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M&A Global MarketInsight & Trends

2020

A surge of fourth quarter deals drove global M&A markets to a total transaction value of $3.5 trillion in 2019, a 3.1% increase over 2018 values. Transaction buoyancy was sustained by a consistent lift in capital markets with 2019 gains on the NASDAQ of 34.6%, the NYSE of 22.2% and the FTSE All-Share Index of 14.0%.

Fourth quarter total global transaction deal value increased by 45% to $980bn in 2019, driven by a large number of mega-deals. Low interest rates combined with strong equity markets, particularly in the United States, drove global M&A activity in the fourth quarter of 2019 despite the U.S.–China trade war, fears of a global recession and unrest in the Middle East.

The most active regions in terms of total deal value and volume in 2019 were North America and Europe, accounting for 53% and 22% of the global transaction deal value, respectively. When combined, these markets represent nearly 75% of the deal value globally. In 2019, North America and Europe represented $1.86 trillion and $781bn in transaction deal value, respectively. Compared to 2018, North American deal value increased by 11.2% from $1.67 trillion, while European deal value decreased by 18.6% from $959bn. Concerns over the impact of Brexit and broader global economics significantly impacted European M&A volume in 2019.

I. ROBUST GLOBAL M&A ACTIVITY CONTINUES IN 2020

Source: Standard and Poor’s

2016 2017 2018 2019 n Value n Volume

Chart I: Global M&A Activity (2015-2019)

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Chart II: Global M&A Activity by Region (2019)

Asia/Pacific 17%

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Source: Standard and Poor’s

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M&A Global MarketInsight & Trends

2020

Momentum in the domestic USA M&A market continued to remain high in 2019. Strategic buyers continued to focus on growth within the U.S. as acquirers took advantage of low borrowing costs and strong balance sheets. Six of the ten largest global transactions in the first five months of 2019 were domestic U.S. deals. Private equity also benefited from the resiliency in the U.S. economy with $596bn raised in new capital.

II. MAJOR GLOBAL TRANSACTIONS 2019Sectors demonstrating the highest international transaction values in 2019 were real estate, healthcare, information technology and industrials. A number of high-profile acquisitions in these sectors occurred throughout 2019. The information technology and healthcare sectors had the greatest number of top ten transactions announced in 2019. The largest announced transaction in 2019 was the $99.6bn acquisition of Celgene Corpo-ration (Nasdaq: CELG) by Bristol-Myers Squibb Company (NYSE:BMY). The buyout gave shareholders a one-for-one share transfer, as well as $50 cash per share and one additional $9 contingent value right, which is triggered if the FDA approves three of Celgene’s pipeline drugs. The transaction created the fourth largest pharmaceutical firm in the United States with a focus on supporting the needs of patients with cancer, inflammatory and immunologic diseases and cardiovascular disease. On November 20, 2019 Bristol-Meyers Squibb announced that it had completed the acquisition of Celgene Corporation. The second largest healthcare transaction and the largest European transaction in 2019 was the $86bn acquisition of Allergan plc (Ireland) by AbbVie Inc. (USA). Allergan shareholders will receive 0.866 AbbVie Shares and $120.30 in cash for each Allergan share. The transaction is expected to close in early 2020. The combined company will create a leader in immunology, hematologic oncology, medical aesthetics, neuroscience, women’s health, eye care and virology. There were a number of high-profile acquisitions in the information technology sector in 2019 as well. The largest transaction in this sector was announced in March 2019 with a $43.6bn acquisition by U.S.

Materials8%

Chart III: Total M&A Transaction Value by Sector (2019)

Real Estate 15%

Health Care 14%

Energy7%

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Consumer Discretionary 9%

Financials7%

Utilities 3%Other 3%

Consumer Staples 3%

Communications Services 6%

Source: Standard and Poor’s

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M&A Global MarketInsight & Trends

2020

fintech group Fidelity National Information Services (NYSE:FIS) of Worldpay Inc. (NYSE:WP), a global payment processing company. This transaction follows on the January 2019 $41.8bn acquisition of payment processor First Data Corporation (NYSE:FDC) by Fiserv, Inc. (NYSE:FISV), suggesting consolidation in the payment processing sectors as firms compete with online transactions and new technology entries into the sector.

