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Private Equity Capital Briefing

November 2016

Monthly insights and intelligence on PE trends

Dry powder continues to climb Dry powder climbs amid strong fundraising and muted investment activity; PE acquisitions down 14% ytd

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 9

Section 4 Loans 10

Section 5 Bonds 11

AppendicesAppendix A PE activity by geography 13

Appendix B M&A activity monthly flash 22

Appendix C M&A multiples and bid premium 23

Appendix D Capital Confidence Barometer 24

1.i. Private equity: fundraising

Executive summary

• Fundraising for buyout funds more than doubled in October, on flat volume, to US$29b on 36 closes. YTD, fundraising is up 6%, standing at US$406b.

• Average fund size in October more than doubled to US$804.9m. YTD rose slightly to US$630.9m, up 0.12% from a year ago.

• PE firms continue to increase the capital available for investment; the tally totaled US$541.8b at the end of October.

Current state

Fundraising

• 2016 is looking to be another strong year for PE fundraising. October was particularly active as total commitments more than doubled to US$29b from a year earlier on flat volume. Both periods closed 36 funds. Year-to-date, fundraising rose 6% to US$406b.

• Large funds were a staple in October 2016, with 10 closes above the US$1b threshold. The largest fund of October 2016 secured more commitments than the three US$1b-plus funds that closed in October 2015. HarbourVest Partners held the largest close during the latest period with its latest secondary fund. Dover Street IX secured US$4.75b with its final close, according to Preqin. The average fund size in October more than doubled to US$804.9m from US$379.9m a year earlier. YTD remains relatively flat, up 0.12% to US$630.9m.

Dry powder

• Access to capital is not a problem for PE, as the industry’s buyout dry powder totals US$541.8b, up 12% compared with the same time last year. But the volume of announced PE deals is trailing last year’s pace as the industry remains concerned about valuations, leading dealmakers to focus more on smaller-sized platform transactions. The premium prices commanded by quality targets are compounded by competition from corporate buyers. PE firms need to find opportunities to put capital to work, but the continued rise of dry powder suggests PE remains an attractive asset class among investors.

Environment and horizon

• Limited partners have a growing interest in direct lending. PE firms are taking advantage of this opportunity by launching new business development companies (BDCs). While BDCs are not new to the industry, as several large PE firms have such vehicles, we may see more firms launching new ones. In early October, Bain Capital LLC registered its first BDC with the US Securities and Exchange Commission (SEC). Bain Capital Specialty Finance Inc. plans to invest primarily in middle-market companies with earnings before interest, taxes, depreciation and amortization (EBITDA) ranging from US$10m to US$150m. It will focus on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender, according to the SEC filing.

• The potential uptick in BDCs could see regulatory hurdles. The SEC is considering rule changes that would affect the “shadow banking” sector, mulling regulations that would curb alternative lenders’ ability to provide loans to small businesses. Specifically, the agency is looking to require BDCs to count the entire amount of the revolving credit line, instead of the current practice of counting only the amount accessed by the borrower. If passed, BDCs would be required to hold larger cushions against potential losses, and small businesses that would not qualify for bank loans could lose another source of potential financing. The Small Business Investor Alliance has argued against the SEC’s proposal.

• While high roman numerals at the end of a fund’s name hint at a firm’s success with specific strategies, limited partners (LPs) should consider first- and second-time funds in order to capture outsized returns. The view is based on Cambridge Associates’ data that indicated two of the top five performing European PE funds across vintages were either first- or second-time funds. The review looked at net total value paid-in (TVPI) multiples, which is a ratio of total value to paid-in capital, and represents the total return of the investments to the original investment. “You need to be willing to make room for new funds,” Andrea Auerbach said at the BVCA Summit in October 2016. “New funds have a lot of reasons for being. They’re very aligned with returns, they’re focused, they’re hungry, and they clearly are showing up in the winner’s circle.” Auerbach is a managing director and head of Cambridge Associates’ global private investment research.

Global PE fundraising by month (in US$b)

4 Private Equity Capital Briefing

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Commitments (US$b) Number of funds

Top five funds closed in October 2016 (US$b)

Fund name TypeGeographic focus

Target (US$b)

Close (US$b)

Dover Street IX Secondaries US NA 4.8

Carlyle Global Partners Buyout US 5.0 3.6

OHA Strategic Credit Fund II

Distressed debt US 2.0 2.7

Lennar Multifamily Venture

Real estate Europe NA 2.2

Kayne Anderson Energy Fund VII

Natural resources

US 1.6 2.0

Global PE dry powder by region (in US$b)

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03 04 05 06 07 08 09 10 11 12 13 14 15 YTD16

Source: Preqin YTD through 31 October 2016.

North America Europe Asia and rest of world (ROW)

Source: Preqin

Source: Preqin

1.ii. Private equity: acquisitions

Executive summary

• PE acquisitions in October decreased 30%, to US$19b from a year earlier. Year-to-date, activity is down 14%, to US$241.1b.

• Are club deals making a comeback? PE firms could start working together to pursue larger deals.

• Europe’s distressed financial services industry is ripe with investment opportunities for PE. Macro issues, Brexit and the new regulatory landscape are contributing to the growing opportunities.

Current state

• PE investment activity remains muted in a market that is dominated by price pressures and a significant buyer/seller disconnect. PE also continues to be constrained by regulatory pressures designed to reduce the use of debt, and by competition from corporate buyers that can use their elevated stock prices along with cash stockpiles to push up bids for potential targets. In October, PE investment activity decreased 30%, to US$19b from a year earlier; year-to-date, activity is down 14%, to US$241.1b. A decline in the Americas overshadowed month-over-month increases in Europe, Middle East and Africa (EMEA) and Asia. For the YTD period, Asia is the only region to record positive comparisons.

• October’s largest PE acquisition involved Blackstone Group LP’s offer to acquire Team Health Holdings Inc. Blackstone agreed to buy the Knoxville, Tennessee, provider of outsourced health care services for about US$5.7b. Team Health was one of nine PE investments in the health care space, which saw the third most activity from financial sponsors during the month. Health care trails the technology and consumer services sectors, based on October deal volume. Consolidation among hospitals and related businesses is contributing to the dealmaking environment. In the US, consolidation is seen as a possible solution against pricing pressures related to the Affordable Care Act.


• Can PE use club deals to compete with corporates? PE firms could once again partner on larger deals, many of which have been recently lost in auctions as a result of corporates’ ability to outbid PE. One key to a potentially good club deal is finding the right partner, one that has a complementary skill set. In October, Cinven and CVC Capital Partners Ltd. agreed to acquire NewDay Capital Partners, a UK-based consumer finance provider, from Värde Partners. Financial terms were not disclosed, but the deal is reportedly valued around £1b (US$1.2b). Such deals could provide one answer to the increased competition PE firms are seeing from corporates, sovereign wealth funds, Chinese multinationals and even pension funds that are increasingly interested in making direct investments.

• Europe’s distressed financial services industry is ripe with investment opportunities for PE. Firms with experience and expertise in credit and distressed markets are likely to find assets to invest in. Macro issues, Brexit and the new regulatory landscape are contributing to the growing opportunities. M&A targets are abundant, especially in the UK, because the value of the pound sterling (symbol: £) has fallen since a June 2016 referendum. Roughly 51.9% voted for the UK to exit the European Union. In addition, PE can look at potential targets in banks and insurance companies that are feeling more pressure to raise their reserves.

