GEREJE Corporate Finance informsyou of the last Euro-Asia M&A Trends

Press Review - November 2013

EURO-ASIA M&A Trends

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Beverage

FOOD & BEVERAGE

Engineering & Construction

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B A N G K O K - B E R L I N - M U M B A I - S H A N G H A I P A R I S - S I N G A P O R E

Growing optimism about the global economy is leading to a pick-up in M&A activity. Both volume & size of deals are expected to improve in 2014. Top 5 destinations for deal-makers are China, India, Brazil, US & Canada while the top few sectors are life sciences, oil & gas, consumer products, automotive & technology.

Cross-border M&A was valued at USD 224.2 Bn in Q3 2013 (+8% vs. Q3 2012) with an increase from Q2 2013 which was valued at USD 184.2 Bn. Europe was the most targeted region for cross-border activity with a 45% market share for deals valued at ~USD 100 Bn.

China is expected to be Asia’s leader in outbound Corporate Acquisitions in 2013, ending Japan’s 2-year lead. In 2013, Chinese companies have invested USD 56.2 Bn in overseas M&As. It remains below 2012 outbound M&A deals of USD 62.1 Bn, but way above USD 40.7 Bn done by Japanese firms this year. Energy & Power dominate China’s outbound deals in value, though their share of overall M&As has fallen to 44% from 53% 5 years ago. According to investment bankers, China targeted investments expand beyond natural resources mainly into sectors such as food & banking.

South East Asia is under-penetrated by PE investments. Apart from Vietnam, every market is characterized by highly condensed corporate ownership by founding families & coupled with the scarcity of large-cap deal flow; these factors are challenges for doing business in the region.

DANONE (France) looking to acquire TIRUMALA MILK (India)

PE giant TPG group & DANONE are in advance talks to acquire 80% of South India’s 2nd largest dairy company, TIRUMALA Milk Products for EUR 214 M. 80% is currently held by 4 farmers & the founders. EV: EUR 268 MOctober 31st / Economic Times & Boursier

CARLSBERG (Denmark) willing to pursue acquisitions in Asia

CARLSBERG is pursuing Asian acquisitions for its growth path as customers in the key Russian market buy less beer causing declining sales. China represents a large regional market, accounting for 35% of global consumption.

November 12th / WSJ & Financial Times

YEO HIAP SENG (Singapore) to be an alluring target in Asia’s beverages market

YHS would be an attractive target for F&B Companies seeking a foothold in emerging markets. YHS possesses great distribution, a household name & excellent revenue growth.

EV: USD 1.0 BnEV/Revenue: 2.4x (LTM September 2013)EV/EBITDA: 17.4x (LTM September 2013)

November 18th / Bloomberg Business Week & Factset

Food

AFFINITY EQUITY PARTNERS (Hong Kong) invests USD 123 M in BEIJING CAPITAL AGRIBUSINESS GROUP (China)

AFFINITY EQUITY PARTNERS invested USD 123 M into a JV with BEIJING CAPITAL, a Chinese state-owned food conglomerate. Being the third-largest dairy farm operating in China, BEIJING CAPITAL will spin-out its dairy operation into the JV, taking 60 % stake (40% for AFFINITY). Their plan is to increase production capacities, capitalizing on the growing demand for fresh milk and on consumers' increased willing-ness to pay a premium for safe and better quality products.

November 2nd / AVCJ & WSJ

TEMASEK (Singapore) & HOPU (China) to buy minority stake in YASHILI (China)

TEMASEK & HOPU with 3 additional investors, purchased a ~13% stake for USD 213M after parent com-pany MENGNIU (China) had to sell down shares to meet HK listing requirements. The deal was negotiated for 471 M shares to be sold at HKD 3.5 each.

EV/EBITDA: 9.9x

November 10th / Reuters & Factset

FIRST PACIFIC (Hong Kong) acquired 31% of ROXAS (Philippines)

The Hong-Kong based Investment fund FIRST PACIFIC Co. acquired a 31% minority stake in the listed sugar miller ROXAS HOLDINGS Inc (RHI) for PHP 2.2 Bn (USD 51 M). FIRST PACIFIC Co. operates in 4 segments: Infrastructure, Telecommunications, Consumer Food Products and Natural Resources. The deal marks the Hong Kong-based firm's venture into Philippine agribusiness, considering RHI as a significant opportunity to enhance efficiency in parts of the agri sector.

