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1、Sponsored byGLOBALM&A ReportQ32022Nourishthe unicornAll deal-makers needdedicated partners.We speak your languageand work at your tempo.Your world is our Liberty Global Transaction Solutions(GTS)is a trading name of the Liberty Mutual Insurance Group(LMIG).Policies are underwritten by LMIG companies
2、 or our Lloyds syndicate.When we offer insurance products we will state clearly which insurer will underwrite the policy.Any description of cover in this document does not include all terms,conditions and exclusions of any cover we may provide,which will be contained in the policy wording itself.For
3、 policies issued in USA,some policies may be placed with a surplus lines insurer;surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers.2022 Liberty Mutual Insurance,175 Berkeley Street,Boston,MA 02116
4、.3ContentsPitchBook Data,Inc.John Gabbert Founder,CEONizar Tarhuni Senior Director,Institutional Research&EditorialDylan Cox,CFA Head of Private Markets ResearchInstitutional Research GroupAnalysisPublished on October 24,2022Click here for PitchBooks report methodologies.DataTJ Mei Data APublishingR
5、eport designed by Chloe Ladwig and Drew SandersQ3 2022 GLOBAL M&A REPORTGlobal M&A4Business products&services8A word from Liberty GTS9Consumer products&services11Energy12A word from RBC Capital Markets13Financial services15Healthcare16Information technology17Materials&resources18Tim Clarke Senior An
6、alyst,Private EJinny Choi Analyst,Private EKyle Walters Associate Analyst,Private ERebecca Springer,Ph.D.Senior Analyst,HSponsored by4Sponsored byGLOBAL M&AQ3 2022 GLOBAL M&A REPORT Global M&A02,0004,0006,0008,00010,00012,000$0$200$400$600$800$1,000$1,200$1,400$1,600Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q
7、1Q2Q3Q4Q1Q2Q32002020212022*Deal value($B)Estimated deal value($B)Deal countEstimated deal countGlobal M&A activity by quarterSource:PitchBook|Geography:Global*As of September 30,2022Jinny Choi Analyst,Private EquityGlobal M&A activity continued to decline for the third consecutive quarter
8、,falling 29.8%in deal value from the peak seen in Q4 2021.The$1.0 trillion of deal value in Q3 is a correction from last years frenzied deal activity.Still,it is on track to surpass the pace of deals set prior to the COVID-19 pandemic.Deal count is a similar story;10,118 global M&A deals are estimat
9、ed for Q3,which is nearly a third higher than the quarterly average for 2015 to 2019.However,announcements are more of a lead indicator.On that basis,cracks are beginning to show.Compared with Q2,Q3 announcements slowed both in terms of deal count and deal value by 7.4%and 26.3%,respectively.It has
10、indeed been a challenging quarter for M&A activity.In September,the US Federal Reserve(Fed)raised interest rates for the fifth time this year,as inflation continued to run near its highest levels since the 1980s.The third interest rate hike of 75 basis points so far this year caused more ripples in
11、the stock markets.Increased interest rates led to expectations of lower economic growth,as future earnings of companies are discounted at higher rates and decline as a result.This is especially true for growth-oriented companies,such as those in tech and healthcare sectors,that have enjoyed premium
12、multiples in recent years.Stocks tumbled as valuations adjusted across sectors,and M&A activity slowed as investors paused to reassess potential acquisition targets.Ongoing public stock market volatility flushed potential sellers out of the market,and those who are left are dealing with lower valuat
13、ions.With the futures market currently pricing in a terminal Fed Funds rate of 4.8%in March of 2023,we can expect M&A activity to remain muted for the next few quarters.In Europe,investors are bracing for stronger headwinds.Soaring consumer prices hit a double-digit record in September,causing Europ
14、ean Central Bank policy makers to rally around a second consecutive interest rate hike of 75 basis points,even with expectations of economic activity slowing substantially.1 Energy was a major source of inflation,and Europe continues to grapple with an energy crisis and disrupted supplies caused by
15、Russias invasion of Ukraine;1:“ECB Officials Lay Foundation for Significant October Rate Hike,”Bloomberg,Carolynn Look,September 30,2022.5Q3 2022 GLOBAL M&A REPORT Sponsored byGLOBAL M&Athe problem is expected to worsen in Q4 as winter drives up energy usage.The deteriorating economic outlook in Eur
16、ope has driven the euro and pound to record lows.Many attribute the euro falling below parity with the dollar to aggressive interest rate hikes by the Fedhigher interest returns in the US are attracting investors away from euros into dollar-denominated investmentsbut the weaker euro could in turn at
17、tract US investors to Europe for greater purchasing power.Rising interest rates also prove to be a challenge for deal financing.In particular,PE firms are now faced with a higher cost of capital for leveraged buyouts(LBOs)and are having to increase their equity portion to keep interest costs in chec
18、k.Although valuations have come down,deal activity has declined as a result,especially as seller-buyer valuation disconnect persists.Uncertain market sentiment further complicates matters,dampening interest for leveraged financing despite higher yields.The painful financing process for Vista Equity
19、Partners and Elliott Investment Managements buyout of Citrix Systems made headlines this quarter as banks struggled to offload$8.5 billion of junk-rated debt.Banks had to offer deep discounts to the levels that the banks had underwritten the debt and ended up with a$700 million loss.2 Core CPICPI8.2
