0 7.2 9.5 12.1 13.2 15.2 10.7

23.1 19.6 28.7 12.0 22.0 28.3

12.5% 8.7% 22.6% 75.7% 8.7% 17.0% 7.6% 11.0%

10,410 7,384 6,410 6,304 4,658 3,940 3,287 2,706 2,537 2,518

national semiconductor tmt Corporation dpl graham packaging Company duncan energy partners savvis endo pharmaceuticals Holdings procter & gamble Company (pringles snack business) energy, mining & Utilities Industrials & Chemcials transportation tmt pharma, medical & biotech Consumer

26.8 -

34.3% -

*Indicates lapsed deal based on announced deals, including lapsed and withdrawn bids based on dominant geography of target company being north America (Us + Canada) data correct as of 13-may-11

source: mergermarket

Monthly M&A Insider

12

top deAls & expeCted deAls

pIpElInE of north AMErICAn ExpECtED DEAls


NORTH AMERICA
situation target company sector potential bidder company financial advisor to bidder (B); target (t); seller (s) seller company Market cap/ est. value (Us$m) Comments

expected deal

ralcorp Holdings

Consumer

ConAgra foods

(b) Centerview partners; (t) Credit suisse

4,937

on 04-may ralCorp Holdings received a proposal from ConAgra foods to acquire the company at Us$86 per share in cash. In addition to paying the consideration of approximately Us$4.9bn, the bidder has also offered to assume ralCorp's debt of Us$2.5bn. the proposed acquisition is intended to expand ConAgra foods' presence in the packaged food segment of the comsumer market. ralCorp has rejected the proposal and adopted a shareholderrights plan to prevent a potential takeover. nonetheless, ConAgra may still go hostile or raise its bid to acquire ralcorp. bJ's Wholesale Club has hired morgan stanley in order to explore strategic alternatives, such as the potential sale of the company. so far, leonard green & partners is the only party that has consistently shown interest in bJ's Wholesale Club in the past. At the end of 2010, it was reported that leonard green may launch a hostile takeover offer by mid-January 2011, but as of 13-may the offer has not been launched yet. since 2010 both Hertz global Holdings and Avis budget group have been interested in acquiring dollar thrifty Automotive. Initially, in April 2010, Hertz signed a definitive agreement with dollar thrifty to acquire the latter at an offer price of Us$41 per share. dollar thrifty shareholders voted that offer down. After that, Avis budget has been in negotiations with ftC to obtain an antitrust approval and merge with dollar thrifty. As of 13-may, no decision has been reached regarding that potential transaction. In the meantime, on 09-may, Hertz proposed to acquire dollar thrifty at Us$72 per target's share, including Us$57.6 in cash and 0.8546 shares of Hertz. no definitive agreement between the two companies has been signed yet. on 19-Apr, blackboard announced that it retained barclays Capital as its financial advisor in response to 'unsolicited' and 'non-binding proposals' to acquire the company. Currently, blackboards advisors are exploring whether to run an auction process or if the company has received enough feedback to determine how to move forward with the current buyer interest. the company currently trades at 13x 2011 ebItdA and 10x 2012s, according to projections from a 28-Apr stifel nicolaus report. ebItdA is forecast to jump from Us$120m in 2011 to Us$156m next year. 99 Cents only stores has received an acquisition proposal from the schiffer/gold family and leonard green & partners. the consideration in the proposal is Us$19.09 per share in cash. the offer was received on 11-mar. outside analysts have concluded, however, that 99 Cent only stores could receive a higher offer.

expected deal

bJ's Wholesale Club

Consumer

leonard green & partners

(t) morgan stanley

2,620

expected deal

dollar thrifty Automotive group

business services

Hertz global Holdings

(t) goldman sachs, Jpmorgan

2,372

expected deal

blackboard

energy

(t) barclays Capital the mcgrawHill Companies; pearson; oracle Corporation

1,543

expected deal

99 Cents only stores

Consumer

leonard green & partners and schiffer/gold family

1,370

expected deals based on confirmed announcements by companies involved

Monthly M&A Insider

13

trend grApHs
north AMErICAn M&A qUArtErly trEnD
NORTH AMERICA
Value (US$bn) Value (US$bn)

north AMErICAn M&A qUArtErly prIvAtE EqUIty trEnD


1,600 250 350

600

1,400 500 1,200 200

300

400 1,000

Value (US$bn)

250 150

Number of deals

Number of deals

200

300

800

600 200 400 100 200

100

150

100 50 50

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

north AMErICAn M&A AnnUAl trEnD

north AMErICAn M&A AnnUAl prIvAtE EqUIty trEnD


6,000 500 450 5,000 400 1,000 1,200

1,600

1,400

1,200

Number of deals

Number of deals

4,000 1,000

Value (US$bn)

350 300 250 200 150 100 50

800

800

3,000

600

600 2,000 400 1,000 200

400

200

0 2004 2005 Y2006 2007 2008 2009 2010 YTD 2011*

0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

Monthly M&A Insider

14

trend grApHs

north AMErICAn M&A sECtor BrEAkDown ytD 2011


NORTH AMERICA

vAlUe

volUme
1.1% 0.8% 0.5% 18.3%
TMT Industrials & Chemicals Business Services Pharma, Medical & Biotech

0.8% 1.2% 0.3% 0.4% 2.2% 6.7% 8.9%

0.3% 20.7%
TMT Industrials & Chemicals Business Services Pharma, Medical & Biotech Energy, Mining & Utilities Financial Services

