Trends in M&A - June 2010

Trends in M&A A GLOBAL FINANCE LIVE VIDEO WEBCAST

TOPICS 1) Opportunities and challenges in today’s M&A market 2) Best practices 3) Managing transaction costs

SPEAKERS • Chris Ruggeri, principal, Deloitte Financial Advisory Services • Allen Miller, head of Corporate Department, Chadbourne and Park • Daniel Barclay, head of Canadian M&A, BMO Capital Markets

Global M&A Activity Summary Deal Volume (US$Bn) Number of Deals Source: SDC 4

Global Cross Border M&A Activity % of Global M&A Activity Deal Volume (US$Bn) Source: TSX Review, SDC 5

Global M&A Transaction Size 100% 90% 21.2% 23.6% 26.8% 24.6% 24.8% 80% 70% 60% 35.7% 43.2% 37.6% 36.4% 38.8% 50% 40% 11.2% 10.1% 9.5% 30% 10.6% 11.6% 20% 19.4% 18.3% 19.3% 16.3% 16.6% 10% 7.5% 7.5% 10.2% 10.1% 9.4% 0% 2006 2007 2008 2009 2010 Less Than $100MM $100MM-$500MM $500MM-$1Bn $1Bn-$10Bn Over $10Bn Source: SDC 6

Top 50 Deals in 2009 by Industry Technology Mining 2% 3% Other Utilities 4% 4% Healthcare 21% Transportation 6% Food & Beverage 6% Financial Services Media & 20% Communications 9% Automotive 10% Energy 15% Total Top 50 Deals: $624Bn Source: Bloomberg 7

North American Offer Considerations Source: S&P 8

Cumulative Uninvested P/E Capital Capital (US$Bn) Sources: S&P 9

M&A in Today’s Market A recent Deloitte survey of over 160 corporate development executives showed that they see an effective M&A effort as: •A competitive differentiator •An accelerant of corporate growth and expansion •A way to evolve their skill sets, especially in the international arena

Where Are the Best Opportunities? 2010 GDP Growth Estimates Asia CIS Middle East Latin America US Euro Area 0 1 2 3 4 5 6 7 8 9 Source: Peterson Institute for International Economics (as of April 2010) 11

Best Practices Beyond execution – using new tools both before and after the deal: • Knowledge management • Playbooks • Training •Standardized analytics • Discounted cash flow– plus decision analysis, probabilistic modeling • Not just measuring value but gaining insight • More advanced technology • Process optimization • Strategic flexibility • Accountability for integration and deal success 12 Copyright © 2010 Deloitte Development LLC. All rights reserved.

Most Important Skills for Effective M&A Top 5 ranked, with 1 being most important Deal team experience and training 1 2 3 4 5 Ability to assess value and risk 1 2 3 4 5 Ability to effectively generate deal flow and targets 1 2 3 4 5 Coordinated and efficient process 1 2 3 4 5 Negotiation skills 1 2 3 4 5 Post-merger integration 1 2 3 4 5 Ability to identify synergies 1 2 3 4 5 Ability at courting targets 1 2 3 4 5 Ability to capture synergies 1 2 3 4 5 Speed in closing deals 1 2 3 4 5 0 20 40 60 80 100 120 140 13 Copyright © 2010 Deloitte Development LLC. All rights reserved.

Deal Process Best Practices • Use RFPs as education tool • Ask advisors to conduct background checks • Know and reconcile disclosure obligations in relevant jurisdictions • Review deal structure from multiple perspectives • Do not assume best case scenario 14

Managing Transaction Costs • Availability of in-house resources Cost • Deal complexity • Schedule • Risk management 15

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Trends in M&A - June 2010

by Global Finance Magazine on Jun 29, 2010

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Trends in M&A - June 2010 — Presentation Transcript