Private Equity Capital Briefing - EY - US...• PE fundraising in November was more than double the amount raised in October, increasing the YTD total to US$575.8b, up 12% YoY. •

Private Equity Capital Briefing

December 2017

Monthly insights and intelligence on PE trends

PE in position to top last year heading down the stretchFundraising flirts with records and PE firms get creative with deals

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 Briefingprovides 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.

Contents

Section 1 Private equity: fundraising 4

Private equity: acquisitions 5

Private equity: exits 6

Section 2 M&A 7

Section 3 IPOs 8

Section 4 Loans 9

Section 5 Bonds 10

AppendicesAppendix A PE activity by geography 12

Appendix B M&A activity monthly flash 21

Appendix C M&A multiples and bid premium 22

Appendix D Capital Confidence Barometer 23

1.i. Private equity: fundraising

Executive summary

• PE fundraising in November was more than double the amount raised in October, increasing the YTD total to US$575.8b, up 12% YoY.

• Asia-Pacific funds have already exceeded the total amount raised last year.

• Dry powder grew to US$628.4b, up 5% from last month and 12% since the end of last year.

Current state

Fundraising

• PE fundraising in November was more than double the amount raised in October. PE firms raised US$50.4b for 50 funds, up 116% by value and 6% by volume since last month. YTD, PE firms raised US$575.8b, up 12%, while the number of funds raised fell 8% versus last year.

• Asia-Pacific funds have already exceeded the total amount raised last year, with PE firms raising US$54.6b across 134 funds.

PE fundraising by region (US$b)Source: Pregin

Dry powder

• Dry powder grew to US$628.4b, up 5% from last month and 12% since the end of last year. Dry powder increased 21% in Asia-Pacific and 20% in North America, offsetting declines of 0.3% in Europe and 21% in the rest of the world since the end of last year.

Environment and horizon

• PE leads alternative strategies in expected allocations over the next year but real estate and private debt are gaining traction among institution investors, according to a recent study by BNY Mellon. Another survey of Registered Investment Advisors by PPB Capital Partners found similar results with 45% expecting the alternative investment allocation in clients' portfolios to increase and 47% expecting the allocation to stay the same. The top three investments were PE (37%), real estate (22%) and private credit (22%). The BNY Mellon survey also revealed that investors see the application of new technologies as an important force driving alternative strategies including predictive analytics (96%), cloud technology (79%) and big data analytics (67%).

• Investors want more transparency and co-investment opportunities, particularly in tech, health care and infrastructure, according to Hedgeweek in partnership with Intralinks. The survey found that only 20% of investors are satisfied with the level of transparency they are getting from GPs and more than 25% said that they were “somewhat” or “very dissatisfied” with the level of transparency they receive even though more than half confirmed that they had seen an increase in transparency during the last few years. Co-investing is important according to 68% of investors and 60% have already increased direct investing. The survey also found that the top three sectors investors are planning to target over the next year are technology (50%), health care (48%) and infrastructure (44%).

• Investment firms are increasingly attracted to PE. Two Sigma, a quantitative hedge fund firm, is reportedly preparing to open its PE strategy to outside investors, ICONIQ Capital, known for investing Mark Zuckerberg's money, is reportedly planning to pursue buyouts of mature, medium-size technology companies and Goldman Sachs is reportedly using its own balance sheet to finance a handful of small, high-growth companies.

4


Global PE fundraising by year (in US$b)

Source: Preqin

Fund TypeTarget

size (US$b)

Finalsize

(US$b)Industry focus

Location focus

Onex Partners V Buyout 6.5 7.2 DiversifiedNorth America

PAI Europe VII Buyout 4.6 5.9 Diversified Europe

PIMCO Bravo Fund III Real estate 3.5 4.6 Property Global

Francisco Partners V Buyout 3.6 4

Technology, Communications Health care US

Brookfield Real Estate Finance Fund V Real estate 3 3 Property US

GI Partners Fund V Buyout 2.3 2.7 DiversifiedNorth America

Glendon Opportunities Fund II

Distressed debt 2 2.5 Diversified

North America

Infracapital Greenfield Infrastructure Fund Infrastructure 1.3 1.7 Infrastructure Europe

KKR Health Care Strategic Growth Fund Growth 0.65 1.5 Healthcare US

Crestline Opportunity Fund III

Special situations 1.3 1.3 Diversified

Europe, North America

Top funds raised in November 2017Source: Pregin

PE dry powder by year and region (US$b)Source: Pregin

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400

600

800

1,000

1,200

$0

$100

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$700

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Value Number of funds

*Through November

$0

$100

$200

$300

$400

$500

$600

$700

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

North America Europe Asia Rest of World

*Through November

$0

$100

$200

$300

$400

Americas EMEA Asia-Pacific

2016 Full year 2017 YTD

1.ii. Private equity: acquisitions

Executive summary

• Acquisitions fell 9% in November from the prior month, the fourth straight monthly decline, to US$19.7b, but are still up 6% YoY.

• Americas was the only region to post growth in acquisitions during the month, but deal values are still down 21% YoY in the region compared with increases of 59% in Asia-Pacific and 28% in EMEA.

• Real estate is attracting more capital while interest in retail, oil and gas and telecom continues to be weak.

Current state

• Acquisitions fell 9% in November from the prior month, the fourth straight monthly decline, to US$19.7b, but are still up YoY. PE firms announced 1,397 deals valued at US$318.6b YTD, up 6% by value versus last year.

• Americas was the only region to post growth in acquisitions during the month, led by a US$3.7b acquisition of a power company in Peru, but deal values are still down 21% YoY in the region compared with increases of 59% in Asia-Pacific and 28% in EMEA.

• PE firms are increasingly teaming up in club deals, according to Preqin. Over the past two years, deals made by two or more PE firms grew from 247 in 2015 to 270 in 2016 with 160 so far this year.

• US middle-market PE deal flow has been strong through 3Q 2017, totaling US$233b, up 13%, across 1,652 deals YoY. Competition for deals has pushed median mid-market M&A EBITDA multiples to 10.7x, their highest level on record, according to PitchBook.

Middle-market acquisition multiples by yearSource: PitchBook

• Real estate is attracting more capital YTD, displacing consumer services in the top five sectors while technology continues to lead and the rest are largely unchanged YoY. Interest in retail, oil and gas and telecom continues to be weak.


• Environmental, social and governance (ESG) interest is growing among PE investors. According to a study by Intertrust, 78% of PE investors expect GPs to increase their focus on ESG over the next two years, including 48% that think ESG will be incorporated into all aspects of the investment process and 39% that think GPs will report ESG performance at the portfolio company level. The top three obstacles to adopting ESG are cost and resource constraints, applying an effective ESG evaluation model and a knowledge shortage at the GP level.

