AUGUST 2013

Press Review August 2013

EURO-ASIA M&A TRENDS

Europe accounted for a 30.2% proportion of global M&A value. 2013 H1 Europe’s overall activity reached USD 270.5bn, through 2,308 deals (-13.6% fewer deals than 2012 H1). Even though, Europe showed a robust M&A recovery in Q2 after a slow Q1 (+20.7% increase vs Q1 in value).
2013 H1 Asia’s* overall M&A reached over USD 120Bn. Asia M&A in Q2 2013 rose to USD 70Bn, outperforming both Europe’s 20.7% increase and the US’s 5.8% decline in value between Q1 and Q2.

  • Domestic & outbound deals in the Chinese (Mainland and HK) M&A market reached a record high with 439 deals in H1 2013, worth USD 84.6Bn (+12.6% vs 2012 H1) with outbound deals contributing 68% of total value. Energy & mining sectors were the most popular followed by other sectors such as property, healthcare, the Internet, manufacturing & clean technology.
  • 2013 H1 Southeast Asia M&A reached its highest opening since 2008 with 183 deals worth USD 27.1bn
  • Thailand emerged as the N1 M&A market in Southeast Asia with deals worth USD 14.7 Bn 2013 H1. Thailand’s richest man, Dhanin CHEARAVANONT, accounts for a large part of the deal activity with his USD 6.6 Bn purchase of SIAM MAKRO, a discount chain.
  • Indian regulations under approval to make M&A & restructuring easie. This could potentially increase the attractiveness of Indian firms to PE investors.

FOOD & BEVERAGE

Beverage

SUPER GROUP looking for acquisition

SUPER GROUP (Singapore), a leading instant-coffee maker, is looking to make an acquisition of a fast-growing coffee producer with established labels, production facilities & distribution networks or beverage makers to expand its non-coffee division. With SGD 96 M cash, SUPER might seek an acquisition in Indonesia, Philippines or China with expected deal size of ~ SGD 100 M.

LTM June 2013 Revenue: SDD 556M (+20.6% YoY)
EBITDA margin: +19.6%

July 25th / Bloomberg


Food

MENGNIU signs a new JV with DANONE

China’s major dairy producer MENGNIU DAIRY Co has signed an agreement with French dairy product company DANONE to form a JV for the take-over, investment and management of chilled yogurt portfolios in the country. The JV with the French major will enable MENGNIU to utilize innovative technology in the production of the promised safe dairy products.

LTM June 2013 Revenue of MENGNIU: USD 6.28Bn


August 13th / Global Times

Boost of domestic dairy mergers in China

A draft to promote M&A transactions among the Chinese dairy companies has been handed out by the Ministry of Industry and Information Technology.
The growth of large dairy companies will be encouraged in the next 5 years in order to “build” 3 to 5 companies with turnovers above USD 807 M by the end of 2018. The aim is to reduce the number of dairy companies to 50, improve the quality of infant formula & the global competitiveness of domestic players.

August 17th / China Daily

CATHAY CAPITAL PE invests in refrigerated transport company

Franco-Chinese firm CATHAY CAPITAL PE will purchase a stake in SHANGHAI ZHENGMING MODERN LOGISTICS CO (China) for USD 20 M. The target company provides supply chain solutions in China. This came amid other investments in China’s logistics industry by PE firms. CATHAY CAPITAL has plans to invest in small & medium-sized French companies that can expand into China or Chinese SMEs that could benefit from Western expertise.

August 20th / Wall Street Journal, Money Beat


Wine & Spirits

USL fully acquires FOUR SEASON WINES

UNITED SPIRITS LIMITED (India) has acquired the remaining 49% stake in its JV, FOUR SEASON WINES from the Sharad Pawar family. USL’s core business is in importing wines from all over the world to offer a diverse portfolio while FOUR SEASON’s is to produce wine from grapes grown at its own winery. Through this JV, USL has entered into India’s premium domestic wine sector.

