AI Issue 4 2018 - John Harrison & Company

Acquisition International - Issue 4 2018 81 Number and Aggregate Value (mil USD) of Deals Globally: Q2 2013- Q1 2018 (as at 26th March 2018) Deal quarterly value (Announced date) Number of deals Aggregate deal value (mil $) Q1 2018 20,758 1,302,865 Q4 2017 25,767 1,420,069 Q3 2017 24,696 1,164,594 Q2 2017 25,763 1,243,109 Q1 2017 25,557 1,160,819 Q4 2016 26,335 1,427,190 Q3 2016 25,498 1,300,916 Q2 2016 25,948 1,111,890 Q1 2016 27,439 1,018,323 Q4 2015 27,884 1,541,367 Q3 2015 28,020 1,449,868 Q2 2015 28,820 1,551,503 Q1 2015 25,177 1,329,643 Q4 2014 26,849 1,253,358 Q3 2014 26,125 1,238,796 Q2 2014 25,131 1,383,476 Q1 2014 24,810 936,571 Q4 2013 26,178 963,310 Q3 2013 23,332 1,074,984 Q2 2013 22,487 925,055 World region (target) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Western Europe 6,978 6,620 6,423 7,507 6,149 Far East and Central Asia 7,113 7,874 7,869 7,698 5,893 North America 6,939 6,559 5,974 5,834 5,488 Eastern Europe 2,259 2,375 2,129 2,246 1,662 Oceania 992 1,089 1,059 1,154 669 South and Central America 596 673 635 673 461 Africa 393 350 335 384 231 Middle East 242 192 222 229 189 Number of Deals Globally by Target World Region: Q1 2017-Q1 2018 (as at 26th March 2018) Q1 round up Despite overall global M&A activity declining in Q1 2018, companies operating in the industrials sector actually bucked the trend and increased by value, despite volume reaching its lowest quarterly level in four years. According to Zephyr, the M&A database published by Bureau van Dijk, there were 4,765 deals worth USD 334,279 million announced over the course of the quarter. In terms of value, the result in Q1 2018 was one of the largest on record for the sector, behind Q3 2016 (USD 349,813 million) and Q4 2015 (USD 342,797 million). Quarter-on-quarter value was up 4 per cent on USD 320,907 million in Q4 2017 and represented an increase of 61 per cent year-on-year from USD 208,144 million in Q1 2017. Volume, however, declined 16 per cent over the three months and 14 per cent on the same timeframe last year to the lowest recorded result since Q2 2014 (4,748 deals). The increase by value against the decline in volume suggests that buyers favoured single transactions with higher valuations over prolific dealmaking in the industrials industry in Q1 2018. One deal propped up overall M&A value in the sector in the three month period as Qualcomm River Holdings agreed to acquire Netherlands-based NXP Semiconductors for USD 53,000 million, or 16 per cent of total value recorded for the period. Three more deals broke the USD 10,000 million- barrier in Q1 2018, including the USD 11,167 million acquisition of UK-based GKN, US-based Microsemi being taken over for USD 10,150 million and Spectrum Brands Holdings of the US, which was purchased for USD 10,000 million. Having featured in the top two deals of the quarter so far, it comes as no surprise to see that companies in Western Europe attracted the most value in Q1, having been targeted in 1,631 deals worth USD 140,052 million. This represents 42 per cent of total value in the quarter. Companies based in the Far East and Central Asia were second by value and first by volume, with 1,743 deals worth USD 86,071 million. North America was third by value with USD 75,226 million invested across 868 deals. In conclusion, the industrials industry has performed well over the opening three months of 2018, which can largely be attributed to a handful of sizeable transactions in the sector. If the coming months continue to see large investments in the industry, it could prove to be an impressive year for M&A activity in industrials companies. Industrials Number and Aggregate Value (mil USD) of Deals Globally: Q2 2013- Q1 2018 (as at 26th March 2018) Number and Aggregate Value (mil USD) of Deals Globally: Q1 2006-Q1 2018 (as at 26th March 2018) Deal type Number of deals Aggregate deal value (mil $) Acquisition 386,996 26,931,432 Minority stake 481,582 11,956,224 Capital increase 185,123 11,397,276 Institutional buy-out 21,040 3,717,157 Management buy-out 5,874 118,784 Demerger 1,776 58,716 Zephus classification (target) Number of deals Aggregate deal value (mil $) Banking, Insurance & Financial Services 173,012 13,542,047 Personal, Leisure & Business Services 210,980 8,584,131 Industrial, Electric & Electronic Machinery 129,327 5,992,614 Mining & Extraction 83,392 5,713,817 Computer, IT and Internet services 178,029 5,362,991 Utilities 37,977 4,863,641 Communications 29,580 4,009,948 Chemicals, Petro- leum, Rubber & Plastic 56,769 3,946,679 Wholesaling 81,607 3,894,742 Property Services 66,782 3,851,908 Transport, Freight, Storage & Travel Services 51,549 3,821,596 Retailing 55,704 2,973,881 Biotechnology, Phar- maceuticals and Life Sciences 27,765 2,435,960 Food & Tobacco Manufacturing 34,261 2,386,071 Metals & Metal Products 41,934 2,197,925