1. Private Equity Capital Briefing
February 2017
Monthly insights and intelligence on PE trends
PE off to a strong start
in 2017
January marks the most active
start to a year for PE since the
financial crisis
The better the question. The better the answer.
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2. The Private Equity Capital
Briefing has been designed to
help you remain current on
capital market trends. It
captures key insights from
subject-matter professionals
across EY and distills this
intelligence into a succinct
and user-friendly publication.
Private Equity Capital Briefing
provides perspectives on both
recent developments and the
longer-term outlook for
private equity (PE)
fundraising, acquisitions and
exits, as well as trends in
global M&A, cross-border deal
flows, IPOs and the debt and
bond markets.
Please feel free to reach out
to any of the subject-matter
contacts listed on the back
page of this document if you
wish to discuss any of the
topics covered.
3. Contents
Section 1 Private equity: fundraising 4
Private equity: acquisitions 5
Private equity: exits 6
Section 2 M&A 7
Section 3 IPOs 9
Section 4 Loans 10
Section 5 Bonds 11
Appendices
Appendix A PE activity by geography 13
Appendix B M&A activity monthly flash 22
Appendix C M&A multiples and bid premium 23
Appendix D Capital Confidence Barometer 24
4. 1.i. Private equity: fundraising
Executive summary
• After a robust year for PE fundraising in 2016, firms are off to a strong start in the New Year. PE firms closed funds valued at
US$45b in January, up 78% from the US$25b raised last year.
• Infrastructure funds were particularly well represented amongst funds that closed in January, accounting for half of the total.
• The average fund size exceeded US$1b in January, compared with US$650m for the full year 2016.
Current state
Fundraising
• After a robust year for PE fundraising in 2016, firms are off to a strong
start in the New Year. PE firms closed funds valued at US$45b in
January, up 78% from the US$25b raised last year.
• Infrastructure funds were particularly well represented among funds
that closed in January, accounting for half of the total by value. The
sector has seen significant interest from investors in recent years from
investors looking for stable returns over time and the ability to deploy
large amounts of capital. The election of Donald Trump in the US has
accelerated interest, after the administration signaled that spending on
infrastructure investments will be a priority. Indeed, several of the
world’s largest alternative asset managers have recently announced
plans to add funds in the space, suggesting that 2017 could be a record
year for fundraising.
• The handful of closing s by a number of large infrastructure funds
pushed average fund sizes past the US$1b mark in January, compared
with US$650m in the full year 2016. Funds have been trending larger as
LPs seek to put greater amounts of assets to work in PE and other
alternative investments.
Environment and horizon
• PE firms are raising capital faster than they have in the past. According
to Preqin, the average PE fund in 2016 spent 16 months between
launch and final close, down from 17 months in 2015, and 18 months in
2013. Buyout and infrastructure funds have seen the strongest
demand, closing in 12 months and 15 months, respectively.
• Currently there are more than 2,800 funds in the market, seeking an
aggregate US$1t. Buyout accounts for the largest share, with roughly
300 funds seeking US$225b, followed by real estate and secondaries
funds.
• “Core” PE funds, or funds which are designed to invest and hold
companies over a much longer period are seeing interest from certain
segments of investors. While some large traditional LPs are wary of
sacrificing liquidity and the ability to be nimble/opportunistic without
sufficient return, for the right LPs—family offices that want fewer
taxable events, SWFs with ultra-low cost of capital and long time
frames—they solve a significant issue and can be a good fit.
• Consolidation in the PE industry has been ongoing for some time, with
LPs seeking to invest greater amounts with smaller number of
managers. CalPERS’ private equity consultant recently disclosed that
the pension had completed the sale of 26 partnership interests with a
value of more than US$420b, following up a similar sale in the first half
of last year. At that time, CalPERS’ ambition was to reduce the number
of managers to less than 120, from a high several years ago of roughly
400.
Global PE fundraising by month, LTM (in US$b)
4 Private Equity Capital Briefing
Source: Preqin
Source: Preqin
$0
$20
$40
$60
$80
$100
$120
$140
Jan Feb Mar Apr May Jun Jul Aug Seep Oct Nov Dec Jan
0
20
40
60
80
100
Commitments No. of funds
Source: Preqin
$0
$10
$20
$30
$40
$50
$60
$70
Global PE infrastructure fundraising by year (in US$b)
Source: Preqin
$0
$200
$400
$600
$800
$1,000
$1,200
0
50
100
150
200
250
Commitments No. of funds
PE funds in the market by type and target (in US$b)
Source: Preqin
Source: Preqin
Time to close by fund type (in months)
12
17 17
15
19
Buyout Growth Real estate Infra Distressed
Source: Preqin
Source: Preqin
Average fund sizes over time (in US$m)
$0
$200
$400
$600
$800
$1,000
$1,200
5. 1.ii. Private equity: acquisitions
Executive summary
• While January typically represents a quiet month for PE acquisitions, it was the most active start to a year since the financial
crisis.
• PE firms announced 84 deals valued at US$16.1b during the month.
• Active sectors continued 2016’s trend, with large deals announced in Health care, Consumer Products and Technology.
Current state
• January typically represents a quiet month for PE acquisitions. Firms
announced 84 deals valued at US$16.1b during the month, a decline
of 58% by value from December. However, it nonetheless represented
the most active start to a year since the financial crisis. Activity was
spread across a range of geographies and sectors; there were six
deals valued at more than US$1b, while active sectors continued
2016’s trend, with large deals announced in Health care, Consumer
Products and Technology.
• Deal activity increased across all regions in January versus the same
period a year ago:
• The Americas saw 38 deals valued at US$7.8b, up 77%
from a year ago.
• EMEA saw 39 deals valued at US$4.5b, up more than
150% from a year ago.
• Asia-Pacific saw 7 deals valued at US$3.8b, up 48% from a
year ago.
Environment and horizon
• With valuations still at elevated levels, PE firms remain challenged to
deploy assets in ways that leave headroom for growth. According to
S&P Leveraged Commentary and Data, average purchase multiples
closed 2016 at 10.0x in both Europe and the US, which is above the
levels seen during the 2006-2007 period. As a result, many firms are
underwriting limited multiple expansion into current acquisitions (or
even multiple compression in certain industries), and instead are
relying on operational improvements and value creation techniques to
drive returns. Industry participants say that maintaining discipline,
sticking to core competencies, and being able to clearly articulate a
firm’s particular competitive advantage relative to a deal is now more
important than ever.
• PE investment in the real estate sector could see continued interest in
2017, despite concerns of high prices and political uncertainty over
the direction of trade agreements. The appetite for the asset class
shows little sign of abating, according to EY’s 2017 Global market
outlook: trends in real estate private equity. The report reviews
various regions and where they are in the business cycle, stating that
while investors have an appetite for US real estate, they are cautious
because of expected interest rate rises. The Southeast Asian real
estate market looks set for increased activity over the latter half of
2017. The report also notes that in many ways, investors are viewing
Germany as Europe’s safe haven. Germany’s economic growth
remains solid and the demand for housing as a result of strong
migration to the country is boosting the residential market.
• According to a study of 805 educational institutions recently released
by Commonfund and the National Association of College and
University Business Officers (NACUBO), the average net investment
return for US and Canadian college and university endowments was
4.5% last year, the worst since 2009. However, endowments that
performed better tended to have the highest allocations to alternative
investments. The top decile allocated 62% to alternatives, versus an
average of 53% across all endowments.