1.8% 2.4% 2.9% 8.8%

10.4% 16.6%

Energy, Mining & Utilities Financial Services Consumer Construction

15.9%

Consumer Construction

29.4% 5.5% 7.7%

Leisure Transportation Real Estate Defense Agriculture

11.2%

Leisure Transportation

13.2% 12.1%

Real Estate Defense Agriculture

north AMErICAn M&A DEAl sIzE BrEAkDown

vAlUe
100 90 80 70

volUme
0.4% 100 1.2% 4.5%
50.2%

0.7% 0.9% 1.3% 4.5% 1.0% 1.5% 1.1% 1.8% 0.9% 3.7% 5.4% 6.3% 4.1%

0.7% 1.0% 3.5%

0.6% 1.1% 5.6% 6.3% 1.3% 1.8%

32.9% 46.6% 43.1% 51.6% 49.3% 58.9%

32.3%

95 4.9% 90

3.8% 5.2%

Percentage

60 50 40 30 20 10 0

18.2% 18.8% 15.0% 18.0% 9.1% 7.0% 16.6% 12.6% 2005 6.4% 9.7% 2006 6.6% 9.7% 2007 7.2% 12.2% 2008

18.1%

Percentage

4.9% 5.3% 5.3% 5.2%

15.8% 23.2%

13.8% 13.3% 27.4%

18.1%

85 89.1% 88.5% 86.8% 80 85.5% 90.6% 91.0% 87.5% 85.4%

17.3%

21.9%

17.5% 13.2% 5.4% 9.2% 2009 12.5% 2010 18.2% 9.7% 5.7% 7.8% YTD 2011*

2004

75 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

Monthly M&A Insider

15

A mergermArket m&A report on

ASIA-pAcIfIc
ASIAn m&A VoLUme In AprIL 2011 contInUed A month-oVer-month SLIde WIth 161 deALS comIng to mArket, WhIch repreSented A 28% decLIne from mArch. deSpIte there BeIng feWer deALS AnnoUnced, the AggregAte VALUe of m&A trAnSActIonS neArLY mAtched thAt of mArch At US$32.6Bn, meAnIng there WAS A SUBStAntIAL IncreASe In AVerAge deAL SIze. thoUgh VoLUmeS hAVe contInUed to SUffer, perhApS dUe to A LApSe In VIgor from JApAneSe compAnIeS recoVerIng from the mArch eArthqUAkeS, It SeemS AcqUISItIVe compAnIeS eLSeWhere Are fIndIng SIgnIfIcAnt VALUe In ASIAn opportUnItIeS And Are tAkIng Up the m&A SLAck.
further highlighting April deal sizes, compared to the same period a year earlier (which saw 200 deals with an aggregate value of US$16.3bn), m&A value almost doubled, despite the fact that deal volumes were 20% off the mark. While acquisitive companies were, perhaps, more vigilant in selecting deals, it appears that those garnering interest deserved significant capital. Leading the way were a number of domestic deals in greater china, which took the top four spots for a total value of almost US$10bn. Looking at the months largest deals, the Industrials sector and financial Services sector took the top spots by a sizeable margin of 31% and 21% of total value, respectively, with tmt fading slightly after last months US$5bn Vodafone deal, which placed it in marchs limelight. As for volumes, Industrials took the top spot with 19.3% of the total; this was followed by consumer and tmt at 18.6% and 13.7%, respectively. clearly, Asias importance in the manufacturing space keeps bidders focussed while a growing consumer class has spurred interest in other sectors.

ASIA-PAcIfIc

The Asian consumer driving M&A


though tmt faded from last month, it remains a particularly prominent sector in Asia as Aprils year-over-year trend shows perfectly. Values of tmt sector deals were up over 325% from a year earlier with 22 transactions taking place in both periods. As Asias emerging markets continue to develop, populations here are plugging into the technological era via cellular phones and the internet, giving increasing prominence to m&A in this sector. Looking forward, it seems that the consumer sector will continue apace, possibly led by acquisitive Japanese firms such as familymart who is planning to conduct m&A in order to escape a declining and greying domestic population and secure market share abroad. By 2020, the company is expecting to have more than 70% of total stores located overseas. At the same time, companies from elsewhere will continue to access the high growth consumer markets in china, India and South east Asia. In this regard, Wal-mart has recently announced plans to buy a minority stake in chinese e-commerce company, Yihaodian, which launched in July 2008 and has achieved a significant position in online grocery sales, as well as consumer electronics and apparel. Yihaodian has 2,000 employees and an existing logistics network based in Shanghai, Beijing, and guangzhou, serving a growing customer base with next-day delivery of essential daily items at competitive prices - a huge growth market in china.

Domestic consolidations in Greater China and Japan


the top deal in the market involved listed china-based, SAIc motor company, acquiring auto components, auto services and new energy auto businesses from its parent company, state-owned SAIc group, for US$4.4bn in a deal that continued the restructuring of the SAIc groups assets. SAIc motor now holds more than 90% of the companys assets, which is in line with regulatory wishes for greater transparency. moving down the list, April saw nine deals in the US$1-2bn range, five of them involving companies in mainland china or its cross-strait counterpart. In a nonchina deal, Japan saw the consolidation of two financial Services companies. the deal in question saw mizuho buy the remaining 42% it did not own of mizuho Securities for US$1.4bn in a continuation of mizuho financial groups march plan to streamline its products through a four-way merger.

