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US South

Mergermarket trend report H1 2016

Fact file - H1 2016 vs. H1 2015

Total

Texas

Florida

Maryland

Energy, Mining

& Utilities

$156.1bn

-18.7%
-18.7%

$53.4bn

-35.3%
-35.3%

$26.0bn

8.0%
8.0%

$16.5bn

149.7%
149.7%

$35.7bn

-35.2%
-35.2%

US South

US South 35.3% decline from H1 2015 (US$ 82.4bn, 247 deals). Texas’ top deal came from

35.3% decline from H1 2015 (US$ 82.4bn, 247 deals). Texas’ top deal came from the Energy, Mining & Utilities (EMU) sector: TransCanada Corporation’s US$ 12bn bid for Columbia Pipeline Group, which accounted for 22.6% of the state’s total value and was the state’s only mega-deal for the first half of the year, whereas H1 2015 had seen two. EMU was the largest sector in the South with 85 deals worth a total of US$ 35.7bn, a 35.2% drop in value with eight fewer deals than H1 2015 (US$ 55.1bn, 93 deals). The TransCanada/Columbia Pipeline deal was not only EMU’s largest transaction, comprising 33.7% of that sector’s total value, but also the largest in Texas, and the second-largest in the South overall.

EMU’s total value was just 4.2% above that of Industrials & Chemicals (US$ 34.3bn, 120 deals), which was the second-ranked sector in the South for H1 2016. I&C also saw a 70% increase in value from H1 2015 (US$ 20.2bn, 134 deals), though with 14 fewer deals. Additionally, the aforementioned Apollo Global Management/ADT Corporation transaction helped to boost I&C, having comprised 35.8% of the sector’s total value. From 2011 to 2016 I&C saw a year-on-year increase in value for a first half of the year, is the only sector with a year-on-year H1 increase during that timeframe.

In the first half of 2016, the Southern US saw 721 deals worth a total of US$ 156.1bn, a drop of 18.7% from H1 2015 (US$ 192.2bn, 825 deals) and of 2.7% from H1 2014 (US$ 160.5bn, 878 deals). Given that 2015 and 2014 were peak years for M&A activity overall, H1 2016’s cool-down may not come as much of a surprise, and is especially worth noting as the decrease in value over the same period last year was relatively small compared to most other regions. The South also comprised 27.1% of overall US market share in H1 2016, and, with dealmakers expecting an increase in activity for H2 2016, this could end up being a strong year overall for M&A in the region.

The South’s top transaction was private equity firm Apollo Global Management’s US$ 12.3bn buyout of Florida-based electronic security and monitoring services company The ADT Corporation. The transaction was responsible for 47.1% of Florida’s total deal value (US$ 26bn, 110 deals), helping to propel the Sunshine State to second place after Texas.

The Lone Star State, meanwhile, was once again number one in the region, with 217 deals in H1 2016 worth a total of US$ 53.4bn. However, this was a

H1

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

Quarterly M&A value

The UK has been central to Europe’s overall M&A activity so far in 2015,

contributing a 38.7% share to the regions total deal value, up from a 14.5%

Sector breakdown

US$ 156.1bn US$ 429.9bn US$ 269.7bn US$ 282.6bn US$ 345.2bn US$ 257.3bn US$ 193.8bn US$
US$ 156.1bn
US$ 429.9bn
US$ 269.7bn
US$ 282.6bn
US$ 345.2bn
US$ 257.3bn
US$ 193.8bn
US$ 194.2bn
18.5 49.9 deals, 11.0 23.4 12.9 20.3 Q3 dropped to £33.5bn during 13.0 1.2 13.5
18.5
49.9
deals,
11.0
23.4
12.9
20.3
Q3
dropped
to
£33.5bn
during
13.0
1.2
13.5
7.3
17.3
14.9
34.3
20.2
35.7

in

55.1

10

20

30 40 Deal value ($bn) H1 2016 H1 2015
30
40
Deal value ($bn)
H1 2016
H1 2015

50

during the same period in 2014,

Other

Technology

and its highest stake on record (since

2001). The 1,004 deals worth £170bn announced to-date have already

overtaken 2014’s full value (1401

£94.8bn) by 79.2%, marking the

US$ 544.5bn

highest annual total since 2007 (1,528 deals, £171.4bn).

