Asia-Pacific M&A Barometer Issue 1

06 June 2014

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Ascent Partners and Mergermarket are proud to present this inaugural edition of their quarterly newsletter on M&A trends in Asia-Pacific. In this issue, we examine M&A activity in 1Q 2014, a three-month period of record transaction volumes and signs that confidence has returned to the market as a steady recovery unfolds.

By market figures, China maintained its position as the most active frontier for M&A across Asia-Pacific, with 247 deals in 1Q 2014. Deal making in Asia’s financial hub Hong Kong saw an uptick from the same period last year with 33 deals in 1Q 2014 from 29 in 1Q 2013. M&A in Singapore, Asia’s other financial center, likewise rose year on year, from 15 deals in 1Q 2013 to 33 in 1Q 2014.

Notable trends illustrated in this first issue of Asia-Pacific M&A Barometer includes:

  • Quarterly figures from 2013 increased from 694 deals worth US$82bn to 725 worth US127bn
  • The top three countries by number of deals were China (247 deals), Japan (100), and Australia (100)
  • Standout sectors included industrials and chemicals (20% of deal volume), TMT (17%), and consumer (12%)
  • 54% of deals were valued below US$50m; 38% of deals were valued between US$51m and US$500m

Also included in the newsletter is an exclusive interview with Ascent Partners’ Director William Yuen providing expert insight into M&A trends and tactics in deal making and M&A valuation.

Indonesia’s mineral export ban: A driver for development?

17 April 2015

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Mergermarket and a consortium of Indonesian Resource and Policy think tanks are proud to present this exclusive newsletter on Indonesia’s mining industry and the potential upside that the export ban and mining law will bring to domestic growth and foreign investment.
 
The export ban holds the potential to help Indonesia move away from its dependency on a deficit-driven world economy while creating more opportunity to gain greater long-term value from its rich mineral wealth. Downstreaming can help galvanize private companies to invest, mainly through transport and new infrastructure, to support a more complex industry with positive knock-on effects expected for the nation’s social infrastructure.
 
According to the Indonesian Resource Centre (IRESS), the ban will help to increase the value of mineral exports by US$268bn and effectively create some 2.5 million jobs. The policy has already led to some 185 project proposals submitted for processing facilities, with a combined value of US$555bn.
 
In addition to analyzing the benefits of the export ban, Marwan Batubara of the IRESS provides insight on:
 
  • The overall impact of the export ban, more than a year after its implementation;
  • The reaction by companies, both domestic and international, to the ban;
  • Potential long-term benefits of the downstreaming policy within the mining industry;
  • And, the regulatory improvements that could facilitate a healthy balance between foreign investment and a value-add economy.

Global M&A Valuation Outlook

16 June 2014

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Mergermarket is pleased to present the third edition of Global M&A Valuation Outlook in association with American Appraisal. This report offers an in-depth insight into the key issues that will be affecting valuations in M&A over the next year.

Highlights from the report include:

  • The outlook for global M&A is optimistic, with dealmakers expecting average EBITDA multiples to rise from 9.2x in 2013 to 10.5x in 2014, and 11.3x in 2015.
  • Private equity multiples are expected to support this increase, with buyout multiples rising from 9.5x in 2013 to 11.2x in 2015, and exit multiples rising from 9.5x in 2013 to 11.4x in 2015.
  • The TMT sector is thriving as consolidation drives up multiples, which are expected to hit a new post-crisis peak of 11.7x in 2015.
  • Economic reforms in China have revitalized M&A and are expected to boost valuations from 11.3x in 2013 to 12.6x in 2015. However, multiples in India are expected to fall from 9.1x in 2013 to 8.4x in 2014, due to economic stagnation and political uncertainty.
  • Although North American deal activity was flat in 2013, economic growth and the availability of debt mean that multiples are expected to increase from 9.0x in 2013 to 10.4x in 2014, and 11.2x in 2015.
  • In Northern and Western Europe, as well as Central and Eastern Europe, valuations are expected to reach new five-year highs by 2015. However, weak economic growth means that valuations in Southern Europe are expected to fall in 2014, before slightly rebounding in 2015.

Aviation, Aerospace & Airports M&A Quarterly Q1 2014

17 June 2014

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In Q1 2014, M&A activity was up in both the aviation and aerospace sectors compared to the previous quarter, according to the third edition of Aviation, Aerospace & Airports M&A Quarterly, published by global consulting firm, ICF International (formerly ICF SH&E) in association with Mergermarket.