• Most investors think Europe is an increasingly attractive investment destination, according to the Global Investment Decision Makers Survey. The survey of investors found that more than 75% in China and 71% in the US believe Europe is a more attractive investment destination than it was five years ago. Over the next five years, 90% from China and 74% from the US think investment in Europe will increase. Stability, economic growth and higher returns on investment contribute to Europe’s increased attractiveness. When asked to compare Europe, the US and China as investment destinations, 74% ranked Europe as the strongest on its commitment to sustainability and the environment with nearly 75% noting those are important factors in their decision-making.

• PE firms are buying stakes in start-ups from early shareholders.According to a Wall Street Journal article, Vincent Letteri, a director at KKR & Co.’s tech investment group, said about half the deals KKR considers for investment now involve some secondary shares and that it has become increasingly common in the past year.

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4.6

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3.5

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4.5

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5.0

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4.3

x

5.1

x

5.3

x

5.4

x

5.2

x

5.7

x

4.1

x

3.5

x

3.5

x

4.2

x

4.3

x

3.6

x

4.3

x

4.6

x

5.2

x

5.0

x

8.7x7.0x

8.0x9.2x 8.6x 8.7x

9.6x 10.0x 10.3x 10.7x

0.0x

5.0x

10.0x

15.0x

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Debt/EBITDA Equity/EBITDA Valuation/EBITDA

*Through Q3

PE deals by sector as a percent of total deals YTD through NovemberSource: Dealogic

Target Sector CountryValue

(US$b)Acquiror

Banco Bilbao Vizcaya Argentaria SA - BBVA (Real estate business in Spain) Real estate Spain

4.7 Cerberus Capital Management LP

IC Power Ltd. (Latin American and Caribbean businesses of IC Power Ltd.) Utilities Peru

3.7I Squared Capital Advisors (US) LLC

Duff & Phelps Corp. FinancialsUnited States

1.8Permira Ltd.

Barracuda Networks Inc.

Computers andelectronics

United States

1.6Thoma Bravo LLC

Amtrust Financial Services Inc. (US-based fee businesses) Insurance

United States

1.2 Madison Dearborn Partners LLC

Top PE deals in November 2017Source: Dealogic

0% 5% 10% 15% 20% 25% 30%

Retail

Oil and gas

Telecom

Consumerservices

Materials

Industrials

Financials

Health care

Utilities

Consumer goods

Real estate

Technology

2017 2016

*Through November

PE acquisitions by year and region (US$b)Source: Dealogic

0

500

1,000

1,500

2,000

2,500

3,000

$0

$100

$200

$300

$400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Americas value Asia-Pacific value

EMEA value Global number of deals

1.iii. Private equity: exits

Executive summary

• Exits declined 51% from last month to US$12.5b, a monthly low for the year, but still are up 7% YoY.

• M&A declined while IPO exits increased in both the Americas and Asia-Pacific, whereas M&A increased while IPO exits declined in EMEA YoY.

• Technology, financials and consumer goods companies accounted for more than half (58%) of exit value during November.

Current state

• Exits declined 51% from last month to US$12.5b, a monthly low for the year, but still are up YoY. PE firms announced 977 exits valued at US$323.5b YTD, up 7% by value versus last year.

• Exits were down across all regions, 11% in Americas, 74% in Asia-Pacific and 80% in EMEA during November. YoY, PE exits increased 22% in EMEA and 3% in Americas but declined 17% in Asia-Pacific by value.

• Both M&A and IPOs exits declined during the month. YoY, M&A exits increased 6% to US$287.7b while IPOs increased 17% to US$35.8b. M&A exits declined while IPO exits increased in both the Americas and Asia-Pacific, whereas M&A exits increased while IPO exits declined in EMEA YoY.

• In the middle-market, PE firms are increasingly selling to other financial sponsors, accounting for 52% of all exit activity, the highest on record, according to PitchBook. In contrast, sales to strategics dominate overall exits at 57%, followed by sales to other financial sponsors at 33% and IPOs at 10%.

Middle-market exit type as a percentage of volume by yearSource: PitchBook

• Technology, financials and consumer goods companies accounted for more than half (58%) of exit value during November, mostly through M&A. Utilities was the only sector in which IPOs dominated exits, accounting for 58% of all PE-backed IPO value during the month.


• It’s a great time to sell, according to Andrea Auerbach, Managing Director and Head of Global Private Investment Research at Cambridge Associates in an interview with Bloomberg TV. She elaborated, “For two years now, valuations have been at the highest purchase price multiple in the industry. It is without doubt a great time to sell, not a great time to buy.“

• A majority of investors expect their alternative investments to outperform in a market sell-off, according to a survey by PPB Capital Partners. In a 10% market decline, 18% expect their allocation to alternatives would be up, 42% expect their alternative investments to be down but not as much as the market and 40% expect their allocations would be roughly in line with the market.

• PE exits should increase over the next 12 to 18 months. The average timeframe of PE investments is 5.8 years from initial investment to exit, according to a BVCA and EY Annual report on the performance of portfolio companies, while current portfolio companies have been owned for an average of 4.2 years. In the meantime, PE firms have used cheap debt and covenant-lite loans, surpassing last year’s issuance total according to Thomson Reuters, for dividend recaps as a way to generate liquidity without fully exiting the investments.

6


*Through Q3

Exits in November 2017 by sector and type (in US$b)Source: Dealogic

Company Type RegionValue

(US$b)Sponsor

Aricent Inc. M&A Americas

2 KKR & Co. LP; Investor Group

Duff & Phelps Corp. M&A Americas

1.8

Carlyle Group LP;Neuberger Berman Group LLC; Banque Pictet & CieSA; Regents of the University of California

Zodiac Pool Solutions SAS M&A Americas1.5

Rhone Group LLC

Marine Acquisition Corp. M&A Americas0.875

American Securities LLC

Pure Gym Ltd. M&A EMEA0.784

CCMP Capital Advisors LLC

Top PE exits in November 2017Source: Dealogic

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Strategic IPO Secondary

*Through November

PE exits by year and type (US$b)Source: Dealogic

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200

400

600

800

1,000

1,200

1,400

$0

$100

$200

$300

$400

$500

$600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

M&A exit value IPO exit value Number of deals

$0

$1

$1

$2

$2

$3

$3IPO value M&A value

-

1,000

2,000

3,000

Americas Asia-Pacific EMEA

LTM value PTM value

Current state• November saw deals worth US$319b, up 11% against the same month

last year. On the face of it, it appears to be the highest monthly deal value recorded so far in 2017. However, the value was inflated by Broadcom’s US$130b unsolicited bid for Qualcomm – which was later rejected by Qualcomm on valuation grounds, stalling potentially the largest technology deal on record.

