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. 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. In the News
Headwaters MB Announces Merger with Reuters: Daruma may advise 5 acquisition
Source Companies deals by end of year
Mergers Alliance's 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".