LTM June 2013 Revenue of USL: USD 1.618Bn
EBITDA Margin: +12%

August 2nd / Deal Curry


Food Ingredients

TATE & LYLE looking for acquisitions

TATE & LYLE (GBR), global provider of F&B ingredients, is looking to acquire companies with high-quality assets with ~USD 580 M worth of cash & equivalents. It will consider any opportunity which provides a platform for growth regardless of the size. The Company expects smaller bolt-on size acquisitions which will not have huge material impact to the business. Its latest deal was a 51% acquisition of JIANGSU HOWBETTER FOOD (China), a provider of ingredient blends & stabilizers for the dairy industry, in July 2013.

July 24th / Company Announcement

SYMRISE eyeing to acquire start-ups in emerging markets

German flavour and scent maker SYMRISE is focusing its acquisition strategy on food technology start-ups in emerging markets in Asia and the Americas. This comes in line with its diversification strategy into nutritional supplements, after the 2012 acquisitions of PROBI (12% stake) and INDEVEX BIOTECH (minority stake), two Swedish food ingredients developers.

Revenue: EUR 1.7Bn
EBITDA Margin: +19%

August 3rd / Reuters

HEALTH & BEAUTY

Luxury

TAMBURI INVESTMENT PARTNERS invests in high-end clothing brand MONCLER

The Italian investment fund TAMBURI INVESTMENT PARTNERS (TIP) has announced the acquisition for EUR 103 M, of a 14% stake in RUFFINI PARTECIPAZIONI (Italy), a group owner of additional famous brands such as MONCLER, HENRY COTTON’S, MARINA YACHTING, (…).

2012Turnover: EUR 624M (CAGR 2010-2012: +20%)
EV/ EBITDA: 12.5x

August 7th / Fashionmag

Robust growth of gold consumption in China

According to the China Gold Association, “China is on track to become the top bullion consumer in 2013”. In the first half of 2013, China’s gold consumption reached a YoY growth of 54% to 706 metric tons. 90% of total gold consumption were via 2 main segments: Jewellery (+44%), & gold bars (+87%). 70% of first half gold purchases in China came from imports, even if Chinese output showed a +8.9% increase vs. 2012.

August 13th / China Daily


Healthcare

South Korean pharma companies set sights on overseas markets

Seeking new profit engines, South Korean pharmaceutical companies are looking to overseas markets. Combined exports of South Korean drug makers rose 47% YoY to USD 1.2 Bn in 2012. This was attributed to the government’s policy to lower drug prices by an average of 17% effective April 2012. Local companies are rushing to takeover overseas drug makers to create an overseas presence.

August 4th / YonHap News

STADA acquires THORNTON & ROSS

The German generic drugmaker STADA acquired a 100% stake in British drug manufacturer THORNTON & ROSS for EUR 259 M. STADA is a global pharmaceutical leader developing active ingredients for healthcare and pharmaceutical markets worldwide. THORNTON & ROSS is UK’s largest independent OTC pharmaceutical manufacturer.

Revenue: EUR 69 M (2012)
EBITDA margin: 20% (vs. 25% in 2011)
EV/EBITDA: 18.9x

August 16th / Pharma Times, Reuters, Capital IQ

PHARMSTANDARD acquires BEVER PHARMACEUTICAL

The N1 Russian pharmaceutical company PHARMSTANDARD acquired BEVER PHARMACEUTICAL based in Singapore, for USD 590 M. BEVER is expected to form part of a spin-off since PHARMSTANDARD is planning on creating its own branded, non-prescription drugs.

August 22nd / Fusacq, Bloomberg


Cosmetics & Toiletries

JAHWA GROUP seeking foreign M&A targets

Cosmetics company SHANGHAI JAHWA GROUP (China) is planning to buy foreign brands to expand product lineup and tap into global markets. The company has abundant cash flow and is keen on acquiring potential foreign targets which would be cheaper than domestic ones. JAHWA posted revenues of USD 729 M in 2012 and has a product portfolio of 10 domestic brands.

August 7th / ECNS

VLCC acquires GVIG

VLCC (India), a wellness & slimming firm, acquired 80% stake of GVIG (Singapore), a manufacturer of beauty & wellness products, for ~ USD 30 M. The acquisition would give VLCC a basket of high-end cosmetics & skin products, as well as an upgrade to its R&D capabilities. VLCC also plans to bring in GVIG’s products into India in September.