III. BREXIT IMPACT Uncertainty surrounding Brexit has impacted the U.K. M&A and European M&A markets over the past three years. However, with the Conservative Party victory in the December snap election, which resulted in a win in 365 of the House’s 650 seats, the U.K. is on a path to exit the European Union. On January 9, 2020 the House of Commons voted overwhelmingly in favor of Prime Minister Boris Johnson’s Brexit Deal. It will now proceed to the House of Lords. Prior to Brexit, the average annual investment into the UK for

Table I: Top 10 Announced Global M&A Transactions in 2019

01/03/2019 11/20/2019 Celgene Corporation Bristol-Myers Squibb 99.6 Health Care Company (NYSE:BMY)

03/27/2019 Pending Saudi Basic Industries Saudi Arabian Oil 94.6 Materials Corporation (SASE:2010) Company (SASE:2222)

06/09/2019 Pending Raytheon Company United Technologies Corporation 93.2 Industrials (NYSE:RTN) (NYSE:UTX)

06/25/2019 Pending Allergan plc (NYSE:AGN) AbbVie Inc. (NYSE:ABBV) 86.0 Health Care

04/24/2019 08/08/2019 Anadarko Petroleum Corporation Occidental Petroleum Corporation 59.9 Energy (NYSE:OXY)

12/18/2019 Pending Fiat Chrysler Automobiles N.V. Peugeot S.A. (ENXTPA:UG) 45.0 Consumer (BIT:FCA) Discretionary

03/18/2019 07/31/2019 Worldpay, Inc. Fidelity National Information 43.6 Information Services, Inc. (NYSE:FIS) Technology

01/16/2019 07/29/2019 First Data Corporation Fiserv, Inc. (NasdaqGS:FISV) 41.8 Information Technology

11/06/2019 Pending HP Inc. (NYSE:HPQ) Xerox Holdings Corporation 38.4 Information (NYSE:XRX) Technology

10/22/2019 Pending The We Company SoftBank Group Corp. (TSE:9984) 28.5 Real Estate

Total: $630.5bn

Announcement Close Target Buyers Total Transaction Sector Date Date Value ($bn)

Source: Standard and Poor’s

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M&A Global MarketInsight & Trends

2020

acquisitions was $40bn from the USA, its largest investing partner. It is estimated that there is substantial pent-up demand for acquisitions and investment into the UK, especially at the current attractive sterling exchange ratio of 1.30 GBP/USD, which represents a 16% decrease over the sustained 1.55 GBP/USD rate pre-Brexit. We anticipate that the combination of attractive exchange rates coupled with continuing low interest rates and debt funding availability will drive more acquisitions into the UK middle market this year.Over the past twelve months, U.K. M&A activity has increased in each quarter from $33.6bn in the first quarter to $88.2bn in fourth quarter. Notable transactions include Kirkbi Invest A/S, the Canada Pension Plan Investment Board and Blackstone Core Equity Partners’ November acquisition of attractions operator Merlin Entertainments for $7.1bn and Apax Plan Investment Board and Ontario Teachers’ Pension Plan Board’s $5.8bn acquisition of satellite operator Inmarsat plc.

IV. INDUSTRIALS The Industrial sector saw tremendous growth in 2019 both in total transaction deal value and number of transactions. Total transaction value increased 22% in 2019 from $337bn in 2018 to $412bn in 2019, while transaction volume increased 9% from 8,502 transactions in 2018 to 8,939 transaction in 2019. The average transaction size for industrial transactions was $180m. Consolidation and technology improvements will continue to be a driving factor in the industrial M&A sector, particularly in the aerospace and defense, transportation and logistics sectors. The largest industrials sector transaction in 2019 was the $93.2bn announced merger of Raytheon Company (NYSE:RTN) and United Technologies Corporation (NYSE:UTX) in an all stock deal. The transaction will create the second largest aerospace and defense company in the world, second only to Boeing. Under the terms of the transaction, United Technologies’ shareholders will own approximately 57%, and Raytheon shareholders will own approximately 43% of the merged company. In October 2019, shareholders for both companies approved the transaction and is currently under regulatory review.

