US South

Mergermarket trend report H1 2016

Fact file - H1 2016 vs. H1 2015

Total

$156.1bn

-18.7%

Texas

$53.4bn

-35.3%

Florida

$26.0bn

8.0%

Maryland

$16.5bn

149.7%

Energy, Mining
& Utilities

$35.7bn

-35.2%

US South
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 2016s 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.

35.3% decline from H1 2015 (US$ 82.4bn, 247 deals). Texas top deal came
from the Energy, Mining & Utilities (EMU) sector: TransCanada Corporations
US$ 12bn bid for Columbia Pipeline Group, which accounted for 22.6% of the
states total value and was the states 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 EMUs largest transaction, comprising 33.7% of
that sectors total value, but also the largest in Texas, and the second-largest
in the South overall.

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 Souths 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.

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

EMUs 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 sectors total value. From 2011 to 2016 I&C
The Lone Star State, meanwhile, was once again number one in the region, saw a year-on-year increase in value for a first half of the year, is the only
with 217 deals in H1 2016 worth a total of US$ 53.4bn. However, this was a sector with a year-on-year H1 increase during that timeframe.

Quarterly M&A value

US$ 156.1bn

2015

2014

US$ 269.7bn
US$ 282.6bn

2012

2011

US$ 345.2bn
US$ 257.3bn

2010

2009

US$ 193.8bn

2008

US$ 194.2bn

2007

Q1

US South trend report H1 2016

www.mergermarket.com

350

Deal activity was bolstered

Biotechby the highest valued
20.3 H1 period on record
(136.5bn) whilst deal value in Q3 dropped to 33.5bn during the
13.0
traditionally slow summerConsumer
months. Despite
showing a 59.7% decrease
1.2
compared to Q2 (325 deals, 83.0bn), Q3 deal value increased by 81.6%
compared to Q3 2014 (311Real
deals,
16.8bn).13.5
Estate
7.3

According to Mergermarket intelligence, the

17.3turmoil surrounding the
Business Services
Greek economy and the consequentially 14.9
weakened euro has pushed
investors to be more confident when entering UK transactions. This year,
34.3
Industrials &
inbound M&A has reached
a record value at20.2
138.6bn, up 118.7% by
Chemicals
value compared to the whole of 2014, and overtaking all annual totals on
35.742.4bn-worth
Mining
Mergermarket record. Energy,
France
by& comparison has recorded
Utilities
US$ 546.8bn
of inbound deals to-date, down 41.7% by value compared to the55.1
same
0
10
20
30
40
50
60
period in 2014 (185 deals, 72.8bn).
Deal value ($bn)

Value of deals ($bn)

Q2

Q3

400

12.9

Pharma, Medical &

2013

State breakdown

H1 2016

H1 2015

Q4

300

Value of deals (US$bn)

H1
2016

The UK has been central to Europes overall M&ASector

activitybreakdown
so far in 2015,
contributing a 38.7% share to the regions total deal value, up from a 14.5%
18.5
during the same period in 2014,
Other and its highest stake on record (since
2001). The 1,004 deals worth 170bn announced to-date have49.9
already
US$ 429.9bn overtaken 2014s full value (1401 deals, 94.8bn)
by 79.2%, marking the
11.0
Technology
23.4
highest annual total since 2007 (1,528 deals, 171.4bn).
US$ 544.5bn

250

200

150

100

50

H1 2007

H1 2008

Florida

H1 2009

Maryland

H1 2010

H1 2011

Georgia

Tennessee

H1 2012

Texas

H1 2013

Virginia

H1 2014

H1 2015

Rest of the region

H1 2016

US South
Top deals
Deal
value
(US$m)

Ann.
date

Bidder
company

Bidder
country

Buy-side
advisors

Target
company

Target
sector

Seller
company

12,269

16-Feb-16

Apollo Global Management LLC

USA

FA: Barclays; Citi; Deutsche Bank;

RBC Capital Markets

The ADT Corporation

Industrials &
Chemicals

LA: O'Melveny & Myers; Paul

Weiss Rifkind Wharton & Garrison;
Stikeman Elliott

12,040

17-Mar-16

TransCanada Corporation

Canada

FA: Wells Fargo Securities

19-Jan-16

Progressive Waste Solutions Ltd

Canada

Columbia Pipeline Group Inc

FA: BMO Capital Markets;

JPMorgan

Waste Connections Inc

Energy,
Mining &
Utilities

Industrials &
Chemicals

15-Jun-16

Envision Healthcare Holdings Inc

USA

15-Jan-16

Qingdao Haier Co Ltd

China

FA: Barclays; Evercore Partners

Amsurg Corp

FA: Bank of America Merrill Lynch;

China International Capital; PwC;
UBS Investment Bank

GE Appliances

Pharma,
Medical &
Biotech

Consumer

General Electric Company

FA: Guggenheim Partners;

JPMorgan
LA: Bass Berry & Sims; Advising FA:
Cravath Swaine & Moore
FA: Goldman Sachs
LA: Sidley Austin

LA: King & Wood Mallesons;

White & Case

US South trend report H1 2016

www.mergermarket.com

FA: Bank of America Merrill Lynch;

Morgan Stanley; Stifel/KBW; Wells
Fargo Securities
LA: Bennett Jones; Latham &
Watkins; Locke Lord; Advising FA:
Gibson Dunn & Crutcher

LA: Debevoise & Plimpton;

Advising FA: Cleary Gottlieb Steen
& Hamilton; Morrison & Foerster
5,600

FA: Goldman Sachs; Lazard

LA: Bennett Jones; Sullivan &
Cromwell; Advising FA: Simpson
Thacher & Bartlett; Skadden Arps
Slate Meagher & Flom