• The key value range driving M&A in 2017 is the US$1b to US$10b band. So far, 2017 has seen 477 deals in this range, compared with 467 in the same period in 2016.

• Technology continues to be the hottest sector in 2017, registering 9,005 deals worth US$520b – the highest volume seen during this period of the year since the dotcom bubble of 2000. This year has seen large number of deals and alliances between technology and non-technology companies as they seek to capitalize on the opportunities opened up by digital and technology-driven disruption.

• The deal that captured headlines in November was the Qualcomm-Broadcom hostile takeover battle – which recently saw Broadcom all set to take its first formal step toward a hostile bid, unveiling nominees whom Qualcomm shareholders can vote for to replace its board of directors. Broadcom had been considering an improved bid and will likely present it by March, based on the reception its proposed board of director receives from Qualcomm shareholders.

• Another deal in the limelight was the merger agreement between Cineworld Group Plc, a British operator of movie theaters and its US

peer Regal Entertainment Group. For Regal, the second-largest cinema chain in the US, the deal would create a company with more than 9,000 screens. A deal between the two would put the combined company in a better position to take market share from US industry leader AMC Entertainment Holdings Inc., and also give it more scale to fight increasing competition from Netflix Inc., Apple Inc. and other digital outlets.

Environment and horizon• The M&A outlook for 2018 remains optimistic. The easing of key

economic and political risks, and the emergence of positive macroeconomic drivers, should accelerate global deal activity in 2018. In addition, other dynamics such as surplus cash reserves, low financing costs, availability of credit and record PE dry powder are likely to persist and aid dealmaking.

• Strategic drivers such as the search for higher returns, the use of consolidation to derive synergies, and the adoption of inorganic route via M&A/JV’s to cater to digital disruption and changing business models will further accelerate M&A activity in 2018.

• Cross-sector deals should continue to drive M&A in the coming months. The convergence of all industries with the technology sector is becoming one of the key narratives of the modern corporate economy. The underlying factors driving sector convergence in today’s disruptive environment include catering to changing customer demands, gaining competitive edge and operational synergies. The extensive expansion of emerging technologies across industries, including FinTech, health care, retail and the automotive sector, should drive deal activity as we see more cross-sector deals involving technology.

• Divestitures are likely to persist as a major focus in 2018. Unrelenting advances in technology and digitalization have led to disruption in models and changing customer behavior, making it necessary for companies toreview their portfolios on a more regular basis. This may lead to an uptick in divestitures, as companies seek to divest noncore assets and invest the capital to fund growth via new technologies. Moreover, 2018 will remain full of opportunities, with companies considering profitable exits in light of historically strong valuations.

• Shareholder demand for M&A may be one of the key drivers of deals in the coming months. The focus from investors is shifting from efficiency drives and organic investment-led growth toward pursuing and achieving higher returns through dealmaking. Companies that are under scale, cash-strapped or struggling in consolidating industries are under intense pressure from shareholder activists.

Deal environment: by area (US$b)

Last 12 months (LTM) to November 2017 versus LTM to November 2016Source: Dealogic and EY analysis.

Deal environment: by target sector and target area (% share of global value)

LTM to November 2017Source: Dealogic and EY analysis; excludes real estate asset sales.

Note: because of rounding, percentages may not add up to total.

M&A analysis as at 1 December 2017.

Note: data is continually updated and therefore subject to change.

Figures have been rounded off to nearest decimal place.

7

Executive summary• November saw 2,469 deals totaling US$319b - the highest monthly year-to-date (YTD) value so far in 2017, largely inflated by Broadcom’s

US$130b takeover bid for Qualcomm.

• Deals worth US$1b to US$10b deals are driving the market, with 477 in this banding announced in 2017.

• Technology led dealmaking during the YTD, recording 9,005 deals worth US$520b.

• The M&A outlook for 2018 remains optimistic, helped by easing economic and political risks, and favorable economic tailwinds.

• Divestitures are likely to be a major focus of M&A activity in 2018.

• Shareholder activism could be one of the key drivers of deals in the coming months.

2. M&A

Americas Asia-Pacific EMEA Total

Technology 9% 5% 3% 18%

Consumer products and retail 4% 3% 5% 12%

Oil and gas 7% 1% 3% 10%

Life sciences 5% 1% 2% 8%

Diversified industrial products 2% 2% 3% 8%

Automotive and transportation 1% 2% 4% 7%

Power and utilities 3% 1% 2% 7%

Real estate 2% 1% 1% 5%

Banking and capital markets 2% 1% 2% 5%

Others 10% 6% 5% 21%

All sectors 45% 23% 31% 100%

Global deal value and volume (YTD last five years)Source: Dealogic and EY analysis.

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4,000

2013 2014 2015 2016 2017

Value (US$b) (LHS) Volume* (RHS)

*Volume based on deals greater than US$100m.


3. IPOs

Executive summary

• In November 2017, global IPO activity registered a year-on-year (YOY) increase of 58% and 64% in terms of number of deals and proceeds respectively.

• The month recorded five US$1b+ deals globally and the strongest monthly IPO activity YTD, by both deals and proceeds.

• US exchanges witnessed the highest monthly activity YTD in terms of number of IPOs due to a surge in cross-border listings.

• The outlook for 2018 global IPO activity is bright as low volatility coupled with high equity valuations create a favorable listing environment in many of the major economies.

8

Current state• November 2017 recorded the strongest IPO activity YTD both in terms

of number of deals and proceeds, on the back of five US$1b+ listings. The month saw 178 deals raising US$23.9b, registering a YOY increase of 58% and 64% in terms of number of IPOs and proceeds respectively. This was the highest monthly IPO activity since June 2015 and October 2016, by deal numbers and proceeds respectively. Technology listings dominated the monthly activity, with the sector accounting for 19% of the deals and 22% of the proceeds due to strong activity in China.

• Asia-Pacific accounted for 66% and 61% of the global number of IPOs and proceeds respectively (US$14.7b raised via 117 deals) driven by solid activity from Greater China, ASEAN and India. Greater China continues to dominate the IPO activity in the region, accounting for 50% and 52% of number of IPOs and proceeds respectively. The region recorded three of the top five deals this month, of which two were insurance companies from India. The insurance sector in India has seen unprecedented growth in IPO activity since the local regulators allowed insurance companies to go public.