20、%6.6%-2%0%2%4%6%8%10%20002020212022*Headline and core inflationSource:FRED,Bureau of Labor Statistics|Geography:US,EU*As of September 30,20222:“Banks Close Painful Citrix Debt Chapter with$700 Mln Loss Source,”Reuters,Abigail Summerville and Matt Tracy,September 21,2022.3:“Wall
21、 Street Banks Rush to Sell Leveraged Buyout Debt as Deals Close,”Bloomberg,Jill R.Shah,July 13,2022.The Citrix debt sale casts doubts on other LBO debt sitting on banks books,estimated at$80 billion.Despite increasing fears of a recession and multiple headwinds in the macroeconomic environment,funda
22、mentals still exits for healthy M&A activity.PE investors are still well-equipped with$1.2 trillion in dry powder to execute deals,and large businesses with strong cash flows and balance sheets have not shied away from strategic acquisitions.In September,Adobe announced the$20 billion acquisition of
23、 Figma,a collaborative design web application,which marked Q3s largest announced deal and Adobes largest acquisition to date.The new asset will expand Adobes product portfolio and accelerate its vision for,and market position in,collaborative creativity on the web.Financial services and energy saw i
24、ncreased M&A value in 2022 as long-term secular trends in the sectors continued to drive capital into attractive assets,and recent strength in energy prices brought renewed attention to the sector.While deals can slow down further as investors become conservative in the current market downturn,M&A a
25、ctivity remains strong and comparable to historic levels,which is especially notable during this time of intense volatility.6Q3 2022 GLOBAL M&A REPORT Sponsored byGLOBAL M&A2,0061,32605001,0001,5002,0002,500$0$50$100$150$200$250$300$350$400$450Deal value($B)Deal count2000202021
26、2022*European M&A activity with non-European acquirerSource:PitchBook|Geography:Global*As of September 30,20226,8377,6307,7928,4539,6519,8419,42114,3238,53222,50524,75623,34521,68120,84019,73318,45224,25114,84823.3%23.6%25.0%28.1%31.7%33.3%33.8%37.1%36.5%20002020212022*Sponsor
27、backedCorporate M&ASponsor backed%M&A deal count by acquirer typeSource:PitchBook|Geography:Global*As of September 30,20221,50988502004006008001,0001,2001,4001,600$0$50$100$150$200$250$300$350$400$450$500Deal value($B)Deal count20002020212022*North American M&A activity with no
28、n-North American acquirerSource:PitchBook|Geography:Global*As of September 30,20227Q3 2022 GLOBAL M&A REPORT Sponsored byGLOBAL M&A0%10%20%30%40%50%60%70%80%90%100%20002020212022*Materials&resourcesITHealthcareFinancialservicesEnergyConsumerproducts&services Businessproducts&se
29、rvices0%10%20%30%40%50%60%70%80%90%100%20002020212022*CombinationStockCashShare of M&A deal value by sectorShare of M&A deal value by payment typeSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,20222.0 x2.0 x3.3x2.3x
30、20002020212022*M&A EV/RevenueS&P 500 EV/Revenue0 x1x2x3x4xM&A deal multiples versus trading multiples on public companiesSource:PitchBook|Geography:Global*As of September 30,20228Q3 2022 GLOBAL M&A REPORT Sponsored byBUSINESS PRODUCTS&SERVICESBusiness products&services02,0004,0
31、006,0008,00013,6768,65110,00012,00014,00016,000$0$200$400$600$800$1,000$1,200$1,400$1,6002001720182019 20202021 2022*Deal value($B)Deal count0.0 x0.2x0.4x0.6x0.8x1.0 x1.2x1.4x1.6x20002020212022*EV to TTM revenue multipleBusiness products&services M&A activityBusiness
32、 products&services M&A deal multiplesSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,2022Tim Clarke Senior Analyst,Private EquityBusiness products&services back in favor,led by large strategic buyers:The business products&services sector
33、rotated back into favor in Q3.Compared to the prior year,deal count surged in Q3 with a total of 2,399 transactions.Large strategic buyers have been leading the charge,completing 17 deals in the quarter at a value of$1 billion or more.PE has also been active,accounting for 40.5%of all deals in the s
34、ector.The sector comprises a broad mix of primarily nontech businesses,spanning everything from manufacturing to professional services to transportation.What attracts corporate and PE buyers alike is its high proportion of boot-strapped and founder-owned businesses.There have been 7,641 acquisitions
35、 of private boot-strapped business products&services companies so far this year,twice as many as any other sector.This comes at a time when both strategics and sponsors are postponing exits in hopes of a recovery in values,so having this source of sellers is important to maintaining deal flow.Aerosp
36、ace&defense heating up:Geopolitical instability,large increases in government defense budgets,and the eventualalbeit gradualrecovery in commercial airline travel have all contributed to renewed interest in the aerospace&defense industry.A total of 56 deals were completed during the quarter,and anoth
37、er 41 are in progress.Notable deals include Parker Hannifins acquisition of Meggitt,a manufacturer of high-performance components and sub-systems,for$7.4 billion(3.3x revenue).The deal doubles Parker Hannifins aerospace systems segment and provides accelerated research&development.In August,PE-backe
38、d Cobham completed its acquisition of defense vendor Ultra Electronics for$3.1 billion(3.1x revenue).Both companies are based in the UK,and the deal combines complimentary offerings for many of the same customers.Supply chain continues as a key investment theme:With inflation now full blown,companie