LA: Stikeman Elliott; Weil

Gotshal & Manges; Advising FA:
Davies Ward Phillips & Vineberg;
Simpson Thacher & Bartlett
6,776

FA: Bank of America Merrill Lynch;

Goldman Sachs
LA: Simpson Thacher & Bartlett;
Advising FA: Shearman & Sterling;
Sullivan & Cromwell

LA: Blake, Cassels & Graydon;

Mayer Brown; Osler, Hoskin &
Harcourt; Advising FA: White &
Case

8,053

Sell-side advisors

US South
Financial advisor league table by value
Ranking
H1
2016

H1
2015

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

2
4
5
9
18
20
3
7
1
6
8
10
106
29
44

Company name

Goldman Sachs
Bank of America Merrill Lynch
Barclays
Deutsche Bank
RBC Capital Markets
Wells Fargo Securities
Citi
Morgan Stanley
JPMorgan
Credit Suisse
Lazard
Evercore Partners
BMO Capital Markets
Jefferies
Stifel/KBW

Financial advisor league table by deal count

H1 2016

Ranking

Value
(US$m)

Deal
count

% Value
change

H1
2016

H1
2015

123,641
62,797
47,177
44,541
43,458
41,803
37,877
36,793
34,224
23,459
18,430
14,459
11,907
11,870
9,766

31
23
27
16
23
17
19
23
25
21
19
20
5
21
19

67.7%
20.2%
-1.4%
32.0%
580.8%
581.8%
-42.4%
-7.4%
-61.3%
-50.9%
-49.3%
-47.1%
9,350.0%
257.2%
653.5%

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

1
11
3
6
2
4
18
5
12
15
9
16
8
7
45

Legal advisor league table by value

Ranking
H1
2016

H1
2015

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

10
3
2
1
4
7
9
11
8
52
40
125
12
14
13

Company name

White & Case

Sullivan & Cromwell
Simpson Thacher & Bartlett
Skadden Arps Slate Meagher & Flom
Weil Gotshal & Manges
Latham & Watkins
Cleary Gottlieb Steen & Hamilton
Kirkland & Ellis
Gibson Dunn & Crutcher
Stikeman Elliott
Hogan Lovells International
Bennett Jones
Shearman & Sterling
Fried Frank Harris Shriver & Jacobson
Cravath, Swaine & Moore

US South trend report H1 2016

www.mergermarket.com

Company name

Goldman Sachs
Barclays
JPMorgan
Raymond James & Associates
Houlihan Lokey
Bank of America Merrill Lynch
RBC Capital Markets
Morgan Stanley
Credit Suisse
Jefferies
Evercore Partners
Citi
Lazard
Stifel/KBW
Robert W. Baird & Co

H1 2016
Value
(US$m)

Deal
count

Count
change

123,641
47,177
34,224
1,523
7,204
62,797
43,458
36,793
23,459
11,870
14,459
37,877
18,430
9,766
5,448

31
27
25
25
24
23
23
23
21
21
20
19
19
19
18

-6
7
-7
0
-11
-7
9
-3
2
3
-4
4
-5
-6
14

Legal advisor league table by deal count

H1 2016

Ranking

Value
(US$m)

Deal
count

% Value
change

H1
2016

H1
2015

76,045
63,949
55,373
43,539
31,427
30,590
27,858
26,343
23,578
22,778
20,932
20,584
20,288
19,628
19,369

30
18
13
22
23
48
8
68
18
9
24
5
11
11
10

108.7%
27.4%
-27.6%
-61.6%
-36.2%
-30.6%
-31.5%
-26.7%
-45.0%
197.6%
63.2%
4,126.7%
-38.0%
-32.8%
-40.2%

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

1
2
3
4
7
9
6
14
11
15
19
18
5
25
28

Company name

Kirkland & Ellis

DLA Piper
Jones Day
Latham & Watkins
White & Case
Goodwin Procter
King & Spalding
Hogan Lovells International
Vinson & Elkins
Cooley
Weil Gotshal & Manges
Morgan Lewis & Bockius
Skadden Arps Slate Meagher & Flom
Locke Lord
Sullivan & Cromwell

H1 2016
Value
(US$m)

Deal
count

Count
change

26,343
6,363
14,128
30,590
76,045
3,659
7,843
20,932
13,637
2,830
31,427
5,099
43,539
10,707
63,949

68
56
51
48
30
26
25
24
24
24
23
23
22
20
18

-3
0
-3
2
0
-4
-6
-2
-4
0
2
1
-14
1
0

US South
Trend report criteria

Production contacts

All data is based on transactions over US$ 5m and is based on Mergermarkets M&A deals database.
Deals with undisclosed deal values are included where the targets 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.

Analyst:
Aram Hovsepian
T: +1 212 390 7826

Research Editor - Americas:

Elizabeth Lim
T: +1 212 686 3016

All values are in US$.

PR contacts

Data correct as of 30-Jun-2016.

Americas:
Chrissy Carney
T: +1 646 378 3118

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

EMEA:
Olivia Cummins
T: +44 20 3741 1129

Asia:
Ajay Narang
T: +852 2158 9764

EMEA:
Ben Rumble
T: +44 3741 1007

Commercial contacts

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.

Americas:
Kurt Viehl
T: +1 212 390 7812

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

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:
Jason Loria
T: +1 646 378 3122

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.

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US South trend report H1 2016

www.mergermarket.com

Asia:
Su Chin Zhang
T: +852 2158 9706

Asia:
John Capulong
T: +852 2158 9723

EMEA:
Andrea Putaturo
T: +44 20 3741 1274