SEPTEMBER 2013

Press Review September 2013

EURO-ASIA M&A TRENDS

Western Europe M&A deal value in August 2013 was worth EUR 21.6 Bn with 1,089 deals concluded. There was a degree of overseas investment in W.European companies with large transactions involving acquirors based in Australia & US. M&A activity favoured the UK in August, with 7 of the top 20 deals featuring companies from the UK.
South-East Asia has remained relatively active. F&B & Consumer Goods are sectors that appear to have increasing appetites for M&As. M&A activity is not confined to inbound investments but also outbound investments with 47 such deals (H1 2013).
According to a report by Grant Thornton, total value of Indian M&A deals in August 2013 reached USD 3.5 Bn. This brings the cumulative value for the 1st 8 months of 2013 to USD 19 Bn. While deal activity remains moderate, the outlook appears bullish & there are significant chances of deal activity in export oriented sectors like IT & Pharma.
According to figures released by market researcher Zero2IPO, China recorded 654 M&A deals in the first 8 months this year (+1.2% YoY). The deals involved a total transaction amount of USD 49 Bn, about 50% more than in the same period of 2012. Zero2IPO predicted the activeness of China’s M&A market would be further promoted in 2013 because the companies planning to be listed were proactively seeking securitization by being acquired by listing companies, and VCs & PEs were quitting investment projects through M&A.

FOOD & BEVERAGE

Beverage

SUNTORY (Japan) to buy GLAXOSMITHKLINE’s (UK) drinks brands

The F&B firm SUNTORY is set to buy GSK’s Lucozade and RIBENA for more than USD 1.6 Bn using funds from its USD 3.9 Bn IPO last July. Its strategy is to strengthen its soft drink business in Europe and N. America.

EV/Revenue: 2.7x

September 6th / AFP & Reuters & Capital IQ

PE groups take large stake in COFFEE BEAN & TEA LEAF (Singapore)

ADVENT INTERNATIONAL (USA), CDIB CAPITAL (China), MIRAE ASSET PE (Korea) & other investors have taken an undisclosed stake in the Singapore-based retailer COFFE BEAN & TEA LEAF. The chain has expanded aggressively in Asia.

September 12th / Reuters & AsiaONE Business

KKR (USA) leading a JV to invest USD 140 M in 2 Chinese dairy farms

KKR, CHINA MODERN DAIRY HOLDINGS & CDH INVESTMENTS are teaming up to build 2 10,000-cow farms over 2 years. KKR & CDH have previously invested in MODERN DAIRY, cashing out earlier this year after 5 years to lock in a profit.

September 23rd / Reuters


Food

INDOFOODS (Indonesia) bids SGD 488 M for CHINA MINZHONG (Singapore)

INDOFOODS who owns 33% of CHINA MINZHONG, has made a buyout offer for the firm despite recent short-selling claims that plummeted the firm’s share price. Managers have no intention of selling shares.

EV/Revenue: 1.0x

EV/EBITDA: 3.4x

September 5th / The Straits Times & Capital IQ

AGRIAL (France) to invest in international expansion

French co-operative AGRIAL raised EUR 95 M from the private bond market to finance international expansion targeting the dairy products and vegetables sectors. AGRIAL & another French co-operative, EURIAL, merged their dairy activities to create France’s second largest co-operative group in the sector.

Revenue: EUR 1.6 Bn

September 18th / Just-Food.com & Factiva

SHUANGHUI (China) to cut stake in the food company CAMPOFRIO (Spain)

SHUANGHUI INTERNATIONAL is willing to reduce its stake to less than 30% (from 37%) in Spanish packaged meat company CAMPOFRIO. It gained CAMPOFRIO through one of the biggest acquisitions of a US business by a Chinese player: the USD 4.7 Bn acquisition of US SMITHFIELD FOODS.

EV/Revenue :0.5x
EV/EBITDA :8.3x

September 27th / Reuters


Wine & Spirits

Chinese JV of SABMILLER (UK) to acquire KINGWAY BREWERY (China)

Brewery SABMILLER’s said CHINA RESOURCES SNOW BREWERIES‚ its JV with CHINA RESOURCES ENTREPRISE‚ has completed the acquisition of the brewery business of KINGWAY BREWERY HOLDINGS for USD 864 M.

September 24th / China Beverage News


Food Ingredients

FERMENTALG (France) to raise EUR 12 M

FERMENTALG a biotechnology company engaged in R&D & production of microalgae for health/nutritionals/cosmetics & aquaculture markets, raised EUR 12 M to increase production capacity & become an international player.

September 17th / AFP

GODREJ AGROVET (India) eyeing buyouts to grow business

GODREJ AGROVET, the farm business unit of GODREJ INDUSTRIES, is exploring R&D partnerships with foreign companies & may consider buying a company to expand its business. GODREJ AGROVET operates in 4 business segments—animal feed, oil palm plantations, agri-inputs & poultry.

September 22nd / LiveMint

HEALTH & BEAUTY

Luxury

VERSACE (Italy) looking to sell up to 20% stake

VERSACE is willing to sell a 15-20% stake, in a deal that would value the group at more than EUR 1.2 Bn. VERSACE wants to strengthen its balance sheet & help fund expansion in overseas markets such as Asia.