• The Carlyle Group LP’s Co-CEO David Rubenstein is hosting a 12-week program called The David Rubenstein Show: Peer-to-Peer Conversations for Bloomberg TV. The show features Rubenstein interviewing high-profile executives such as Microsoft Corp. co-founder Bill Gates and Berkshire Hathaway CEO Warren Buffett. Rubenstein will also have one-on-one interviews with Goldman Sachs Group Inc. CEO Lloyd Blankfein, American Express Co. CEO Ken Chenault, Alphabet Inc. CEO Eric Schmidt and PepsiCo. CEO IndraNooyi. The program began airing in October. “This is a wonderful opportunity to help a broad audience better understand the great minds, leaders and entrepreneurs of our day,” Rubenstein said in a press release. “We explore life journeys, get at lessons learned and find wisdom throughout. They are all titans, but we find the humanity that makes them real and approachable.”

PE acquisitions by month (in US$b)

Top five announced acquisitions in October 2016


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Value (US$b) Volume

Sector 2016 valueIndustry

share (%)2016 volume

Industry share (%)

Technology $57.94 24.0% 256 19.8%

Utilities $29.48 12.2% 25 1.9%

Health care $28.85 12.0% 127 9.8%

Consumer goods $25.11 10.4% 171 13.2%

Financials $18.05 7.5% 82 6.3%

Real estate $16.92 7.0% 33 2.5%

Industrials $16.61 6.9% 113 8.7%

Materials $16.32 6.8% 184 14.2%

Consumer services $15.27 6.3% 186 14.4%

Telecom $6.44 2.7% 35 2.7%

Oil and gas $5.79 2.4% 28 2.2%

Retail $4.32 1.8% 55 4.2%

PE acquisitions by sector, YTD 2016 (US$b)

Annouce-ment Date

Company Acquirer Value (US$b)

Sector

31-Oct-16 Team Health Holdings Inc.

Blackstone Group LP 5.74 Health care

14-Oct-16 Grupa Allegro Sp zoo

Cinven Ltd./Permira Ltd.;Mid Europa Partners LLP

3.25 Technology

7-Oct-16 Atotech BV Carlyle Group LP 3.20 Materials

4-Oct-16 Wharf T&T Ltd. TPG Capital LP/MBK Partners Ltd.

1.22 Telecom

6-Oct-16 SVG Capital plc (Investment portfolio) (Bid No 2)

Goldman Sachs Group Inc./Canada Pension Plan Investment Board

0.95 Financials

Source: Dealogic.

Source: Dealogic. Data through 31 October 2016.

Source: Dealogic

1.iii. Private equity: exits

Executive summary

• PE-backed M&A exits rose 2% to US$23.8b from a year earlier, on fewer transactions (76 vs. 93). Asia and EMEA activity more than offset continued weakness in the Americas.

• YTD, PE-backed M&A deal value is down 27%, to US$229.3b from a year ago; 2014 was a record year for PE exits, and 2015 was likewise robust.

• There were 17 PE-backed IPOs during October that combined to raise US$7.5b in proceeds, down 39% from a year earlier. YTD is down 46%, partly on continued market uncertainty.

Current state

• The pace of PE-backed M&A exits in 2016 continues to progress at a slower pace compared to a year earlier, when many financial sponsored businesses were on the block to take advantage of the exit environment at that time. October 2016 was relatively unchanged. PE-backed M&A exits recorded deal value of US$23.8b, up 2% from US$23.5b a year earlier on fewer transactions (76 vs. 93). Despite a strong October, YTD PE-backed M&A deal value is down 27% from a year ago, to US$229.3b. The trend of moderating exit activity will likely remain in place for the foreseeable future, as the overall M&A exit market is coming off a peak recorded during the final quarter of 2015.

• PE-backed M&A exits in Asia and EMEA more than offset the downturn in realizations recorded in the Americas region during October 2016. Activity in Asia was led by Shanghai Electric Power Co. Ltd.’s offer to purchase a 66.4% stake in K-Electric Ltd. The proposed transaction represents an exit opportunity for Abraaj Capital Ltd. The other sellers are National Industries Group (Holding) SAK and Al Jomaih Power Ltd. The transaction is reportedly the largest M&A deal in Pakistan in a decade.

• The lingering uncertainties of Brexit and the US presidential election have chilled the IPO market and thawing will likely start in the new year. This does not mean we won’t see a PE-backed IPO take place for the rest of 2016. In October, 17 PE-backed IPOs raised US$7.5b, down 39% from the US$12.3b raised by 13 similar offerings a year earlier. There was reduced activity in all region for both the latest month and YTD periods. The total for 2016 is 46% behind last year’s pace based on raised proceeds. More clarity will help confidence in the public markets and trigger more PE-backed companies to proceed with IPO plans.

• The largest PE-backed IPO for October 2016 was ConvaTec Ltd.’s listing on the London Stock Exchange. The maker of medical products raised nearly £1.5 billion, as the offering was priced at the bottom of the anticipated range. Brexit’s uncertainty has hurt the valuation of companies listing on the LSE. The offering represents a partial exit for both Nordic Capital and Avista Capital Partners. After the offering, they owned 45.1% and 19.5%, respectively, in ConvaTec.


• Carried interest legislation could be coming and, potentially, in the first year of the new White House administration in 2017. Change could be inevitable, with the US presidential candidates from both major political parties calling for the taxation of carried interest as ordinary income at 39% rather than at a capital gains tax rate that can be as low as 23%. Delegates at the PEI Private Fund Finance and Compliance Forum on 19 October in San Francisco agreed that efforts to change the treatment of carried interest appear imminent and that “adjacent legislation to address management fee waivers would be put on the backburner.”

• PE is outperforming all other asset classes with a median 10-year annualized return of 11.4%, according to a study conducted by the American Investment Council and Bison. They reviewed PE investments of more than 155 US public pension funds. The study showed public equity posting a median return of 7.6%, real estate at 6.8% and fixed income at 5.2%. “The data show that private equity is the standout asset class for public pensions over the long term, and its allocation is critical to public pensions as they seek to meet their financial obligations,” AIC Vice President of Research and Investor Relations Bronwyn Bailey said. “Particularly now, with low interest rates and noticeable public market volatility, pension officials can turn to private equity as a source of stable, high returns for their beneficiaries.”

PE M&A exits by month (US$b)

PE IPOs by month (in US$b)

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Value (US$b) Volume

Top five announced M&A exits in October 2016

Date Company SponsorValue (US$m)

Sector

11-Oct-16 LM Group Holding A/S

Doughty Hanson & Co Ltd.

1,675.51 Materials

20-Oct-16 Materne Mont Blanc (65%)

LBO France SA 606.58 Consumergoods

17-Oct-16 Jemella Ltd. Lion Capital LLP 511.91 Consumer goods

24-Oct-16 SARquavitaeServicios a la Dependencia SL

PAI Partners SAS/Palamon Capital Partners LP

478.89 Consumer services

3-Oct-16 * SagemcomCommunication SAS (70%)

Carlyle Group LP/Charterhouse Development Capital Ltd.

449.69 Telecom

Source: Dealogic

Source: Dealogic.Note: * refers to completion date.

Source: Dealogic

-15%

-10%

-5%

0%

-20% 0%

Current state• October was one of the busiest months for global dealmaking. We saw

deals worth just over US$526b, the highest monthly deal value on record, indicating a remarkable comeback of M&A activity after a moderate performance in the first nine months of 2016. A host of megadeals grabbed the headlines, contributing around 60% to the total deal value.