39、s continue to seek ways to counter supply chain disruptions and unlock savings for their organizations and their customers.Several logistics firms were among the top deals closed in Q3 2022.In July alone,Shopify paid$2.5 billion for Deliverr,a provider of tech-enabled e-commerce fulfillment services
40、;JD Logistics acquired Deppon,a provider of express delivery,whole vehicle storage,for$1.3 billion;and Siemens divested its parcel logistic services business to Korber for$1.2 billion.9Q3 2022 GLOBAL M&A REPORT Sponsored byA WORD FROM LIBERTY GTSA WORD FROM LIBERTY GTSWhere will deals meet challenge
41、s in 2023?Simon Radcliffe joined Liberty GTS in February 2019 as a dedicated M&A claims counsel and now oversees the GTS claims practice.Simon qualified as a lawyer in 2008 after completing training at CMS.He moved to Norton Rose Fulbright LLP in 2013,where he was a senior associate on the insurance
42、 team.During his time in private practice,Simon specialized in assisting insurers to investigate and assess policy claims across a range of business lines,with a particular focus on handling high-value M&A insurance claims.Simon has extensive London market experience and undertook secondments at two
43、 leading Lloyds syndicates before joining the GTS team.Simon RadcliffeHead of Liberty GTS ClaimsLiberty GTS releases annual claims briefing.Every year at this time,Liberty GTS publishes an analysis of the claims that have arisen on M&A deals that we have insured.The results give us real insight into
44、 how the nature of R&W claims is changing over time and how they are likely to change in the future.This year particularly,the macroeconomic and geopolitical environment poses numerous challenges for businesses,and insight to help manage this turbulence is particularly useful for all those involved
45、in making and insuring M&A deals.The significant headwinds facing the global economy are likely to weigh on the M&A industry in the coming months and increase the possibility of buyers remorse,especially where the buyer believes it bought at the top of the market or that the business it has acquired
46、 may not deliver the expected returns.However,if our experience from the COVID-19 pandemic is anything to go by,we do not anticipate that this will lead to a sudden flood of R&W claims.We anticipate that the current environment will,instead,lend itself to an increase in certain types of claims and w
47、e have identified a number of potential areas of concern.Undisclosed price increasesThe inflationary pressures that have built up due to the supply chain issues created by COVID-19,and the disruption caused by the on-going war in Ukraine,could mean that we see more claims relating to undisclosed pri
48、ce changes going forward.The risk is particularly acute if the price change is imposed on the target late in the day,just before signing,particularly in a big business.This increases the importance of a buyer taking active steps to understand the targets pricing arrangements with its suppliers and t
49、he contracting parties ability to amend the terms of an agreement or to terminate it.We take additional comfort if we know that the buyer has been allowed to speak with key suppliers,as this will usually flush out any issues not picked up as part of the desk-top due diligence.Undisclosed customer in
50、centivesWe have seen a number of claims already this year relating to undisclosed customer incentives,with the allegation being that these were either not properly reflected in the accounts or were given outside of the usual course of business.This is probably a by-product of the fact that customer
51、incentiveswhich can range from rebates to discounts on future orderswere used as a means of retaining customers through the pandemic.This is a trend that is likely to continue given the current economic climate.As such,we expect this to become an area of increased focus for buyers and their advisors
52、 during the due-diligence process.Inventory issuesThe supply chain issues that resulted from the pandemic are still not fully resolved and continue to impact businesses and their customers.This is a particularly critical issue for businesses whose operations are heavily reliant on large amounts of d
53、iverse inventory,such as the automobile industry.Furthermore,any bottlenecks that impact the speed with which inventory is able to move gives rise to potential issues around stock deterioration and obsolescence.Therefore,understanding supply chain risks remains a crucial part of the due-diligence pr
54、ocess and a heightened area of concern.10Q3 2022 GLOBAL M&A REPORT Sponsored byA WORD FROM LIBERTY GTSAccounts receivablesWe anticipate that we could see more claims in the coming months relating to accounts receivable issues,such as the setting of inadequate bad debt reserves and errors in terms of
55、 quantifying a companys total accounts receivables.Indeed,one of our largest paid claims to date resulted from an allegation that the targets management had knowingly underestimated the accounts receivable reserve,which caused more revenue to be recognised in the financial statements than management
56、 knew could be realistically collected.We are paying much closer attention,as part of our underwriting,to the size of the accounts receivable figure,relative to the size of the balance sheet,and asking more questions around this issue.Fraud There is a risk that the challenges presented by the curren