EV/EBITDA: 6.0x

November 15th / Business World & Factset

RAMKY INT. (Singapore) buys 51% stake in SEMBCORP ENVIRO’s (India)

SEMBCORP ENVIRONMENT is divesting 51% of SEMBCORP ENVIRO to its JV partner RAMKY INTERNA-TIONAL for USD 6 M to streamline its business. RAMKY provides services in civil, environment & waste management infrastructure.

October 30th / Deal Curry & Factset

Renewable Energy

ARMSTRONG (Singapore) raises USD 164 M for SEA Clean Energy Fund

ARMSTRONG ASSET MANAGEMENT provides development capital to small-scale renewable energy projects in South East Asia. The Singapore-based fund plans to make 10-15 investments of USD 5 – 25 M each & has backed 2 projects so far in Thailand, Indonesia & the Philippines.

November 11th / AVCJ

Testing, Inspection & Certification

ATA Inc (China) acquires XING WEI Institute (Hong Kong) for USD 3 M

Testing related services & technologies firm ATA, acquired XING WEI, a designer & developer of online & mobile training & educational platforms founded in 2012. The deal allows ATA to expand its service offerings & testing platforms.

Revenue: USD 59 M (2013)EBITDA margin: 10% (2013)EV/EBITDA: 8.3x

November 18th / Wireless News & Factset

Payment Solutions

RELIANCE CORP (India) is entering into mobile payment services

India’s largest private sector company seeks to enter the payment services sector after it has received its license. Other large Indian corporates such as ZEE GROUP & TECH MAHINDRA have also recently got into the payments space.

November 8th / Let’s Talk Payments

BOKU (US) acquires QUBECELL (India)

BOKU INC., the global leader in mobile payments, acquired QUBECELL. Founded in 2012, QUBECELL is India’s leader in “direct carrier billing”. The acquisition will provide BOKU with 4 of the largest carrier billing connections in the country & reach of >75% of the country’s mobile subscribers, ~550 M users making BOKU the largest provider of direct carrier billing in India.

Revenue: USD 55 M (2010)

November 21st / Techcrunch & Reuters

HITACHI (Japan) acquired PRIZM PAYMENT SERVICES (India)

The Japanese tech giant HITACHI acquired PRIZM from WINVEST HOLDINGS (India), SEQUOIA CAPITAL & AXIS BANK. The company has been valued between USD 250-260 M. PRIZM provides ATMs & sales systems to financial institutions in India.

Revenue: USD 80 M (2013)

November 28th / The Times of India

Pay TV

C MEDIA to invest additional USD 2 M in YOU ON DEMAND (China)

The Video-On-Demand platform YOU ON DEMAND has received a grand total of USD 6 M from mobile internet company C MEDIA to-date. C MEDIA expects to further expand their investment in the company at the end of the year.

November 6th / Rapid TV News

Social Media

Global Media M&A value for Q1-3 2013 has already surpassed the whole of 2012

2013’s current value of USD 82.4 Bn has already registered an increase of 39% over the whole of 2012’s value of USD 59.2 Bn. M&A activity in the media sector is still strong with a consistent YoY increase by value since 2008.

November 11th / Merger Market

E-Media

SQS (Germany) acquires 26% stake in THINKSOFT GLOBAL (India)

Software Testing & Quality Management services SQS SOFTWARE SYSTEMS buys minority stake in the financial software company THINKSOFT GLOBAL for USD 11 M. This acquisition will expand SQS’ market presence & service coverage, focusing on banking & financial services. EV/EBITDA: 5.5x

November 8th / Business Standards & Factset

AUFEMININ.COM (France) buys 60% stake in MYLITTLEPARIS.COM (France)

French online media platform AU FEMININ, dedicated to women's content, agreed to acquire 60% stake in startup MY LITTLE PARIS for ~EUR 40 M. It plans to acquire the remaining 10% & 30% in 2015 & 2017.The acquisition combines the target's e-shopping experience with the buyer's media know-how.