• On the volume front, the month witnessed 2,123 deals compared with 2,506 deals recorded at the same time last year. An interesting point to note is that there were 89 deals valued between US$500m and US$10b, worth a combined US$146b, a key indicator of the underlying health of the M&A market. This remains in line with the median monthly value and volume since the deal market accelerated in 2014. Despite political uncertainty, factors such as low growth, low interest rates and accommodative capital markets drove activity in the M&A market.

• The value for US-targeted deals reached US$335b, surpassing the previous record of US$322b in July 2015. This shows the high level of corporate confidence in the outlook for the US economy.

• The month also saw the biggest deal of 2016 so far — AT&T Inc. agreed to buy Time Warner Inc. forming a company with complementary strengths to lead the next wave of innovation in the converging media and

communications industries. The transaction combines the world’s best premium content with distribution to capture the customers replacing traditional pay-TV packages with more streamlined offerings and online delivery.

• In another prominent deal, British American Tobacco (BAT) offered to pay US$47b to buy the remaining stake in Reynolds American, in a takeover that would create the world’s largest tobacco company based on net turnover. The deal would place BAT back in the US market after a 12-year absence, and is also likely to speed the development of e-cigarettes and vapes.

Environment and horizon• The prospects for global M&A are positive. According to EY 15th Global

Capital Confidence Barometer (CCB), more than half (57%) of companies expect to pursue deals actively in the next 12 months — the second-highest percentage recorded in the Barometer’s seven-year history, and well above the long-term average.

• Despite economic uncertainty, the appetite for dealmaking remains strong, indicating an uptick in M&A in the first half of 2017. Also, more than 90% of executives expect the M&A market to improve or remain stable over the next year, and less than 10% expect their own deal pipelines to contract over the same period. The survey covers more than 1,700 executives in 45 countries. “Everything is changing for global companies, except the expectations of their stakeholders around growth and returns — profitable growth is a mainstay demand of business. But turbocharged technological advances and an unsettled geopolitical landscape have changed the M&A field of play forever. In this disruptive environment, the quickest route to innovation and growth is M&A —

mergers, acquisitions and alliances,” commented Steve Krouskos, EY Global Vice Chair, Transaction Advisory Services.

• Smaller, smarter deals are likely to be on the deal table. Megadeals remain a strategic option for firms, but the prevailing M&A trend is for smaller, smarter deals as companies target start-ups and fast-growth tech innovators. According to the survey, half (49%) of companies have, on average, more than five deals in progress, and more than half are expecting to do deals between US$250m and US$1b.

• Sector convergence continues to be a key deal driver. Sector blurring and industrial mash-ups have become prominent in the current M&A landscape as companies make deeper inroads into adjacent or unrelated industries. “Industrial mash-ups — through acquisitions and alliances — are being driven by new market entrants upsetting the status quo. These disruptors are changing the competitive landscape with new operating models and new ways of creating demand,” commented Steve Krouskos.

• Geopolitical concerns and the rise of nationalism complicate cross-border investments. Although the majority (76%) of executives surveyed see the global economy as stable or improving, they recognize an increase in certain downside risks. These include uncertainty caused by Brexit and US elections, interest rate trajectory and currency fluctuations, and declining trade flows. These issues also add complexity to international deals and, for the first time in the Barometer’s seven-year history, the UK is not among global executives’ top five investment destinations of choice.

Deal environment: by area (YOY % change)

Last 12 months (LTM) to October 2016 versus LTM to October 2015Source: Dealogic and EY analysis

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

LTM to October 2016Source: Dealogic and EY analysis; excludes real estate asset transactions.

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

Top 10 announced deals by value, October 2016Source: Dealogic

M&A analysis as at 1 November 2016.

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

Figures have been rounded off to nearest decimal place.7

Executive summary• Global M&A rebounded in October on the back of major deal announcements; we saw a “US$100b M&A day” almost exactly a year after

the last one.

• Core M&A is driving the uptick, with strong performance in the US$500m–US$10b value band.

• US-targeted M&A set a new record, with deals worth US$334.7b.

• EY’s 15th Global Capital Confidence Barometer (CCB) finds that the prospects for M&A remain healthy, with 57% of global companies planning to acquire in the next 12 months.

2. M&A

Target Sector Country Acquiror Value (US$m)

Time Warner Inc. Media and entertainment

US AT&T Inc. 107,697

Reynolds American Inc. (57.8%)

Consumer products and retail

US British American Tobacco plc – BAT

58,073

NXP Semiconductors NV

Technology Netherlands Qualcomm Inc. 46,990

Level 3Communications Inc.

Telecommunications US CenturyLink Inc. 33,722

Baker Hughes Inc. Oil and gas US General Electric Co. 24,996

Essar Oil Ltd, VadinarOil Terminal Ltd – VOTL

Oil and gas India Rosneftegaz OAO,United Capital Partners Advisory OOO – UCP andTrafigura Beheer BV

12,904

CIT Group Inc. (Commercial aircraft leasing business)

Other sectors US Bohai Financial Investment Holding Co Ltd.

10,000

BE Aerospace Inc. Aerospace and defense

US Rockwell Collins Inc. 8,228

Texas Competitive Electric Holdings Co LLC

Power and utilities US Creditors 6,840

Hilton Worldwide Holdings Inc.

Real estate US Hainan Traffic Control Holding Co Ltd.

6,497

Value

Vo

lum

e

AmericasEMEA

Global

Asia-Pacific

Americas Asia-Pacific EMEA Total

Technology 9% 4% 4% 17%

Diversified industrial products 7% 2% 3% 12%

Consumer products and retail 6% 2% 2% 10%

Oil and gas 7% 1% 1% 9%

Life sciences 5% 1% 2% 8%

Banking and capital markets 2% 2% 3% 8%

Power and utilities 3% 2% 1% 7%

Automotive and transportation 1% 4% 1% 6%

Media and entertainment 4% 1% 1% 5%

Others 8% 5% 4% 18%

All sectors 53% 24% 23% 100%

Executive Briefing

http://www.ey.com/Publication/vwLUAssets/Capital_Confidence_Barometer_15_-_Global/$FILE/ey-capital-confidence-barometer-15-global.pdf

2.i. M&A: cross-border deal flow

Key cross-border M&A deal flow(LTM to October 2016)(Total = US$1.26t)

N America to:W Europe – $104b

UK&I – $76bOceania – $22b

Japan to:UK&I - $33b

N America – $31bW Europe – $13b

UK&I to:N America – $98bW Europe – $17b

Africa – $2b

L America to:W Europe – $9bN America – $3b

Greater China andMongolia to:

W Europe – $85bN America – $69b

Latin America – $16b

W Europe to:N America – $160b

UK&I – $22bJapan – $14b

Latin America - $14b

Cross-border M&A deal flow (LTM to October 2016)

(US$m)

Key

>$100b

>$50b

>$10b

Note: all figures are in US$.

1. Acquiror refers to acquiror’s ultimate holding company.

2. Greater China and Mongolia includes mainland China, Hong Kong, Macau, Mongolia and Taiwan.

M&A analysis as at 1 November 2016.

Source: Dealogic. All Rights Reserved.