• As the PE industry continues to grow and mature, digital technologies
are playing a more critical role than ever. Firms are rapidly seeking to
scale their capabilities across a range of competencies including
analytics, reporting, cyber and regulatory compliance. While the
industry currently remains overly reliant on manual processes for
front-office, middle-office and back-office functions, it is beginning to
recognize the need for change. EY and Private Equity International
recently released a survey of more than 100 PE CFOs, which found
that while sourcing and dealmaking remain center stage, developing
cost-effective operations through talent management, automation
and the ability to harness fund-level and portfolio company data is
increasingly essential.
PE acquisitions by month (in US$b)
5 Private Equity Capital Briefing
Source: Dealogic
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
0
5
10
15
20
25
30
35
40
45
Commitments No. of funds
Global PE acquisitions see most active January since GFC (in US$b)
Source: Dealogic
Top deals in Jan 2017
Source: Dealogic
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
Target Region Industry Sponsor Value (US$b)
McDonald's China
Management Ltd. Asia Pacific Dining & Lodging
Carlyle Group LP
CITIC Capital Partners Ltd. $2.1
Hitachi Koki Co. Ltd. Asia Pacific Consumer Products KKR & Co LP $1.3
Leslie's Poolmart Inc. Americas Consumer Products
Catterton Management Co.
LLC-L Catterton $1.8
Eagleford Shale Assets Americas Oil & Gas Blackstone Group LP $2.3
Cerba Healthcare
SASU EMEA Health care Partners Group Holding AG $1.9
LANDesk Software Inc. Americas Technology ClearLake Capital Group LP $1.2
33%
44%
40%
33% 34%
42% 41%
33%
27% 25%
Management
reporting
Portfolio analytics Investor portal Fund accounting Regulatory
reporting
Past two year Next two years
Insights from EY/PEI PE CFO survey: What has been your technology focus
during the past two years, and what will it be over the next two years?
Source: EY/PEI 2017 Global Private Equity Survey
6. 1.iii. Private equity: exits
Executive summary
• The pace of exits has been slowing as PE firms shift their focus to deployment. January 2017 saw a continuation of the trend,
with PE firms announcing 70 exits valued at US$26.0b, a decline of 11% from December.
• However, the month saw significantly improved sentiment in the IPO markets, with a number of PE-backed deals going public.
In total, six PE-backed deals raised US$3.9b. All were listings on US exchanges.
Current state
• The pace of exits has been slowing as PE firms shift their focus to
deployment. While 2014 was a record year for exits, and 2015 was
similarly robust, exit activity has decelerated in recent quarters. PE firms
exited 999 companies with an aggregate value of US$331b in 2016, down
22% by value versus the year prior.
• January 2017 saw a continuation of the trend, with PE firms announcing
70 exits valued at US$26.0b, a decline of 11% from December. Activity
slowed most significant in sales to strategics and secondary buyers.
Overall, M&A exits were down 20% versus December; this was largely the
result of declines in EMEA, which saw a particularly active month in
December. However, this represented an increase of 81% versus January
2016.
• Macro concerns and geopolitical uncertainty have weighed heavily on the
global IPO markets in recent months—between the macro slowdown in
China, Britain’s vote to leave the EU in June and the surprise results of the
US presidential election in November, markets have been largely unable to
find their footing. In 2016, global IPO activity declined 13% by volume and
31% by value, with 1,084 companies going public, raising US$134.2b,
making it the quietest year for IPOs since 2012.
• January saw significantly improved sentiment in the IPO markets, with a
number of PE-backed deals going public. In total, six PE-backed deals
raised US$3.9b. All were listings on US exchanges.
Environment and horizon
• 2017 is positioned to be a strong year for IPOs. With many of the more
obvious geopolitical impediments now in the rearview, and many global
equities markets flirting with all-time highs, investor confidence is high. Q4
saw several high-profile deals price, and there remains evidence that this
momentum is poised to carry over into the New Year. The year could even
see the return of some PE manager listings to the market. In early
February, alternative investment manager and PE advisory Hamilton Lane
Advisors filed for a listing on the Nasdaq exchange in an IPO that could
raise up to US$200m.
• There are currently more than 60 PE-backed companies in IPO
registration; in the aggregate, they could raise nearly US$10b in total
proceeds. Key things to watch in 2017:
• Low volatility and a lack of macro impediments should set the
stage for an active first half.
• Investor confidence is returning to the emerging markets, and
could enable a marked uptick in issuance.
• Mounting pressure on unicorns could drive deals in the tech
space.
PE M&A exits by year (US$b)
PE IPOs by month (in US$b)
6
Private Equity Capital Briefing
Source: Dealogic
Source: Dealogic
Source: Dealogic
Top PE exits, January 2016
Announce
ment or
filing date
Company Sector Value
(US$b)
Sponsor Type
6-Jan-17
Invitation Homes
Inc.
Real
Estate/Property $6.3 Blackstone Group LP IPO
9-Jan-17
Surgical Care
Affiliates Inc. Health care $3.4 TPG Capital LP M&A
2-Oct-15
Laureate
Education Inc.
Professional
Services $2.9
Sterling Partners Inc.;
Citigroup Private Equity;
KKR & Co. LP;
Snow Phipps Group LLC IPO
1-Jun-16
JELD-WEN Holding
Inc.
Construction/
Building $2.4 Onex Corp. IPO
24-Jan-17
Multi Packaging
Solutions
International Ltd.
Forestry &
Paper $2.3
Carlyle Group LP;
Madison Dearborn Partners
LLC M&A
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Strategic PE
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
PE exits by region—comparison of LTM (last 12 months) and
PTM (prior 12 months)
Source: Dealogic -20%
-15%
-10%
-5%
0%
5%
-30% -25% -20% -15% -10% -5% 0%
Americas
Global
EMEA
Asia-Pacific
Value
Number of deals
7. -20%
-15%
-10%
-5%
0%
5%
-20% 0%
Current state
• Megadeals led the charge in 2017, as the year started strongly for big-
ticket deals, with a number of billion-dollar plus deals (44) capturing the
limelight and boosting M&A deal value. January saw deals worth
US$262b, the highest value recorded in the first month since 2008. Total
value was up 44% and 14% compared with similar periods in 2016 and
2015 respectively. Companies are using dealmaking as their primary
response to elevated pressure for growth and the threat of disruption,
even though heightened geopolitical and economic uncertainty further
complicates the outlook for many industries.
• US-based deals kicked off 2017 in a big way. Total value for US-targeted
deals was US$110b, a four-year high, indicating the increasing optimism
for US M&A activity. This trend may accelerate further due to anticipated
favorable policies under the Trump Administration, strong credit markets
and elevated confidence in the C-suite.
• Oil and gas was one of the most active sectors in January, with 68 deals
worth US$43.5b. With the stabilization of oil prices, there is a growing
demand for upstream assets, particularly in the Permian Basin, signaling a
recovering appetite for production expansion. The Permian Basin has
become the hot spot for M&A in the shale oil industry, due to its impressive
production profile and low-cost resources. There were several examples of
this trend: a US$6.6b asset acquisition by Exxon Mobil; the friendly
takeover of Clayton Williams by Noble Energy, worth US$3b; and Targa
Resources’ purchase of Outrigger Energy's assets.