Revenue: EUR 409 M (+20% vs. 2011)
EBITDA margin: 12%

September 12th / Reuters & Business of Fashion & Bloomberg

LVMH (France) to acquire NICHOLAS KIRKWOOD

LVMH acquired a majority stake in British shoe designer Nicolas KIRKWOOD’s company for an undisclosed amount. LVMH is willing to expand KIRKWOOD internationally & reinforce its market of creative young designers.

September 20th / Reuters & AFP

RICHEMONT (Switzerland) willing to sell LANCEL (France)

The Swiss group RICHEMONT is finding a buyer for French label of leather goods LANCEL. Acquired in 1997 for EUR 210 M, RICHEMONT is hoping to sell it for EUR 500 M.

September 23rd / Challenge & Le Figaro

CHINA HAIDIAN (HK) sells stake in PRC watch business

CHINA HAIDIAN agreed to sell 51% of RUIHUANG Watch for EUR 3 M to SHIQIAO Investment Management who agreed to take up RUIHUANG’s loans totaling EUR 6 M. HAIDIAN’s disposal was to bolster capital for working capital and future investments.

September 24th / ET Net News Hong Kong

L CAPITAL Asia is keen to exit GENESIS LUXURY (India)

L CAPITAL is in talks with the founders to buyout its 40% stake or sell the Indian luxury brands marketing firm altogether. L CAPITAL first made a 26% investment but is planning to exit the company as it is unhappy with the way it is being run.

September 26th / DealCurry


Healthcare

India approves MYLAN’s (USA) acquisition of AGILA (India)

India’s government has given the green light for MYLAN to acquire AGILA, a vaccine & injectable-drug maker for USD 1.6 Bn. The acquisition allows MYLAN to reach new geographies & make it a global leader in injectable drugs which is set to see robust growth as many drugs come off patent in a few years.

EV/Revenue: 7.3x
EV/EBITDA: 21.5x

September 4th / Financial Times

AIR LIQUIDE (France) looking to sell 66% stake of ANIOS (France)

AIR LIQUIDE is willing to sell a 66% stake of LABORATOIRES ANIOS, hygiene & disinfection manufacturer. ANIOS has been valued at ~EUR 350 M & AXA private equity showed strong interest as a buyer.

EV/Revenue: 2.3x
EV/EBITDA: 13x

September 5th / Les Echos & Usine Nouvelle & Capital IQ


Cosmetics & Toiletries

Singapore market is booming for cosmetics

Rising concerns & awareness about beauty & personal care are driving the cosmetics market growth in Singapore despite its tiny market size. Along with high GDP & luxury spending, RNCOS predicts a CAGR +4% for 2013-2017, well ahead of global growth. Recently, UNILEVER has made a USD 56 M investment to build a training facility in Singapore.

September 3rd / Cosmetics Design Europe

SVENSKA (Sweden) to make a buyout offer of VINDA (HK)

Swedish hygiene and forest products group SVENSKA, who already owns 22% of VINDA, offered to buy the remaining shares of the HK listed company for USD 1.1 Bn, a 38% premium over the last closing price.

EV/Revenue: 1.5x
EV/EBITDA: 10.6x

September 9th / Bloomberg & AAstocks & Reuters

L’OREAL (France) to buy NICKEL brand (France)

L’OREAL acquires NICKEL, a men’s skincare brand owned by INTERPARFUMS for EUR 3 M. In addition to the brand, L’OREAL will own 2 spas in France & the US.

September 12th / Les Echos & Usine Nouvelle

L’OREAL India buys CHERLY’S COSMECEUTICALS (India)

L’OREAL has acquired CHERLY’S COSMECEUTICALS, a professional skin-care products & treatment firm based in Mumbai. This is the 1st acquisition for L’OREAL in India. The acquisition is expected to strengthen L’OREAL’s professional products division, which targets salons & beauty parlors.

Revenue: EUR 3 M (2012)

September 23rd / DealCurry


Fashion

DAMARTEX (France) acquires COOPERS OF STORTFORD (UK)

The French leading apparel distributor DAMARTEX acquired the British COOPERS for EUR 30 M. COOPERS is a multi-channel Home & Garden distributor.

EV/Revenue: 0.9x
EV/EBITDA: 6.7x

September 5th / Les Echos & Fortuneo

FOSUN INTERNATIONAL (China) acquires 35% stake of CARUSO (Italy)

Chinese Conglomerate FOSUN INTERNATIONAL acquired a 35% stake in Italian menswear CARUSO. This comes after other investments in consumer-focused European brands such as French resort CLUB MEDITERRANEE & Greek jeweler FOLLIE FOLLIE Group.