Revenue: EUR 14 M (est. 2013)

November 20th / Les Echos & See News

Luxury

MAYHOOLA INVESTMENTS (Qatar) eying to buy stake in PAL ZILERI (Italy)

MAYHOOLA INVESTMENTS is looking to buy 65% stake in PAL ZILERI luxury men’s fashion brand. This acquisition comes after the Qatar-based fund bought VALENTINO in July 2012 for USD 858 M. PAL ZILERI is currently owned by the Italian Fashion & Textile Group FORALL.

November 6th / WWD

MONCLER (Italy) readies for EUR 785 M IPO

The luxury jacket maker MONCLER will offer 27% of its capital on the Milan stock market. Valuing the com-pany at EUR 2.6 Bn, it would be the biggest flotation in the European luxury sector since 2011. The indicative price would value MONCLER at 10-12x EBITDA.

Revenue: EUR 630 M (2012)EBITDA Margin: 27%

November 28th / Dow Jones & Co. & Reuters

Healthcare

SGD 30 M will be set aside to help grow start-ups in sectors such as medical & clean technology in Singapore

This is the 2nd tranche of funding under the Research, Innovation & Enterprise 2015 plan. The fund will be managed by SPRING SEEDS Capital (SSC) which will co-invest in these start-ups on a 1:1 basis.

November 7th / CAN

SARTORIUS (France) to acquire TAP BIOSYSTEMS (UK) for USD 45 M

The leading healthcare technology provider SARTORIUS BIOTECH, acquired for USD 45 M, TAP BIOSYS-TEMS Group, a British company specialized in automated cell culture & fermentation systems. The acquisi-tion will allow SARTORIUS to meet the rapidly changing technology requirements of the Healthcare & Phar-maceutical industry it serves.

Revenue: USD 32 M (2012)

November 25th / German Collection & Reuters

NICOX (France) acquired EUPHARMED (Italy) for EUR 3.5 M

The French biotech company NICOX acquired for EUR 3.5 M 100% stake in the Italian company EUP-HARMED, specialized in ophthalmic medical devices & pharmaceuticals. NICOX has agreed to pay an additional earn-out payment for up to EUR 2.4 M linked to the achievement of some undisclosed business objectives.

Revenue: EUR 4 MEBITDA Margin: 9%

November 26th / 4 Traders & See News

KKR (USA) to invest USD 200 M in GLAND PHARMA (India)

US buyout firm KKR agreed to acquire a minority stake in the Indian drugmaker GLAND PHARMA, including stake held by PE fund EVOLVENCE INDIA. This would be the largest PE investment in the local pharmaceu-tical sector.

November 28th / Reuters

Cosmetics & Toiletries

UNILEVER (UK) acquired a majority stake in IOMA (France)

The mass market cosmetics group UNILEVER acquired a majority stake in IOMA, a French luxury skincare brand founded in 2010. Already distributed in 10 countries, & >1000 POS’, IOMA will now access UNILVER’s R&D and boost its international development in Asia beginning in Singapore.

Revenue: EUR 20 M (2012)

November 12th / Fusacq & Cosmetics Design

Fashion

BLACKSTONE (US) to buy 40% stake in SCP (China) for ~USD 400 M

BLACKSTONE & ICBC acquired 40% & 6% in SCP respectively, which owns & manages shopping malls across China. Financials were not disclosed but the value of BLACKSTONE’s stake is about USD 400 M.

November 4th / FinanceAsia

ESSILOR (France) acquired 50% stake in XIAMEN YARUI (China)

XIAMEN YARUI OPTICAL is China’s leading supplier of mid-range sunglasses. ESSILOR can accelerate its development in China & will give XIAMEN YARUI resources to capitalize on the strong reputation of its flagship brand BOLON(R).

Revenue: EUR 42 M (2012)

November 27th / WSJ & 4 Traders

HEALTH & BEAUTY

INDUSTRY & CLEANTECH

NEW TECHNOLOGIES