• The largest deal of the month saw US health care giant Johnson &
Johnson (J&J) agree to buy Swiss biotech company Actelion, including
spinning off Actelion's research and development pipeline. The acquisition
gives J&J access to the Swiss group's lineup of high-price, high-margin
medicines for rare diseases, helping it diversify its portfolio as its biggest
product Remicade, which treats arthritis, faces cheaper competition.
• Another important deal was the merger between Italy's Luxottica and
France’s Essilor, to create a global powerhouse in the eyewear industry
with annual revenue of more than €15b. The deal, one of Europe's largest
cross-border tie-ups, brings together Luxottica, the world's top frame
maker, with brands such as Ray-Ban and Essilor, a leading manufacturer of
ophthalmic lenses. By merging, the companies will be better positioned to
take advantage of strong demand in a market expected to achieve
continued growth due to an aging global population and increasing
awareness about eye care in Asia and Latin America.
Environment and horizon
• Global M&A is expected to remain strong in 2017. Increasing investor
demands for higher returns means strategic growth remains at the heart of
companies’ corporate strategy as they look to focus on expansion to tap
into new areas of growth – and M&A is often the quickest route to achieve
this. Market conditions remain supportive of M&A, with an abundance of
capital available at historically low borrowing rates.
• Cross-border deals are likely to be in ready supply in 2017. In the next
year, we are expected to see heightened cross-border deals, to buy into
pockets of growth and secure supply chains. With companies increasingly
operating in a global environment with globalized supply chains, those
need to be secured, and M&A is increasingly becoming an effective
instrument to achieve that. In 2017, we should see increasing cross-border
dealmaking, particularly between Asia and North America, as well as a
continuing flow of outbound purchases from China into Europe and Asia.
• Regulatory policies may ease in 2017 compared with 2016, which saw a
record amount of deals being pulled due to regulatory and antitrust
concerns. In 2017, the regulation of dealmaking will be in the spotlight,
particularly in the US, where the new Trump Administration may lead to a
more favorable regulatory regime.
• Sector convergence is set to be a hot topic for the boardroom in the
foreseeable future. Digital disruption has led to the blurring of sector lines
and changing consumer behavior, thereby making it imperative for
companies to look at new business models. Companies will look to future-
proof their businesses through acquisitions outside their core sector to
survive and thrive in this increasingly disruptive environment.
• Consequently, portfolio reorganization will be a key deal driver, making
companies active both on the buy side and sell side. We can expect to see
companies having another look at their portfolio to capitalize better on the
disruptive trends impacting their business. Conducting strategic reviews
will be the new norm to ensure resilient capital allocation, with a view to
selling non-core assets and releasing capital to support their strategic
priorities.
Deal environment: by area (YOY % change)
Last 12 months (LTM) to January 2017 versus LTM to January 2016
Source: Dealogic and EY analysis.
Deal environment: by target sector and target area (% share of
global value)
LTM to January 2017
Source: Dealogic and EY analysis; excludes real estate asset transactions.
Note: because of rounding, percentages may not add up to total.
Top 10 announced deals by value, January 2017
Source: Dealogic.
M&A analysis as at 1 February 2017.
Note: data is continually updated and therefore subject to change.
Figures have been rounded off to nearest decimal place.
7
Executive summary
• There was a strong start to global M&A in 2017 by value, though volume declined marginally.
• The value for US-targeted deals during the month was US$110b − up 26% year-on-year (Y0Y).
• Big-ticket deals in consumer products and retail, oil and gas, and life sciences grabbed headlines.
• The M&A outlook for 2017 remains positive as companies look to optimize portfolios.
• Future-proofing will be a key driver of M&A as companies look for disruptive trends within their core and innovation outside their sectors.
2. M&A
Target Sector Country Acquiror Value
(US$m)
Actelion Ltd. Life sciences Switzerland Johnson & Johnson 31,373
Luxottica Group SpA Consumer
products and retail
Italy Essilor International SA 25,546
Williams Partners LP
(31.6527%)
Oil and gas US Williams Companies Inc 11,400
Zodiac Aerospace SA Aerospace and
defense
France Safran SA 10,333
VCA Inc. Provider care US Mars Inc. 9,082
Permian Basin – oil and
gas assets
Oil and gas US Exxon Mobil Corp. 6,600
WGL Holdings Inc. Power and utilities US AltaGas Ltd. 6,295
Ariad Pharmaceuticals
Inc.
Life sciences US Takeda Pharmaceutical
Co Ltd.
5,664
Bioverativ Inc. Life sciences US Existing Shareholders 5,167
Booker Group plc. Consumer
products and retail
UK Tesco plc. 4,687
Value
Volume
Americas
EMEA
Global
Asia-Pacific
Americas Asia-Pacific EMEA Total
Technology 8% 3% 4% 16%
Oil and gas 9% 1% 2% 13%
Diversified industrial products 5% 2% 5% 12%
Consumer products and retail 5% 2% 3% 10%
Life sciences 5% 1% 2% 8%
Power and utilities 3% 1% 2% 7%
Media and entertainment 4% 1% 1% 6%
Banking and capital markets 1% 1% 2% 5%
Automotive and transportation 1% 3% 1% 5%
Others 9% 6% 5% 19%
All sectors 51% 22% 27% 100%
Capital Briefing
8. 2.i. M&A: cross-border deal flow
Key cross-border M&A deal flow
(LTM to January 2017)
(Total = US$1.35t)
N America to:
W Europe – $173b
UK&I – $72b
Latin America – $21b
Japan to:
N America – $40b
UK&I - $35b
W Europe – $12b
UK&I to:
N America – $90b
W Europe – $12b
Middle East – $3b
Africa – $3b
L America to:
W Europe – $8b
N America – $3b
Greater China and
Mongolia to:
W Europe – $84b
N America – $59b
L America – $17bW Europe to:
N America – $131b
UK&I – $23b
L America - $13b
Cross-border M&A deal flow (LTM to January 2017)
(US$m)
Key
>$100b
>$50b
>$10b
Note: all figures are in US$.
1. Acquiror refers to acquiror’s ultimate holding company.
2. Greater China and Mongolia includes mainland China, Hong Kong, Macau, Mongolia and Taiwan.
M&A analysis as at 1 February 2017.
Source: Dealogic. All Rights Reserved.
Note: data is continually updated and therefore subject to change.