• EMEA IPO activity (US$5.6b via 34 deals) recorded a YOY increase of 36% and 118% by number of deals and proceeds respectively. The proceeds in the region grew on account of the mega listings of EN+ Group plc (US$1.5b) on the London Stock Exchange and Emaar Development PJSC (US$1.3b) on the Dubai Financial Market.

• US exchanges witnessed the highest monthly activity this YTD by number of IPOs, with 28 deals raising US$3.8b on the back of an increase in cross-border technology listings from China.

Environment and horizon• The outlook for 2018 global IPO activity is bright as low volatility coupled

with high equity valuations create a favorable listing environment in many of the major economies. The prospects of the listing of the world’s largest oil company, Saudi Aramco, and megadeals from other parts of the world are also breeding a lot of excitement in the capital markets. The only significant source of risk emanates from the Korean peninsula but, so far, its impact has been minimal.

• In Greater China, the technology and telecommunications industries are expected to drive IPO activity, aided by the Chinese Government’s efforts to spur technology firms to go public. In particular, the Hong Kong Stock Exchange is expected to see an increase in IPOs from this sector as they try to attract big Chinese technology firms. Traditionally, Chinese technology firms have preferred to list in the US due to higher valuations. But this may change as Hong Kong is making efforts, such as amending its listing requirements, to attract more technology listings.

• European IPO activity should grow stronger in 2018 as political uncertainties have largely dissipated, with healthy economic forecasts and soaring equity markets in many markets within this region. While 2018 looks set for strong IPO activity, in the medium term, it is possible that the negotiation of UK’s trading relationships with the European Union may increase market volatility, which may impact IPO windows.

• In the Middle East, economic reforms and privatization plans of countries such as Egypt and Saudi Arabia are likely to drive a significant level of IPO activity in 2018. Aside from the activity of former state-owned enterprises, the IPO pipeline is looking strong for entrepreneurial companies looking to realize their funding and exit strategies.

• The Indian IPO market looks good for 2018 after posting record numbers this year. However, some analysts believe valuations have become quite high for some recent listings. They suggested that the tepid investor response from a couple of recent IPOs could lead to a lower level of activity in the short term and that companies coming to the market in the near term may have to readjust their pricing.

• In the Americas, US is likely to see a further rise in IPO activity driven by technology and biotech sectors. IPO activity should also increase in Latin America, especially Brazil and Mexico, as market conditions continue to improve amid abating political risk.

Top 10 IPOs by proceeds, November 2017Source: Dealogic.

Issuer name Issuerlocation

Sector Exchange Proceeds(US$m)

EN+ Group plcRussian Federation

Power and utilities London 1,500

New India Assurance Co. Ltd. India Insurance Bombay 1,482

HDFC Standard Life Insurance Co. Ltd.

India Insurance Bombay 1,336

Emaar Development PJSCUnited Arab Emirates

Real estateDubai Financial Market (DFM)

1,313

China Literature Ltd. China Technology Hong Kong 1,227

Cromwell European REIT Australia Real estate Singapore 890

Yixin Group Ltd. China Technology Hong Kong 867

GMexico Transportes S.A. de C.V.

MexicoAutomotive and transportation

Mexican (BMV)

864

Gulf Energy Development pcl Thailand Power and utilities Thailand (SET) 732

Sogou Inc. China Technology New York 658

IPO activity by sector and area (% share of global proceeds)

LTM to November 2017Source: 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

Technology 5% 8% 3% 16%

Banking and capital markets 1% 6% 5% 12%

Real estate 2% 4% 4% 11%

Diversified industrial products 2% 6% 2% 10%

Consumer products and retail 2% 5% 2% 10%

Automotive and transportation 1% 4% 3% 8%

Life sciences 2% 3% 2% 8%

Insurance 1% 5% 0% 6%

Power and utilities 0% 2% 2% 4%

Others 6% 7% 4% 16%

Total 23% 49% 28% 100%

IPO activity by area (YOY % change)

(LTM to November 2017 versus LTM to November 2016)Source: Dealogic; regional classification on the basis of issuer nationality.

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100%

-10% 20% 50% 80% 110% 140% 170% 200%

ValueVo

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EMEA

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Asia-Pacific

US


4. Loans

Executive summary

Global investment-grade loans (US$b)Source: Thomson ONE.

Global high-yield loans (US$b)Source: Thomson ONE.

Top arrangers ranking, YTD 2017 (US$b)Source: Thomson ONE.

Global loan issuance by industry, YTD 2017Source: Thomson ONE.

Proceeds Issues

Bank of America Merrill Lynch 285.4 1,387

JP Morgan Chase & Company 248.1 1,239

Citigroup Inc. 218.0 823

Wells Fargo & Company 170.3 1,066

Mitsubishi UFJ Financial Group 150.6 1,310

All loans by region, YTD 2017 (US$b)Source: Thomson ONE.

Market share (%) Proceeds Issues

Americas 62.5 2,372.8 4,096

EMEA 21.1 803.4 1,205

Asia-Pacific 16.3 620.1 3,049

9

• November was the second-busiest month of the year in the European leveraged loan market, with €16.2b of issuance, behind €17.6b seen in March.

• Leveraged loan repricing activity has surged during 2017, as strong investor demand for loans has boosted secondary prices, allowing issuers to return to the market to cut primary pricing.

• Managers of collateralized loan obligations (CLOs) have contributed to an unprecedented surge of repricing of the debt they hold in their portfolios.

• More loan deals are anticipated in the coming months, driven by LBO and M&A activity.

Current state• In November, US$51.6b of loans were issued in the US and €16.0b in

Europe, taking the YTD global issuance to US$743.5b, up 40% from the same period in 2016. Monthly volume increased in November due to an increase in M&A-driven transactions.

• M&A-driven deals accounted for 45% of total volume YTD, followed by refinancing activity, which accounted for 39%, in both the US and Europe.

• November was the second-busiest month of the year in the European leveraged loan market, with €16.2b of issuance, behind €17.6b seen in March:

• M&A volume increased in November due to large-scale buyouts, with €9.6b of new-money acquisition transactions.

• In the US, the default rate of the S&P/LSTA Leveraged Loan Index reached a 13-month high of 1.95% due to four defaults in November, from 1.51% at the end of October.

• Leveraged loan repricing activity has surged during 2017 as strong investor demand for loans has boosted secondary prices, allowing issuers to return to the market to cut primary pricing:

• Repricing volume totaled US$71.9b in November, making it the busiest month for these deals since the US$101.b in January 2017.

• In November, issuers reduced spreads by an average of 64bps compared with 69bps in October. That’s down from an average of 85bps during the first 10 months of the year.

• Riskiest borrowers continue to drive the market. Single-B issuers, which stepped up activity in October, are dominating the segment this month.