EV/Revenue: 0.6x
EV/EBITDA: 7.7x

September 12th / Wall Street Journal & Capital IQ

INDUSTRY & CLEANTECH

Engineering & Construction

SKM (Australia) & JACOBS ENGINEERING (USA) merge in USD 1.2 Bn deal

Employee-owned SINCLAIR KNIGHT MERZ (SKM) is being bought by NYSE-listed JACOBS ENGINEERING. SKM is looking for expansion into new markets & needed additional scale, diversification & growth opportunities.
EV/Revenue: 1.0x
EV/EBITDA: 7.2x

September 9th / The Australian & Capital IQ

LIXIL Group (Japan) to form a 50-50 JV & buy 88% of GROHE (Germany)

The Japanese building products group LIXIL has agreed to acquire 88% of Germany’s biggest bathroom fittings company GROHE for USD 4 Bn. This is Japan’s largest M&A deal in Germany. GROHE & LIXIL will benefit from European & Asian footprints to expand internationally.
EV/EBITDA: 10.3x

September 27th / Reuters


Electronics

ABB (Switzerland) acquires ELBI ELEKTRIK (Turkey)

ABB acquired a majority stake of Turkish manufacturer of electrical wiring accessories ELBI ELEKTRIK for an undisclosed amount. Through this acquisition, ABB group is to improve its position in the Turkish low-voltage products segment & to expand its existing business in Eastern Europe.

EV/Revenue: 1.4x
EV/EBITDA: 10.1x

September 9th / Fusacq & Company Announcement & Capital IQ


Water Treatment

SUNPOWER GROUP (China) clinches SGD 18 M deal in China

An SGD 18 M contract has been won by SUNPOWER GROUP who is listed on the SGX. Its wholly-owned subsidiary JIANGSU SUNPOWER TECHNOLOGY LTD will supply key equipment for salty wastewater treatment for the Methanol downstream processing project in China.

September 6th / The Business Times


Renewable Energy

NEWQUEST (HK) makes USD 160 M buyout offer to CHINA HYDROELECTRIC

NEWQUEST CAPITAL PARTNERS has made a take-private offer to CHINA HYDROELECTRIC who has been posting losses. NEWQUEST already owns 57% of the company. With a working capital deficiency of USD 81 M there is doubt as to whether the company can continue operations.
EV/Revenue: 5.0x

EV/EBITDA: 7.7x

September 5th / AVCJ & Capital IQ

SUZLON ENERGY (India) enters into a JV with POLY LONGMA (China)

SUZLON ENERGY, the world’s fifth-largest wind turbine maker, has agreed to sell a 75% stake in its Chinese manufacturing unit to POLY LONGMA ENERGY for USD 28 M. SUZLON would retain 25% & operate in a JV with POLY LONGMA.
EV/Sales : 1.1x

EV/EBITDA : 8.8x

September 19th / Reuters & LiveMint

RESPONSABILITY (Switzerland) acquires minority stake in PUNJAB (India)

RESPONSABILITY Investments AG has picked up a minority stake in PUNJAB Renewable Energy Systems. This will drive PRES’ planned expansion into new locations in India & abroad. PRES is one of India’s leading organised fuel aggregation & supply companies focused on agriculture residue.

September 23rd / FRPT Research


Testing, Inspection & Certification

DEKRA (Germany) acquires 60% stake in VTNZ (NZ)

German automotive testing DEKRA has acquired 60% of Vehicle Testing New Zealand (VTNZ) from Motor Trade Association (MTA). The acquisition enables DEKRA to expand outside Europe & into Asia-Pacific.
EV/Revenue: 0.7x

September 25th / ABR Technology Testing & Capital IQ

NEW TECHNOLOGIES

Payment Solutions

NEWFUND (France) reinvests EUR 2 M in LIMONETIK (France)

NEWFUND, ORKOS & DENTRESSANGLE reinvest EUR 2 M in web-based payment solutions expert LIMONETIK. This new investment aims to boost LIOMONETIK’s growth through international developments.

September 2nd / Fusacq & Capital IQ & Le Journal Du Net & Company Announcements


Social Media

LOCALIIZ (HK) acquires NECESCITY (HK)

LOCALIIZ has successfully acquired NECESCITY, the only men’s digital lifestyle guide. NECESCITY will operate as a stand-alone brand focusing on the highly influential English-speaking male segment.

September 20th / PR Newswire


E-Media

YIXIA.COM completes USD 25 M series B financing round

YIXIA.COM (China), a mobile video app company, has completed a USD 25 M series B round of funding led by internet giant SINA CORPORATION. Previous investors such as REDPOINT VENTURES & MORNINGSIDE VENTURES who invested last year were re-investors.

September 2nd / AVCJ

RAKUTEN (Japan) set to acquire VIKI (Singapore)

RAKUTEN, the Japanese e-commerce giant, is expected to buy VIKI for USD 200 M. RAKUTEN’s acquisition of a video streaming company signals its intention to compete against AMAZON & NETFLIX. VIKI has previously raise USD 24 M in publicly-disclosed funding.

September 1st / TechCrunch

TENCENT (China) to acquire 37% stake in SOGOU (China)

TENCENT HOLDINGS acquired a 37% stake in SOGOU for USD 448 M, which is China’s third most popular search engine. The Chinese internet sector is controlled by 3 powerful players; TENCENT & BAIDU.

EV/Revenue: 6.5x

September 18th / Wall Street Journal & Moody’s PR