Key >US$100b >US$50b >US$10b
Intra-area cross-border deals
Target Acquiror1 Africa SE Asia
(including
Korea)
Greater
China and
Mongolia$
Russia,
CIS and
CSE
W Europe
(excluding
UK&I)
India Japan Latin
America
Middle
East
North
America
Oceania UK&I Inbound
total
%
versus
PTM
Africa 962 81 4,702 1,621 2,695 32 1,563 - 447 5,912 867 2,879 21,763 127%
SE Asia (including
Korea)
1 7,188 7,692 13 2,662 36 3,018 24 1,174 5,118 261 1,192 28,381 -20%
Greater China and
Mongolia 2
2 5,115 24,858 - 3,643 - 553 - - 11,106 212 101 45,590 -11%
Russia, CIS and CSE 1,038 1,406 3,146 2,955 3,704 4,148 8,630 1,048 11,856 1,281 1,914 1,269 42,397 19%
W Europe (excluding
UK&I)
47 2,717 84,497 6,460 90,640 1,331 11,916 7,962 1,981 172,834 1,084 12,495 393,964 43%
India 632 7,651 1,589 12,922 1,515 - 2,105 - 500 4,385 83 86 31,469 82%
Japan - 217 8,759 - 236 444 - - - 475 15 - 10,146 -58%
Latin America 40 28 16,914 700 13,360 20 69 5,724 1,194 20,667 1,683 319 60,717 28%
Middle East 43 44 14,381 436 7,509 6 4 - 3,843 2,463 125 2,887 31,741 195%
North America 6,937 15,062 59,441 177 131,378 1,930 40,478 3,269 6,221 128,285 5,522 89,684 488,383 11%
Oceania 675 1,976 14,436 1 2,702 50 1,559 - - 14,556 1,827 1,465 39,249 -13%
UK&I 3,486 767 12,708 70 22,711 1,030 35,040 - 2,646 72,053 474 1,241 152,227 -55%
Outbound total 13,865 42,252 253,125 25,356 282,755 9,028 104,934 18,027 29,864 439,134 14,067 113,620 1,346,027 1%
% versus previous
12 months (PTM)
-8% 91% 91% 253% -42% 85% 35% 22% -58% 20% 11% -6% 1%
8 Capital Briefing
9. 3. IPOs
Executive summary
• Global IPO activity surged in January 2017, witnessing a significant YOY increase in terms of both deal volume and value.
• The Asia-Pacific region continued to dominate global IPO activity in terms of both deal volume and value.
• US exchanges accounted for 6 of the top 10 deals this month.
• IPO activity in Europe is expected to increase in the next few months, as the IPO pipeline looks healthy and investors are seeking investment
opportunities. However, implications from Brexit, new US policies and elections in France, Germany and the Netherlands later in 2017 may
affect the IPO markets across the region.
9
Current state
• Global IPO activity got off to a lively start, with 103 deals raising
US$10.1b in January 2017 on the back of strong activity in Asia-Pacific
and the US. This level of activity was significantly up on the slow start to last
year (up 243% by volume and 1118% by value YOY) and compared positively
with the average for January over the past five years (74% and 44% higher).
This month witnessed the highest level of IPO activity in January since
2014.
• Asia-Pacific continued to dominate the global IPO activity, raising
US$5.4b via 88 deals in January 2017, accounting for 85% and 54% of the
global volume and value respectively. Compared with January 2016, the
region registered a 300% and 679% increase in terms of deal volume and
value respectively. The activity largely made up of listings from Greater
China, which contributed 66% and 49% to the global deal volume and value
respectively.
• EMEIA saw sluggish IPO activity, as investors continue to be selective as a
result of the current economic and political outlook. While January is
traditionally a slow month, the region saw only four deals raising
US$128.8m in January 2017, which was down 43% in terms of deal volume
and up 297% in terms of deal value as compared with January 2016.
• US exchanges made a bright start to 2017 with nine deals raising US$4.3b
against no activity in January 2016, accounting for 43% of total global
value. Financial-sponsored IPOs also made a comeback, accounting for eight
of the nine deals this month. US exchanges accounted for five of the top six
deals globally by proceeds this month, along with the only US$1b-plus deal –
the listing of real estate investment trust Invitation Homes Inc., which raised
US$1.5b. This was the largest US IPO since October 2015.
Environment and horizon
• The prospects for global IPO activity look more positive in 2017 compared
with 2016 as many threats to the stability of the global economy ease and
investors regain confidence. However, uncertainty is likely to persist in
certain regions over the coming months, so we do not expect a significant
improvement until at least the second half of the year.
• Asia-Pacific is expected to drive global IPO activity in 2017, much like
2016. IPO activity in mainland China is expected to accelerate in 2017 due
to the faster pace of IPO approvals by the China Securities Regulatory
Commission since November 2016. This should enable more companies that
are currently in the long queue of the pipeline to gain access to the capital
markets, as long as the market environment is supportive. Despite a solid
pipeline, Hong Kong's IPO fund-raising capability, especially for mega IPOs,
may come under pressure due to the relatively lower post-IPO performance
of some high-profile listings in 2016. This may result in a slower start to
Hong Kong's IPO market in the first half of the year.
• US IPO activity is expected to improve as we progress through 2017 on
the back of a pipeline of more than 130 companies ready to list, as well as
those that have filed their IPO registrations confidentially. However, US
President Donald Trump’s Executive Order on minimizing the economic
burden of the Patient Protection and Affordable Care Act (Obamacare) may
affect a number of health care and life science companies considering an
IPO, as investors may face greater uncertainty in valuing such companies in
a rapidly changing regulatory environment.
• The European IPO outlook is optimistic, as the IPO pipeline looks healthy
and investors are seeking investment opportunities with compelling and
well-supported equity stories. The pipeline of cross-border IPO activity is
also beginning to build, with a number of international companies looking at
listing in London. However, as we move into 2017, implications from Brexit,
new US policies and elections in France, Germany and the Netherlands may
potentially affect equity stories and investor sentiment, and hence the IPO
markets across Europe.
• IPO activity in the ASEAN (Association of Southeast Asian Nations) region
should rise in 2017, as receding uncertainty, commodity price gains and
faster economic growth is expected to attract investors in Singapore and
Malaysia. However, elsewhere in Southeast Asia, significant fluctuation in
the rupiah over the past year is expected to dampen the appetite for listings
in Indonesia, while the political situation and a drop in the peso may affect
investor sentiment for the Philippines. Higher benchmark interest rates
under a new Government in the US could also tempt international investors
to pull money out of riskier emerging markets.
Top 10 IPOs by proceeds, January 2017
Source: Dealogic.
Issuer name Issuer
location
Sector Exchange Proceeds
(US$m)
Invitation Homes Inc. US Real estate New York 1,540
JELD-WEN Holding Inc. US
Diversified industrial
products
New York 661
China Galaxy Securities Co.
Ltd.
China
Banking and capital
markets
Shanghai 591
Keane Group Inc. US Oil and gas New York 585
Laureate Education Inc. US
Government and
public Sector
NASDAQ 490
Jagged Peak Energy Inc. US Oil and gas New York 474
Jilin Jiutai Rural
Commercial Bank Corp. Ltd.
China
Banking and capital
markets
Hong Kong 446
Central China Securities Co.
Ltd.
China
Banking and capital
markets
Shanghai 406
REV Group Inc. US
Automotive and
transportation
New York 275
SMU SA Chile
Consumer products
and retail
Santiago 198
IPO activity by sector and area (% share of global proceeds)
LTM to January 2017
Source: Dealogic; regional classification on the basis of issuer nationality.
Note: because of rounding, percentages may not add up to total.
Americas Asia-Pacific EMEA Total
Banking and capital markets 1% 17% 2% 20%
Real estate 3% 8% 2% 13%
Technology 1% 5% 3% 10%
Life sciences 2% 5% 2% 9%
Consumer products and retail 2% 5% 2% 9%
Automotive and transportation 1% 7% 1% 8%
Diversified industrial products 1% 5% 2% 8%
Oil and gas 3% 1% 3% 6%
Power and utilities 0% 1% 4% 5%
Others 2% 6% 4% 12%
Total 16% 59% 25% 100%
IPO activity by area (YOY % change)
(LTM to January 2017 versus LTM to January 2016)
Source: Dealogic; regional classification on the basis of issuer nationality.