Pharma, Medical &

whilst

deal

Biotech

value

Deal activity was bolstered by the highest valued H1 period on record

the

(£136.5bn)

traditionally slow summer months. Despite showing a 59.7% decrease

Consumer

compared to Q2 (325 deals, £83.0bn), Q3 deal value increased by 81.6%

compared to Q3 2014 (311 deals, £16.8bn).

Real Estate

According to Mergermarket intelligence, the turmoil surrounding the

Business Services

Greek economy and the consequentially weakened euro has pushed

investors to be more confident when entering UK transactions. This year,

Industrials &

inbound M&A has reached a record value at £138.6bn, up 118.7% by

Chemicals

value compared to the whole of 2014, and overtaking all annual totals on

Mergermarket record. France by comparison has recorded £42.4bn-worth

Energy, Mining &

Utilities

of inbound deals to-date, down 41.7% by value compared to the same

60

US$ 546.8bn

period in 2014 (185 deals, £72.8bn).

0

Value of deals ($bn) Q1 Q2 Q3 Q4
Value of deals ($bn)
Q1
Q2
Q3
Q4

US South trend report H1 2016 www.mergermarket.com

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Q3 Q4 US South trend report H1 2016 www.mergermarket.com 2 According to Mergermarket Intelligence, Southern dealmakers

According to Mergermarket Intelligence, Southern dealmakers are anticipating strong M&A activity for the rest of 2016, particularly in the Pharma, Medical & Biotech sector. PE funds eager to buy up assets with attractive valuations have also added to the South’s optimism for dealmaking in H2 2016. The middle market space also looks promising as it is not likely to be influenced by global market uncertainty caused by Brexit. However, the Energy sector did not have the same positive outlook as other sectors. Supporting the downturn trend shown by Mergermarket data, experts noted that Energy, as well as service providers supporting Energy firms, have become a turn off for some clients in the region.

State breakdown

400 350 300 250 200 150 100 50 0 H1 2007 H1 2008 H1 2009
400
350
300
250
200
150
100
50
0
H1 2007
H1 2008
H1 2009
H1 2010
H1 2011
H1 2012
H1 2013
H1 2014
H1 2015
H1 2016
Florida
Maryland
Georgia
Tennessee
Texas
Virginia
Rest of the region
Value of deals (US$bn)

US South

US South Top deals Deal Ann. Bidder Bidder Buy-side Target Target Seller value Sell-side advisors date
Top deals Deal Ann. Bidder Bidder Buy-side Target Target Seller value Sell-side advisors date company
Top deals
Deal
Ann.
Bidder
Bidder
Buy-side
Target
Target
Seller
value
Sell-side advisors
date
company
country
advisors
company
sector
company
(US$m)
12,269
16-Feb-16
Apollo Global Management LLC
USA
FA: Barclays; Citi; Deutsche Bank;
RBC Capital Markets
The ADT Corporation
Industrials &
Chemicals
- FA: Bank of America Merrill Lynch;
Goldman Sachs
LA: O'Melveny & Myers; Paul
Weiss Rifkind Wharton & Garrison;
Stikeman Elliott
LA: Simpson Thacher & Bartlett;
Advising FA: Shearman & Sterling;
Sullivan & Cromwell
12,040
17-Mar-16
TransCanada Corporation
Canada
FA: Wells Fargo Securities
Columbia Pipeline Group Inc
Energy,
- FA: Goldman Sachs; Lazard
Mining &
LA: Blake, Cassels & Graydon;
Mayer Brown; Osler, Hoskin &
Harcourt; Advising FA: White &
Case
Utilities
LA: Bennett Jones; Sullivan &
Cromwell; Advising FA: Simpson
Thacher & Bartlett; Skadden Arps
Slate Meagher & Flom
6,776
15-Jun-16
Envision Healthcare Holdings Inc
USA
FA: Barclays; Evercore Partners
Amsurg Corp
Pharma,
Medical &
- FA: Guggenheim Partners;
JPMorgan
Biotech