2019 Industrials Transaction Summary

Deal Value ($bn) $411.7bnDeal Volume (Number) 8,939Global Market Share 11.6%+/- 2018 Volume +22.0%Trend Positive

Source: Standard and Poor’s n Value n Volume

Chart IV: UK M&A Activity (2015-2019)

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M&A Global MarketInsight & Trends

2020

V. AEROSPACE AND DEFENSE One subsector of the industrials sector that has seen tremendous growth in transaction value and volume is the aerospace and defense sector. Total transaction deal value increased by 157% to $115.7bn in 2019, and transaction volume increased by 24% to 329 transactions. Of these 329 transactions in 2019, a majority of these companies were based in North America (46%) and Europe (35%). The aerospace and defense sector has increasingly been a market for private equity investment. Several notable transactions were announced or were completed in 2019. In July 2019, Advent International Corporation announced the £4bn take private of Cobham plc (LSE:COB), the UK aerospace and defense supplier. The transaction received regulatory approval in December 2019. The company has extensive military contracts and is a world leader in air-to-air refueling technology. In August 2019, Platinum Equity-backed Pattonair Limited announced the take private acquisition of Wesco Aircraft Holdings, Inc. (NYSE:WAIR), one of the world’s leading distributors and providers of comprehensive supply chain management services to the global aerospace industry for $1.9bn. The transaction completed in January 2020. Additionally, in July 2019, CVC Capital Partners announced the $1.3bn acquisition of Ontic Engineering and Manufacturing, Inc., a leading provider of high-quality, OEM-licensed parts for mature aerospace platforms. The aerospace and defense sector will continue to see a high volume of transactions in 2020. With the rise in global conflicts in the Middle East and the expected increase in defense budgets to $1.9 trillion world-wide, aerospace and defense companies will become attractive targets. Both strategic corporations and private equity firms will look to acquire new technologies such as hypersonic weapons, artificial intelligence and cyber security.

Source: Standard and Poor’s

2016 2017 2018 2019 n Value n Volume

Chart V: Industrials M&A Activity (2016-2019)

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2019 Aerospace and Defense Transaction Summary

Deal Value ($bn) $115.7bnDeal Volume (Number) 329Global Market Share 3.3%+/- 2018 Volume +156.6%Trend Positive

Source: Standard and Poor’s

2016 2017 2018 2019 n Value n Volume

Chart VI: Aerospace and Defense Global M&A Activity (2016-2019)

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M&A Global MarketInsight & Trends

2020

VI. CONSUMER As consumer companies look to diversify product offerings and expand geographic footprints globally, the consumer sector has seen an increase in M&A activity, particularly in the discretionary purchases sector. Total transaction deal value in the discretionary sector has increased 9.7% from $293bn in 2018 to $322bn in 2019. This is in contrast to the staples consumer sector which witnessed a 13% decrease in transaction deal value from $122bn in 2018 to $106bn in 2019. The average transaction across both discretionary and staples consumer sectors was $157m in 2019. Eight of the top ten consumer transactions in 2019 were from the discretionary sector. The largest announced transaction was the $45bn merger between Fiat Chrysler and Peugeot, which will create the world’s fourth-largest carmaker once completed. The combined company will have a portfolio of brands covering, luxury, premium and mainstream car segments. The largest consumer staples transaction in 2019 was the April 2019 $10bn acquisition of cosmetics maker Coty Inc., (NYSE:COTY) by German conglomerate JAB Holding Co. Owned by the Reimann family, JAB Holding Co. is a privately held group focused on long term investments in companies with premium brands and strong growth. Other notable brands include Kuerig Dr. Pepper, Panera Bread, Pret A Manger and Peet’s Coffee. JAB was previously a 40% shareholder in Coty Inc., and with the acquisition of an additional 150m shares, increased their holding to 60%. Brands of Coty Inc. include CoverGirl Makeup, Wella hair products and Clairol.The premium consumer goods sector has been active with a number of high-profile acquisitions in-cluding the $18.6bn October 2019 acquisition of fine silver and luxury goods retailer Tiffany & Co. (NYSE:TIF) by LVMH Moët Hennessy (ENXTPA:MC). The deal should be completed in the second quarter of 2020. LVMH is one of the world’s largest luxury groups and the owner of 75 different brands including Bulgari, Dior, Moët & Chandon, Dom Perignon, Givenchy and Louis Vuitton. Premium consumer brands will continue to be highly attractive to both private equity buyers and strategic corporations as companies try to differentiate customer experiences for consumers particularly in the spirits, leisure and luxury item sectors.