• CLO issuance remains active going into December with liability spreads continually moving lower and more new issues being added to the pipelines in the US and Europe:

• YTD global CLO volume has reached US$128b from 235 deals compared with US$80b from 174 deals in the same period last year.

Environment and horizon• More loan deals are anticipated in the coming months, driven by LBO and

M&A activity.

• Managers of CLOs have contributed to an unprecedented surge of repricing of the debt they hold in their portfolios. These refinancings could further strengthen the hands of borrowers, allowing them to demand even more rate cuts from their creditors due to little choice.

• As borrowers turn the screw tighter on pricing, increase leverage and build in weaker covenant structures, investors are showing signs of impatience with any indication of corporate underperformance.

Opportunities• The US senators passed a sweeping tax cuts bill on 2 December 2017- first

major legislative victory for the Trump Administration. It is expected that once the final bill will be approved and implemented, this would boost loan market in 2018.

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600

800

4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Proceeds (LHS) Number of issues (RHS)

0

1,000

2,000

3,000

0

300

600

900

1,200

4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17


0 200 400 600 800

Energy and power

Financials

Industrials

High technology

Materials

Health care

Consumer staples

Consumer products and services

Retail

Media and entertainment

Real estate

Telecommunications

Government and agenciesProceeds (US$b)


Current state• Global high-yield activity declined on a monthly basis in November. High-

yield issuance was US$26.4b in the US and €8.6b in Europe, taking the YTD total global issuance to US$360b, up 35% compared with the same period last year.

• The European high-yield market saw €7.8b of high-yield issuance in November, down from €10.9b and €14.4b in September and October respectively:

• The European high-yield bond market faced a barrage of volatility in the secondary market in November. Meanwhile, the volume of deals in the primary market slowed and newly launched issues were little impacted.

• Sponsor-backed transactions have increased during 2017 both in the US and Europe:

• YTD sponsor-backed high-yield transactions have reached to US$79.0b globally, 21.5% above the overall sponsor-backed high-yield transactions volume during 2016.

• The bulk of new issuances were used to fund refinancing YTD accounting for 65% of total volume in both the US and Europe. This is similar to 2016, when 63% of volume refinanced existing debt across the same regions.

• YTD high-yield issuance for M&A activity accounted for 22% of volume in the US and 16% of volume in Europe.

• New-issue yields for single B- rated bonds for the three months ending in November widened in the US to 6.54% from 6.04% at the end of 3Q17. At the same time, yields narrowed in Europe to 5.18% from 5.34% at the end of 3Q17.

• High-grade companies have sold approximately US$2.4t of bonds YTD, volume is 5% ahead compared with the same period last year.

Environment and horizon• The US Congress is working on tax reforms and is set to close some

loopholes currently exploited by issuers of high-yield bonds, as the global high-yield bond market is dominated by US issuers:

• Notably, there are talks of a cap on the tax deductibility of interest, which would have an adverse impact on companies with a high debt burden, which includes many companies with high-yield bonds.

• Record-high prices combined with more risky corporate bond supply is increasing uncertainty and raising the chances of a sharp turnaround in the European high-yield credit market.

Opportunities• The European market offers a more cost-effective means of financing,

given the lower yields in the European market compared with the US market, so it is expected that more US issuers will cross the Atlantic in 2018.

Executive summary

Euro bond issuances (US$b)Source: Thomson ONE.

US bond issuances (US$b)Source: Thomson ONE.

Top 10 corporate bond issuers, YTD 2017 (US$b)Source: Thomson ONE.

Global bond issuance by industry, YTD 2017Source: Thomson ONE.

Issuer Nation Industry Proceeds

AT&T Inc. US Telecommunications 44.7

Apple Inc. US High technology 28.8

China Railway Corporation China Industrials 26.4

Verizon Communications Inc. US Telecommunications 24.6

Broadcom Corporation US High technology 17.6

Microsoft Corporation US High technology 17.0

Amazon.com Inc. US Retail 16.0

SoftBank Group Corporation Japan Telecommunications 14.5

State Power Investment Corporation

China Energy and power 13.3

Qualcomm Incorporated US Telecommunications 11.0

5. Bonds

• Global high-yield activity declined in November, primarily due to low activity in the European market.

• The European high-yield bond market faced a barrage of volatility in the secondary market in November.

• The US Congress is working on tax reforms and is set to close some loopholes currently exploited by issuers of high-yield bonds, as the global high-yield bond market is dominated by US issuers.

• More US issuers are expected to come into the European market for financing in the coming months due to lower yields in the European market compared with the US market.

10

0

120

240

360

480

600

0

80

160

240

320

400


0

40

80

120

160

200

240

0

50

100

150

200

250

Proceeds (LHS) Number of Issues (RHS)

0 100 200 300 400

Energy and power

Industrials

High technology

Real estate

Telecommunications

Consumer staples

Health care

Materials

Consumer products and services

Retail

Media and entertainment

Proceeds (US$b)


Appendices

Dry powder — buyout funds — by region (in US$b)

Global PE fundraising (in US$b)

Appendix AGlobal PE fundraising activity

Source: Preqin

Source: Preqin

0

200

400

600

800

1,000

1,200

$0

$100

$200

$300

$400

$500

$600

$700

Commitments Number of funds

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

$0

$100

$200

$300

$400

$500

$600

$700

North America Europe Asia-Pacific and rest of world Asia-Pacific and rest of world as percentage of total

Private Equity Capital Briefing12

Source: Dealogic

Global PE value and volume — quarterly trend (in US$b)

PE acquisitions by year (in US$b)

Appendix AGlobal PE acquisition activity

Source: Dealogic

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

Value Number of deals

0

100

200

300

400

500

600

700

$0

$20

$40

$60

$80

$100

$120

$140

Value Volume


Americas PE acquisitions — the top deals with disclosed financial terms in November 2017

Appendix AGlobal PE acquisition activity by region — Americas

Americas PE acquisitions (in US$b)

Source: Dealogic

Source: Dealogic

Announcement date

Completion date Company SectorValue

(US$b)Acquiror

26-Nov-17

IC Power Ltd. (Latin American and Caribbean businesses of IC Power Ltd.) Utilities 3.7

I Squared Capital Advisors (US) LLC

1-Nov-17 Duff & Phelps Corp. Finance 1.8 Permira Ltd.

27-Nov-17 Barracuda Networks Inc. Computers and electronics 1.6 Thoma Bravo LLC

6-Nov-17Amtrust Financial Services Inc.(US-based fee businesses) Insurance 1.2 Madison Dearborn Partners LLC

27-Nov-17 Bazaarvoice Inc. Computers and electronics 0.518 Marlin Management Co. LLC

27-Nov-17 Pearson plc (Wall Street English) Professional services 0.300Baring Private Equity Asia Ltd.;CITIC Capital Holdings Ltd.

