After years in the doldrums, M&A markets have rebounded
in many markets and industries around the world
, benefiting
corporates and private equity firms alike. And indicators suggest
that dealmaking will remain robust into and beyond 2015.

US M&A roared back in 2014

After a number of tough years, 2014 marked a turning point for US M&A. Companies announced 4,795 deals worth US$1.4 trillion, a 22 percent increase in volume and a 57 percent rise in value compared to 2013. Indeed, deal value was the highest since 2007.

Telecommunications, media and technology was the most active sector in terms of number of deals, with a total of 1,029 transactions worth US$302 billion. By value, the energy, mining and utilities sector was on top, with a total of US$318 billion from 495 transactions (more than double the US$139.6 billion logged in 2013).

The private equity (PE) industry also performed strongly. Exit volumes were up 31 percent, and the value of exits rose 70 percent to US$262 billion. Corporates eager to deploy unspent cash bought 698 companies worth US$192 billion from PE firms, up from 526 deals worth US$120 billion in 2013. Secondary buyouts (PE-to-PE deals) were also up.

Deal activity eased a bit toward the end of the year as equity and debt markets cooled in the final quarter. But the fundamentals remain in place for US and international M&A markets to support robust deal activity in 2015. Positive indicators include:

Companies have the means and motivation to transact.
US stock markets, while experiencing certain volatility toward the end of 2014 and the beginning of 2015, remain strong. Many companies have substantial cash piles to invest, and many have visions of growth and the backing of shareholders to pursue their vision.

Rising middle-market activity could extend the M&A surge.
Megadeals drove the increase in value in 2014. The number of deals also rose, but not as much as value. We expect the market to deepen and broaden beyond megadeals during 2015.

Overseas buyers have a strong appetite for US targets.
The US economy is stable and growing, particularly compared to markets in Europe and Asia, which is attracting non-US buyers. International interest in the US market reached heights not seen since 2007, with 822 inbound deals worth US$374 billion recorded in 2014.

Indeed, recovery in US M&A has led a wider rebound in global M&A markets, which recorded total deal value of US$3.2 trillion in 2014, a 45 percent increase compared to 2013. At 16,554 deals, global transaction volume was 14 percent higher than in 2013. Corporates and buyout firms in virtually all markets are turning to M&A as they shift their focus back to growth.

New tech hubs benefit as more PE firms pursue
start-up opportunities

Traditional venture capital (VC) firms still dominate the funding landscape for start-ups, but other types of investors are pursuing start-up opportunities at an accelerating rate. These include PE firms eager for returns in a highly competitive, low-yield environment, as well as companies seeking strategic opportunities to invigorate their innovation pipelines through corporate venture investments.

At the same time, decreasing costs of entry now allow start-ups to achieve world-class success without relocating to traditional hubs such as Silicon Valley. Indeed, the majority of the 140 start-ups that reached a billion-dollar valuation in the last decade were not located in Silicon Valley, but were spread around the world according to Atomico, the London-based VC firm.

This trend will only accelerate as talent pools develop in new locations around the world. For example, Central and Eastern Europe has already emerged as a rich pool of programming expertise.

Rising competition for good investments is driving valuations sky-high for start-ups located in traditional hubs, which is leading an increasing number of investors to look for opportunities in newer hubs, such as New York, Berlin, Tel Aviv, Beijing, Stockholm and London. This is shoring up a trend that is enabling new hubs to take root and allowing promising new start-ups to blossom regardless of where they are located.

M&A matters


We represented Zimmer Holdings, Inc., a world leader in musculoskeletal health solutions, in its proposed US$13.35 billion acquisition of Biomet, Inc., one of the world’s leading medical device manufacturers. The merger of Zimmer and Biomet will position the combined company as a leader in the US$45 billion musculoskeletal industry. The transaction is expected to be completed in the first quarter of 2015.


In one of the largest-ever merger and acquisition transactions in Qatar, we advised on the US$5.3 billion sale of stakes in three companies by Barwa Real Estate Company Q.S.C. to a subsidiary of Qatari Diar. We advised Labregah Real Estate Company Q.S.C., a wholly owned subsidiary of Qatari Diar Real Estate Investment Company Q.S.C., and Barwa Real Estate Company Q.S.C. on the purchase by Labregah of a 95 percent stake in Barwa Commercial Avenue Company for US$2.5 billion, the US$2.1 billion acquisition of the entire share capital in Barwa City Company, and the sale of a 37.34 percent stake in Barwa Bank for US$660 million.