Monthly M&A Insider

16

ASIA-pAcIfIc

E-commerce on the rise in Asia


ASIA-PAcIfIc
In the e-commerce space, growth of internet companies should continue to be a substantial driver of tmt m&A in Asia going forward. At a time when valuations for social networking and e-commerce companies are soaring, renren, the facebook of china, just debuted on the nYSe, and others are likely to follow. though it may be a sellers market, the sector could see continued consolidation as larger firms snap up their smaller counterparts with promise in emerging markets. for example, chicago-based groupon has continued its recent buying spree in Asia. After acquisitions last year in India, South korea, Singapore, taiwan and hong kong, groupon has most recently acquired disdus.com, an Indonesian merchant discount website. the company, newly named groupon Indonesia, was purchased for an undisclosed value, and mergermarket intelligence indicates that groupon is also eyeing up targets in Australia and thailand in the near future.

Monthly M&A Insider

17

top deALS
Top 10 AsIA-pACIfIC AnnounCED DEAls of ThE MonTh (Apr-11)
ASIA-PAcIfIc
Announced Bidder company Target company Target dominant sector seller company Exit multiples (x) revenue EBITDA p/E Bid premia 1-day before Deal value (us$m)

20-Apr-11

ku6 media co

hangzhou Soushi networking co

tmt

Shanghai Shanda networking co; Lianghai Yang; Bin Wu; changzhuang Yang; zhongxue huang; Yong chen; andkun zhang (six private investors) Shanghai Automotive Industry corporation (group) 0.3 n/a n/a 7.5 n/a n/a 65.1 10.0

12,543

06-Apr-11

SAIc motor corporation

Industrials & SAIc group (independent auto chemicals components assets); SAIc group (auto service and trading business); and SAIc group (new energy auto business) Laiwu Steel co Bank of Beijing co (14.83% stake) polaris Securities co Australia pacific Lng pty (15.00% stake) mizuho Securities (42.12% stake) hite Brewery co Samsung (hard disk drive hdd business) mizuho trust & Banking co (25.51% stake) Industrials & chemicals financial Services financial Services

4,367

13-Apr-11 09-Apr-11 09-Apr-11 21-Apr-11 28-Apr-11 08-Apr-11 19-Apr-11 28-Apr-11

Jinan Iron and Steel company chinese consortium led by huatai motor Yuanta financial holdings co china petroleum & chemical corporation mizuho financial group Jinro co Seagate technology mizuho financial group

15.2% -13.8% 11.3% -

1,939 1,805 1,692 1,500 1,485 1,453 1,375 1,276

energy, mining origin energy and & Utilities conocophillips financial Services consumer tmt financial Services Samsung electronics co n/a n/a 22.6 n/a 1.6 n/a 7.4 (loss) 16.2

-5.8% -0.6% 0.1%

Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Asia-pacific data correct as of 12-may-11

Source: mergermarket

Monthly M&A Insider

18

trend grAphS
AsIA-pACIfIC M&A quArTErly TrEnD
ASIA-PAcIfIc
Value (US$bn) Value (US$bn)

AsIA-pACIfIC M&A quArTErly prIvATE EquITy TrEnD


900 800 700 20 25 100 90 80

160

140

120

Number of deals

Number of deals

600 100 500 80 400 60 300 40 200 100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

Value (US$bn)

70 15 60 50 10 40 30 5 20 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11* 0

20

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

AsIA-pACIfIC M&A AnnuAl TrEnD

AsIA pACIfIC M&A AnnuAl prIvATE EquITy TrEnD


3,000 70 350

500 450 400 350 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

2,500

60

300

2,000

Value (US$bn)

50

250

Number of deals

Number of deals

40

200

1,500

30

150

1,000 20 500 100

10

50

0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

Monthly M&A Insider

19

trend grAphS

AsIA-pACIfIC M&A GEoGrAphIC BrEAKDoWn yTD 2011


ASIA-PAcIfIc

VALUe
9.4% 5.1% 10.9%

VoLUme
2.0% 9.7% 6.8%

Australia China Hong Kong

14.8%

Australia China Hong Kong

8.5%

India Indonesia

4.2% 2.5% 26.8% 16.3%

India Indonesia Japan Malaysia Singapore South Korea Taiwan

3.7% 1.5%

28.9%

Japan Malaysia Singapore

11.4%

South Korea Taiwan

1.0%

3.7% 15.6%

Other

2.3%

10.4%

4.2%

Other

AsIA-pACIfIC M&A sECTor BrEAKDoWn yTD 2011

VALUe
2.6% 2.9% 6.1% 2.0% 2.9% 23.1%
Industrials & Chemicals Telecommunications Consumer Business Services Energy, Mining & Utilities

VoLUme
0.6% 3.7% 3.9% 3.9% 6.5% 20.7% 2.5% 2.0%
Industrials & Chemicals Telecommunications Consumer Business Services Energy, Mining & Utilities

17.0%

Financial Services Pharma, Medical & Biotech

7.9%

Financial Services

15.6%

Pharma, Medical & Biotech Leisure

19.5%

Leisure Construction Transportation

9.9% 13.0%

Construction Transportation

13.7%

3.9%

5.6%

Real Estate Agriculture

10.4%

Real Estate Agriculture

Monthly M&A Insider

20

trend grAphS

AsIA-pACIfIC M&A DEAl sIzE BrEAKDoWn


ASIA-PAcIfIc

VALUe
100 90 25.6% 80 70 18.9% 21.4% 16.7% 5.1% 21.5% 18.2% 15.7% 29.7% 18.4% 16.5% 15.3% 28.1% 29.3% 14.4% 30 20 26.7% 10 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011* 20.7% 20.9% 24.3% 20.4% 21.7% 20.0% 20.3% 9.6% 11.1% 28.3% 30.7% 22.6% 38.2% 30.7% 27.7% 28.1% 20.0% 13.7% 10.5%