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

Key >US$100b >US$50b >US$10b

Intra-area cross-border deals

Target Acquiror1 Africa SE Asia (including Korea)

Greater China and Mongolia$

Russia, CIS and CSE

W Europe (excluding UK&I)

India Japan Latin America

Middle East

North America

Oceania UK&I Inboundtotal

% versus PTM

Africa 982 373 4,603 55 1,970 14 1,028 - 512 3,136 850 1,557 15,079 29%

SE Asia (including Korea)

6 6,861 11,096 13 5,939 23 3,523 376 120 5,082 683 692 34,415 11%

Greater China andMongolia 2

2 3,981 25,581 - 4,355 - 535 - - 11,800 300 116 46,670 -11%

Russia, CIS and CSE 1,197 1,619 2,647 3,669 4,344 4,096 135 613 3,858 1,531 160 1,261 25,129 -30%

W Europe (excluding UK&I)

46 2,711 84,719 6,484 50,656 512 12,554 8,945 1,331 104,478 1,505 16,998 290,940 -1%

India 631 9,786 1,857 12,914 1,074 - 2,977 - 753 4,063 28 121 34,203 129%

Japan - 209 8,802 - 14,289 443 - - - 2,345 15 575 26,679 206%

Latin America 70 1,198 16,415 700 14,209 11 166 5,979 1,374 22,726 1,104 1,111 65,064 73%

Middle East 43 89 14,456 508 7,815 10 216 - 4,356 1,653 133 5 29,284 136%

North America 4,337 4,716 68,519 367 160,311 1,672 30,836 2,541 5,727 131,364 2,518 97,994 510,900 28%

Oceania 385 2,213 6,863 1 2,927 46 1,755 0 80 22,453 2,424 281 39,429 14%

UK&I 1,962 1,111 5,880 57 21,577 1,116 33,235 51 3,038 76,269 1,925 933 147,155 -54%

Outbound total 9,661 34,868 251,438 24,768 289,466 7,942 86,961 18,505 21,149 386,899 11,646 121,645 1,264,948 1%

% versus previous 12 months (PTM)

-32% 80% 122% 98% -34% 59% 0% 18% -72% 15% -15% 5% 1%

8 Executive Briefing

3. IPOs

Executive summary

• October 2016 recorded the strongest IPO activity YTD, both in terms of capital raised and number of deals, with six US$1b+ deals.

• Global IPO activity recorded the highest number of deals for the month of October since 2010 and the highest proceeds since 2013.

• US exchanges saw the highest monthly activity in terms of capital raised this YTD, mainly due to the US$1.4b listing of Chinese delivery service provider ZTO Express (Cayman) Inc.

• Asia-Pacific continued to dominate global IPO activity, both in terms of deal volume and value.

9

Current state• October 2016 recorded the strongest IPO activity YTD, both in terms of

deal value (US$27.2b) and volume (115 deals), on the back of six deals that together raised more than US$15b. The activity registered an increase on the year prior of 4% and 35% in terms of deal value and volume respectively.

• Asia-Pacific accounted for 52% and 70% of global deal value and volume respectively (US$14.2b raised via 80 deals). IPO activity in the region almost doubled YOY. The region recorded three of the six billion-dollar deals this month.

• While EMEA IPO activity declined 40% and 44% in terms of deal value and volume respectively (US$8.5b raised via 15 deals) when compared with October 2015, it recorded a month-on-month (MOM) increase of 159% and 88% and accounted for two of the top three deals this month.

• US exchanges recorded the highest monthly activity this YTD, raising US$4.8b via 19 deals, as IPO candidates looked to take advantage of the short IPO window before the presidential election.

• The top three deals of the month were:

• Innogy SE: the company raised US$5.2b in the largest German IPO in more than a decade. It intends to use its IPO proceeds for investments in its core business areas.

• JR Kyushu: Japanese Government raised US$4.0b in the biggest domestic rail IPO since 1993. The proceeds from the listing are expected to be used for pension payments to former employees.

• ConvaTec Group plc: the medical technology company raised US$1.8b in the largest London IPO this year. It intends to use the proceeds to pay down debt and enable existing investors to sell their stock.

Environment and horizon• Global IPO sentiment should improve from 1Q17, on the back of improving

economic fundamentals, higher valuations, lower volatility and more political certainty in the US post-elections. Given these conditions, while we may not see the bumper levels of 2014, activity should improve against this year and last.

• With Donald Trump winning the election, we expect heightened volatility caused by uncertainties in the near-term as polls and prediction markets had been pointing to a Hillary Clinton victory until the last moment. The lack of clarity around Trump's policies will likely weigh on sentiment, as investors and corporations weigh the balance between the potential for higher growth rates against the risks of geopolitical conflict and discontinuous Fed policy. As a result, we are likely to see companies putting their IPO plans on hold, until a clearer picture of Trump’s policies emerge.

• The outlook for the European IPO market for the rest of 2016 is cautious as the weak demand for shares due to pricing concerns and uncertainty from the UK’s Brexit have led to the postponement of some listings, especially in the UK. However, a growing pipeline, along with continued supportive monetary policy and investors chasing higher returns via equity, are encouraging signs for higher levels of IPO activity in 2017.

• Despite lingering concerns about the slowdown of mainland China’s growth rate, the Asia-Pacific region is expected to continue to drive global IPO activity with Greater China, Australia, South Korea and India leading the way.

• Mainland China and Hong Kong are expected to see heightened IPO activity, as IPO-ready companies are keen to complete their listings ahead of the Chinese holiday season. In addition, some IPO candidates may bring forward their listing in anticipation of the possible changes resulting from the release of the joint consultation paper by the Securities and Futures Commission and the Stock Exchange of Hong Kong Stock on proposed enhancements to the exchange’s decision-making and governance structure for listing regulation.

• Indian IPO activity is expected to see a blockbuster end to the year,with the pipeline looking solid for 2017. This is supported by an upbeat economic sentiment, improved business confidence, easing inflationary pressure and stable foreign direct investment inflows.

• South Korea is set to end the year with a slew of mega IPOs adding to the already record-breaking IPO activity experienced during 2016. Among the expected are Samsung Biologics (with expected IPO proceeds of US$2.0b) and Doosan Bobcat (US$900m).

Top 10 IPOs by proceeds, October 2016Source: Dealogic

Issuer name Issuerlocation

Sector Exchange Proceeds(US$m)

Innogy SE Germany Power and utilities Deutsche Borse5,204

JR Kyushu JapanAutomotive and transportation

Tokyo3,994

ConvaTec Group plc UK Life sciences London1,814

China Resources Pharmaceutical Group Ltd.

China Life sciences Hong Kong1,810

ZTO Express (Cayman) Inc. ChinaAutomotive and transportation

New York1,406

China Merchants Securities Co. Ltd.

ChinaBanking and capital markets

Hong Kong1,379

Ahlsell AB SwedenDiversified industrial products

NASDAQ OMX Stockholm

671

Extraction Oil & Gas Inc. US Oil and gas NASDAQ 633

Infraestructura Viable S.A. de C.V.

MexicoAutomotive and transportation

Mexican 626

Bank of Hangzhou Co. Ltd. ChinaBanking and capital markets

Shanghai 565

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

LTM to October 2016Source: 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

Banking and capital markets 1% 18% 5% 24%

Real estate 2% 8% 2% 12%

Technology 2% 4% 3% 9%

Consumer products and retail 2% 4% 2% 8%

Automotive and transportation 1% 6% 1% 8%

Life sciences 2% 3% 2% 7%

Diversified industrial products 0% 4% 2% 6%

Power and utilities 1% 1% 4% 6%

Government and public sector 0% 4% 0% 4%

Others 2% 7% 7% 16%

Grand total 13% 59% 28% 100%

IPO activity by area (YOY % change)

(LTM to October 2016 versus LTM to October 2015)Source: Dealogic; regional classification on the basis of issuer nationality.

