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Merger_Tracker_2015_02

Merger_Tracker_2015_02

William Blair Table of

William Blair Table of Contents Commentary .............................................................................................................................................................................................................................................. 1 Global M&A Activity ............................................................................................................................................................................................................................... 3 Regional Transactions ...................................................................................................................................................................................................................... 3 Mid-Cap Regional Transactions ................................................................................................................................................................................................... 4 Annual Transactions ......................................................................................................................................................................................................................... 5 Global Cross-Border M&A Flows ...................................................................................................................................................................................................... 6 2014 M&A Activity by Regional Flow ........................................................................................................................................................................................ 6 U.S. M&A Activity..................................................................................................................................................................................................................................... 9 Transaction Detail .............................................................................................................................................................................................................................. 9 Annual Activity .................................................................................................................................................................................................................................. 10 U.S. Valuation Multiples ................................................................................................................................................................................................................. 11 Private Equity Transaction Analysis ........................................................................................................................................................................................ 12 Transaction Participants and Considerations ...................................................................................................................................................................... 16 Industry Breakdown ....................................................................................................................................................................................................................... 18 Cross-Border Transaction Analysis .......................................................................................................................................................................................... 20 U.S. Debt Capital and Private Equity ............................................................................................................................................................................................. 22 Fourth Quarter 2014 Update ...................................................................................................................................................................................................... 22 European M&A Activity ...................................................................................................................................................................................................................... 26 Transaction Detail ............................................................................................................................................................................................................................ 26 European Valuation Multiples .................................................................................................................................................................................................... 28 Private-Equity Transaction Analysis ....................................................................................................................................................................................... 29 Emerging Markets M&A Activity .................................................................................................................................................................................................... 30 Recent Select William Blair Transactions ................................................................................................................................................................................... 31 William Blair Corporate Industry Coverage .............................................................................................................................................................................. 36 Notes .......................................................................................................................................................................................................................................................... 37 Disclosures ............................................................................................................................................................................................................................................... 38 Merger Tracker Table of Contents

William Blair Commentary Beyond the Headline Numbers: M&A Trends in 2014 A surge in mega-cap deals drove overall M&A volume in 2014, but in a flat midcap environment, deal-making was shaped by a huge private equity overhang, the streamlining of Corporate America, and intense interest from Asian buyers. Year-end headlines suggest that 2014 was a resoundingly robust year for M&A activity. Global M&A activity totaled $3.4 trillion in 2014, a 37% increase from 2013. A closer look at these numbers, however, reveals that the vast majority of this uptick was driven by a surge in mega-cap transactions. There were 87 transactions of more than $5 billion announced in 2014, more than double the number of such deals in 2013. The realities of the vast majority of the M&A market don’t align with the perception that everything that was not tied down was being sold in 2014. In the U.S., deal volume between $100 million and $1 billion was actually down 2.7%, and the number of transactions was up only 1.2%. Other than the mega cap strategic deals, the overall level of transaction activity was essentially flat. Mega-Deals Drive M&A Surge in 2014 Number of Deals Undisclosed Mid-Cap >$750M Deal Value 60,000 50,000 40,000 30,000 20,000 10,000 0 26,755 25,067 22,933 26,148 31,346 36,896 Sources: Dealogic and William Blair’s mergers and acquisitions market analysis. 42,819 Global M&A activity in 2014 increased 37%, to $3.4 trillion. This increase was driven mostly by the 87 transactions of greater than $5 billion that were announced during the year. Midcap activity was mostly flat in 2014. What shaped the mid-cap deal-making landscape in 2014 While the number of mid-cap transactions in 2014 was generally flat relative to 2013, mid-cap valuations continued to steadily increase. U.S. and European mid-cap transaction multiples, 10.2 and 9.6 times, respectively (as measured by EV/EBITDA), approached their pre-recession highs in 2014. The upward pricing pressure was largely the result of increasingly motivated buyers with record amounts of capital chasing a limited number of available companies. 41,479 36,601 41,270 44,314 42,708 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 37,209 Deal Value ($ in billions) $6,000 39,777 $5,000 $4,000 $3,000 $2,000 $1,000 $0 • Private equity overhang creates hyper-motivated buyers: With more than $535 billion of dry powder (as of June 30, 2014), the U.S. private equity industry is flush with capital that has to be put to use. When analyzing the private equity overhang, it is important to look at not only the size but also the vintage of the funds. Several of the most aggressive bidders we encountered in sale processes over the past two years were funds that needed to put capital from 2007- and 2008-vintage funds to work. According to our analysis of data provided by PitchBook, at the beginning of 2014 more than $95 billion of capital remained uncalled from funds raised from 2006 to 2008. Given the strength of the private equity fundraising market over the past two years, we believe that private equity firms are positioned to be very active buyers over the next four years. Funds raised in 2012 or 2013 represented approximately 58% of the private equity overhang at the beginning of 2014. Merger Tracker Commentary 1

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