VoLUme
0.1% 100 1.2% 3.9% 95 4.9% 0.3% 1.0% 5.0% 0.3% 1.1% 4.9% 0.3% 0.9% 5.1% 0.4% 0.9% 4.5% 0.4% 0.9% 5.5% 0.3% 1.6% 0.3% 0.8%

4.8%

6.8%

Percentage

Percentage

4.6% 90

4.8%

5.4%

5.7%

5.2%

5.1% 6.1%

60 50 40

85 12.5% 11.1% 90.0% 10.4% 12.6% 80 89.1% 88.9%

12.0%

88.4%

88.5%

88.0%

88.2%

86.1%

75 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

<US$250m or undisclosed value US$251m-US$500m US$501m-US$2,000m US$2,001m-US$5,000m >US$5,001m

Monthly M&A Insider

21

A mergermArket m&A report on

eUrope

LArgEst EuroPEAn Buyout so FAr thIs yEAr Is ItALIAn: on 9-mAy, BC pArtnerS hAS ACqUIred ItAly-BASed grUppo CoIn In the lArgeSt eUropeAn BUyoUt oF the yeAr So FAr, vAlUIng the ItAlIAn FAShIon retAIler At ApproxImAtely 1.4Bn. It IS AlSo the lArgeSt prIvAte eqUIty deAl In ItAly SInCe the ACqUISItIon oF enel rete gAS By AxA prIvAte eqUIty And F2I In 2009, And one oF the BIggeSt retAIl deAlS In eUrope SInCe the FInAnCIAl CrISIS.
the British private equity firm acquired a 69.3% share of gruppo Coin from French competitor pAI partners, together with a 9.4% stake from the management team and other minority investors, and will launch a mandatory offer of 6.50 per gruppo Coin share to acquire the remaining outstanding shares listed on Borsa Italia. pAI partners, which held its stake in gruppo Coin for 74 months, will receive approximately 644.8m for its stake, and will make a return of approximatly 1.3x its 490m investment in 2005. the transaction underlines moves by private equity firms to step up activity following the long deal and fundraising drought during the financial crisis. But the protracted sales process shows that private equities are often still struggling to agree on price. pAI partners, which started the auction process last September, entered into exclusive negociations with BC partners in January, but reopened the bidding auction four weeks later after the two sides failed to agree on a deal value. Consumers in Italy spend an average of almost 1bn a year on clothes. BC partners said the deal in europes largest clothing market was aimed at expanding the group domestically and globally, and will fit into the consolidation play in europes fragmented apparel market. Consumer retail is the hottest niche for private equity firms in europe so far this year, where buyout firms spent already spent 4bn, mainly in the apparel sector with the acquisition of companies such as Camaieu and olly gan in France, All Saints and phase eight in the Uk, or Shoeby-Shop in the netherlands. International and Charterhouse in the final stages of the auction process. the two partners had entered into exclusive talks with BpCe to buy Foncia, after offering over 1bn to the financial group for its real estate subsidiary. Foncia has a network of about 600 branches run by 7,000 employees in France, Switzerland, germany and Belgium. It offers a complete range of services for the residential real estate market: lease management, joint property management, sales advice, financing research, insurance and technical diagnoses. In 2010, the company had earnings before interest tax depreciation and amortisation of 83m on revenue of 580m. the residential property management services market in France is estimated to be worth 8bn and has grown at an overall rate of 3.5% a year over the last 10 years. eurazeo and Bridgepoint expect to capitalise on the fragmented nature of the sector, which is mostly composed of small independent players, making further acquisitions and boosting the scope of its services. Foncias enterprise value has been estimated up to 1.02bn. eurazeo and Bridgepoint would invest about 480m in equity capital. BpCe would re-invest 200m in the business, under conditions that protect eurazeo and Bridgepoints returns. the balance of the acquisition would be financed by a debt of 395m. the company will also have access to 90m in available financing to assist with its development. the price is significantly higher than what was expected by real estate industrials (between 500m-600m) such as Citya, Altara or promogim, who where keeping an eye on Foncia. But in any case, BpCe, which bought Foncia in 2007 for 1.43bn, will not recover its original bet and could, in order not to lose face, keep a minority share of 15% or 20% in Foncia. Banking groups such as Crdit Agricole and Crdit Immobilier de France, which had, in the late 2000s, acquired branch networks or property managers, have never been able to develop these companies. Will private equities succeed? Urbania was taken over by Investors in private equity last September, but it is still early to draw up a balance sheet.

europe

BPCE gets rid of Foncia:


A year after selling Socit marseillaise de Crdit du nord Credit for 872m, BpCe, the French financial group created through the merger of Banque populaire and Caisse depargne, is on the verge of realising its second large disposal. BpCe has finally chosen private equity firms Bridgepoint and eurazeo, partners in this operation, for the disposal of its real estate subsidiary Foncia. the buyout duo fended off competition from rival private equity firms Advent

Monthly M&A Insider

22

top deAlS & expeCted deAlS


toP 10 EuroPEAn AnnounCEd dEALs oF thE Month (APr-11)
europe
Announced Bidder company target company target dominated sector seller company Exit multiples (x) revenue EBItdA P/E Bid premia 1-day before deal value (m)

27-Apr-11 03-Apr-11 04-Apr-11 26-Apr-11 14-Apr-11

Johnson & Johnson vivendi Solvay groupe lactalis prologis

Synthes SFr (44.00% stake) rhodia parmalat (71.03% stake) prologis european properties (62.00% stake) edF energies nouvelles (50.00% stake) dekaBank deutsche girozentrale (50.00% stake) SBS Belgium; and SBS Broadcasting

pharma, medical & Biotech telecommunications Industrials & Chemicals Consumer real estate vodafone group