8-Nov-17Cornerstone OnDemand Inc. (10.9815%) Computers and electronics 0.300

Silver Lake Group LLC;LinkedIn Corp.

29-Nov-17 Rhone Group LLC (30%) Finance 0.274 Eurazeo SA

21-Nov-17 Rand Logistics Inc. Transportation 0.243 AIP LLC

8-Nov-17 8-Nov-17Property Portfolio (Two office buildings ) Real estate 0.156

Investcorp Properties Ltd. of New York

0

50

100

150

200

250

300

350

$0

$10

$20

$30

$40

$50

$60

$70

$80



Appendix AGlobal PE acquisition activity by region — EMEA

EMEA PE acquisitions (in US$b)

Source: Dealogic

Announcement date

Completion date

Company Sector Value (US$b) Acquiror

29-Nov-17

Banco Bilbao Vizcaya Argentaria SA - BBVA (Real estate business in Spain) Real estate 4.7 Cerberus Capital Management LP

10-Nov-17 Stark Group A/S Construction/Building 1.2 Lone Star Global Acquisitions Ltd.

23-Nov-17 BGL Group Ltd (30%)Computers and electronics 0.899 Canada Pension Plan Investment Board-CPPIB

19-Nov-17 Belron SA (40%) Auto/Truck 0.731 Clayton Dubilier & Rice LLC

13-Nov-17 Telxius Telecom SA (15.2%) Telecommunications 0.565 KKR & Co. LP

23-Nov-17 Servelec Group plcComputers and electronics 0.305 Montagu Private Equity LLP

27-Nov-17Radius Payment Solutions Ltd. (18.75%)

Computers and electronics 0.200 Inflexion Private Equity Ltd.

22-Nov-17 Studienkreis GmbH Professional services 0.084 IK Investment Partners Ltd.

6-Nov-17 euNetworks Group Ltd. (Majority%) Telecommunications 0.079 Stonepeak Partners LP

7-Nov-17 ImageSat International NV (53.6%) Telecommunications 0.075 First Israel Mezzanine Investors Ltd. - FIMI

Source: Dealogic

EMEA PE acquisitions — the top deals with disclosed financial terms in November 2017

0

50

100

150

200

250

300

$0

$10

$20

$30

$40

$50

$60



Appendix AGlobal PE acquisition activity by region — Asia-Pacific

Asia-Pacific PE acquisitions (in US$b)

Source: Dealogic

Announcement date Completion date Company SectorValue

(US$b)Acquiror

28-Nov-17 28-Nov-17Beijing Sunsea Parking Management Co. Ltd. Transportation 0.227

Warburg Pincus LLC;Red Star Macalline Group Corp. Ltd.

1-Nov-17SK Encar Co. Ltd. (Offline business) Auto/Truck 0.180 Hahn & Co. Eye Holdings Co. Ltd.

20-Nov-17 Peak Gold Asia Pacific Pty Ltd. Mining 0.058 Aurelia Metals Ltd.

17-Nov-17 17-Nov-17 Shamwoo Co. Ltd. Utilities 0.052 Anchor Equity Partners GP

7-Nov-17 7-Nov-17 Shapl Inc. Computers and electronics 0.002 KTB Network Co. Ltd.

2-Nov-17 30-Nov-17 LB C.o Ltd. Food and beverage Polaris Capital Group Co. Ltd.

4-Nov-17 4-Nov-17 Avendus Capital Pvt. Ltd. Financials

Gaja Capital Partners;KKR & Co. LP;private investor

7-Nov-17 Takara Chou Un Co. Ltd. Transportation Aspirant Group Inc.

29-Nov-17Mitsubishi Materials Real Estate Corp. Real estate Fortress Investment Group LLC

Source: Dealogic

Asia-Pacific PE acquisitions — the top deals with disclosed financial terms in November 2017

0

20

40

60

80

100

120

140

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45



Source: Dealogic

Global PE-backed IPOs — value and volume — quarterly trend (in US$b)

Appendix AGlobal PE exit activity

Global PE-backed exits by M&A — value and volume — quarterly trend (in US$b)

Source: Dealogic

0

50

100

150

200

250

300

350

$0

$20

$40

$60

$80

$100

$120

$140


0

10

20

30

40

50

60

70

80

90

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45



Source: Dealogic

Appendix AGlobal PE exit activity — Americas

Americas PE exits — top exits in November 2017

Americas PE exits (in US$b)

Announcementor filing date

Completion orpriced date

Company Sector Value (US$b) Sponsor Type

30-Nov-17 Aricent Inc.Computers and electronics 2

KKR & Co. LP;Investor Group M&A

1-Nov-17 Duff & Phelps Corp. Financials 1.8

Carlyle Group LP;Neuberger Berman Group LLC;Banque Pictet & Cie SA;Regents of the University of California M&A

3-Nov-17 Zodiac Pool Solutions SAS Construction 1.5 Rhône Group LLC M&A

22-Nov-17 Marine Acquisition Corp. Retail 0.875 American Securities LLC M&A

15-Nov-17 Centerplate Inc. Dining and lodging 0.675 Olympus Partners LLP M&A

15-Nov-17 Leehar Distributors Inc. Health care 0.595Nautic Partners LLC;Oak HC/FT Partners LP M&A

1-Nov-17Evoqua Water Technologies Corp. Utilities 0.575 AEA Investors LP IPO

2-Nov-17 Richelieu Foods Inc. Food and beverage 0.435 Centerview Partners Holdings LLC M&A

3-Nov-17Infrastructure & Energy Alternatives LLC Construction 0.351 Oaktree Capital Group LLC M&A

16-Nov-17SailPoint Technologies Holdings Inc. Technology 0.276 Thoma Bravo LLC IPO

18

Source: Dealogic

0

20

40

60

80

100

120

140

160

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

M&A value IPO value M&A volume IPO volume


Source: Dealogic

Appendix AGlobal PE exit activity — EMEA

EMEA PE exits — top exits in November 2017

EMEA PE exits (in US$b)




3-Nov-17 Pure Gym Ltd. Leisure and recreation 0.784 CCMP Capital Advisors LLC M&A

16-Nov-17 ForVEI Srl Financials 0.396Palladio Finanziaria SpA;Foresight Group LLP M&A

8-Nov-17 IGE+XAO SAComputers andelectronics 0.219

Institut Regional de DeveloppementIndustriel de Midi-Pyrenees - IRDI M&A

1-Nov-17 1-Nov-17 Mini-Cam Ltd.Computers andelectronics 0.113 LDC (Managers) Ltd. M&A