August 13th / Deal Curry

L’OREAL acquires MAGIC HOLDINGS

The world’s largest cosmetics group L’OREAL (France) acquired 100% stake of the Hong Kong facial mask leader MAGIC HOLDINGS for EUR 636 M. With 26% of market share controlled by MAGIC HOLDINGS, L’OREAL will now have a solid foothold in the facial mask segment.

EV/Revenue: 3.7x
EV/EBITDA: 19.3x
EBITDA margin: 19%

August 15th / Le Figaro, Business Report, Capital IQ


Fashion

BESTSELLER acquires 10% of ZALANDO

The Danish fashion wear producer BESTSELLER bought 10% of shares of ZALANDO (Germany), Europe’s biggest online fashion retailer. A booming e-commerce market is observed with apparels and accessories being the main purchases made. China is the largest e-commerce marketplace in the world, led by ALIBABA. Online retail revenue in China in 2012 is estimated to be USD 200 Bn (6% of China’s total retail spending) with only 43% internet penetration.

August 13th / Fashionmag & Reuters

INDUSTRY & CLEANTECH

Water Treatment

SEMBCORP to spend SGD 62 M on 2 wastewater treatment plants in China

SEMBCORP (Singapore) has announced the expansion of its water business in China’s Liaoning province with 2 agreements to build wastewater treatment plants. The 1st agreement will be a JV to build, own & operate a USD 24 M plant to serve industrial customers in the Panjin Fine Chemical Industrial Park (PFCIP). The 2nd agreement to be signed will be non-binding and will cost SGD 38 M.

August 28th / Singapore Business Review


Renewable Energy

NAGARJUNA AGRICHEM to sell its wind business

NAGARJUNA AGRICHEM (India), a manufacturer of pesticide formulations & fine chemicals, plans to sell its entire wind business for USD 5 M to focus on its core business. It also plans to set up a new corporate R&D center. The divestment follows the wind sector trend in which fringe players try to sell their assets to the companies whose core business is wind power generation.

July 30th / Deal Curry

GE ENERGY invests in GATI INFRASTRUCTURE’s hydro-electric project

Express distribution & supply chain solutions leader GATI INFRASTRUCTURE (India) has invested in a hydro-electric project in Sikkim via a share subscription agreement with GE ENERGY FINANCIAL SERVICES (India) investing USD 43 M. GE ENERGY recently completed the acquisition of 30 wind farms in France & GATI is looking to further expand its renewable energy portfolio.

July 30th / Deal Curry


Testing, Inspection & Certification

BUREAU VERITAS purchases SIEVERT INDIA

BUREAU VERITAS (France) has acquired SIEVERT (India), a non-destructive testing (NDT) & related industrial inspection services provider in India & West Asia. The deal augments BV already dominant position in the TIC industry by bringing additional capabilities in advanced NDT & added value to clients in numerous industries.
SIEVERT Revenue: USD 42 M

August 21st / Capital Finance les Echos

BUREAU VERITAS acquires KANAGAWA BUILDING INSPECTION

BUREAU VERITAS (France) concluded its fourth acquisition this year by buying KANAGAWA BUILDING INSPECTION (KBI) from Japan which specializes in building inspection and certification services. This acquisition will enable BV to extend its geographic presence in the country, strengthen its client base and increase its market shares in Building Conformity Assessment services.

LTM March 2013 Revenue: EUR 8 M

August 21st / Capital Finance les Echos

NEW TECHNOLOGIES

Payment Solutions

SINGTEL & VISA announce mobile payment alliance

SINGTEL (Singapore) & VISA (USA) have announced an alliance that will enable consumers in Singapore & Australia to pay using smartphones at all VISA payWave points through NFC technology. Payments will not only be limited to these 2 countries for e-commerce transactions online as they can be made using VISA accounts that have been linked to SINGTEL’s mCash accounts.