57、t economic environment may provide target management with a greater incentive to cross the line in order to boost revenue and avoid breaching financial covenants or future cash flow difficulties.Indeed,we have already received several significant claims this year involving allegations of fraud.The t
58、ypes of issues we see differ in terms of the range of sophistication:from an allegation of a local manager passing off a set of forged accounts as the audited accounts,to an allegation of a long-running and elaborate fraud around revenue recognition issues.Rigorous forensic scrutiny applied across t
59、he entire due-diligence process is the best way to avoid later complications here.Cyber The invasion of Ukraine and the resulting isolation of Russia has moved cyber even further up the risk agenda as concerns grow about the possibility of state-sponsored attacks against Western businesses.These con
60、cerns are compounded by fears that many businesses do not have adequate cyber insurance cover in place.Indeed,we received a notification within the last 12 months where the estimated loss suffered by the target is significantly higher than the limit provided by its cyber insurance cover.Therefore,we
61、 and many other M&A insurers are increasingly focused on managing cyber risk.This is achieved in many cases by excluding cover for cyber-related issues altogether and,in other cases,limiting it by only covering specific cyber-related warranties that we are satisfied have been properly diligenced.Thi
62、rd-party claimsWe have seen a significant increase in third-party claims in the last 12 months,especially in the Americas region.We do not expect to see any let-up in this trend in the near term,particularly given that during times of economic uncertainty,litigation is seen almost as a means of rais
63、ing revenue.This is likely to necessitate an increased emphasis on the identification of potential future disputes during the due-diligence process,as opposed to ongoing and/or threatened disputes.ESG issuesWe expect to see more claims arising from ESG-related issues,reflecting the increased importa
64、nce of this area and the reality that buyers are increasingly expecting sellers to give specific warranties on these issues.The raft of associated legislation that has been,or is due to be,implemented will create more pitfalls for businesses and require costly new ways of working.A business that doe
65、s not keep up with these changes or fails to live up to its own ESG credentialsor ensure that its suppliers live up to theirswill be susceptible to enforcement action or litigation,including from increasingly active action groups.11Q3 2022 GLOBAL M&A REPORT Sponsored byCONSUMER PRODUCTS&SERVICESCons
66、umer products&services01,0002,0003,0004,0007,3374,6125,0006,0007,0008,000$0$100$200$300$400$500$600$700$800$900$1,0002000202021 2022*Deal value($B)Deal count0.0 x0.2x0.4x0.6x0.8x1.0 x1.2x1.4x1.6x1.8x20002020212022*EV to TTM revenue multipleConsumer product
67、s&services M&A activityConsumer products&services M&A deal multiplesSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,2022Kyle Walters Associate Analyst,Private EquityConsumer products&services M&A experienced a major slowdown in Q3 2022,bo
68、th in deal value and deal count:During Q3,dealmakers closed 1,222 transactions worth an aggregate of$104.3 billion,flat on deal count but down significantly in value versus the prior year.Three quarters into 2022,corporate buyers lead the way,as once again PE funds see their share of M&A volume decr
69、ease,accounting for 31.4%of deal volumedown from a 34.1%share in Q3 2021.The third quarter of 2022 saw no mega-deals($5 billion or more)close,continuing the trend seen in Q1 of 2022 after Q2 saw numerous take place.Consumers are now faced with new issues including record-high inflation,continuous ra
70、te hikes,and persistant supply chain disruptions.These problems have wreaked havoc on households and their spending power,thus continuing the downward pressure in consumer M&A.Consumers are more likely to reduce debt and increase savings in the quarters ahead.Consumer non-durables remained strong as
71、 other consumer industries saw big declines:Recent shifts in consumer spending have carried over to M&A activity.M&A has remained strong in the non-durable goods consumer sub-sector,reflecting its more defensive nature in an economic downturn.Examples of non-durable goods include food,beverages,and
72、personal care items.As these goods remain in demand,M&A activity follows suit.In July,CVC Capital Partners finalized its acquisition for UK tea powder and blends manufacturer Ekaterra for$4.7 billion from Unilever.Corporate divestitures continue to provide opportunities for firms to adjust to market
73、 headwinds:Persisting market headwinds has caused many firms to re-evaluate their assets and look for ways to cut costs and increase efficiencies.Q3 saw an uptick from Q2 2022 in corporate divestitures,including Radisson Hotel Groups sale of its US franchise business to Choice Hotels International f
74、or$675.0 million.4 This move comes as Radisson looks to continue its focus on the Europe,the Middle East,and Africa,and Asia-Pacific(APAC)regions.Noncore assets will continue to be spun off as companies keep hunkering down to face headwinds.4:“Choice Hotels International to Acquire Radisson Hotel Gr
75、oup Americas,”Radisson Hotel Group,June 13,2022.12Q3 2022 GLOBAL M&A REPORT Sponsored byENERGYEnergy02004006008001,0007321,2871,2001,4001,600$0$50$100$150$200$250$300$350$400$4502000202021 2022*Deal value($B)Deal countEV to TTM revenue multiple0.0 x0.5x1.0 x1.5x2.0 x2.5x3.0 x3.