5.7 1.4 0.9 1.0

13.3

23.9

8.5%

14,331 7,750

5.2 11.2

12.3 16.3 57.6

50.0% 12.6% 7.5%

4,533 3,210 2,280

08-Apr-11 07-Apr-11

electricite de France deutscher Sparkassen und giroverband Sanoma oyj; Corelio; talpa media group; and messrs Wouter vandenhaute & erik Watte rhone Capital Suleiman kerimov (private investor)

energy, mining & Utilities Financial Services glB & co. ohg

4.2

17.0

29.2

9.2%

1,515 1,300

20-Apr-11

media

proSiebenSat.1 media

3.0

10.7

1,225

17-Apr-11 25-Apr-11

evonik Industries (Carbon Black Business) oJSC polyus gold (10.00% stake)

Industrials & Chemicals energy, mining & Utilities

evonik Industries dmitri rybolovlev (private investor)

0.8 6.8 16.8 33.7

900 824
Source: mergermarket

Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being europe data correct as of 12-may-11

Monthly M&A Insider

23

top deAlS & expeCted deAlS

PIPELInE oF EuroPEAn ExPECtEd dEALs


situation target company sector Potential bidder company Financial adviser to bidder (B); target (t); seller (s) seller company Market cap/est. value (m) Comments

europe

rumoured deal

nycomed holding

pharma, medical & Biotech

takeda pharmaceutical Co

9,853

A spokesperson from takeda pharmaceutical, a listed Japanese pharmaceutical company, declined to comment on media reports speculating that it was in advanced stages to acquire Swiss nycomed. verizon could be looking to buy Francebased technology partner, technicolor, said an industry source with knowledge of the company, who reported hearing the rumor from more than one person inside verizon. k+S, a listed german chemicals company, has declined to comment on source claims that the sale of compost group Compo is on the verge of collapse. A k+S spokesperson declined to give details of the process beyond saying that, as revealed at the company Annual general meeting on 11-may, second-round bids are expected this month.
Source: mergermarket

rumoured deal

technicolor

media

verizon Communications

612

expected deal

Compo

Industrials & triton partners; Chemicals Israel Chemicals

goldman Sachs (S)

400 k+S Aktiengesellschaft

note: expected deals based on confirmed announcements by companies involved

Monthly M&A Insider

24

trend grAphS
EuroPEAn M&A quArtErLy trEnd
europe
Value (bn) Value (bn)

EuroPEAn M&A quArtErLy PrIvAtE EquIty trEnd


2,000 1,800 100 90 80 450 400 350

500

400

1,600

Number of deals

Number of deals

1,400 300 1,200 1,000 200 800 600 100 400 200 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11* 0

70

Value (bn)

300 250

60 50 200 40 30 20 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11* 150 100 50 0

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

EuroPEAn M&A AnnuAL trEnd


1,200 7,000

EuroPEAn M&A AnnuAL PrIvAtE EquIty trEnd


300 1,600

1,000

6,000

1,400 250 1,200

5,000 800 4,000 600 3,000 400 2,000 200

Number of deals

Number of deals

Value (bn)

200 1,000

150

800

600 100 400 50 200

1,000

0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

Monthly M&A Insider

25

trend grAphS

EuroPEAn M&A gEogrAPhIC BrEAkdown ytd 2011


europe

vAlUe
4.9% 28.5%

volUme
7.9%

3.3% 6.2% 3.6% 6.7%

CEE Iberia UK Nordic Germany France Benelux

14.8%

5.2% 4.5%

CEE Iberia

9.0%

UK Nordic Germany France

13.1%

20.7%

Benelux Italy Others

8.5% 27.4% 11.0%

Italy Others

11.7% 13.1%

EuroPEAn M&A sECtor BrEAkdown ytd 2011

vAlUe

volUme
1.7% 1.4% 0.7% 0.3% 20.7%
Industrials & Chemicals Business Services Consumer

14.3%

17.9%

3.8%
Industrials & Chemicals Business Services

4.1% 4.8% 5.5%

5.7% 1.9% 1.9% 3.6% 0.8% 1.3% 2.7% 6.6%

Consumer Technology Financial Services Energy, Mining & Utilities Pharma, Medical & Biotech Construction Media

Technology Financial Services

5.9% 16.1% 5.9%

Energy, Mining & Utilities Pharma, Medical & Biotech Construction Media

8.7%

27.1%

7.3%

Transportation Leisure Real Estate Telecommunications

8.6% 11.0% 9.3%

Transportation Leisure Real Estate Telecommunications Defence Agriculture

Monthly M&A Insider

26

trend grAphS

EuroPEAn M&A dEAL sIzE BrEAkdown


europe

vAlUe
100 90 80 70 14.3% 15.1% 17.7% 26.0% 26.7% 39.2% 40.3% 23.6% 23.4%

volUme
0.2% 100 0.6% 0.5% 0.7% 0.5% 0.9% 0.4% 0.9% 0.4% 0.6% 2.7% 3.8% 4.0% 2.2% 3.2% 94 3.5% 3.9% 3.5% 3.9% 24.9% 9.0% 92 94.9% 9.2% 8.1% 13.4% 88 92.4% 90 93.1% 91.6% 91.4% 90.8% 93.0% 92.1% 0.2% 0.6% 2.1% 3.3% 3.4% 3.3% 3.5% 0.2% 0.7% 0.4%

