Billion-dollar M&A deals

Mergers and acquisitions (M&A) activity has been “healthy” so far this year, with a number of multi-jurisdictional billion-dollar deals, NZ firms say.

Forecasts for a strong year in the mergers and acquisitions (M&A) space are on track with New Zealand firms seeing healthy levels activity and deals worth billions of dollars.

In the first quarter of 2015, the value of announced M&A deals involving Asia Pacific companies (excluding Japan) totalled US$243.0 billion – a 67.5 percent increase in deal value compared to the first quarter of 2014, according to Thomson Reuters figures.

Completed M&A activity involving APAC companies totalled US$99.6 billion – an 8.3 percent increase compared to the same period in 2014, despite a 13.7 percent decrease in the number of completed transactions.

Minter Ellison Rudd Watts chair and head of M&A Cathy Quinn told NZLawyer that she had seen a reasonable amount of activity, and expected the market to continue to be “healthy and vibrant”.

“There are a lot of Australian and New Zealand entities and global funds which have large amounts of money they want to spend on good quality assets.”

One trend was companies opting to IPO instead.

“The capital markets are still attractive to people, so what might have otherwise been an M&A deal, some people are looking to IPO instead.

“But going to IPO and listing on the New Zealand stock exchange is not for every major shareholder or company, so there’s still a major place for M&A.”

Recent deals Minter Ellison Rudd Watts’ M&A team advised on include instructing Onex, who agreed to acquire SIG Combibloc.

“They [SIG] are the second largest global provider of carton packaging for food and beverage. We advised Onex on that transaction along with Latham and Watkins in London, and that was a transaction over $3b.”

The firm also advised US corporation Brunswick over the acquisition of the business and assets of BLA, a boating marine and industrial products company.

The value of that deal is confidential, she said.

“We advised Abbott Laboratories on its sale of non-US developed markets specialty and branded genetics business, to a company called Mylan Inc. Both those are companies which listed on the New York stock exchange; both global pharmaceutical businesses.”

The transaction value was in excess of US$5billion.

“And there’s quite a lot of IPO activity that we are involved in as well.

“We advised the Chinese party Kuang Chi Science Ltd which took a major stake in Martin Jetpack, and that was pretty instrumental in the Martin Jetpack IPO being successful. That was multi-jurisdictional - Hong Kong, Australia, New Zealand.”

Hudson Gavin Martin special counsel and M&A specialist Charlotte McLoughlin said the firm was seeing a lot of investment transactions of varying sizes and lots of interest from angels and through incubators.

“We’ve actually seen a fair bit from overseas investors who are interested in clever Kiwi entities operating either here or offshore, but who are largely flying under the radar in New Zealand. There’s stuff out there that you just don’t see or hear about.”

“The market’s seen a few listings of the tech kind with the likes of Orion Health and ERoad, and we’re interested in seeing how things pan out in the NXT market. We’ve seen a few exit transactions too,” she said.

Generally this year’s been a bit flatter on the exit transactions side than last year, she said.

“I think that’s a market experience. I know that Australian PE and VC funds are coming back to New Zealand with money to spend, and so it just remains to be seen whether any of our clients will be of particular interest to that investment group.”

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