8-Nov-17 8-Nov-17 Brandon Hire Ltd. Professional services 0.090 Rutland Partners LLP M&A

6-Nov-17 6-Nov-17 Factor Energia SA Utilities 0.081 JZ Capital Partners Ltd. M&A

2-Nov-17 23-Nov-17 Merlyn Industries Ltd. Consumer products 0.079 Broadlake Capital M&A

10-Nov-17 10-Nov-17 Eque2 Ltd.Computers andelectronics 0.021 Living Bridge EP LLP M&A

7-Nov-17 7-Nov-17 Hobbs Ltd. Retail 3i Group plc M&A

2-Nov-17 Hortex Holding SA Food and beverage Argan Capital Advisors LLP M&A

19

Source: Dealogic

0

20

40

60

80

100

120

140

160

$0

$10

$20

$30

$40

$50

$60

$70



Capital Briefing20

Source: Dealogic

Appendix AGlobal PE exit activity — Asia-Pacific

Asia-Pacific PE exits — top exits in November 2017

Asia-Pacific PE exits (in US$b)

Source: Dealogic




30-Nov-17Bellsystem24 Holdings Inc. (14.43%) Professional services 0.127 Bain Capital LLC M&A

3-Nov-17Eastern Broadcasting Co. Ltd. (21.3218%) Telecommunications 0.125

Eastern Media International Corp. (21.3%);Carlyle Group LP M&A

15-Nov-17

Closure Systems International Inc. (Asian packaging operations);Graham Packaging Co. Inc. Machinery 0.108 Rank Group Ltd. M&A

11-Nov-17 11-Nov-17Traphaco Joint Stock Co. (24.99%) Healthcare 0.064 Mekong Capital Ltd. M&A

14-Nov-17 14-Nov-17 KoMiCo Ltd. (22.22%) Metal and steel 0.037BNW Investment Co. Ltd.;Neoplux Co. Ltd. M&A

8-Nov-17 22-Nov-17Sagin Capital & Consulting Co. Ltd. (93.75%) Finance 0.002

JAFCO Co. Ltd. (31.25%/25%/12.5%/12.5%/12.5%);Sagin Computer Service Co. Ltd.;Sagin Shiyo Hosho Co. Ltd.;Tokiwa Shoji Co. Ltd.;Sagin Lease Co. Ltd. M&A

14-Nov-17Brownes Foods Operations Pty Ltd. Food and beverage Archer Capital Pty Ltd. M&A

0

5

10

15

20

25

30

35

40

45

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45



Appendix BM&A activity monthly flash

Volume Value Volume Value

Calendar YTD

YTD % ∆ Calendar YTD

YTD % ∆ LTM LTM % ∆ LTM LTM % ∆

2017(to November

17)

vs. 2016(to November

16)

2017(to November

17)

vs. 2016(to November

16)

LTM(to November

17)

vs. PTM(to November

16)

LTM (to November

17)

vs. PTM(to November

16)

M&A activity by areas and regions

Global 34,662 4% 2,788,590 -10% 37,663 4% 3,151,565 -9%

Americas 12,332 -1% 1,483,796 -20% 13,435 0% 1,665,494 -20%

Canada 1,828 -26% 159,080 -29% 2,004 -25% 167,927 -28%

MeCAR 34,662 4% 2,788,590 -10% 37,663 4% 3,151,565 -9%

SA region 34,662 4% 2,788,590 -10% 37,663 4% 3,151,565 -9%

US 10,422 5% 1,301,254 -23% 11,319 5% 1,473,593 -22%

EMEA 12,826 5% 948,399 -3% 13,803 5% 1,151,917 7%

Africa 561 1% 25,855 -34% 597 0% 34,558 -15%

CIS 1,039 22% 24,676 -47% 1,101 20% 41,706 -15%

CSE 858 -8% 25,158 -31% 908 -11% 39,378 -7%

GSA 2,663 28% 242,514 1% 2,805 24% 309,378 14%

Israel 324 56% 29,110 35% 349 55% 30,101 37%

Mediterranean 1,433 13% 196,647 82% 1,527 12% 209,970 76%

MENA 232 -18% 38,845 -15% 250 -19% 56,730 13%

Nordics 1,522 21% 116,955 80% 1,665 23% 127,356 86%

UK&I 2,934 -14% 211,078 -14% 3,230 -13% 278,147 5%

WEM 2,953 -1% 217,330 3% 3,209 2% 239,290 -1%

Asia-Pacific 13,134 4% 805,095 -19% 14,433 5% 907,763 -21%

ASEAN 1,670 -2% 71,183 -6% 1,795 -3% 77,584 -12%

Greater China 5,537 12% 494,634 -18% 6,239 16% 553,525 -22%

India 1,070 -1% 54,202 -8% 1,125 -5% 56,861 -9%

Japan 3,084 7% 116,268 -26% 3,384 7% 143,668 -19%

Korea 1,034 -15% 60,412 0% 1,079 -22% 64,169 -1%

Oceania 1,470 -4% 67,859 -17% 1,609 -4% 83,548 -6%

M&A activity by sectors

Aerospace and defense 343 6% 73,250 131% 383 7% 76,305 125%

Automotive and transportation 2,368 6% 237,414 0% 2,604 6% 258,106 -5%

Banking and capital markets 32,633 4% 2,576,633 -10% 35,456 4% 2,896,125 -9%

Consumer products and retail 4,938 1% 388,506 9% 5,390 1% 424,524 4%

Diversified industrial products 4,591 4% 262,177 -45% 5,044 5% 344,028 -41%

Government and public sector 568 0% 25,719 -4% 614 -1% 26,999 -20%

Health care 1,117 7% 46,952 -9% 1,209 4% 53,924 -3%

Insurance 33,654 3% 2,659,145 -11% 36,557 3% 3,003,938 -10%

Life sciences 2,296 3% 257,771 -22% 2,500 3% 280,870 -24%

Media and entertainment 2,195 -1% 106,943 -50% 2,353 -2% 134,646 -39%

Mining and metals 1,834 -6% 83,380 -11% 2,012 -5% 101,832 1%

Oil and gas 1,246 -5% 299,938 -22% 1,385 -3% 351,478 -14%

Other sectors 3,857 4% 101,902 -18% 4,174 4% 116,484 -13%

Power and utilities 1,441 10% 206,196 -12% 1,560 8% 229,613 -8%

Real estate 3,323 6% 230,877 15% 3,643 7% 268,754 24%

Technology 10,192 13% 571,645 -5% 10,913 13% 613,353 -3%

Telecommunications 673 6% 125,138 -49% 731 5% 136,217 -47%

Wealth and asset management 989 8% 42,199 -13% 1,073 5% 48,970 -7%

21

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 December 2017. Source: Dealogic. All Rights Reserved. Note: data is continually updated and therefore subject to change.