-60%

-40%

-20%

0%

-80% -60% -40% -20% 0%

Value

Vo

lum

e

Americas(incl. US)

EMEA

Global

Asia-Pacific

US

Executive Briefing

Current state• In October, US$53b of loans were issued in the US and €6b in Europe,

taking the YTD global issuance to US$476b, up 6% YOY. Repricing and refinancing leveraged loans continued to dominate in Europe, outweighing the amount of dividend recapitalization deals.

• The repricing wave that formed in September rolled on in October as sustained investor appetite in the asset class allowed issuers to be increasingly aggressive when marking deals to market.

• Given the depth of demand in the European leveraged loan market, global issuers tapped into the liquidity and tight terms available. On a rolling three-month basis, the European market financed deals 87 bps lower than the US, the deepest discount offered against the US in five years.

• It is not only pricing that benefited from the strength of demand in Europe, European transactions also supported a higher leverage than their US counterparts. On a rolling three-month basis, last month, Europe financed deals with an average leverage of 5x. Similarly, European investors have become accustomed to the cov-lite structure, and there has been the exact same proportion of cov-lite deals here as in the US, forming another key factor supporting reverse Yankee issuance.

• In the US, low M&A lending coupled with depleted refinancing activity meant the demand and supply imbalance continued and remained at the top of lenders’ list of concerns.

• Given the slowdown in the UK, Germany took over as EMEA's biggest market in late October, when the US$56.9b loan, backing drug and crop chemical group Bayer's agreed US$66b takeover of US seed company Monsanto, was allocated.

• October continued to observe the tightening of pricing during syndication; the average clearing yield for single-B rated term loans dipped in the US to 5.5% from 5.63% in September, and tightened to 4.61%, from 4.77%, in Europe.

Environment and horizon• Rising political and macroeconomic risks continue to depress companies’

appetite to borrow across the EMEA region, but the sharper UK slowdown can be attributed to Brexit. Some concern is lingering over sterling liquidity, particularly among Asian investors who are expressing concern about the prospects for the UK economy.

• While the fourth quarter usually sees an increase in lending activity, most lenders are not betting on it. Even those that are more optimistic said that while they are seeing more new money opportunities, it is mostly dominated by smaller deals that will not tip the demand and supply imbalance in lenders’ favor.

• However, if the market stays as it is, with uncertainty gradually clearing after the US election results, it will remain positive and keep the window open for aggressive trades.

Opportunities• There is high demand for new deals, as investors have a lot of cash in

hand. The pipeline is building, with bankers lining up around €13.5b of leveraged loans to back sponsors on several auction processes that are expected to provide relief to a market desperate for event-driven issue.

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 2016 (US$b)Source: Thomson ONE

Global loan issuance by industry, YTD 2016Source: Thomson ONE

Proceeds Issues

Bank of America Merrill Lynch 211.8 1,037

J.P. Morgan 185.8 884

Citigroup Inc. 155.5 600

Mizuho Financial Group, Inc. 134.0 785

Mitsubishi UFJ Financial Group, Inc. 132.4 1,118

All loans by region, YTD 2016 (US$b)Source: Thomson ONE

Market share Proceeds Issues

Americas 55.8% 1,730.8 3,263

EMEA 24.8% 768.1 1,285

Asia-Pacific 19.4% 600.9 2,830

0

200

400

600

0

200

400

600

800

4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Proceeds (LHS) Number of issues (RHS)

0

1,000

2,000

3,000

0

300

600

900

1,200

4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Proceeds (LHS) Number of issues (RHS)

10

• The repricing wave that formed in September rolled on in October as investor appetite was sustained.

• Depth of demand in the European leveraged loan market allowed global issuers to tap into the liquidity and tight terms available.

• Germany took over as EMEA's biggest market in late October, following the allocation of Bayer's loan in order to acquire Monsanto.

• Rising political and macroeconomic risks continue to depress companies’ appetite to borrow across the EMEA region.

• High demand for new deals as investors have a lot of cash in hand is causing the pipeline to build up.

0 200 400 600

Energy and power

Industrials

Financials

Materials

High technology

Real estate

Consumer products and services

Health care

Consumer staples

Retail

Media and entertainment

Telecommunications

Government and agencies

Proceeds (US$b)

Executive Briefing

Current state• Global high-yield activity fell in October as high-yield issuance in the US

was US$13.1b and €5.1b in Europe, taking the YTD total to US$248.3b, still down 17% from the same period last year. October’s volume was the third-lowest monthly output for this year. Nonetheless, this figure still managed to surpass the US$9.4b high-yield bond volume total for October 2015.

• In Europe, an assessment of use of proceeds for October shows that the bulk of issuers continued to tap the market for refinancing purposes, with close to 52% targeting debt repayments, including names such as BUT Group, Domus Vi, Snai, and N&W Global Vending. M&A and acquisition transactions accounted for 18.3% of total issuance for the month of October, up from 3.19% in September.

• High-yield issuance for M&A activity was US$50b, contributing 26% to total high-yield issuance in the US or a 45% YOY decrease. In Europe, it was €9.2b of high-yield issuance or a 19% contribution, signalling a 56% decline from last year.

• Investors’ fears about interest rates and wavering central bank support have dampened the bullish tone that has held the market through much of 2016. However, they are still willing to swallow deals. Although the pace has come off the corporate bond market this month, the success of a jumbo deal from a triple-B rated credit (Danone) was never really in question. Investors may be more selective on deal flow these days but there are still certainly enough of them to execute primary transactions.

• YTD, more than 70% of all euro high-yield issuance has been double-B, as investors all head to the safest area of the high-yield market, in search of yield hard to find in the corporate investment grade space, where central banks in Brussels and London have become buyers.

• The Schuldschein market is continuing to spread into new territories, with the help of new arranging banks. Citigroup is heading a €300m deal for French kitchen appliance maker Groupe SEB.

• Clearing yields for double-B rated bonds rose in the US to 5.67% in the three months to the end of October, from 5.35% at the end of September, and yields rose steeply to 4.16% from 3.71% in Europe.

Environment and horizon• While sentiment has been a strange mix of caution and confidence among

investment grade accounts, in high yield, the swings between nerves and appetite for paper have been much more extreme. In the last week of October, a set of corporate issuers burst into the bond market to make use of the gap between All Saints’ Day holiday in Europe and the US presidential election.

• There are borrowers on the sidelines that were looking to bring deals in October, but held back given the uncertainty with the US Presidential election. With the elections concluded, borrowers may start bringing deals to the market in November.

Opportunities• Not many doubt the market’s resilience to volatility in the rates and equity

stocks. The recently concluded US election is just one of a series of central bank and political-risk events taking place before the year-end. Difficult, if not necessarily apocalyptic, days lie ahead, and another surge in the bull run is unlikely.