-40%
-20%
0%
20%
-60% -50% -40% -30% -20% -10% 0%
Value
VolumeAmericas
EMEA
Global
Asia-Pacific
Capital Briefing
10. Current state
• In January, US$95b of loans were issued in the US and €9.4b in Europe,
taking the YTD global issuance to US$105b, up 133% from same period in
2016. Europe recorded the second-highest monthly tally in nearly two
years, and the biggest for an opening month in any year since 2007.
• The recent pickup in this activity is an extension of a bustling fourth
quarter, bolstered by the sustained issuer-friendly market. M&A
contributed about a quarter of January’s deals by both volume and count,
but were overshadowed by the avalanche of repricings.
• Repricing activity continued the surge in January although it did not
reach as high a level as seen during September and October. There has
almost been three times as much repricing activity from September to
January as M&A-driven activity.
• The Middle East’s loan market has had the quietest January in 21 years
with little sign of picking up. Due to the execution of all the imminent
refinancings in the recent past, only a few new money deals are expected
as low oil prices do not trigger appetite for money.
• Globally, China’s property developers are tapping the offshore loan
markets to help refinance billions of dollars of maturing debt this year.
These financings are in contrast with the start of 2016, when property
developers were rushing into the domestic Chinese market to lock in lower
funding costs.
• Issuer-friendly conditions in the US loan market have prompted a rush of
opportunistic transactions to start the new year. Even as borrowers
crowded the market in anticipation of better terms, the results in January
were often better than they might have expected.
• The tightening of yield continued in January from last year, helping
borrowers to shave off considerably more from their cost of financing in
January; the average clearing yield for single-B rated term loans dipped in
the US to 5.18% from 5.34% in December, and tightened to 4.28% from
4.50% in Europe, explaining the repricing wave of the past five months.
Environment and horizon
• Since May of 2016, a repricing wave in the European market has led to
documentation terms growing steadily weaker. Lack of information is
making investors concerned, as it makes investment decisions more
challenging and could exacerbate any downward turn in a business with no
covenants to protect them.
• However, 2017 has got off to a busy start; refinancing and repricing
deals are driving issuance, supported by a “bond to loan” trend as private
equity firms take advantage of favourable covenant lite loan structures.
Add-on acquisitions, secondary buyouts and bond to loan deals are also
supporting supply as sponsors refinance high-yield bonds and junior loans
with lower coupon, covenant lite senior loans.
Opportunities
• Issuance of second lien debt and, potentially, subordinated mezzanine
debt is expected to increase in 2017 in Europe as borrowers look to
refinance and recapitalize existing deal structures. Players are expecting
the loan space, with its ample liquidity, to continue to be the market of
choice for borrowers in early 2017.
• The trend of US borrowers looking to the European market for loan
financing is not expected to end soon, especially with the anticipated rise
in US rates.
4. Loans
Executive summary
Global investment-grade loans (US$b)
Source: Thomson ONE.
Top arrangers ranking, YTD 2017 (US$b)
Source: Thomson ONE.
Global loan issuance by industry, YTD 2017
Source: Thomson ONE.
Proceeds Issues
Bank of America Merrill Lynch 96.4 32
Sumitomo Mitsui Finl Grp Inc 46.0 14
Mizuho Financial Group 43.1 12
Deutsche Bank 34.4 11
Barclays 30.8 9
All loans by region, YTD 2017 (US$b)
Source: Thomson ONE
Market share Proceeds Issues
Americas 47.5% 392.5 72
EMEA 44.1% 365.1 17
Asia-Pacific 8.4% 69.5 46
10
• Europe recorded the second-highest monthly tally in nearly two years, and the biggest for an opening month in any year since 2007.
• Repricing activity continued the surge in January; there has almost been three times as much repricing activity from September to January
as M&A-driven activity.
• China’s property developers are tapping the offshore loan markets to help refinance billions of dollars of maturing debt this year.
• The tightening of yield continued in January from last year, helping borrowers to shave off considerably more from their cost of financing.
• Issuance of second lien debt and potentially subordinated mezzanine debt is expected to increase in 2017.
0 100 200 300 400
Consumer staples
Financials
Telecommunications
Energy and power
Real estate
Consumer products and services
High technology
Media and entertainment
Health care
Retail
Materials
Industrials
Government and agencies
Proceeds (US$b)
0
200
400
600
0
200
400
600
800
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
Proceeds (LHS) Number of issues (RHS)
0
1,000
2,000
3,000
0
300
600
900
1,200
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
Proceeds (LHS) Number of issues (RHS)
Global high-yield loans (US$b)
Source: Thomson ONE.
*
*
*QTD data till 31 January 2017
*QTD data till 31 January 2017
Capital Briefing
11. Current state
• Global high-yield activity rose sharply in January on a monthly basis.
High-yield issuance in the US was US$17.5b and €5.9b in Europe, taking
the YTD total global issuance to US$23.4b, up 261% from the same period
last year.
• The European high-yield market had a strong start this year, measured
by volume, diversity and deals flying through syndication. January 2017
was far ahead of this time last year and, at one stage, even looked like it
might have been the strongest start to a year in the market’s history.
Compared with the typical slow-start opening, this year has proven to be
far more varied, however, and this is most evident in the amount of
sterling issuance, which almost touched the full-year total in 2016.
• US high-grade issuance shattered both records and expectations in
January; refinancing-driven borrowers swarmed the market to lock in
rates, banks built capital and borrowers maintained strong pricing leverage
through cascading supply.
• The high-yield new issue market was dominated by sterling debut issuers
such as Talk Talk, Amigo Loans, NewDay and B&M Retail, as well as dual
currency double-B rated such as Telecom Italia, Jaguar Land Rover and
Smurfit Kappa. NewDay was the only Leveraged Buyout related deal.
• This year’s early hurdles have been more political than economic and,
other than the foreign exchange space, markets have largely taken
Theresa May’s “hard Brexit” speech and Donald Trump’s inauguration in
their stride compared with concerns over Chinese growth last year.
• High-yield issuance for M&A activity in January was US$5.3b,
contributing 43% to the total in the US. In Europe, there was €494m of
high-yield issuance, or a 9% contribution. Although these numbers are
marginally higher than the same period last year, M&A contributions have
decreased overall from the last few months due to the surge in repricings.
• Clearing yields for single-B rated bonds widened in the US to 5.34% in the
three months to the end of January, from 5.18% at the end of December,
and yields tightened to 3.62% from 4.11% in Europe.
Environment and horizon
• Market sentiment felt as if there was a lot of pent-up demand in high
yield. People weren’t fully invested, there wasn’t the volatility they had
expected, and then they had large inflows and coupon build-up that led to a
strong start to the year.
• Technical factors are pushing issuers back to the loan market, which is
why the use of all-senior financing has increased, thereby resulting in
lower overall leverage multiples, while leverage through senior debt rose to
2007 levels.
Opportunities
• Sterling issuances increased in January as the Brexit debate intensified,
as borrowers typically avoid times of potential volatility. However, the
market is sensing uncertainty ahead and playing high on issuing sterling.
• Issuers are going to take advantage of Brexit new-issue premium;
sterling deals tend to offer more yield than euros anyway and, in a year
when borrowers are confident that low yielding double-Bs will be beneficial,
the chance to buy paper with some yield is always going to be attractive.
• The European Central Bank might start to signal the gradual tapering of
its bond purchase program in few months, a policy move that is keenly
anticipated by investors.