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

A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N


Appendix CM&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 December 2017. Source: Dealogic. All Rights Reserved. Note: data is continually updated and therefore subject to change.

22

Median deal multiple — EV / EBITDA

Global Americas Asia-Pacific EMEA

LTM(to Nov 17)

PTM(to Nov 16)

LTM(to Nov 17)

PTM(to Nov 16)

LTM(to Nov 17)

PTM(to Nov 16)

LTM(to Nov 17)

PTM(to Nov 16)

Aerospace and defense 11.7x 12.1x 21.0x 9.9x 4.5x 14.1x 12.3x 15.0x

Automotive and transportation 10.2x 10.6x 10.0x 11.8x 10.9x 11.7x 9.9x 10.0x

Consumer products and retail 9.5x 10.6x 10.6x 10.6x 9.5x 11.7x 9.1x 9.7x

Diversified industrial products 10.3x 9.9x 10.0x 10.1x 12.0x 11.0x 8.8x 9.1x

Financial services 10.7x 10.2x 14.5x 12.5x 8.0x 8.8x 7.7x 7.6x

Government and public sector 10.0x 8.7x 10.6x 8.2x 10.5x 8.2x 8.9x 8.8x

Health care 13.8x 10.7x 13.3x 10.0x 17.2x 12.8x 13.4x 9.7x

Life sciences 8.9x 10.7x 9.1x 8.8x 9.5x 12.8x 8.7x 9.9x

Media and entertainment 6.9x 8.8x 9.8x 6.3x 6.9x 11.6x 5.9x 9.7x

Mining and metals 11.5x 7.8x 12.2x 8.7x 13.4x 9.0x 6.6x 6.1x

Oil and gas 10.3x 10.0x 10.5x 14.4x 10.6x 9.5x 9.8x 8.4x

Other sectors 10.7x 10.0x 11.4x 10.9x 10.6x 15.7x 9.5x 8.8x

Power and utilities 10.3x 11.8x 8.5x 7.4x 8.5x 12.3x 13.8x 12.6x

Real estate 10.7x 10.1x 10.4x 12.0x 12.4x 10.4x 9.8x 9.8x

Technology 11.6x 10.8x 12.8x 12.5x 11.8x 11.7x 10.5x 9.3x

Telecommunications 7.2x 8.5x 6.1x 10.6x 6.4x 8.2x 8.1x 7.2x

Total 10.3x 10.2x 11.3x 10.6x 10.7x 10.9x 9.1x 9.3x

Median bid premium to four-week stock price

Global Americas Asia-Pacific EMEA

LTM(to Nov 17)

PTM(to Nov 16)

LTM(to Nov 17)

PTM(to Nov 16)

LTM(to Nov 17)

PTM(to Nov 16)

LTM(to Nov 17)

PTM(to Nov 16)

Aerospace and defense 23% 33% 28% 48% 11% 31% 33% 22%

Automotive and transportation

17% 22% 20% 38% 18% 18% 11% 31%

Consumer products and retail 15% 18% 21% 33% 15% 15% 11% 18%

Diversified industrial products 20% 22% 29% 27% 22% 18% 10% 27%

Financial services 17% 23% 21% 30% 13% 14% 13% 15%

Government and public sector 23% 31% 14% 65% 24% 10% 23% -

Health care 25% 32% 35% 43% 14% 31% 18% 11%

Life sciences 21% 26% 24% 36% 18% 24% 22% 21%

Media and entertainment 23% 31% 23% 40% 25% 22% 21% 24%

Mining and metals 21% 21% 18% 29% 27% 20% 21% 14%

Oil and gas 17% 24% 20% 31% 11% 25% 32% 19%

Other sectors 11% 23% 13% 26% 12% 22% 10% 17%

Power and utilities 24% 18% 30% 9% 17% 29% 6% -

Real estate 21% 25% 18% 27% 24% 25% 19% 19%

Technology 19% 23% 25% 38% 18% 17% 14% 15%

Telecommunications 13% 24% 33% 46% 13% 25% 11% 15%

Total 19% 23% 24% 33% 17% 18% 14% 19%


Appendix DCapital Confidence Barometer (October 2017): by area

Respondents who expect their company to pursue acquisitions in the next 12 months

56%59%

50%

57% 56% 56%

0%

25%

50%

75%

100%

Apr 15 Oct 15 Apr 16 Oct 16 Apr 17 Oct 17

57%

67%

54%

62%

81%

51%

0%

25%

50%

75%

100%


50% 48%44%

47% 46%

58%

0%

25%

50%

75%

100%


Global Americas EMEA

45% 44%

38%

47% 46%

57%

0%

25%

50%

75%

100%


Asia-Pacific China Germany

51%56%

50%

61%

33%

63%

0%

25%

50%

75%

100%


Japan UK US

58%

52%

59%

48%51%

60%

0%

25%

50%

75%

100%


61%

74%

57%

75%79%

42%

0%

25%

50%

75%

100%


23

43%40%

43%

49%

43%

58%

0%

25%

50%

75%

100%


51%

43%

35%

61%

37%

50%

0%

25%

50%

75%

100%



Notes

24 Private Equity Capital Briefing

Notes

25 Private Equity Capital Briefing

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Steve Krouskos

EY Global Vice Chair


+1 404 817 5090

[email protected]

Bill Casey

EY Americas Leader


+1 305 415 1645

[email protected]

Andrea Guerzoni

EY EMEIA Leader


+39 02 8066 9707

[email protected]

Harsha Basnayake

EY Asia-Pacific Leader


+65 6309 6741

[email protected]

Peter Wesp

EY Japan Leader


+81 3 4582 6465

[email protected]

Private Equity

Herb Engert

EY Global Private Equity Leader

+1 212 773 6202

[email protected]

Bill Stoffel

EY Americas Private Equity Leader

+1 212 773 3141

[email protected]

Jeff Hecht

EY Global PE Tax Leader

+1 212 773 2339

[email protected]

Research and Insights

Mark Temple

EY Knowledge


+44 20 7951 6985

[email protected]

Pete Witte

EY Knowledge

Private Equity

+1 312 879 4404

[email protected]

Documents

Private Equity Capital Briefing - EY - US...• PE fundraising in November was more than double the amount raised in October, increasing the YTD total to US$575.8b, up 12% YoY. •