Mergers alliance newsletter 30 th sep 2011

Globalisation of activities and location of Mid-‐Market M&A production capacities in the emerging markets along with acquisition and development of new Snapshot... th cutting-‐edge technologies (for instance industrial biotechnology) will be in the focus of potential 30 September 2011 investors. In these segments there should be a flurry of deals and it is also likely the next mega-‐ deals will be observed in this space. Overall disclosed mid-‐market deal volume in the month of September stood at 1056 equating to Macro Snapshot: In an attempt to drive down US$46,733bn (average deal value US$44.26m). long term interest rates the US Federal Reserve The figures are down from September 2010 when US$400bn of long Treasuries, which will be paid there were 1228 deals equating to US$59,964bn for by selling short-‐dated bonds. The outcome will (average deal US$56.83m). be increased costs for short term borrowing. Perversely, this will likely have a detrimental effect The majority of deals took place in the financial on the profit margins of banks which will, in turn, services and consumer sectors. There was also notable activity from the real estate industry with Hong Kong Based Henderson Land Development Co We do not rule out another round of full-‐on QE in involved in 20 transactions and Blackstone Real the US while there have been murmurings of an Estate also participating heavily. additional round of monetary stimulus in the UK in Num ber of Transactions by Sector the form of its own QE2. This will have an adverse Energy 57 effect on the pu Materials 88 currencies. However, a lack of competition will Industrials 103 Consumer Discretionary 116 keep the dollar king for now, although expect gold Consumer Staples 29 to rally after its recent spiral. Elsewhere, EU senior Healthcare 47 Financials 312 officials are to discuss proposals for a fiscal union Information Technology 79 and apportioned responsibility in fiscal indiscipline. Telecommunication Services 3 Utilities 18 No Primary Industry Assigned 204 Valuation Summary Total Deal Value($mm): 46,733.91 Word from the ground Average Deal Value: 44.26 Our local experts give the latest M&A indicators from their respective regions Source: Capital IQ Sector Focus: Practically no large company in the Owen Hultman, General Manager, IBS chemical industry has missed the chance to use the Yamaichi Securities economic recovery for acquisitions. During the Outbound Japan M&A is accelerating as the global crisis the market players were more or less JPY reaches new highs against the USD and focused on their internal issues: cost cutting EUR, recently reaching JPY 102/EUR. programs, portfolio and capacity optimization, The Japanese automotive brake materials internal restructuring, repositioning etc. Mega M&A manufacturer, Nisshinbo announced the acquisition of deals did not take long to materialise. The takeover European brake manufacturer TMD for EUR 440m, placing of Cognis GmbH by BASF SE in June 2010 kicked off a Nisshinbo in the top position globally in this sector. The period of acquisitions in the European chemical president commented that the strong Yen makes the current industry. environment the best time for overseas M&A for Japanese companies. Since then a number of prominent deals have followed. In summary, the second half of 2010 and Driven by shrinking markets from the declining population in the first half of 2011, have seen M&A activity in the the domestic market, consumer products groups are actively European chemical industry fully recover and reach looking abroad for acquisitions in new growth markets, the pre-‐recession levels in terms of company especially Asia. Japanese beverage group Asahi Holdings has valuation, cumulated deal value and volume. recently made large acquisitions in New Zealand/Australia and Malaysia and the paper diaper and personal care

products company Unicharm recently acquired a major diaper manufacturer in Vietnam. Unless the Euro situation creates another major global shock that reverberates in Japan, we plight expect the outbound M&A to continue over the mid-‐term as The recent Bankia IPO and Caja de Ahorro del Mediterraneo high cash positions at Japanese corporates and ready access to (CAM) intervention by the Bank of Spain have been the capital from low interest rates supports this trend. latest episodes of the drama played by the Spanish saving banks over the recent months. Click here to read the full report. Hakan Persson, Managing Partner, Experia Corporate Finance Advisors Before the last financial run in August the Reasons to remain optimistic about the industrial general M&A environment in Sweden was technology segment despite economic uncertainty becoming increasingly bullish, indeed there The US economy continues to send conflicting signals and was an overhang of transactions; lots of recent market volatility will certainly impact the psyche of buyers with lots of cash. This coupled with strengthening investors globally, however, I remain positive in my outlook fundamentals of the Scandinavian economies meant that for M&A in the industrial technology segment. transaction volumes were increasing. Click here to read the full report. Unfortunately, the recent economic blows throughout Europe has any seen the gains subsequently fizzle out. Nonetheless, Mergers Alliance Transaction Highlights two areas that have remained unaffected have been healthcare and cleantech, ironically thanks to two contrasting forces. In healthcare, deregulation has encouraged firms to Ethica Corporate Finance has advised expand and consolidate while in cleantech a rise in FinProject in the acquisition of Foam government support mechanisms have incentivised firms to Creations, a Canada based company active invest and increase their M&A efforts to carve out market in the injection of expanded foam plastic share. We expect general M&A activity to return to its peak products for various industry applications. levels once the international unrest finally settles down. FinProject is an integrated group active in PVC compounds manufacturing and PVC Looking Ahead: Mergers Alliance Deals Review and expanded materials molding. Lead was Fausto Rinallo Closed deals are usually a good indicator of future activity. The business services sector has dominated since January which can be partly attributed to increased financing and The Bombay Burmah Trading Corp is the balance sheet vitality. Business services made up 18% of total second oldest company in India being part deal volume followed by building products and construction of INR 35 billion Wadia Group, a reputed which made up 16%. Cleantech and industrials were not far Indian business house with interests in behind with 12%. plantations, foods, textiles, chemicals, light engineering and real estate. Bombay Burmah, Bombay Dyeing and Britannia are the mastheads of the group. Lead was Vikas Aggarwal New on Opinions

In the News Headwaters MB Announces Merger with Reuters: Daruma may advise 5 acquisition Source Companies deals by end of year Mergers Alliances US partner firm Headwaters announced that it has merged with Source Companies, LLC, which was founded in 1982 to provide business owning families and family offices with growth strategy, company capitalisation. Click here to read more. Speaking to Reuters, a top executive from Daruma, Turkish partner for Mergers Alliance says a European pharmaceuticals firm is interested in entering the Turkish market. A top manager of Daruma Corporate Finance, an Northstar strengthens natural resources and Istanbul-‐based adviser for mergers and acquisitions, said five energy wing large partnerships and capital finance transactions would be automotive and construction products sector. strategic generic drugs manufacturer that intends to make a partnership by acquiring or buying major shares of a strengthen across the board with the appointment of Kirill rs in a recent interview. Dragun as a partner. Kirill has over 17 years of experience in the finance and energy segments. He has served on the Board of Directors of a number of companies in Russia and internationally. He has a degree in applied mathematics from the Kazakh State University and an MBA from the Graduate School of Business of Moscow State University and is fluent in English.Mark Bond, Chairman and Managing Partner of Northstar welcomed Kirill to the team and said that it was his opinion that Kirill would "increase the depth of knowledge within the company in the key area of natural resources, especially oil and gas and add an increased understanding of the markets of the former Soviet Union due to his significant experience in the areas of Kazakhstan and new and private Russian business".

Mergers alliance newsletter 30 th sep 2011

by josefinapersson

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