1. DIGEST 92SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 92
April 26, 2013
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Buyout of China’s Focus Media
Close to Closure
Mobile Location-Based Advertising
will be worth € 6.5 billion in 2017
First Quarter Global M&A Down :
Mergermarket
GPs Advised to Examine Past Wins
For Success Tips; Bain & Co.
Researcher Spot Oversubscribed PE
Fundraising Trend in Q1
Quote of the Week: Relationship
Advice for Entrepreneurs
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BUYOUT OF CHINA’S FOCUS MEDIA
CLOSE TO CLOSURE
This week’s deal of the week is the USD 3.8
billion buyout of China's digital advertiser
Focus Media Holding Ltd. by management and
a Carlyle Group-led private equity consortium,
which should close next week following
shareholder approval, according to a report in
The Deal. There were few other mega buyouts
in the market this week, neither reported nor
rumored.
MOBILE LOCATION-BASED ADVERTISING
WILL BE WORTH €6.5 BILLION IN 2017
Good news about growth opportunities for web companies such as Yelp, Verve, Placecast, Foursquare
and more is to be found in a new research report from the analyst firm Berg Insight. Berg forecasts the
total value of the global real-time mobile location-based advertising and marketing (LBA) market to grow
from EUR 526 million in 2012 to EUR 6.5 billion in 2017. This will then correspond to 32.8 percent of all
mobile advertising and marketing. The ability to precisely target prospective customers using real-time
location is currently one of the most promising additions to the advertising toolbox.
Key drivers for LBA include the growing adoption of both outdoor and indoor location technologies, as
well as the increasing consumer acceptance of location-based services in general. Major brands are so far
the main spenders.
Image source: K-mobile

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FIRST QUARTER GLOBAL M&A DOWN:
MERGERMARKET
The latest report from mergermarket on
M&A trends reveals that despite sever
mega-deals around the world at the end
of the last quarter, the totals for Q1 2013
were down compared to Q1 2012 by a
little over 10%. The most active adviser
was JPMorgan, which leads the global
league table by deal value with USD
124.2bn-worth of deals, including four of
the top ten deals.
Image source: MergermarketOther Findings on Global M&A
• The first quarter of this year was the slowest opening quarter in ten years (Q1 2003, USD 232.9bn)
• After the highest quarterly value in five years (Q4 2012, USD 737.1bn, 3,559 deals), Q1 2013 saw a
decrease in total M&A value of 44.9%. It is the seventh year in a row to see lower totals in Q1 than in
the preceding Q4
• The year has already seen four mega-deals adding up to USD 87.7bn. Last year’s mega-deals in the
same period totaled USD 70.7bn
• Only the US and Africa & Middle East saw higher totals in Q1 2013 than in the same period in 2012,
with increases in deal value of 33.6% and 101.4% respectively
GPS ADVISED TO EXAMINE PAST WINS
FOR SUCCESS TIPS; BAIN & CO
New research conducted by Bain & Company was described in its latest PE Outlook report. The globally
focused report said that Bain, along with Oliver Gottschalg, a professor at the École des Hautes Études
Commerciales in Paris, and PERACS, a provider of quantitative analytics for the PE industry, found that
most buyout funds, including the top-quartile performers, produce a mix of big winners and losers.
Examining the successful deals closely can be useful way to find reliable information on which to base
future success.
Bain said that in order to mobilize the right resources and processes to ensure that a higher proportion of
their investments will become run-away winners, some leading firms are subjecting their past deals to a
detailed forensic examination. A forensic investigation can serve a multitude of purposes. It can help lay a
strong foundation for the launch of a new fund or set the right course for investing an immature fund.
Such a probing dissection of nearly 100 of its past deals helped one major global PE firm define its deal
“sweet spot” and mobilize its resources and processes around factors that make a deal successful.

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The report says that examining “the scores of variables that influenced each deal, it is possible to find real
measures that influence returns, such as leverage, multiple expansion, revenue growth and margins”. The
PE industry’s strongest funds got there not because of the specific size and types of deals they target,
rather than success is driven by the “alpha-generating capabilities of the GPs that manage them”. Further
details on forensic examination were not provided in the report. It is to be assumed that Bain provides this
kind of consulting for PE funds interested in examining their past data for future success.
RESEARCHER SPOT OVERSUBSCRIBED PE
FUNDRAISING TREND IN Q1
Private Equity International’s latest quarterly report on global PE fundraising found that the amount raised
is stable compared to last year. The estimated sum of USD 69.3 billion was raised globally, by 130 funds,
across all private equity strategies in the first quarter of 2013, according to a release that was published
on PE Hub. Last year an average of USD 73.7 billion was raised in each quarter of the year. Of note, is that
several firms raised surplus amounts on their fund targets. The oversubscribed funds trend reinforces the
belief that for managers with strong track records and a good story to tell, there’s ample opportunity to
attract capital. It is the flight to quality trend that is often evident in PE.
Other findings
• Funds with a focus on investment in North America proved the most popular, securing USD 23.3 billion
• The single largest fund close in the quarter was that of Cinven at USD 6.5 billion for pan-European
investment.
• Buyout funds are still the most popular, accounting for USD 28.5 billion in the quarter.
• Venture capital and growth equity funds also demonstrated a strong quarter, collecting USD 17.9
billion.
• Both distressed and secondary funds showed a marked decline relative to fundraising appeal 2012.
• Funds aiming to invest in Asia-Pacific are notable for their growing confidence.
“Entrepreneurs who successfully navigate the complex
process and emotional whirlwind associated with private
equity investment are the ones who take the time to
evaluate all of the pros and cons, and ultimately make a
pragmatically informed decision with their eyes wide
open. Rather than denying the mental and emotional
issues that come with a decision of this magnitude, they
embrace all of its ramifications and choose to frame the
decision — the “win” — on their”
QUOTE OF THE WEEK: RELATIONSHIP
ADVICE FOR ENTREPRENEURS

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Who said it: newly appointed CEO of Martin Jetpack
In context: In an article written by Kadlic, entrepreneurs are given some advice on the benefits of
accepting private equity investment. The PE expert suggests that owning a small business is a white-
knuckled affair, where mission-critical events can threaten a company's very survival on a daily basis.
Aside from launching the company and terminating the company, perhaps the next most important
decision for a business owner is agreeing to accept outside investment from a private equity firm, the
article posits. It is about giving up some control, but also about gaining support to grow the company and
perhaps even gain more free time. The article is unusual in that it has a strong emotional component and
psychological perspective for a transaction that is normally described in terms of material and financial
pros and cons.
Where we found it: Crains Cleveland

6. DealMarket
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Editor: Valerie Thompson, Zurich