76、5x20002020212022*Energy M&A activityEnergy M&A deal multiplesSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,2022Kyle Walters Associate Analyst,Private EquityEnergy deals increase in size:Overall,energy deal count wa
77、s up slightly in Q3 versus the prior year,although value was up by nearly two-fold.This comes as tensions in European Union(EU)states remain high while trying to prepare for the winter heating season with limited gas supplies from Russia.M&A activity in Europe is expected to continue as many compani
78、es look to take advantage of the search for energy alternatives and try to lower reliance on Russian supplies.Still,oil&gas remains at the center of M&A activity in the energy sector as prices remain elevated and deals get larger.Oil&gas M&A activity in the EU remained strong as it looks to address
79、its energy needs:Many countries in the EU have relied on Russian-supplied oil&gas for decades,and for some EU countries,that dependence has even increased since moving to end coal and nuclear power generation and production from their own gas fields.5 Several EU countries have found themselves overl
80、y reliant on Russian imports and look to create energy independence and stabilize their energy markets as tensions rise between Russia and the EU.In August,PKN ORLEN announced it has closed on its acquisition of Grupa LOTOS for$10.1 billion,with the goal of increasing Polands energy independence and
81、 ensuring stable fuel prices for all customers.6 Later in August,Germany confirmed its nationalization of gas importer Uniper,buying out Finnish company Fortums stake for$16.8 billion,in an effort to stabilize its energy market.Despite reliance on fossil fuels,renewables continue to see deal activit
82、y:Some of the biggest energy deals in Q3 came from renewables.Among them was the$2.9 billion purchase of Reden Solar,a France-based solar energy company that finances,develops,and operates solar power facilities across Europe and Latin America,7 by a Macquarie Asset Management-led consortium.In Augu
83、st,Shell paid$1.6 billion for Sprng Energy,a developer and manager of renewable energy facilities such as solar and wind farms and other infrastructure assets.This acquisition triples Shells renewable capacity in operation and helps it achieve its target of becoming a profitable net-zero emissions e
84、nergy business by 2050.8 5:”How Europe Became So Dependent on Putin for its Gas,”The Washington Post,July 12,2022.6:“ORLEN LOTOS Merger Completed,”Orlen,January 8,2022.7:“Macquarie-led Consortium to Purchase Reden Solar for$2.7bn,”Power Technology,March 8,2022.8:“Shell Completes Acquisition of Renew
85、ables Platform Sprng Energy Group,”Shell,August 9,2022.13Q3 2022 GLOBAL M&A REPORT A WORD FROM RBC CAPITAL MARKETSSponsored byA WORD FROM RBC CAPITAL MARKETSRegulation and activism on the riseHow are you seeing the Biden administrations antitrust policies play out?Vito Sperduto:One of the things wer
86、e watching closely is how the regulatory agencies are evaluating transactions.The largest players,especially in the technology space,are getting increased scrutiny,even when theyre buying smaller assets.Weve counseled our clients to extend the normal estimate of the timeline from announcement to clo
87、sing,because that has become the norm in the US and other geographies.At the end of the day,good strategic transactions still get done;its just a matter of planning properly.Larry Grafstein:Companies outside Big Tech still have to be cognizant of the risks of antitrust.The most important thing,almos
88、t always,is certainty of closure.If we knew that a deal was going to happen,would we take 5%less than we would from another bidder who had a big antitrust issue?Most boards advised by most law firms and leading investment banks would take the discount for certainty.If your companys in limbo between
89、signing and closing,it affects your employees and current operations.You really dont want to go through a deal being shot down if you can avoid it.The regulators are well aware of that,and theyre trying to create that sense of deterrence.Sperduto:Volumes YTD are off over 40%in the US,and over 30%glo
90、bally.Given some of those mega-deals,such as the Microsoft and Broadcom acquisitions,the technology sector is actually up by over 20%.Its other sectors that are trying to figure out how to push the envelope a little and expand into key sectors.What have been the knock-on effects of the slump in valu
91、ations?Grafstein:The drop in valuations in the venture market means its much more expensive to raise money,especially as venture capitalists get a little more conservative.It also means the IPO option may not be as predictably available by the time you think you might need money.That leads you to re
92、ally consider M&A.So larger companies in Silicon Valley are the logical way for private companies to monetize their investments or take their business to the next level as part of a bigger entity.And thats exactly what the government is laser-focused on.There will be an incentive for companies to se
93、ll themselves at fair prices to strategic buyers,which will lead to a lot of scrutiny in Washington.Sperduto:Currently,there is still a lag in private valuations overall.I think buyers need to take a look at the assets they consider acquiring and figure out how they fit strategically.What happens if