0 100 200 300 400

Energy and power

Industrials

Health care

Real estate

High technology

Consumer staples

Materials

Telecommunications

Consumer products and services

Retail

Media and entertainment

Government and agencies

Proceeds (US$b)

Executive summary

Euro bond issuancesSource: Thomson ONE

US bond issuancesSource: Thomson ONE

Top 10 corporate bond issuers, YTD 2016 (US$b)Source: Thomson ONE

Global bond issuance by industry, YTD 2016Source: Thomson ONE

Issuer Nation Industry Proceeds

Apple Inc. US High technology 24.9

Microsoft Corporation US High technology 19.8

Shell International Finance B.V.

Netherlands Energy and power 16.5

Teva Pharmaceutical Finance Netherlands II B.V.

Netherlands Health care 15.0

Anheuser-Busch InBevSA/NV

Belgium Consumer staples 14.9

Oracle Corporation US High technology 14.0

China Railway Corporation China Industrials 13.6

Cisco Systems, Inc. US High technology 13.3

Aetna, Inc. US Health care 13.0

Verizon Communications, Inc.

US Telecommunications 12.3

0

50

100

150

200

0

50

100

150

200

250

Nov15

Dec15

Jan16

Feb16

Mar16

Apr16

May16

Jun16

Jul16

Aug16

Sep16

Oct16

Proceeds (US$b) (LHS) Number of issues (RHS)

11

0

100

200

300

400

500

0

100

200

300

400

Nov15

Dec15

Jan16

Feb16

Mar16

Apr16

May16

Jun16

Jul16

Aug16

Sep16

Oct16

Proceeds (US$b) (LHS) Number of issues (RHS)

5. Bonds

• Global high-yield activity fell in October, generating the third-lowest monthly output for this year.

• Investors’ fears about interest rates and wavering central bank support have dampened the bullish tone. The majority of euro high-yield issuance has been double-B, as investors all head to the safest area of the high-yield market.

• The market is believed to be resilient to volatility in the rates and equity stocks, but the US elections, along with a series of central bank and political-risk events, might prevent it from rallying before the year-end.

Executive Briefing

Appendices

Dry powder — buyout funds — by region

Global PE fundraising (in US$b)

Appendix AGlobal PE fundraising activity

Source: Preqin

0

200

400

600

800

1,000

1,200

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Commitments (US$b) Number of funds

0%

2%

4%

6%

8%

10%

12%

14%

16%

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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

Private Equity Capital Briefing13

Source: Preqin

Source: Dealogic

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

PE acquisitions by year (in US$b)

Appendix AGlobal PE acquisition activity

Source: Dealogic

0

100

200

300

400

500

600

700

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

Value Number of deals

Private Equity Capital Briefing14

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


15

Americas PE acquisitions — the 10 deals with disclosed financial terms in October 2016

Appendix AGlobal PE acquisition activity by region — Americas

Americas PE acquisitions (in US$b)

0

50

100

150

200

250

300

350

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0




Source: Dealogic

Announcementdate

Completiondate

Company SectorValue

(US$m)Acquiror

31-Oct-16 Team Health Holdings Inc. Health care 5,736.1 Blackstone Group LP

11-Oct-16 11-Oct-16 Luxe Energy LLC (Stake %) Oil and gas 524.0 NGP Energy Capital Management LLC

10-Oct-16 Gas Natural Inc. Utilities 188.8 First Reserve Corp.

10-Oct-16 10-Oct-16 Property Portfolio (Hill7, WA, US)

Real Estate 180.0 Hudson Pacific Properties Inc./Canada Pension Plan Investment Board

24-Oct-16 24-Oct-16 International Textile Group Inc. Materials 175.6 Platinum Equity LLC

7-Oct-16 CustomerContactChannels/C3 Consumer services 150.0 Everstone Capital Ltd./Sunrise BPO Services Pte. Ltd.

20-Oct-16 20-Oct-16 PaySimple Inc. (Stake %) Technology 115.0 Providence Equity Partners LLC

7-Oct-16 7-Oct-16 SunOpta Inc. (11.6559%) Consumer goods 85.0 Oaktree Capital Group LLC

12-Oct-16 12-Oct-16 Nexus Systems LLC (Stake %) Technology 28.0 Mainsail Partners LP

24-Oct-16 24-Oct-16 International Textile Group Inc. (46.1989%)

Materials 3.8 WL Ross & Co. LLC

Source: Dealogic

EMEA PE acquisitions — top 10 in October 2016

Appendix AGlobal PE acquisition activity by region — EMEA

EMEA PE acquisitions (in US$b)

Source: Dealogic

16


Announcement date

Completion date

Company SectorValue

(US$m)Acquiror

14-Oct-16 Grupa Allegro Sp z oo Technology 3,253.0 Cinven Ltd./Permira Ltd./Mid Europa Partners LLP

7-Oct-16 Atotech BV Materials 3,200.0 Carlyle Group LP

6-Oct-16 SVG Capital plc (Investment portfolio) (Bid No. 2)

Financials 952.3 Goldman Sachs Group Inc./Canada Pension Plan Investment Board

24-Oct-16 SARquavitae Servicios a la Dependencia SL

Consumer services 478.9 PAI Partners SAS

3-Oct-16 3-Oct-16 SagemcomCommunication SAS (70%)

Telecommunication 449.7 Charterhouse Development Capital Ltd.

25-Oct-16 3i Group plc (3i Debt Management Business)

Financials 271.2 Investcorp Bank BSC

27-Oct-16 Permanent tsb Group Holdings plc (UK non-core loans)

Financials 223.5 Cerberus Capital Management LP

26-Oct-16 26-Oct-16 Agromillora Iberia SL (Majority %)

Consumer goods 217.6 Investcorp Bank BSC

25-Oct-16 EuroMaint AB Industrials 72.9 Orlando Management AG

27-Oct-16 27-Oct-16 Bonesupport AB (Stake %) Health care 36.7 Industrifonden AB/TellacqAB/HealthCap Partners LLC

0

50

100

150

200

250

300

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0



Source: Dealogic

Asia-Pacific PE acquisitions — the top 10 regional deals in October 2016

Appendix AGlobal PE acquisition activity by region — Asia-Pacific

Asia-Pacific PE acquisitions (in US$b)

Source: Dealogic

0

20

40

60

80

100

120

140

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0


Value No. of deals


Announcement date

Completion date

Company SectorValue

(US$m)Acquiror

4-Oct-16 Wharf T&T Ltd. Telecommunication 1,225.0 TPG Capital LP/MBK Partners Ltd.

5-Oct-16 Tricor Holdings Ltd. Consumer services 834.2 Permira Ltd.

14-Oct-16 Aderans Co. Ltd. Consumer goods 375.0 Integral Corp.

25-Oct-16 25-Oct-16 Arvind Brands & Retail Ltd. (10%)

Retail 110.7 Multiples Alternate Asset Management Pvt. Ltd.

24-Oct-16 24-Oct-16 Iron Mountain Inc.’s Australian records management business

Consumer services 53.3 Housatonic Partners

24-Oct-16 24-Oct-16 Rubicon Research Pvt. Ltd. (70%)

Consumer services 32.9 Everstone Capital Ltd./Private Investor

24-Oct-16 24-Oct-16 Dairy Classic Ice Creams Pvt. Ltd. (Stake %)

Consumer goods 16.5 Motilal Oswal Private Equity Advisors Pvt. Ltd.

16-Oct-16 16-Oct-16 Rent Alpha Pvt. Ltd. (Stake %)

Financials 16.0 Bravia Capital Hong Kong Ltd.