LA: Debevoise & Plimpton; Advising FA: Cleary Gottlieb Steen & Hamilton; Morrison & Foerster

LA: Bass Berry & Sims; Advising FA:

Cravath Swaine & Moore

LA: Bass Berry & Sims; Advising FA: Cravath Swaine & Moore US South trend report H1

US South trend report H1 2016 www.mergermarket.com

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US South

US South Financial advisor league table by value Financial advisor league table by deal count Ranking
Financial advisor league table by value Financial advisor league table by deal count Ranking Company
Financial advisor league table by value
Financial advisor league table by deal count
Ranking
Company name
H1 2016
Ranking
Company name
H1 2016
H1
H1
Value
Deal
%
Value
H1
H1
Value
Deal
Count
2016
2015
(US$m)
count
change
2016
2015
(US$m)
count
change
1 Goldman Sachs
2
123,641
31
67.7%
1 1
Goldman Sachs
123,641
31
-6
2 Bank of America Merrill Lynch
4
62,797
23
20.2%
2 11
Barclays
47,177
27
7
3 5
Barclays
47,177
27
-1.4%
3 3
JPMorgan
34,224
25
-7
4 9
Deutsche Bank
44,541
16
32.0%
4 6
Raymond James & Associates
1,523
25
0
5 18
RBC Capital Markets
43,458
23
580.8%
5 2
Houlihan Lokey
7,204
24
-11
6 20
Wells Fargo Securities
41,803
17
581.8%
6 4
Bank of America Merrill Lynch
62,797
23
-7
7 3
Citi
37,877
19
-42.4%
7 18
RBC Capital Markets
43,458
23
9
8 7
Morgan Stanley
36,793
23
-7.4%
8 5
Morgan Stanley
36,793
23
-3
9 1
JPMorgan
34,224
25
-61.3%
9 12
Credit Suisse
23,459
21
2
10 6
Credit Suisse
23,459
21
-50.9%
10 15
Jefferies
11,870
21
3
11 8
Lazard
18,430
19
-49.3%
11 9
Evercore Partners
14,459
20
-4
12 10
Evercore Partners
14,459
20
-47.1%
12 16
Citi
37,877
19
4
13 106
BMO Capital Markets
11,907
5
9,350.0%
13 8
Lazard
18,430
19
-5
14 29
Jefferies
11,870
21
257.2%
14 7
Stifel/KBW
9,766
19
-6
15 44
Stifel/KBW
9,766
19
653.5%
15 45
Robert W. Baird & Co
5,448
18
14

Legal advisor league table by value

Legal advisor league table by deal count

Ranking

Company name

H1 2016

 

Ranking

Company name

H1 2016

 

H1

H1

Value

Deal

%

Value

H1

H1

Value

Deal

Count

2016

2015

(US$m)

count

change

2016

2015

(US$m)