1.2%

33.0%

35.1%

98

Percentage

20.3% 16.4% 14.5% 23.7% 23.2% 22.4% 19.9%

60 50 40 30 20 10 0 2004 21.2% 10.9%

30.2%

Percentage

20.4%

96

2.8% 2.8%

27.6% 23.9% 29.9%

10.1%

8.4% 15.7%

8.3% 13.7%

8.8%

17.9%

16.6%

20.3%

16.9%

2005

2006

2007

2008

2009

2010

YTD 2011*

2004

2005

2006

2007

2008

2009

2010

YTD 2011*

<250m or undisclosed value 251m-500m 501m-2,000m 2,001m-5,000m >5,001m

<250m or undisclosed value 251m-500m 501m-2,000m 2,001m-5,000m >5,001m

Monthly M&A Insider

27

A mergermArket m&A report on

tHe mIDDLe eASt & AFrICA


MEA M&A ActIvIty stAlls for thE thIrd consEcutIvE Month sIncE JAnuAry
Middle east & africa

tHe meA regIon HAS Seen ItS m&A ACtIVIty In AprIL StALL, BotH In termS oF VALUe AnD VoLUme, For tHe tHIrD ConSeCUtIVe montH reLAtIVe to JAnUAry AnD FeBrUAry AFter SeeIng 18 DeALS WortH A totAL oF US$3.29Bn. tHIS repreSenteD A 73% DeCreASe In VALUe AnD A 22% DeCreASe In VoLUme CompAreD to JAnUAry 2011. HoWeVer, ACtIVIty In AprIL WAS SLIgHtLy ImproVeD CompAreD to mArCH By VALUe (22 DeALS WortH US$2.41Bn).

this is a clear sign that the political unrest in the middle east is continuing to have a strong negative impact on investor confidence, which has already led to a number of deals being cancelled. For example, etisalat, a UAe telecommunications company, decided to abandon its plan to acquire a 46% stake in kuwait rival Zain for US$12bn. the deal, which would have ranked among the middle easts largest deals in recent years, was cancelled because of disagreements among Zain shareholders and regional political uncertainties. the activity seen was driven by a series of deals predominantly based in Africa. more specifically, the top deal of the month in the meA region involved Vale, the listed Brazil-based metals and mining company acquiring metorex Limited, the listed South Africa-based multi-commodity mining company, for US$1.1bn. metorex has operations and new projects in the Democratic republic of Congo and Zambia and mainly produces Copper and Cobalt; for Q1, the strongly performing company saw its Copper and Cobalt production increase by 8% to 13,344 tons and 10% to 1,041 tons respectively, while its ruashi copper and cobalt production increased by 20% and 10% respectively. the most active sectors this month were the energy, mining & Utilities and the Financial Services sectors, both accounting for 80.8% and 12.1% of total value activity respectively. everincreasing high commodity prices are leading to aggressive consolidation in the energy, mining & Utilities sector as companies, such as metorex, are posting higher earnings from direct commodity production and distribution and become increasingly attractive. Just like m&A, mining activity in 2010 reached new highs as demand for commodities rebounded following the financial crisis. this trend only seems to be intensifying as, when looking at the first four months of 2011, the energy, mining & Utilities sector alone represented 32% of total value activity for the period.

this trend is likely to continue as analysts are forecasting that commodity prices, a main driver for m&A activity in the region, will remain strong for at least the next few years. In the short-term, this is because of the weakening of the US$ and is leading to an increase in the demand for commodities which are used as a hedge against inflation. In the longer-term, according to the US investment management firm gmo, it is because the fast paced growth of the global population and the slower growth in resources-extracting-efficiency are both placing a severe pressure on the price of all commodities.

Expected M&A activity and Broad European interest in renewable energy across MEA
Several expected deals in the coming months involve the same sector that has dominated both Q1 and April 2011 deal value activity: energy, mining & Utilities. one potential takeover should see exxaro, the listed South African diversified miner, acquire coal assets that are being sold by BHp Billitons South African coal business. BHp Billitons metallurgical Coal unit reported an eBIt of US$1.453bn for the half-year ended 31-Dec-10. Furthermore, according to industry sources, ACWA power International and kepCo are interested in acquiring a 65% stake in enara energy Arabia from Jordan Dubai Capital for an estimated consideration of over US$320m. enara is the energy investment arm of JDC, of which private equity firm Dubai International Capital is the main shareholder.

Monthly M&A Insider

28

tHe mIDDLe eASt & AFrICA

Similarly, industry reports suggest that european companies are actively seeking to invest in the renewable energy sector and see meA as an attractive region in which to expand, since growth in their respective domestic markets remains uncertain and cuts in feed-in tariffs have been granted in several countries. For example, german companies SAg Solarstrom and Solar millennium are looking to expand their presence in meA via joint ventures or 100% acquisitions, according to their respective Ceos. Solar millennium is part of an industrial initiative to strengthen the DeSerteC Concept to further support its penetration in the region. the DeSerteC is based on the concept that sufficient clean power can be generated in the worlds deserts to supply mankind with enough electricity on a sustainable basis. these european companies could invest in potential regionalSmes, such as energytech International, a UAe-based supplier of new and renewable energy products. the company which is tapping into the renewable energy market by manufacturing solar efficient products is seeking an investor to expand the business and would sell a 50% stake, according to the companys sole owner mr Swaminathan. established only a year ago, energytech is already generating sales of around AeD500,000. Likewise, according to a government source, the egyptian ministry of electricity and energy also intends to launch two 250mW wind farms in the gulf of Suez and the tender is expected to be launched in may 2011. However while this seems like a positive outlook for the forthcoming meA m&A activity, if the current economic and geopolitical uncertainty in the region lingers, it is likely that overall activity will continue to stall in the coming months.