2019 Aerospace and Defense Transaction Summary

Deal Value ($bn) $428Deal Volume (Number) 8,550Global Market Share 12.1%+/- 2018 Volume +3.0%Trend Positive

Source: Standard and Poor’s

2016 2017 2018 2019 n Value n Staples Value n Discretionary Volume n Staples Volume

Chart VII: Consumer M&A Activity (2016-2019)

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M&A Global MarketInsight & Trends

2020

VII. ENERGY INCLUDING RENEWABLES The energy sector is one the most important and active global M&A markets. Total M&A transaction deal value, including renewable energy projects, was $282bn in 2019. This represents approximately 8.0% of the total global M&A Market. Global energy sector activity as measured by transaction volume contracted slightly by 3.0% in 2019, while transaction deal value decreased by 36.6%. The average deal size for energy transactions in 2019 was $307m. One sector that continues to see growth is the renewable energy sector. In 2019, the total volume of renewable energy transactions increased by 17% to 959 transactions, and total transaction value increased 4.5% to $49.2bn. In 2019, the renewable energy sector M&A deal value made up 17.4% of the total energy transaction deal value compared to 10.5% of the total energy M&A transaction deal value in 2018. Renewable energy targets are attracting continued interest from strategic investors, financial sponsors, governments and corporations outside of the energy industry such as Google and Facebook. As governmental policies continue to stabilize and advancement in technologies continues to drive down renewable energy prices, global demand for renewable energy continues to rise. Total renewable energy capacity increased 7.9% from 2,179 gigawatts (GW) in 2017 to 2,351 GW in 2018. The majority of this increase (84%) was driven by new installations of wind and solar energy projects. This growth in demand for renewable energy has had a positive impact on the renewable M&A market. In 2019, there were a number of large transactions in the renewable energy sector; the largest transaction was the announced $8.1bn acquisition of the remaining 47.61% stake in Huaneng Renewables Corporation Limited (SEHK:958) by the Chinese state-owned electric utility China Huaneng Group. Once approved, the China Huaneng Group plans to delist the company in an effort to create a new renewable energy giant through a consolidation with other wind and solar assets. Renewable energy projects increasingly are becoming targets for financial sponsors, including pension funds, asset management firms and private equity funds. The second largest transaction in 2019 was the $6.4bn take private acquisition of Pattern Energy Group Inc. (Nasdaq GS:PEGI) by Canada Pension Plan Investment Board (CPPIB). CPPIB entered the agreement concurrently with Riverstone Holdings LLC. Once acquired, CPPIB and Riverstone Holdings LLC will combine Pattern Energy and Pattern Energy Group Holdings 2 LP (Pattern Development) under common ownership. Pattern Energy has a portfolio of 28 renewable energy projects with an operating capacity of 4.4 GW in the United States, Canada and Japan. Other notable financial sponsor transactions in the renewable sector include the private equity firm Greencoat Capital LLP’s £635m acquisition of Stronelairg and Dunmaglass wind farms from SSE plc (LSE:SSE) and Brookfield Renewable Partners LP’s $500m acquisition of the solar farm provider X-ELIO Energy, S.L.

2019 Energy Including Renewables Transaction Summary

Deal Value ($bn) $282.4Deal Volume (Number) 2,129Global Market Share 8.0%+/- 2018 Volume -36.6%Trend Negative

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M&A Global MarketInsight & Trends

2020

We expect continued growth in the global renewables market in 2020. Further competition from private equity buyers, strategic corporations (including traditional oil and gas companies), technology companies (Such as Google, Facebook and Amazon) and utility companies will drive more demand and competition for renewable projects. For example, National Grid recently acquired wind and solar developer Geronimo Energy in July 2019 for $100m as the company looks to expand its commitment to the decarbonization of the energy system.