3-Oct-16 31-Oct-16 Nippon Outsourcing Corp. Consumer services NA Longreach Group (Hong Kong)

17-Oct-16 17-Oct-16 Paradise Group Holdings Pt.e Ltd. (Stake %)

Consumer goods NA PAG Asia Capital Ltd.

Source: Dealogic

Source: Dealogic

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

Appendix AGlobal PE exit activity

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

0

50

100

150

200

250

300

350

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0



0

10

20

30

40

50

60

70

80

90

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00




Source: Dealogic

Source: Dealogic

Appendix AGlobal PE exit activity — Americas

Americas PE exits — top 10 in October 2016

Americas PE exits (in US$b)

Announcementor filing date

Completion or priced date

Company Sector Value (US$m)

Sponsor Type

24-Oct-16 Hilton Worldwide Holdings Inc. (25.0056%)

Consumer goods 6,496.88 Blackstone Group LP M&A exit

13-Oct-16 Silver Hill Energy Partners II LLC

Oil and gas 1,315.76 Kayne Anderson Capital Advisors/Ridgemont Partners Management LLC

M&A exit

13-Oct-16 Silver Hill Energy Partners LLC

Oil and gas 1,231.90 Kayne Anderson Capital Advisors/Ridgemont Partners Management LLC

M&A exit

24-Oct-16 Contech Engineered Solutions LLC

Materials 950.00 Littlejohn & Co. LLC M&A exit

11-Oct-16 AmWINS Group Inc. (35%)

Financials 910.00 New Mountain Capital LLC M&A exit

25-Oct-16 PennTex Midstream Partners LP (65.4529%)

Utilities 790.57 NGP Energy Capital Management LLC

M&A exit

11-Oct-16 11-Oct-16 Extraction Oil & Gas Inc. Oil and gas 633.33 Yorktown Partners LLC IPO

31-Oct-16 Performance Sports Group Ltd.

Consumer goods 575.00 Kohlberg & Co. LLC M&A exit

10-Oct-16 10-Oct-16 Red Lobster Hospitality LLC (49%)

Consumer goods 575.00 Golden Gate Capital Corp. M&A exit

20-Oct-16 Appirio Inc. Technology 500.00 General Atlantic LLC M&A exit

0

20

40

60

80

100

120

140

160

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0


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

19

Source: Dealogic


Source: Dealogic

Appendix AGlobal PE exit activity — EMEA

EMEA PE exits — top 10 in October 2016

EMEA PE exits (in US$b)

Announcementor filing date

Completion orpriced date

Company Sector Value (US$m) Sponsor Type

26-Oct-16 26-Oct-16 ConvaTec Group plc Health care 1,813.68 Nordic Capital SvenskaAB/Avista Capital Partners

IPO

11-Oct-16 LM Group Holding A/S Materials 1,675.51 Doughty Hanson & Co. Ltd. M&A exit

28-Oct-16 28-Oct-16 Ahlsell AB Industrials 670.98 CVC Capital Partners Ltd. IPO

20-Oct-16 Materne Mont Blanc (65%)

Consumer goods 606.58 LBO France SA M&A exit

17-Oct-16 Jemella Ltd. Consumer goods 511.91 Lion Capital LLP M&A exit

24-Oct-16 SARquavitae Servicios a la Dependencia SL

Consumer services 478.89 PAI Partners SAS/PalamonCapital Partners LP

M&A exit

3-Oct-16 3-Oct-16 Sagemcom Communication SAS (70%)

Telecom 449.69 Carlyle Group LP/Charterhouse Development Capital Ltd.

M&A exit

24-Oct-16 Esselte AB Consumer goods 333.00 JW Childs Associates LP M&A exit

17-Oct-16 17-Oct-16 Biffa plc Utilities 258.89 Angelo Gordon & Co. LP IPO

26-Oct-16 26-Oct-16 Agromillora Iberia SL (Majority %)

Consumer goods 217.58 Nazca Capital/Investcorp Bank BSC

M&A exit

0

20

40

60

80

100

120

140

160

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0



20

Source: Dealogic


Capital Briefing21

Source: Dealogic

Appendix AGlobal PE exit activity — Asia-Pacific

Announcement or filing date

Completion orpriced date

Company Sector Value (US$m) Sponsor Type

31-Oct-16 K-Electric Ltd. (66.3966%)

Utilities 2,326.16 Abraaj Capital Ltd. M&A exit

26-Oct-16 26-Oct-16 ZTO Express (Cayman) Inc.

Industrials 1,405.95 Warburg Pincus LLC IPO

12-Oct-16 12-Oct-16 KH Neochem Co. Ltd. Materials 386.54 Japan Industrial Partners Inc.

IPO

14-Oct-16 Eastern Broadcasting Co. Ltd. (65%)

Telecom 350.62 Carlyle Group LP M&A exit

5-Oct-16 5-Oct-16 CITIC Envirotech Ltd. (23.8512%)

Materials 285.01 KKR & Co. LP M&A exit

5-Oct-16 13-Oct-16 Sigma Electric Manufacturing Corp.

Materials 250.00 Goldman Sachs Capital Partners

M&A exit

19-Oct-16 TVS Logistics Services Ltd. (Minority%)

Industrials 149.92 Goldman Sachs Capital Partners/KKR & Co. LP

M&A exit

28-Oct-16 28-Oct-16 Bravura Solutions Ltd. Technology 112.80 Ironbridge Capital Ltd. IPO

25-Oct-16 ClearView Wealth Ltd. (14.9%)

Financials 110.40 Crescent Capital Partners Ltd.

M&A exit

18-Oct-16 18-Oct-16 New Zealand King Salmon Investments Ltd.

Consumer goods

54.95 Direct Capital Partners Ltd.

IPO

Asia-Pacific PE exits — top 10 in October 2016

Asia-Pacific PE exits (in US$b)

0

5

10

15

20

25

30

35

40

45

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0



Source: Dealogic


Appendix BM&A activity monthly flash

Volume Value Volume Value

Calendar YTD

YTD % ∆ Calendar YTD

YTD % ∆ LTM LTM % ∆ LTM LTM % ∆

2016(to May 16)

vs. 2015(to May 15)

2016(to May 16)

vs. 2015(to May 15)

LTM (to May 16)

vs. PTM(to May 5

LTM (to May 16)

vs. PTM(to May 15)