We represented MMG Limited (MMG) and the MMG-led consortium including Guoxin International Investment Corporation Limited (22.5 percent) and CITIC Metal Peru Investment Limited (15 percent) in the US$7 billion acquisition of the Las Bambas copper project in Peru from Glencore plc. We advised MMG on the consortium shareholder arrangements and the consortium on the merger and acquisition, Hong Kong Stock Exchange approvals and financing of the acquisition (including ongoing project development costs) through a combination of equity and long-term debt facilities from a banking syndicate arranged by China Development Bank. The Las Bambas project is a world-class copper asset with prospective, near-mine exploration opportunities located in the Cotabambas, Apurimac region of Peru. The estimated mine life exceeds 20 years and is expected to produce over two million tons of copper in concentrate in its first five years of operation. MMG will become one of the world’s largest copper producers.

European PE is reborn four slow years after the sovereign debt crisis

2014 was a banner year for the European private equity industry. Exits were up, with buyout firms selling 762 businesses worth €121.9 billion—the highest value since 2007 by a significant margin. Buyouts recovered too, with 1,110 deals worth €100.9 billion closed in 2014—again the highest value of activity since 2007.

The industrials and chemicals sector was the busiest, with 260 buyouts and 183 exits. Deal activity in consumer goods (156 buyouts and 102 exits) and technology, media and telecommunications (158 buyouts and 155 exits) was also well up in comparison to 2013.

The United Kingdom, traditionally Europe’s largest PE market, led the way through 2014. The country accounted for 28.4 percent of European buyout value in 2014.

And while deal activity eased a little as the year came to a close, and some concerns arose about slow economic growth in Europe, there are a number of reasons for optimism in the asset class.

The initial public offering (IPO) market has proven especially lucrative.
In 2014, there were 43 PE-backed IPOs worth €44 billion, a record high since 1998, according to the Centre for Management Buyout Research.

The rebound is not only a UK phenomenon.
France recorded 182 buyout deals worth €20.9 billion in 2014, and Germany had 131 buyouts worth €8.9 billion—both up from 2013. Spain and Italy also showed encouraging signs, with investors drawn to attractive valuations. In the Nordic region, especially in Denmark and Norway, deal flow was consistent with 2013.

US firms are looking to Europe.
During 2014, US-sponsored buyouts increased year-on-year in terms of value and volume. The United Kingdom led the way as the region of choice for the growing number of US firms aiming to gain a foothold in Europe, capturing 61 US-sponsored deals in 2014—almost triple the 21 transactions recorded by its nearest rival, Spain.

Challenges remain, but thriving debt markets, large war chests and a more stable economic backdrop for the region as a whole mean there is reason for optimism about the prospects for PE in Europe.


We represented Nordic Capital Fund VIII in its €2.3 billion acquisition of the Lindorff Group from Altor funds and Investor AB (publ), the third-largest secondary buyout ever completed in the Nordic countries.


We represented Avast Software, one of the world’s major players in the antivirus market, and a selling shareholder consortium in the sale of a significant minority stake to CVC Capital Partners, a private equity and investment advisory firm. Supporting the successful completion of the deal included advising on the new US borrower financing that supported CVC’s acquisition of an approximately 40 percent interest in Avast, which values the Prague-based business at around US$1 billion.


We represented BC Partners in the €940 million sale of Spotless Group, the French maker of laundry and cleaning products, to Henkel AG.


We represented Falcon Group, a consortium of investors 75 percent controlled by funds managed or advised by Mid Europa Partners, the leading buyout investor focused on Central and Eastern Europe and Turkey, in the €828 million sale of its stake in T-Mobile Czech Republic a.s. to Deutsche Telekom AG.

Helping women make a greater impact in private equity

Few women work in private equity today. One problem is finding mentors, sponsors and role models who will help them stay in the field and flourish. To help address this, White & Case launched an initiative in 2014 to help women make a greater impact in the PE world.

The initiative, led by White & Case partner Carolyn Vardi, launched a quarterly breakfast series—“PE and Finance Breakfast for Women”—that brings junior women in the PE world together and offers them a high-level approach to topics from a deal perspective. Each breakfast features a presentation from a woman White & Case partner. Participants receive materials about the discussed topics, including relevant White & Case articles and alerts, as well as a “cheat sheet” providing them with quick tips on the topic addressed at each particular breakfast. All materials are packaged in a branded notebook that can be expanded to hold all course materials. Participants come from PE shops and banks in New York City.

White & Case also launched a LinkedIn group called “Women in PE and Finance” where we continue the conversations started at the quarterly breakfasts. “The ultimate goal,” said Vardi, “is creating a community for junior women in private equity that will help them bring value to transactions, be valued members of transaction teams and develop long-lasting careers in the private equity field.”

The ultimate goal is creating a community for junior women in private equity that will help them bring value to transactions, be valued members of transaction teams and develop long- lasting careers in the private equity field.
Carolyn Vardi
Partner, M&A