94、 I dont get this asset and someone else does?And then,is there an opportunity to get a comparable asset at a different value?I think thats going to become a bigger issue given the volatility out there.Are corporates or PE firms better placed in the current regulatory and economic landscape?Sperduto:
95、Our PE clients are more often doing transactions,but at the same time,the financing markets are difficult right now.Meanwhile,a lot of our corporate clients are probably better capitalized,and theres a window where theyre in a better position to do some transactions.Vito SperdutoCo-Head,Global M&ALa
96、rry GrafsteinDeputy Chairman,Global Investment B14Q3 2022 GLOBAL M&A REPORT A WORD FROM RBC CAPITAL MARKETSSponsored byAt the beginning of the pandemic,we saw a lot of private pipes into public companies.Companies were trying to solidify their balance sheets.But PE funds quickly got back to their br
97、ead-and-butter transactions and finding opportunities for leveraged buyouts(LBOs).We saw a spike in fund-to-fund transactions.We also saw an incredible amount of corporate divestitures.Thats picked up as corporates have increased their review of their internal portfolios.The record levels of dry pow
98、der in PE firms also means theyre thinking about alternative places to put money.In the middle of this year,we saw a number of firms look closely at their existing portfolios.They saw opportunities where the debt on their companies was trading at levels they knew were inaccurate.They took advantage
99、of those anomalies and bought in outstanding debt at discounts.Now theyre starting to look at getting back to traditional LBOs.Weve also seen a huge pool of capital from direct lenders that is unprecedented and growing day by day.Many PE firms have also set up funds so that at the point of signing t
100、he transaction,they already have a specific debt structure lined up from lenders.Grafstein:You would think that if you increased corporate market share enforcement of antitrust,that would give an advantage to a PE buyer.They may be buying multiple companies within a domain,but they dont always compe
101、te against each other directly,and they dont approach the level of antitrust market share thresholds that all large companies do.But in Washington,theres an awareness of this dry powder.As much as theyre suspicious of corporate concentration,they certainly dont want to see PE buying up even more of
102、the economy,when that could lead to job losses or political questions about the influence of private capital.The administration is trying to constrain PE in a way that perhaps previous administrations have not:its definitely part of that net theyre extending to try to catch certain transactions.How
103、are companies handling the return of shareholder activism after the pandemic lull?Sperduto:There was a dip in the number of true activist campaigns in the first half of this year.But the rise of things like universal proxies makes it simpler for investors to raise an issue.And there are a lot of fun
104、ds that want a greater role and greater access to companies and boards.Grafstein:When the overall equity indexes are down,the pressure on the buy side is intense.That includes many large and influential institutions that we wouldnt classically call activists,but that have objectives that are very al
105、igned with those of the activistsnamely to get the stock price up.Its a very good discussion to have with companies to prepare for this.Companies have become more sophisticated,because activism has been ubiquitous after the slowdown post-COVID-19 and into the first half of this year.It has become mu
106、ch more embedded in the market.Sperduto:Given that the cash on corporate balance sheets is near an all-time high now,we are seeing that cash used for stock buybacks.Its been a preferred route to get board representation.More often than not,theyre looking for a more detailed dialogue.Those shareholde
107、rs are not looking to be passivethey want to be part of the conversation.I think the companies that are dealing with this well are the ones that have a good,articulated strategy and are constantly reflecting on how theyre doing relative to that strategy.For our latest perspectives on M&A trends impa
108、cting global markets,go to 2022 GLOBAL M&A REPORT Sponsored byFINANCIAL SERVICESFinancial services05001,0001,5002,0001,7832,8622,5003,0003,500$0$100$200$300$400$500$600$7002000202021 2022*Deal value($B)Deal countEV to TTM revenue multiple0.0 x0.5x1.0 x1.5x2.0 x2.5x3.0 x3.5x4.0
109、x4.5x20002020212022*Financial services M&A activityFinancial services M&A deal multiplesSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,2022Tim Clarke Senior Analyst,Private EquityFinancial services M&A reflects capi
110、tal preservation in a rising interest rate environment:In Q3 2022,497 deals closed for a combined deal value of$74.7 billion.Similar to technology,deal activity has been tracking well above pre-pandemic levels,up 1.65%if compared to the first nine months of 2019.Deal value,however,is now tracking do
111、wn due to smaller deal sizes and a more mature state of consolidation in many key sub-segments.During a rising interest rate cycle,certain financial businesses,such as banks,do well due to widening spreads and net interest earnings power.For the others,such as asset management and insurance,it place