M&A activity by areas and regions

Global 14,585 -10% 1,200,960 -20% 36,551 -7% 4,005,902 15%

Americas 5,585 -9% 657,189 -21% 14,257 -4% 2,337,439 16%

Canada 1,129 13% 96,643 32% 2,638 18% 223,616 20%

MeCAR 87 -19% 10,354 1% 254 -18% 28,767 -11%

SA region 356 -23% 30,327 95% 1,018 -15% 76,718 -1%

US 4,424 -12% 578,566 -25% 11,410 -6% 2,139,683 18%

EMEA 5,316 -13% 406,722 -10% 12,738 -16% 1,266,500 15%

Africa 267 2% 15,502 37% 651 3% 35,451 -19%

BeNe 296 -31% 14,098 -87% 811 -19% 200,128 44%

CIS 431 -30% 13,813 53% 879 -55% 51,815 72%

CSE 458 -12% 15,728 2% 1,070 -14% 44,635 6%

FraLux 1,022 -3% 64,267 -14% 2,255 -9% 165,416 5%

GSA 839 -16% 170,586 352% 2,217 -13% 297,997 63%

Israel 109 8% 6,882 -39% 270 8% 57,956 195%

Mediterranean 553 -26% 52,007 -24% 1,371 -23% 160,441 -17%

MENA 142 2% 3,319 -84% 354 3% 24,015 -40%

Nordics 565 -16% 25,849 -17% 1,226 -25% 57,590 -26%

UK&I 1,361 0% 74,984 -61% 3,411 6% 420,079 7%

Asia-Pacific 5,296 -6% 451,470 -6% 13,674 3% 1,234,531 26%

ASEAN 710 -1% 36,153 65% 1,696 -12% 78,908 23%

Greater China 2,063 -7% 305,653 4% 5,572 10% 823,440 35%

India 523 -9% 16,755 -30% 1,294 6% 44,644 -6%

Japan 1,162 -13% 59,729 -3% 2,906 -5% 181,768 54%

South Korea 549 17% 26,450 -54% 1,361 18% 69,048 -30%

Oceania 612 -2% 31,032 -36% 1,664 0% 88,212 -8%

M&A activity by sectors

Aerospace and defense 135 -23% 9,684 12% 356 -17% 35,432 30%

Automotive and transportation 958 -14% 111,907 9% 2,464 -9% 295,634 40%

Banking and capital markets 972 -14% 113,009 -2% 2,435 -12% 413,663 42%

Consumer products and retail 2,205 -11% 192,858 -9% 5,522 -8% 637,330 36%

Diversified industrial products 1,913 -12% 166,427 9% 4,856 -9% 457,555 20%

Government and public sector 261 -25% 10,638 -33% 663 -17% 27,903 -2%

Insurance 418 -11% 40,100 -36% 1,100 1% 288,607 114%

Life sciences 966 -8% 221,343 19% 2,454 2% 485,024 2%

Media and entertainment 980 -10% 60,059 -61% 2,495 -9% 207,767 -16%

Mining and metals 895 6% 49,875 10% 2,153 4% 142,972 36%

Oil and gas 552 -3% 80,454 -43% 1,413 -16% 332,462 -27%

Other sectors 1,679 -16% 60,760 55% 4,312 -14% 157,078 37%

Power and utilities 526 -13% 90,930 93% 1,399 -14% 231,933 38%

Provider care 455 -9% 13,990 -48% 1,174 0% 52,736 -5%

Real estate 1,320 -15% 73,292 -50% 3,245 -16% 207,316 -33%

Technology 3,881 -4% 226,946 -14% 9,520 4% 742,274 61%

Telecommunications 274 -29% 39,224 -60% 757 -19% 148,424 -33%

Wealth and asset management 412 -9% 19,355 -82% 1,019 -5% 42,204 -68%

22

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 June 2016. Source: Dealogic. All Rights Reserved. Note: Data is continually updated and therefore subject to change.


2015 2016

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

2014 2015 2016

M 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 June 2016. Source: Dealogic. All Rights Reserved. Note: Data is continually updated and therefore subject to change.

23

Median deal multiple — EV/EBITDA

Global Americas Asia-Pacific EMEA

LTM(to May 16)

PTM(to May 15)

LTM(to May 16)

PTM(to May 15)

LTM(to May 16)

PTM(to May 15)

LTM(to May 16)

PTM(to May 15)

Aerospace and defense 10.3x 11.3x 10.1x 16.6x 14.1x 11.5x 10.9x 10.6x

Automotive and transportation 8.9x 10.3x 9.8x 9.2x 9.9x 10.2x 8.2x 10.6x

Consumer products and retail 10.9x 11.3x 10.4x 14.7x 12.0x 11.0x 10.0x 9.6x

Diversified industrial products 9.8x 10.5x 10.8x 10.7x 11.0x 11.7x 9.1x 9.2x

Government and public sector 10.2x 15.0x 4.6x 15.6x 21.8x 5.5x 10.2x 25.4x

Life sciences 11.0x 17.2x 12.4x 19.2x 11.4x 18.3x 10.8x 12.5x

Media and entertainment 12.0x 12.4x 8.8x 10.8x 15.2x 13.8x 10.7x 11.9x

Mining and metals 8.8x 9.1x 7.8x 12.7x 10.4x 8.5x 9.4x 8.5x

Oil and gas 8.0x 7.4x 8.0x 6.6x 6.5x 9.7x 9.3x 7.7x

Other sectors 9.2x 9.5x 10.6x 8.6x 10.5x 11.6x 7.8x 8.6x

Power and utilities 11.9x 11.6x 11.5x 11.7x 18.0x 8.8x 10.2x 10.1x

Provider care 11.9x 11.1x 10.2x 11.6x 10.4x 9.1x 12.6x 12.7x

Real estate 10.0x 10.4x 10.4x 10.3x 10.5x 10.1x 8.7x 10.6x

Technology 11.2x 10.7x 13.6x 17.1x 11.3x 9.4x 10.2x 10.6x

Telecommunications 7.3x 10.5x 6.9x 10.1x 8.2x 11.6x 7.3x 9.6x

Total 10.3x 10.7x 10.4x 11.7x 11.1x 10.8x 9.5x 10.0x

Median bid premium to four-week stock price

Global Americas Asia-Pacific EMEA

LTM(to May 16)

PTM(to May 15)

LTM(to May 16)

PTM(to May 15)

LTM(to May 16)

PTM(to May 15)

LTM(to May 16)

PTM(to May 15)

Aerospace and defense 15% 26% 14% NA 31% 32% 14% 13%

Automotive and transportation 14% 17% 21% 7% 13% 17% 9% 18%

Consumer products and retail 23% 17% 32% 24% 16% 16% 27% 9%

Diversified industrial products 19% 14% 24% 24% 17% 12% 24% 27%

Government and public sector 22% 20% 44% 23% 21% 12% 16% 14%

Life sciences 27% 22% 43% 31% 17% 16% 17% 23%

Media and entertainment 17% 20% 34% 34% 11% 20% 14% 18%

Mining and metals 23% 24% 28% 29% 18% 20% 36% 12%

Oil and gas 27% 18% 34% 17% 24% 18% 14% 30%

Other sectors 19% 25% 28% 27% 16% 17% 18% 31%

Power and utilities 17% 11% 27% 17% 10% 7% 17% 8%

Provider care 23% 12% 34% 21% 18% 13% 5% 3%

Real estate 14% 21% 13% 30% 15% 18% 3% 11%

Technology 22% 25% 34% 28% 15% 21% 23% 20%

Telecommunications 25% 14% 28% 12% 27% 13% 16% 17%

Total 21% 20% 30% 26% 16% 17% 18% 19%


Appendix DCapital Confidence Barometer (April 2016): by Area

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

31%

40%

56%59%

50%

0%

25%

50%

75%

100%

Apr 14 Oct 14 Apr 15 Oct 15 Apr 16

28%

34%

57%

67%

54%

0%

25%

50%

75%

100%


32% 33%

49% 48% 47%

0%

25%

50%

75%

100%


Global Americas EMEA

26%

57%

45% 44%

38%

0%

25%

50%

75%

100%


Asia-Pacific China Germany

23%28%

51%56%

50%

0%

25%

50%

75%

100%


Japan UK US

26%

16%

58%

52%

59%

0%

25%

50%

75%

100%


29%33%

61%

74%

57%

0%

25%

50%

75%

100%



33%

56%

43%40%

43%

0%

25%

50%

75%

100%


16%

68%

51%

43%

35%

0%

25%

50%

75%

100%


Notes


Notes


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