0 10 20 30 40
High technology
Industrials
Energy and power
Telecommunications
Materials
Consumer staples
Real estate
Media and entertainment
Consumer products and services
Retail
Health care
Proceeds (US$b)
Executive summary
Euro bond issuances
Source: Thomson ONE.
Top 10 corporate bond issuers, YTD 2017 (US$b)
Source: Thomson ONE.
Global bond issuance by industry, YTD 2017
Source: Thomson ONE.
Issuer Nation Industry Proceeds
Microsoft Corp US High technology 17.0
Broadcom Corp US High technology 13.6
AT&T Inc US Telecommunications 10.0
Deutsche Telekom
International
Netherlands Telecommunications 7.3
Petrobras Global Finance
BV
Netherlands Energy and power 4.0
Park Aerospace Holdings
Ltd
Republic of
Ireland
Industrials 3.0
IBM Corp US High technology 2.8
Comcast Corp US
Media and
entertainment
2.5
Telefonica Emisiones S.A.U Spain Telecommunications 2.0
Nissan Motor Co Ltd Japan Industrials 2.0
0
50
100
150
200
250
0
50
100
150
200
250
Feb
16
Mar
16
Apr
16
May
16
Jun
16
Jul
16
Aug
16
Sep
16
Oct
16
Nov
16
Dec
16
Jan
17
Proceeds (US$b) (LHS) Number of issues (RHS)
11
0
100
200
300
400
500
0
100
200
300
400
Feb
16
Mar
16
Apr
16
May
16
Jun
16
Jul
16
Aug
16
Sep
16
Oct
16
Nov
16
Dec
16
Jan
17
Proceeds (US$b) (LHS) Number of issues (RHS)
5. Bonds
• Global high-yield activity rose sharply in January; both the US and Europe experienced tremendous volume increments.
• The start of this year has proven to be far more varied, most evident in the amount of sterling issuance.
• Technical factors are pushing issuers back to the loan market, which is why the use of all-senior financing has increased.
• Sterling issuances increased in January as the Brexit debate intensified, as borrowers typically avoid times of potential volatility.
Capital Briefing
US bond issuances
Source: Thomson ONE.
13. Dry powder — buyout funds — by region
Global PE fundraising
Appendix A
Global PE fundraising activity
Source: Preqin
0
200
400
600
800
1,000
1,200
$0
$100
$200
$300
$400
$500
$600
$700
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ytd
Commitments (US$b) Number of funds
0%
2%
4%
6%
8%
10%
12%
14%
16%
$0
$100
$200
$300
$400
$500
$600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jan
2017
North America Europe Asia and rest of world Asia-Pacific and ROW as percentage of total
Private Equity Capital Briefing13
Source: Preqin
14. Source: Dealogic
Global PE value and volume — quarterly trend (US$b)
PE acquisitions by year (in US$b)
Appendix A
Global PE acquisition activity
Source: Dealogic
0
100
200
300
400
500
600
700
$0
$20
$40
$60
$80
$100
$120
$140
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Value Number of deals
Private Equity Capital Briefing14
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
$0
$100
$200
$300
$400
$500
$600
$700
$800
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ytd
Value Number of deals
15. 15
Americas PE acquisitions — the top deals with disclosed financial terms in 2016
Appendix A
Global PE acquisition activity by region — Americas
Americas PE acquisitions (in US$b)
0
50
100
150
200
250
300
350
$0
$10
$20
$30
$40
$50
$60
$70
$80
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Value Number of deals
Private Equity Capital Briefing
Source: Dealogic
Announcement
date
Completion
date
Company Sector Value (US$) Acquiror
12-Jan-17
Oil & Gas Assets (Eagleford Shale
Assets) Oil & Gas 2.3b Blackstone Group LP
17-Jan-17 Leslie's Poolmart Inc. Consumer Products 1.8b Catterton Management Co. LLC
3-Jan-17 23-Jan-17 LANDesk Software Inc.
Computers &
Electronics 1.2b ClearLake Capital Group LP
19-Jan-17
Power Station (four natural gas
and one hydro plant) Utility & Energy 925m LS Power Equity Advisors LLC
27-Jan-17 Harris Corp (IT services business)
Computers &
Electronics 690m Veritas Capital Management LLC
24-Jan-17
Bob Evans Farms Inc. (Bob Evans
Restaurants) Dining & Lodging 605m Golden Gate Capital Corp
9-Jan-17 9-Jan-17 Anvil International Consumer Products 315m One Equity Partners LLC
Source: Dealogic
16. Appendix A
Global PE acquisition activity by region — EMEA
EMEA PE acquisitions (in US$b)
Source: Dealogic
16
Private Equity Capital Briefing
Announcement date Completion date Company Sector Value (US$) Acquiror
22-Jan-17 Cerba Healthcare SASU Health care 1.9b Partners Group Holding AG
30-Jan-17 Zenith Vehicle Contracts Ltd. Finance 940m Bridgepoint Advisers Ltd.
13-Jan-17 ConCardis GmbH
Computers &
Electronics 744m
Advent International Corp.;
Bain Capital LLC
6-Jan-17
Power Station (365 MW
operational solar PV power
portfolio) Utility & Energy 581m EFG Hermes Private Equity
3-Feb-17 Resilux NV Chemicals 455m Bain Capital LLC
2-Feb-17 Golden Goose Srl Textile 432m Carlyle Group LP
3-Feb-17 Audiotonix Ltd.
Consumer
Products 254m Astorg Partners SA
30-Jan-17 30-Jan-17 Davies Group Ltd. (Majority %) Insurance 113m HGGC LLC
0
50
100
150
200
250
300
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Value Number of deals
Source: Dealogic
EMEA PE acquisitions — the top deals with disclosed financial terms in 2016
17. Appendix A
Global PE acquisition activity by region — Asia-Pacific
Asia-Pacific PE acquisitions (in US$b)
Source: Dealogic
0
20
40
60
80
100
120
140
$0
$5
$10
$15
$20
$25
$30
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Value No. of deals
17 Private Equity Capital Briefing
Announcement
date
Completion
date
Company Sector
Value
(US$b)
Acquiror
8-Jan-17
McDonald's China
Management Ltd. Dining & Lodging 2.1b
Carlyle Group LP;
CITIC Capital Partners Ltd.
13-Jan-17 Hitachi Koki Co Ltd. Consumer Products 1.3b KKR & Co LP
1-Feb-17 Hyundai Card Co Ltd. (43%) Finance 584m
Affinity Equity Partners
(HK) Ltd.;
Carlyle Group LP
31-Jan-17 31-Jan-17 Allied Mills Pty Ltd. Food & Beverage 344m
Pacific Equity Partners Pty
Ltd.
4-Jan-17 4-Jan-17
MEDALL Healthcare Pvt
Ltd. (80%) Health care 235m Abraaj Capital Ltd.
3-Feb-17 3-Feb-17
Shanghai Siyanli Industry
Co. Ltd. (Majority %) Health care 224m
Standard Chartered
Private Equity Ltd.