112、s a strain on balance sheets and earnings power.Asset and wealth management stay active:The investment management industry stayed active during the quarter,mostly with small tuck-in deals.Most notable was RBC Capitals significant push into Europe by acquiring one of the UKs largest wealth management
113、 franchises,Brewin Dolphin,for$1.8 billion,equivalent to 2.9x revenue and 2.8%of client AUM.In August,Apex Group closed its LBO of Sanne Group,a leading global provider of fund administration services to the alternative asset industry,for$1.8 billion.Lastly,while no value has been disclosed,Voya Fin
114、ancial closed its acquisition of the US arm of Allianz Global Investors.The deal was prompted by Allianzs$6 billion settlement with the Department of Justice(DOJ),which also barred Allianz from the US asset management industry for 10 years.Voya acquired$93 billion in AUM,increasing total AUM to$330
115、billion.Insurance produces the mega-deals:Insurance produced the largest deals in the financial sector during Q3.In July,the Agnelli Familys closely held conglomerate Exor completed its$9.3 billion divestiture of reinsurance giant Partner Re to French mutual insurer Covea.The deal will significantly
116、 increase Partner Res global scale and capital strength,while improving Coveas global risk management capabilities.Also in July,Cigna completed the divestiture of its APAC life,accident,and supplementary benefits business to Chubb for$5.7 billion(1.9x premium revenue).The deal adds to Chubbs already
117、 sizeable presence in the region and significantly increases Chubbs exposure to APAC from 11%to 20%of total revenue,excluding China.16Q3 2022 GLOBAL M&A REPORT Sponsored byHEALTHCAREHealthcare4,1512,17305001,0001,5002,0002,5003,0003,5004,0004,500$0$100$200$300$400$500$600$700$800200172018
118、201920202021 2022*Deal value($B)Deal count0.0 x0.5x1.0 x1.5x2.0 x2.5x3.0 x3.5x4.0 x20002020212022*EV to TTM revenue multipleHealthcare M&A activityHealthcare M&A deal multiplesSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of Septe
119、mber 30,2022Rebecca Springer,Ph.D.Senior Analyst,HealthcareHealthcare deal activity stutters:Healthcare accounts for 11.4%of global deal value and 9.3%of deal count YTD,the lowest proportions since 2016.The industry is typically considered a recession safe haven,but smaller companiesmost of which ar
120、e in healthcare servicesare under significant financial strain due to knock-on effects of COVID-19 and labor force displacement.The pipeline for large deals,which typically come from the pharmaceutical,medtech,and healthcare information technology(IT)industries,looks thin as well.While many large he
121、althcare companies are on solid financial footing and have cash on hand for M&A,growing macroeconomic uncertainty is causing some to press pause on their deal pipelines.Opportunities for Big Pharma:More than half of pharmaceutical company revenue now comes from specialty drugs,which are extremely in
122、elastic goods.This means that Big Pharma is well-positioned for a recession,and that these firms must continue to diversify and add cutting-edge therapeutics to their portfolios to stay competitive.In the US,the Inflation Reduction Acts much-touted provision to allow Centers for Medicare&Medicaid Se
123、rvices to negotiate Medicare drug prices had little effect on Big Pharma stocks;the provision applies only to a limited drug list,will not be implemented until 2026,and removes some regulatory uncertainty for investors.Pfizer,whose revenue nearly doubled from 2020 to 2021 due to vaccine sales,has be
124、en on a noteworthy buying spree.The company has completed four acquisitions,including three$5 billion-plus all-cash deals this year.Optum-Change deal clears antitrust block:UnitedHealth Groups Optum subsidiary completed its$13.0 billion acquisition of Change Healthcare in October.The merger had been
125、 temporarily blocked by a much-watched DOJ antitrust lawsuit that turned on the alleged potential for anticompetitive data consolidation between United,an insurer,and Optum/Change,a healthcare provider and analytics company.9 To pass muster,Change also divested ClaimsXten to TPG for$2.2 billion.The
126、successful acquisition means US antitrust scrutiny is unlikely to discourage vertical M&A in healthcare in the future,although it may spur additional divestitures.9:“DOJ Sues to Block UnitedHealthChange Healthcare Deal,”Fierce HealthCare,Paige Minemyer,February 24,2022.17Q3 2022 GLOBAL M&A REPORT Sp
127、onsored byINFORMATION TECHNOLOGYInformation technology7,8694,71301,0002,0003,0004,0005,0006,0007,0008,0009,000$0$200$400$600$800$1,000$1,2002001720182019 2020 2021 2022*Deal value($B)Deal count0.0 x0.5x1.0 x1.5x2.0 x2.5x3.0 x3.5x4.0 x4.5x20002020212022*EV to TTM reve
128、nue multipleInformation technology M&A activityInformation technology M&A deal multiplesSource:PitchBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,2022Tim Clarke Senior Analyst,Private EquityTechs dealmaking machine finds another gear:In what was su
129、pposed to be the slump that followed the COVID-19“bump,”deal activity in tech has inched higher instead.The sector continues to churn out deals at a pace that is well above the 2017 to 2019 median of roughly 1,200 deals per quarter.Tech is the one sector that has not reverted to the pre-pandemic mea
