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Mergers alliance newsletter 30 th sep 2011


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Mergers alliance newsletter 30 th sep 2011

  1. 1. 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  
  2. 2. 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  
  3. 3. 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".