18-Jan-17 18-Jan-17 PVR Ltd. (14%) Leisure & Recreation 121m Warburg Pincus LLC
Source: Dealogic
Asia-Pac PE acquisitions — the top deals with disclosed financial terms in 2016
18. Source: Dealogic
Global PE-backed IPOs — value and volume — quarterly trend (US$b)
Appendix A
Global PE exit activity
Global PE-backed exits by M&A — value and volume — quarterly trend (US$b)
0
50
100
150
200
250
300
350
$0
$20
$40
$60
$80
$100
$120
$140
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Value Number of deals
0
10
20
30
40
50
60
70
80
90
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Value Number of deals
18 Private Equity Capital Briefing
Source: Dealogic
19. Source: Dealogic
Appendix A
Global PE exit activity — Americas
Americas PE exits — top exits 2016
Americas PE exits (in US$b)
Announcement
or filing date
Completion
or priced
date
Company Sector Value (US$b) Sponsor Type
6-Jan-17 31-Jan-17 Invitation Homes Inc. Real Estate/Property $6.3 Blackstone Group LP IPO
9-Jan-17
Surgical Care Affiliates
Inc. Health care $3.4 TPG Capital LP M&A
2-Oct-15 31-Jan-17 Laureate Education Inc. Professional Services $2.9
Sterling Partners Inc.;
Citigroup Private Equity;
KKR & Co. LP;
Snow Phipps Group LLC IPO
1-Jun-16 26-Jan-17 JELD-WEN Holding Inc. Construction/Building $2.4 Onex Corp. IPO
24-Jan-17
Multi Packaging Solutions
International Ltd. Forestry & Paper $2.3
Carlyle Group LP;
Madison Dearborn Partners LLC M&A
14-Dec-16 19-Jan-17 Keane Group Inc. Oil & Gas $2.0 Cerberus Capital Management LP IPO
17-Jan-17 Leslie's Poolmart Inc. Consumer Products $1.8
Leonard Green & Partners LP;
CVC Capital Partners Ltd. M&A
26-Jan-17
MoneyGram International
Inc. Finance $1.5
Thomas H Lee Partners LP;
Goldman Sachs Capital Partners M&A
24-Oct-16 26-Jan-17 REV Group Inc. Auto/Truck $1.4 AIP LLC IPO
25-Jan-17 CoverMyMeds LLC
Computers &
Electronics $1.4 Francisco Partners Management LP M&A
0
20
40
60
80
100
120
140
160
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
M&A value IPO value M&A volume IPO volume
19
Source: Dealogic
Private Equity Capital Briefing
20. Source: Dealogic
Appendix A
Global PE exit activity — EMEA
EMEA PE exits — top exits 2016
EMEA PE exits (in US$b)
Announcement
or filing date
Completion or
priced date
Company Sector Value (US$) Sponsor Type
7-Feb-17 Mauser Group NV Chemicals $2.3b Clayton Dubilier & Rice LLC M&A
22-Jan-17
Cerba Healthcare
SASU Health care $1.9b PAI Partners SAS M&A
30-Jan-17
Zenith Vehicle
Contracts Ltd. Finance $940m HgCapital LLP M&A
23-Jan-17
Nordic Cinema Group
AB
Leisure &
Recreation $931m Bridgepoint Advisers Ltd M&A
7-Feb-17 Momondo Group Ltd.
Computers &
Electronics $550m Great Hill Partners LP M&A
2-Feb-17 Golden Goose Srl Textile $431m Ergon Capital Partners SA M&A
5-Jan-17 5-Jan-17 Micheldever Group Ltd. Auto/Truck $265m
Graphite Capital Management
LLP M&A
3-Feb-17 Audiotonix Ltd. Consumer Products $253m Epiris Managers LLP M&A
1-Feb-17
Shopping Centres (4
shopping centres)
Real
Estate/Property $179m Blackstone Group LP M&A
7-Jan-17
Generis Farmacêutica
SA Health care $142m
Magnum Capital Industrial
Partners M&A
0
20
40
60
80
100
120
140
160
$0
$10
$20
$30
$40
$50
$60
$70
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
M&A value IPO value M&A volume IPO volume
20
Source: Dealogic
Private Equity Capital Briefing
21. Capital Briefing21
Source: Dealogic
Appendix A
Global PE exit activity — Asia-Pacific
Announcement or
filing date
Completion or
priced date
Company Sector Value (US$) Sponsor Type
5-Jan-17
China Modern Dairy
Holdings Ltd. (74.9%) Agribusiness $1.9b
CDH China Holdings
Management Co. Ltd.;
KKR & Co. LP M&A
6-Feb-17 6-Feb-17 YongLe Tape Co. Ltd. Chemicals $245m Shaw Kwei & Partners Ltd. M&A
4-Jan-17 4-Jan-17
MEDALL Healthcare Pvt
Ltd. (80%) Health care $235m Peepul Capital LLC M&A
8-Feb-17
Abacus Property Group
(World Trade Centre
complex in Melbourne);
KKR & Co. LP
Real
Estate/Property $204m KKR & Co LP M&A
18-Jan-17 18-Jan-17 PVR Ltd. (14%)
Leisure &
Recreation $121m
Multiples Alternate Asset
Management Pvt Ltd. M&A
Asia-Pacific PE exits — top exits 2016
Asia-Pacific PE exits (in US$b)
0
5
10
15
20
25
30
35
40
45
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
M&A value IPO value M&A volume IPO volume
Source: Dealogic
Private Equity Capital Briefing
22. Appendix B
M&A activity monthly flash
Volume Value Volume Value
Calendar
YTD
YTD % ∆ Calendar
YTD
YTD % ∆ LTM LTM % ∆ LTM LTM % ∆
2017
(to January
17)
vs. 2016
(to January
16)
2017
(to January
17)
vs. 2016
(to January
16)
LTM
(to January
17)
vs. PTM
(to January
16)
LTM
(to January
17)
vs. PTM
(to January
16)
M&A activity by areas and regions
Global 2,410 -25% 262,303 44% 35,113 -8% 3,570,462 -14%
Americas 942 -24% 156,190 45% 12,930 -12% 2,113,137 -14%
Canada 124 -38% 9,762 -53% 2,515 2% 223,272 9%
MeCAR 13 0% 753 83% 218 -17% 21,700 -6%
SA region 67 -13% 6,813 22% 826 -25% 85,002 30%
US 804 -21% 146,919 54% 10,332 -14% 1,933,996 -15%
EMEA 918 -27% 103,211 235% 12,745 -5% 1,256,119 -2%
Africa 35 -41% 1,875 -12% 570 -12% 46,903 55%
BeNe 60 -29% 1,882 407% 836 -11% 95,547 -69%
CIS 38 -45% 590 -59% 878 -10% 66,128 47%
CSE 34 -69% 1,929 -38% 896 -19% 51,837 21%
FraLux 177 -38% 42,444 1607% 2,312 -1% 172,651 -5%
GSA 203 3% 34,399 476% 2,193 -7% 351,410 121%
Israel 24 -14% 344 -74% 235 -10% 22,807 -59%
Mediterranean 113 6% 29,155 696% 1,352 -12% 144,855 -19%
MENA 19 -39% 2,749 480% 291 -16% 62,950 67%
Nordics 132 -3% 3,350 1% 1,378 3% 71,739 12%
UK&I 234 -29% 14,333 66% 3,604 4% 332,457 -36%
Asia-Pacific 862 -20% 63,335 -13% 13,460 -5% 1,113,718 -4%
ASEAN 135 -1% 3,551 -9% 1,842 6% 85,740 47%
Greater China 378 -19% 43,623 -14% 5,488 -4% 667,631 -8%
India 115 6% 2,091 26% 1,139 -16% 69,644 32%
Japan 201 -9% 9,264 -3% 3,032 -4% 180,426 4%
Korea 17 -85% 881 -89% 1,137 -14% 56,307 -45%
Oceania 60 -38% 4,680 148% 1,644 -4% 110,355 15%
M&A activity by sectors
Aerospace and defense 22 -24% 11,417 2184% 346 -13% 41,644 23%
Automotive and transportation 174 -19% 7,865 -82% 2,399 -8% 220,372 -29%
Banking and capital markets 142 -32% 11,171 -51% 2,212 -15% 279,718 -33%
Consumer products and retail 368 -26% 60,039 184% 5,198 -10% 440,233 -34%
Diversified industrial products 304 -23% 42,090 108% 4,723 -7% 562,810 34%
Government and public sector 43 -25% 603 -80% 592 -19% 17,597 -49%
Insurance 68 -24% 4,597 -7% 999 -13% 138,628 -55%
Life sciences 187 -21% 54,284 256% 2,346 -8% 420,491 -5%
Media and entertainment 146 -35% 4,668 -67% 2,301 -12% 239,310 -22%
Mining and metals 107 -24% 7,527 24% 2,099 1% 119,315 -14%
Oil and gas 96 -14% 44,963 421% 1,402 -1% 459,794 48%
Other sectors 322 -16% 9,103 -64% 3,895 -13% 119,212 -16%
Power and utilities 116 -9% 16,938 84% 1,408 -5% 260,753 42%
Provider care 85 -13% 15,151 324% 1,095 -8% 74,915 23%
Real estate 214 -26% 10,400 -12% 3,305 -5% 245,930 12%
Technology 665 -26% 28,882 -25% 9,228 -7% 624,950 -19%
Telecommunications 45 -22% 1,484 -65% 697 -18% 270,150 51%
Wealth and asset management 48 -45% 2,824 24% 967 -6% 52,173 -23%
22
Regions’ M&A numbers represent a summation of domestic, inbound and outbound M&A activity involving the region.