130、n,and the precipitous decline in valuations has only stimulated further interest and deal flow from opportunistic buyers.The sectors share of M&A value rose to 22.2%in 2022,up from 19.7%in 2021,a fifth consecutive yearly increase.Valuations return from orbit:Enterprise value(EV)to revenue multiples
131、on tech M&A deals have returned to earth after reaching unprecedented heights in 2021.At the epicenter of this were software as a service companies,which regularly traded at mid-teen multiples(EV to revenue)both in public markets and private M&A deals.2022 saw an almost complete unwind to multiples
132、more in line with pre-pandemic medians.These more rational valuations are on full display in this years 18 take-private tech deals,which feature a median revenue multiple of 6.9x and an average discount of 12.2%from the 52-week highs of their shares.Still,for the right transformative deal,iconic val
133、uations are not completely a thing of the past,as Adobes$20.0 billion acquisition of Figma clearly demonstrates.In what would be the largest acquisition of a VC-backed company,should it gain full regulatory approval,Adobe is believed to be paying 50 times the companys annual recurring revenue.10 Cit
134、rix deal highlights disruption in LBO lending:The largest IT deal to close in Q3 was Vistas take-private of Citrix for$16.5 billion(4.7x revenue).The deal creates a new global leader in enterprise software by combining Citrixs virtualization products with the business intelligence and integration so
135、lutions of TIBCO,a Vista portfolio company.11 The two firms struggled to raise$8.5 billion in high yield and leveraged loan debt to back the deal,ultimately resulting in$700 million in losses to bank underwriters.12 All four of the last take-privates have since been funded by private debt funds inst
136、ead of banks,signaling a potential shift in future LBO deal financing,at least until the risk-off conditions subside for investors in public debt.10:“Why Adobe Wants Figma and Why Some Investors are Worried,”The Wall Street Journal,Aaron Tilley,September 18,2022.11:“Citrix Joins Tibco in Newly Forme
137、d Cloud Software Group,”Channel Futures,Jeffrey Schwartz,October 3,2022.12:“Banks Close Painful Citrix Debt Chapter with$700 Mln Loss-Source,”Reuters,Abigail Summerville and Matt Tracy,September 21,2022.18Q3 2022 GLOBAL M&A REPORT Sponsored byMATERIALS&RESOURCESMaterials&resources1,392708
138、001,0001,2001,4001,600$0$50$100$150$200$250$3002000202021 2022*Deal value($B)Deal count0.0 x0.2x0.4x0.6x0.8x1.0 x1.2x1.4x1.6x1.8x2.0 x20002020212022*EV to TTM revenue multipleMaterials&resources M&A activityMaterials&resources M&A deal multiplesSource:Pitc
139、hBook|Geography:Global*As of September 30,2022Source:PitchBook|Geography:Global*As of September 30,2022Kyle Walters Associate Analyst,Private EquityMaterials&resources M&A activity returns to 2020 levels:The materials&resources sector continues to see sequential decline in M&A activity after strong
140、deal activity in 2021.In Q3 the sector saw 212 M&A deals take place for a total value of$32.8 billion,a pace seen this year that is reverting back to pre-2021 norms.Mining firms are seeing lower commodities prices after a two-year bull run that came to an end at the beginning of 2022.Firms in the sp
141、ace are also facing growing environmental,social,and governance(ESG)-related scrutiny as the push for net-zero emissions continues.Re-shoring is a growing option for the materials&resources industry:Many countries and firms are still being hampered by supply chain disruptions.In addition,geopolitica
142、l tensions with Russia and China have pushed many countries and firms to consider other supply chain options.The materials&resources industry is especially sensitive to supply chain issues,and re-shoring is one option that is being actively pursued,with deal activity likely to follow.Strong end dema
143、nd and M&A in containers&packaging:The pandemic spurred increased utilization in the containers&packaging industry,due to the lock-step change in e-commerce purchasing habits by businesses and consumers.These trends have yet to abate,and the industry has seen strong M&A as a result.In September,MML
144、Capital Partners acquired Global Pallets and Packaging Services for$251.2 million.The containers and packaging industry should see strong demand going forward as e-commerce continues its upward trend.ESG will be a factor in M&A activity going forward:ESG has been a hot topic when it comes to impleme
145、nting strategies in different industries.The focus of ESG in the materials&resources sector is not going away and will be a point of focus for M&A activity to come.The goal of many big companies is to achieve net-zero emissions,which would have been unthinkable just a few years ago for this industry
146、.Some firms will be weighting their portfolios in favor of critical minerals and away from more carbon-intensive assets,driven by both the looming supply gap and carbon reduction targets.13 Net zero and the energy transition will drive demand for metals.The shift to net-zero mining will require more
147、 mining,not less.13:“Global M&A Trends in Energy,Utilities and Resources:2022 Mid-Year Update,”PWC,n.d.,accessed October 11,2022.Additional researchCOPYRIGHT 2022 by PitchBook Data,Inc.All rights reserved.No part of this publication may be reproduced in any form or by any meansgraphic,electronic,or
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