August 1st / Today Online

CVC CAPITAL PARTNERS acquires SKRILL

The European fund CVC acquired an unknown majority stake in British company SKRILL, provider of online payment and digital wallet services, from INVESTCORP for EUR 600 M. CVC has recently announced several transactions, including the acquisition of assets from CAMPBELL SOUP Europe.

Revenue: EUR 200 M (2012)
EBITDA margin: 25%

August 22nd / Fusacq, Capital IQ


Electronics

SAMSUNG announces the acquisition of NOVALED Group

CHEIL INDUSTRIES, a subsidiary of the Korean group, SAMSUNG ELECTRONICS announced the acquisition of a 90% stake of the German company for EUR 260 M. The remaining 10% is owned by NOVALED SAMSUNG VENTURE INVESTMENT (South Korea). The German company specializes in organic light-emitting diodes (OLEDs) worldwide.

EV/Revenue: 10x
EBITDA margin: 24.4%

August 12th / Boursier, Capital IQ


E-Media

SINGTEL invests USD 10 M into FAB

FAB (USA), a design-focused e-commerce site has secured an additional USD 10 M in funding from SINGTEL INNOV8 (Singapore), the VC arm of SINGTEL GROUP. SINGTEL would be a key partner in enabling FAB to expand in Asia. Additionally, FAB has recently acquired USD 150 M in new funding and is expecting to raise USD 100 M more. FAB has a history of expanding via acquisitions and may be looking to acquire startups in Asia.

August 1st / Tech Crunch

NXTGEN DATACENTER raises funds from INTEL CAPITAL

NXTGEN (India), which provides data storage services to corporations, has raised USD 9 M from INTEL CAPITAL (USA) in a first round of funding. The company has a cloud data storage center in Bangalore and plans to launch two more in Delhi & Mumbai. Demand for data center & storage services in India has been growing as large corporations look to outsource storage of basic data.

August 13th / Deal Curry

BAIDU to pay USD 160 M for stake in NUOMI

BAIDU, China’s largest search engine provider, will acquire a stake in the wholly-owned subsidiary of social network company RENREN INC (China), NUOMI HOLDINGS (China). BAIDU will purchase newly issued ordinary shares of NUOMI, a group-buying & local information service (similar to GROUPON). The acquisition will complement BAIDU’s existing mobile location-based services (LBS) & maps platforms.

EV/Revenue: 2.3x

August 23rd / The Business Times & Yahoo Finance

HIGH CO acquires start-up PROMOLAND

Young start-up PROMOLAND (France), a pioneer in promotions on smartphones, has technology that allows the sending of targeted promotions through receipt analysis. HIGH CO SA (France) provides marketing solutions to retailers and consumer good brands in France and internationally.

HIGH CO Revenue: EUR 132 M (2012)

EBITDA margin: 10%

August 26th / Fusacq & Reuters

PLAYTECH is looking to spend over EUR 600 M on acquisitions

The UK gaming software developer for betting firms is looking to spend over EUR 600 M on acquisitions, taking advantage of the increasing number of people betting on bingo and sports using their mobile phones and tablets. This comes after the acquisition of POKERSTRATEGY.COM last July for EUR 38.3 M.

Revenue (H1 2013): EUR 177 M (+15% vs. H1 2012)

EBITDA margin (H1 2013): 45% (+13 % vs. H1 2012)

August 29th / Reuters

AUFEMININ.COM willing to develop through acquisitions

With good turnover results for H1 2013 of EUR 29 M, the French website publisher AUFEMININ.COM is willing to intensify its investments in H2 of 2013 through acquisitions. This statement comes after it has accelerated its overseas development with the launch of wewomen.com in June for the US market.

Revenue (2012): EUR 55 M (+17% vs. 2011)
EBITDA margin: 30%

August 29th / Fusacq & Capital IQ

China to become e-commerce market leader

China’s e-commerce market is expected to reach USD 250 Bn in 2015 (vs. USD 75 Bn in 2011). Consumer-to-consumer (C2C) sites such as TAOBAO dominate the online marketplaces with 80% market share. However, B2C is showing a robust growth of CAGR +160% (2009-2012) & expected CAGR of +53% (2012-2015) driving the expansion of China’s entire e-commerce industry.

August 28th / China Daily & Bain & Co