Highlights include:

  • A new section focused on airport transactions: Russia and Italy saw a number of key airport deals in Q1 2014
  • Drivers of aviation M&A: The proliferation of technology-related aviation deals and heightened activity in the rotorcraft industry
  • Original Equipment Manufacturers (OEMs) consolidation trend continues

Rebooting the deal process: How technology is changing the art of M&A

02 March 2015

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The role of technology in M&A deals has significantly increased over the years, transforming the way transactions are completed. The use of different platforms is facilitating the quick delivery of deal information to a wider group, and as a result, crucial stages in a transaction can now be done remotely and simultaneously by several deal parties. But what does it bring to the table for those involved, and how should companies manage its use? Vintage commissioned Mergermarket to look closely at this topic.
 
Points of discussion:
 
  • Tech is increasing speed and efficiency in the deal process—but is it the be all and end all?
  • How is technology enhancing value in the deal process?
  • What are the risks and challenges dealmakers face when incorporating technology into the deal process?

Business without borders: International growth at mid-cap companies

01 March 2015

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Mergermarket is pleased to present Business without borders: International growth at mid-cap companies, published in association with Mazars. The report canvasses the opinions of 150 senior corporate decision makers at global mid-market firms to discover which markets and regions they are targeting, where they are already achieving success and how they intend to finance their international growth plans.
 
Key findings from the study include:
 
  • International growth is seen as a key part of company strategy by 56% of mid-cap firms surveyed, while exactly half plan to make an acquisition in the next three years.
  • 45% of respondents generate more than half of their revenues internationally, and 47% already operate in more than 10 international markets.
  • 73% of mid-cap firms polled say access to a proven business model is a key driver of their acquisition strategy.
  • To finance their international strategy 58% of respondents are most likely to use bank debt, with 56% preferring internal profits. 31% expect private equity capital to be one of their top funding sources.

Market Spotlight: Corporate Breakups

31 March 2015

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Welcome to March’s Venue® Market Spotlight. This month’s edition focuses on Corporate Breakups.
 
In March 2015, RR Donnelley commissioned Mergermarket to interview professionals based in the US, Europe and Asia-Pacific who predict the volume of corporate breakups will increase over the next 12 months. Breakups can serve as a way for companies to unlock value by separating out the good and the bad performers within their organization to better focus on each one’s key strengths.

Monthly M&A Insider: June 2014

20 June 2014

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Deal sizes increased again in May, continuing a trend from April. The total value of transactions the two months of Q2 2014 already reached US$623bn, exceeding the total value for the full quarter of Q2 2013 that saw US$555bn.

Highlights include:

 

  • May’s top deal was in the telecommunications sector with AT&T purchasing DirecTV for US$65bn
  • Bayer’s US$14bn purchase of Merck & Co.’s consumer care unit will create one of the largest global healthcare-related consumer companies
  • In the consumer sector, food-related transactions made up over a third of the top 20 deals

Monthly M&A Insider – March

24 March 2015

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Last year was clearly a landmark year for M&A dealmaking as the market saw deal numbers soar and reach pre-crisis levels. The big question for this year is whether the number of transactions will remain elevated and reach the heights that it saw in 2014. The first two quarters of this year indicate that this may not be the case. The volume and value of global deals during this period have not kept pace with last year’s Q1 2014 deal activity.
 
Highlights include:
 
  • The Consumer sector is dominating global M&A activity, followed by Pharmaceuticals, Medical and Biotech.
  • The largest European deal for February was BT Groups US$19bn acquisition of mobile carrier EE Limited.
  • APAC activity for February remained active raking in 213 deals worth US$45.9bn; YTD figures show that Q1 has already surpassed figures for the full first quarter in 2014, exhibited by the US$137.2bn in transactions against US$123.6bn in Q1 2014

Developing Best Practices- Operational Due Diligence

25 June 2014

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Mergermarket and Toppan Vite are pleased to present the first edition of the Developing Best Practices newsletter. Focusing on operational due diligence, Mergermarket interviewed five industry experts to gain insight on why conducting thorough operational due diligence is an integral part of M&A.

Industry Professionals Discuss:

  • Commonly overlooked areas of operational due diligence
  • Risks of inadequate due diligence
  • Added complexity of cross-border transactions

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