VIII. FINANCIALSThe financial sector reported a 9.4% gain in total transaction value in 2019. Total transaction value increased from $237.4bn in 2018 to $259.6bn in 2019, while the volume of transactions decreased by -3.9% from 3,487 transactions to 3,350 transactions in 2019. The largest transaction in the financial sector was the announced $28.4bn acquisition of TD Ameritrade Holding Corporation (NasdaqGS:AMTD) by The Charles Schwab Corporation (NYSE:SCHW) as an all stock deal. This merger between two of the largest publicly traded discount brokers will create a company with more than $5 trillion in client assets.An important subsector within the financial sector is the asset management industry. The asset management sector saw sustained volume in 2019 with 796 transactions compare to 803 transactions in 2018. However, total transaction deal value fell 54.1% from $34.5bn in 2018 to $15.8bn in 2019. Notable transactions include CapitaLand Limited’s (SGX:C31) $4.3bn acquisition of Ascendas Pte Ltd & Sing-bridge Pte. Ltd. from Temasek. The proposed transaction will create the largest diversified real estate asset manager in Asia with combined total AUM of $123.4 billion. Other notable transactions include the $750m acquisition of United Capital Financial Partners, Inc. by The Goldman Sachs Group, Inc. (NYSE:GS) and the $628.8m acquisition of A & J Mucklow Group Limited by LondonMetric Property Plc (LSE:LMP). The Insurance sector saw sustained transaction volume in 2019. Total transaction volume increased by 1.4% from 956 transactions in 2018 to 969 transactions in 2019, while transaction value decreased -50.3% in 2019 from $86.2bn in 2018 to $42.9bn in 2019. This decrease in transaction deal was due to fewer large-scale transactions being closed in 2019. In 2018, there were 11 transactions totaling $52.8bn, each of

Source: Standard and Poor’s

2016 2017 2018 2019 n Value n Volume

Chart VIII: Renewable Energy Global M&A Activity 2016-2019

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2019 Financials Transaction Summary

Deal Value ($bn) $259.6Deal Volume (Number) 3,350 Global Market Share 7.3%+/- 2018 Volume 9.4%Trend Positive

Source: Standard and Poor’s

2016 2017 2018 2019 n Value n Volume

Chart IX: Insurance M&A Activity (2016-2019)

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M&A Global MarketInsight & Trends

2020

which was over $2bn in total transaction size. In 2019, there were only four transactions of greater than $2bn deal size for a total of $16.5bn.The largest insurance transaction in 2019 was the $6.3bn announced acquisition of the Life and Disability Insurance Business of Cigna Corporation by New York Life Insurance in December 2019. The $6.3bn acquisition was the largest transaction in New York Life’s history. The group sells benefits such as life insurance, disability and accident insurance directly to employers. As large insurance companies seek a strategic advantage, insurtech investments will continue to rise. Disruptive technologies such as machine learning, drone technol-ogy, sensors for data usage, and blockchain technology are examples of sectors that will likely see increased demand. From a consumer’s perspective, wearable technology (Apple Watch, Fitbit, etc.) will continue to reshape the industry by providing up-to-date health data, allowing life insurers to regularly adjust mortality charges. In the P&C sector, we see a similar trend with connected cars that allow insurers to track a driver’s individual risk and overall car usage, potentially reducing average premiums.

IX. PRIVATE EQUITY INVESTMENTStrong private equity investment, bolstered by $596bn in new fund raising for 2019, continued to fuel the global M&A market. In 2019, private equity firms had an estimated $1.63 trillion in committed but uninvested capital. This is an increase of $114bn in dry powder or 7.4% more than the total amount available at the end of 2018 and nearly a 44% increase from dry powder available at the end of 2014. The spike in dry powder has been driven by the increased concentration of capital committed to larger buyout funds, which indicates divergence in this market. Recent examples include Blackstone’s $26bn Capital Partners VIII, Advent’s Global Private Equity IX Fund and Vista Equity Partners’ $16bn Partners Fund VII. Buyout funds accounted for 47% ($760m) of the total amount of dry powder. The second largest sector was growth funds, which accounted for 16% ($254m), followed by venture funds 10% ($157m). In 2019, approximately 23% of all trans-action deal value was from private equity buyers.

Source: Preqin2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Chart X: Private Equity Dry Powder Accumulation (2010-2019)

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2020

Given the number of PE firms seeking acquisition opportunities and the limited life cycle of existing investment holdings, the first half of 2020 represents a highly attractive period in which to consider divestment of non-core assets or vintage investments at good valuation, prior to any recession. Private equity firms have record amounts of capital that require investment, and they will belooking to deploy it in 2020.