Middle east & africa

Monthly M&A Insider

29

top DeALS
top 10 MIddlE EAstErn & AfrIcAn AnnouncEd dEAls of thE Month (Apr-11)
Middle east & africa
Announced Bidder company target company target dominated sector seller company Exit multiples (x) revenue EBItdA p/E Bid premia 1-day before deal value (us$m)

08-Apr-11 15-Apr-11

Vale gold Fields

metorex tarkwa and Damang gold mines (18.90% stake) taung gold (86.97% stake) the mediterranean and gulf Insurance and reinsurance Co. (51.00% stake) rand Uranium (pty)

energy, mining & Utilities energy, mining & Utilities energy, mining & Utilities Financial Services IAmgoLD Corporation

2.7

3.5%

1,164 667

04-Apr-11 11-Apr-11

Wing Hing International (Holdings) Lutfi el-Zein group

electrum Strategic resources Saudi oger Limited na na 12.6 23.7%

580 400

28-Apr-11

gold one International

energy, mining & Utilities

pamodzi Cooke (proprietary); pamodzi Uranium (proprietary); and Armgold/ Harmony Joint Investment Company (proprietary) multi-links telecommunications Ltd Ho Hee Han (private investor); Stella Ang Hui ming (private investor); Fong kwan meng (private investor); and Lim Wong Heng (private investor) Acwa Holding 0.8

250

01-Apr-11

Visafone Communications

multi-Links telecommunications Limited (CDmA business) multiheight Scaffolding pte; multiheight International Co. (49.00% stake); and multiheight marine pte

tmt

52

14-Apr-11

nordic group

Construction

37

13-Apr-11 19-Apr-11

Drake & Scull International Frigoglass SAIC

International Center for Contracting Company Jebel Ali Container glass Factory Fze (80.00% stake) picScout

Construction Consumer

34 30

27-Apr-11

getty Images

Business Services

20
Source: mergermarket

Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target being middle east or Africa Data correct as of 13-may-11

Monthly M&A Insider

30

trenD grApHS
MIddlE EAstErn & AfrIcAn M&A quArtErly trEnd
120,000 140

MIddlE EAstErn & AfrIcAn M&A quArtErly prIvAtE EquIty trEnd


7,000 25

Value (US$m)

Value (US$bn)

100

300 250 200 150

Value (US$bn)

Middle east & africa

100,000

120

6,000 20 5,000 15

Number of deals

100 80,000 80 60,000 60 40,000 40 20,000

Number of deals

4,000

3,000

10

2,000 5

20

1,000

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11*

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

MIddlE EAstErn & AfrIcAn M&A AnnuAl trEnd

MIddlE EAstErn & AfrIcAn M&A AnnuAl prIvAtE EquIty trEnd

160

500 450

14

70

140

12 400

60

120

350

10

50

Number of deals

Number of deals

40

80

30

60

40 100 20

20

2 50 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011* 0 2004 2005 2006 2007 2008 2009 2010 YTD 2011*

10

Total value

Mid-market value

Total volume

Mid-market volume

Buyout value

Exit value

Buyout volume

Exit volume

Monthly M&A Insider

31

trenD grApHS

MIddlE EAstErn & AfrIcAn M&A GEoGrAphIc BrEAKdoWn ytd 2011


Middle east & africa

VALUe
0.1% 5.4% 0.1% 0.2% 0.2% 0.4% 4.6% 6.8% 5.1% 3.4% 0.1%
South Africa Israel

VoLUme
0.3% 0.2% 0.2% 6.0% 4.7% 2.5% 2.5% 0.6%
South Africa Israel United Arab Emirates Saudi Arabia Egypt

13.8%

37.4%

United Arab Emirates Saudi Arabia Egypt Morocco

20.4%

13.6%

Morocco Ghana Nigeria

0.6% 3.1%

Ghana Nigeria Iraq

10.5%

Qatar

9.3% 0.7% 0.5% 0.1% 0.5%

Iraq Qatar

22.1%

Kenya Tunisia Zimbabwe Kuwait Swaziland Mozambique

21.8%

Kenya Tunisia Zimbabwe Kuwait Swaziland Mozambique Jordan

MIddlE EAstErn & AfrIcAn M&A sEctor BrEAKdoWn ytd 2011

VALUe
0.8% 13.2% 25.2% 3.4% 0.8% 8.2% 0.5%
Industrials & Chemicals Pharma, Medical & Biotech Consumer Energy, Mining & Utilites Financial Services Business Services

VoLUme
2.4% 3.6% 4.8% 3.6% 1.2% 15.5%
Industrials & Chemicals Pharma, Medical & Biotech Consumer

10.7%

Energy, Mining & Utilites

13.1%

Financial Services Business Services TMT

8.4%

TMT Real Estate Construction

10.7% 11.9%

Real Estate Transportation Construction

7.5% 31.9%

Defence

10.7%

11.9%

Defence Agriculture

Monthly M&A Insider

32

trenD grApHS

MIddlE EAstErn & AfrIcAn M&A dEAl sIZE BrEAKdoWn


Middle east & africa

VALUe
100 90 80 52.7% 70 54.8% 67.2% 60 50 40 30 19.8% 20 10 0 2004 13.0% 2.0% 12.1% 10.3% 2005 1.3% 5.0% 5.1% 3.1% 2006 0.4% 12.5% 21.5% 11.3% 17.3% 13.3% 7.3% 2007 0.9% 14.0% 1.7% 11.9% 1.5% 19.1% 10.9% 9.3% 2010 6.8% 8.6% 5.6% 1.1% 0.9% YTD 2011* 10.3% 18.8% 14.5% 86.4%