count

change

1 10

White & Case

76,045

30

108.7%

1 1

Kirkland & Ellis

26,343

68

-3

2 3

Sullivan & Cromwell

63,949

18

27.4%

2 2

DLA Piper

6,363

56

0

3 Simpson Thacher & Bartlett

4 Skadden Arps Slate Meagher & Flom

2

1

55,373

43,539

13

22

-27.6%

-61.6%

3 3

4 Latham

Jones Day

4

& Watkins

14,128

30,590

51

48

-3

2

5 4

Weil Gotshal & Manges

31,427

23

-36.2%

5 7

White & Case

76,045

30

0

6 7

Latham & Watkins

30,590

48

-30.6%

6 9

Goodwin Procter

3,659

26

-4

7 Cleary Gottlieb Steen & Hamilton

8 Kirkland & Ellis

9

11

27,858

26,343

8

68

-31.5%

-26.7%

7 6

8 Hogan Lovells International

King & Spalding

14

7,843

20,932

25

24

-6

-2

9 Gibson Dunn & Crutcher

8

23,578

18

-45.0%

9 11

Vinson & Elkins

13,637

24

-4

10 Stikeman Elliott

52

22,778

9

197.6%

10 15

Cooley

2,830

24

0

11 Hogan Lovells International

40

20,932

24

63.2%

11 19

Weil Gotshal & Manges

31,427

23

2

12 125

Bennett Jones

20,584

5

4,126.7%

12 18

Morgan Lewis & Bockius

5,099

23

1

13 12

Shearman & Sterling

20,288

11

-38.0%

13 Skadden Arps Slate Meagher & Flom

5

43,539

22

-14

14 Fried Frank Harris Shriver & Jacobson

14

19,628

11

-32.8%

14 25

Locke Lord

10,707

20

1

15 Cravath, Swaine & Moore

13

19,369

10

-40.2%

15 28

Sullivan & Cromwell

63,949

18

0

US South trend report H1 2016

4

US South

Trend report criteria

All data is based on transactions over US$ 5m and is based on Mergermarket’s M&A deals database. Deals with undisclosed deal values are included where the target’s turnover exceeds US$10m. Deals where the stake acquired is less than 30% will only be included if the value is greater than US$100m.

All values are in US$.

Data correct as of 30-Jun-2016.

Production contacts Analyst: Aram Hovsepian T: +1 212 390 7826 PR contacts Americas: Chrissy Carney
Production contacts
Analyst:
Aram Hovsepian
T: +1 212 390 7826
PR contacts
Americas:
Chrissy Carney
T: +1 646 378 3118
Commercial contacts

Americas:

Kurt Viehl T: +1 212 390 7812

M&A trend: Based on the dominant geography of the target company being South. All trend data excludes lapsed and withdrawn bids.

Top deals: Based on the dominant geography of the target company being South. FA refers to financial advisor and LA refers to legal advisor. Excludes lapsed and withdrawn bids.

Industry analysis: Based on the dominant sector and geography of the target company. Excludes lapsed and withdrawn bids.

of the target company. Excludes lapsed and withdrawn bids. Research Editor - Americas: Elizabeth Li m

Research Editor - Americas:

Elizabeth Lim T: +1 212 686 3016

Asia:

Su Chin Zhang T: +852 2158 9706

Asia:

Ajay Narang T: +852 2158 9764

EMEA:

Olivia Cummins T: +44 20 3741 1129

EMEA:

Ben Rumble T: +44 3741 1007

Deal submission contacts

League tables: Based on the dominant geography of the target, bidder or seller company being South. Financial advisor tables exclude lapsed and withdrawn bids. Legal advisor tables include lapsed and withdrawn bids.

Americas:

Asia:

Jason Loria T: +1 646 378 3122

John Capulong T: +852 2158 9723

EMEA:

Andrea Putaturo T: +44 20 3741 1274

South includes: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

About Mergermarket

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Mergermarket is part of The Mergermarket Group which has nearly 1000 employees worldwide and regional head offices in New York, London and Hong Kong.

In any market, the life blood of advisors is deal flow. Mergermarket is unique in the provision of origination intelligence to the investment banking, legal, private equity, acquisition finance, public relations (PR) and corporate markets.

With an unrivalled network of analysts covering M&A in the Americas, Europe, Middle-East, Africa and Asia-Pacific, Mergermarket generates proprietary intelligence and delivers it together with daily aggregated content, on its Mergermarket.com platform and by real-time email alerts to subscribers.

This wealth of intelligence, together with a series of deal databases, individual and house league tables, profiles and editorial have proven time and time again that this product can and does generate real revenues for clients. This is apparent when you see that Mergermarket is used by over 1,500 of the world’s foremost advisory firms to assist in their origination process.

US South trend report H1 2016 www.mergermarket.com

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