Sectors’ numbers represent involvement from either side, i.e., target or acquiror, except in the case of wealth and asset management, where only target-side involvement has been mapped.
M&A analysis as at 1 February 2017. Source: Dealogic. All Rights Reserved.
Note: data is continually updated and therefore subject to change.
Capital Briefing
2016 2017
J F M A M J J A S O N D J F M A M J J A S O N D
2015 2016 2017
J F M A M J J A S O N D J F M A M J J A S O N D J
23. Appendix C
M&A multiples and bid premium
Deal multiples greater than 30x and bid premium greater than 100% have been excluded from calculation of median.
M&A analysis as at 1 February 2017. Source: Dealogic. All Rights Reserved.
Note: data is continually updated and therefore subject to change.
23
Median deal multiple — EV / EBITDA
Global Americas Asia-Pacific EMEA
LTM
(to Jan 17)
PTM
(to Jan 16)
LTM
(to Jan 17)
PTM
(to Jan 16)
LTM
(to Jan 17)
PTM
(to Jan 16)
LTM
(to Jan 17)
PTM
(to Jan 16)
Aerospace and defense 11.7x 12.5x 10.1x 9.1x 13.9x 11.5x 15.5x 13.7x
Automotive and transportation 9.7x 10.0x 8.7x 10.3x 11.8x 10.0x 9.1x 9.2x
Consumer products and retail 10.8x 11.0x 11.1x 11.0x 11.7x 12.0x 10.1x 10.2x
Diversified industrial products 9.8x 10.1x 9.9x 11.0x 11.1x 10.7x 8.8x 9.1x
Financial services 10.4x 10.4x 12.2x 11.8x 8.9x 8.0x 8.7x 10.5x
Government and public sector 8.6x 15.6x 7.8x 15.6x 8.2x 11.2x 9.5x 15.9x
Health care 10.9x 11.8x 11.9x 10.3x 15.7x 16.3x 8.9x 11.1x
Life sciences 13.3x 10.9x 8.7x 9.8x 23.7x 8.6x 13.3x 11.9x
Media and entertainment 12.2x 12.4x 11.3x 12.7x 18.4x 12.7x 10.2x 11.8x
Mining and metals 10.2x 11.7x 8.8x 10.7x 12.8x 14.2x 9.2x 10.7x
Oil and gas 9.2x 8.4x 8.3x 8.3x 8.7x 8.8x 9.7x 8.1x
Other sectors 8.5x 7.9x 10.1x 6.2x 10.5x 15.4x 5.6x 8.7x
Power and utilities 9.2x 9.5x 11.3x 10.4x 10.5x 10.8x 8.3x 7.9x
Real estate 9.7x 9.3x 11.1x 9.1x 9.6x 9.3x 9.6x 10.0x
Technology 11.3x 11.2x 12.2x 13.2x 11.8x 10.5x 10.1x 10.4x
Telecommunications 8.3x 7.4x 9.9x 6.4x 8.0x 10.3x 7.2x 7.0x
Total 10.3x 10.5x 10.7x 10.7x 11.2x 10.9x 9.3x 10.0x
Median bid premium to four-week stock price
Global Americas Asia-Pacific EMEA
LTM
(to Jan 17)
PTM
(to Jan 16)
LTM
(to Jan 17)
PTM
(to Jan 16)
LTM
(to Jan 17)
PTM
(to Jan 16)
LTM
(to Jan 17)
PTM
(to Jan 16)
Aerospace and defense 31% 29% 48% 14% 22% 32% 29% -
Automotive and
transportation
22% 12% 37% 18% 19% 11% 8% 11%
Consumer products and retail 18% 21% 27% 32% 15% 17% 17% 16%
Diversified industrial products 23% 18% 33% 24% 20% 17% 22% 26%
Financial services 22% 20% 30% 27% 15% 11% 15% 14%
Government and public sector 35% 22% 44% 23% 10% 21% 40% 16%
Health care 13% 18% 13% 30% 10% 10% 12% 24%
Life sciences 27% 18% 25% 32% 35% 16% - 2%
Media and entertainment 32% 23% 42% 37% 26% 19% 11% 16%
Mining and metals 22% 19% 26% 29% 21% 12% 23% 17%
Oil and gas 25% 23% 29% 28% 22% 18% 18% 32%
Other sectors 19% 24% 23% 27% 20% 20% 18% 22%
Power and utilities 27% 21% 31% 26% 22% 22% 28% 21%
Real estate 25% 13% 27% 15% 25% 14% 18%% 3%
Technology 24% 24% 38% 29% 18% 18% 15% 25%
Telecommunications 21% 15% 43% 26% 7% 15% 15% 12%
Total 23% 20% 31% 27% 18% 17% 17% 17%
Capital Briefing
24. Appendix D
Capital Confidence Barometer (October 2016): by area
Respondents who expect their company to pursue acquisitions in the next 12 months.
40%
56%
59%
50%
57%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
34%
57%
67%
54%
62%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
30%
50% 48%
44%
47%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
Global Americas EMEA
57%
45% 44%
38%
47%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
Asia-Pacific China Germany
28%
51%
56%
50%
61%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
Japan UK US
16%
58%
52%
59%
48%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
33%
61%
74%
57%
75%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
24
56%
43%
40%
43%
49%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
68%
51%
43%
35%
61%
0%
25%
50%
75%
100%
Oct 14 Apr 15 Oct 15 Apr 16 Oct 16
Private Equity Capital Briefing