VoLUme
100 90 80 53.1% 70 6.0% 3.4% 11.1% 10.7% 5.6% 8.6% 9.2% 6.2% 14.2% 7.2% 5.7% 15.4% 4.0% 5.7% 11.1% 3.4% 4.0% 13.1% 5.9% 4.6% 11.1% 14.8% 3.7% 8.6%

48.1%

Percentage

Percentage

68.4% 78.0%

60 50 40 30 20 10 0

35.0% 34.8% 34.0% 32.6%

36.9%

32.6%

33.7%

24.7%

44.4%

40.3%

36.4%

39.1%

42.3%

47.0%

44.8%

48.1%

2008

2009

2004

2005

2006

2007

2008

2009

2010

YTD 2011*

<US$14.9m or undisclosed value US$15m-US$100m US$101m-US$250m US$251m-US$500m >US$501m

<US$14.9m or undisclosed value US$15m-US$100m US$101m-US$250m US$251m-US$500m >US$501m

Monthly M&A Insider

33

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revolutionizing the due diligence process merrill DataSite is designed for rapid deployment and can be up and running within two hours of a clients need. our team can scan, upload and organize thousands of pages of content from any source in 24 hours or less. every aspect of the process, from document scanning to VDr hosting and project management is delivered by merrills multilingual team, available around the clock worldwide. With merrill DataSite, all documents are captured and indexed to an online database and because all rights are designated by the client, security and control are guaranteed. each users ability to view, print or access source documents is set up by the client administrator and can be changed at any time. merrill DataSite provides useful tools including full search, viewer audit capability, Q&A, bulk uploads and detailed user activity tracking that help clients maintain tighter control and have greater insight into reviewer behavior. Merrill datasite enhances transaction success merrill DataSite is the industrys acknowledged leader. more than 61,000 different private and public companies across the globe have leveraged merrill DataSite to increase the value of the following types of transactions: mergers, acquisitions and divestitures private placement transactions Leveraged buyout transactions Bankruptcy and reorganization transactions Financial restructuring transactions Initial public offerings and dual-track processes Asset purchases and liquidations post-merger integration

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ABoUt merrILL DAtASIte


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Monthly M&A Insider 35

ABoUt merrILL CorporAtIon

ExEcutIvE MAnAGEMEnt

Ed Bifulk president tel: +1 212 229 6563 paul hartzell Senior Vice president tel: +1 212 367 5950 ExEcutIvE sAlEs chris Beckmann regional Director, europe tel: +49 69 25617 110 Alex Gross regional Director, europe tel: +49 69 7593 7148 Michael hinchliffe regional Director, europe tel: +44 20 7422 6100 Alvaro ortega regional Director, europe tel: +44 20 7422 6100 Merlin J. piscitelli regional Director, europe tel: +44 20 7422 6100 Jrme pottier regional Director, France tel: +33 (0) 1 40 06 13 12 colin schopbach regional Director, europe tel: +44 20 7422 6100 Anna scott regional Director, europe tel: +44 20 7422 6100 hakema El-hadad regional Director, northern Africa tel: +33 (0) 1 40 06 13 10 shashank Jain representative, United Arab emirates tel: +52 55 9171 2237 vincent lork regional Director, South Asia tel: +65 6248 4602

Ari lee regional Director, Asia-pacific tel: +852 9855 3758 chris robilliard regional Director, Australia & new Zealand tel: +612 8667 3064 Manuel Bentosinos regional Director, mexico tel: +52 55 9171 2237 Ana paula Macd tvora de castro regional Director, South America tel: +55 11 9908 0858 Will Brown regional Director, Canada tel: +1 514 877 5177 hank Gregory SVp, Western Canada & US tel: + 604 603 4360 ryan MacMillan regional Director, Canada tel: +1 416 214 2448 Michael Kennedy regional Director, Boston tel: +1 207 829 4369 ross Whittaker regional Director, new england tel: +1 617 266 0189 forrest r. doane regional Director, new york tel: +1 917 934 7341 Adam Kuritzky regional Director, new york tel: +1 917 934 7340 shelle Martin regional Director, new york tel: +1 212 229 6613 John McElrone regional Director, new york tel: +1 212 229 6656 Matthew Mezzancello regional Director, new york tel: +1 917 934 7346

steve piccone Vice president, new york tel: +1 212 229 6883 William polese regional Director, new york tel: +1 212 229 6612 paul Kleinkauf regional Director, Southeast tel: +1 404 602 3251 Anthony crosby regional Director, Chicago tel: +1 312 674 6511 Mark plaehn regional Director, Chicago tel: +1 312 674 6527 Kelly Weisenfels regional Director, Chicago tel: +1 312 674 6508 scott haugen regional Director, minnesota tel: +1 651 632 4375 Brian Gilbreath regional Director, omaha tel: +1 404 934 8085 nicholas renter regional Director, Dallas tel: +1 214 754 2100 Mark tully regional Director, San Francisco tel: +1 415 357 1400 Andrew Buonincontro regional Director, palo Alto tel: +1 650 493 1400 Erik sandie regional Director, palo Alto tel: +1 650 493 1400 dan phelan regional Director, Los Angeles tel: +1 213 253 2139 Jay loyola regional Director, Irvine tel: +1 949 622 0663

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Monthly M&A Insider

36

The following notes pertain to data contained in this publication:


Deals are included where the deal value is greater than or equal to 5m. Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to 10m. Deals are included in the graphs and top Deals in each section based on the dominant geography and dominant sector of the target company. Data underlying the League tables are based on deals where the bidder, target or parent geography of either is that of the geography in focus. ytD 2011 refers to the period 1-Jan-11 to 30-Apr-11.

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