X. SPACSA record number of 59 Special Purpose Acquisition Companies (SPACs) IPO filings for $13.6bn were launched in the USA in 2019. With volatility in the traditional IPO market, SPACs continued to be an attractive alternative to initial public offerings. SPACs are publicly traded company acquirers that raise capital through a listing with the purpose of acquiring one or more existing companies. The capital is raised through a public offering and held in trust until it is released to fund a business acquisition. SPACs often will target a specific sector in which the SPAC sponsor has significant business experience or operating knowledge to create future value. SPACs will typically have 18-24 months following a capital raise to make an acquisition that must be approved by shareholders; if an investment is not made in the time frame, the funds must be returned to investors.The largest SPAC IPO in 2019 was the $600m public offering of Churchill Capital Corp II (NYSE:CCX) in June of 2019. Churchill Capital Corp II was founded by Michael Klein, who is also the founder and managing partner of M. Klein and Company. This SPAC was not focused on any specific sector. Churchill Capital Corp is the second SPAC undertaken by Mr. Klein. It follows on the successful merger with Clarivate Analytics Plc, a leading global aggregator of intellectual property and scientific information, analytical tools and services, for $4.2bn.There were several notable acquisitions announced in 2019. In December 2019, it was announced that Sports-betting firm DraftKings Inc. would be going public in a business combination with Diamond Eagle Acquisition Corp. (NasdaqCM:DEAC) and technology provider SBTech for $3.3bn. Other notable recent transactions include the December 2019 acquisition of gaming company Gateway Casinos for $1.1bn by Leisure Acquisition Corp. (NasdaqCM:LACQ) and Monocle Acquisition Corporation’s (NasdaqCM:MNCL) announced acquisition of AerSale Corp, a leading integrated global provider of aviation aftermarket products and services. An exit through a SPAC continues to be an appealing alternative to a traditional IPO or trade sale. SPACs offer the ability for sellers to retain shares, generate present liquidity and enjoy the potential of future value. SPACs can be significantly less expensive when compared to a traditional IPO. SPAC buyers are typically highly motivated to complete a transaction.

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M&A Global MarketInsight & Trends

2020

Churchill Capital Corp II NYSE CCX Any Sector 600.0 06/26/2019

Conyers Park II Acquisition Corp. Nasdaq CPAA Consumer Products and Services 400.0 07/17/2019

Gores Metropoulos, Inc. Nasdaq GMHI Consumer Products and Services 400.0 01/31/2019

Haymaker Acquisition Corp. II Nasdaq HYAC Consumer Products and Services 400.0 06/06/2019

Diamond Eagle Acquisition Corp. Nasdaq DEAC Any Sector 400.0 05/10/2019

Juniper Industrial Holdings, Inc. NYSE JIH Industrials 345.0 11/07/2019

Thunder Bridge Acquisition II, Ltd. Nasdaq THBR Financial Technology 345.0 08/08/2019

EverArc Holdings Limited LSE EVRA Any Sector 340.0 12/12/2019

Landcadia Holdings II, Inc. Nasdaq LCA Consumer, Hospitality & Gaming 316.3 05/06/2019

Acamar Partners Acquisition Corp. Nasdaq ACAM Consumer & Retail 305.6 02/21/2019

Total: $3.85bn

SPAC Exchange Ticker Sector Amount Raised ($m) Offer Date

Source: Standard and Poor’s

Table II: Top 10 USA and UK SPAC IPOs in 2019

XI. CONCLUSIONSWe believe that positive momentum in the Global M&A Market will continue in the first half of 2020.• Domestic U.S. M&A Activity should continue to be strong through 2020. The U.S. presidential election

could have some impact on companies and capital markets in the fall of 2020, but we expect an active first half of the year.

• We see stronger momentum in the M&A middle market ($100-$500m) continuing as strategic buyers seek growth and shareholder value by avoiding mega-deals with the potential for added deal costs, increasing regulatory risk and market volatility.

• We expect a boost in domestic U.K. and cross-border M&A activity with the resolution of Brexit as private equity and strategic corporations pursue pent-up demand in the UK Market, particularly for smaller to mid-sized companies.

• Private equity firms will continue to gain M&A market share in 2020, with a record level of $1.6 trillion in dry powder, which is forecasted to increase. Private equity firms will increasingly become bidders for mega-deals ($5bn and above) as an increasing number of funds target new funds of $10bn or more.

• The recent policy of the U.S. Federal Reserve for interest rate reduction will support continuing M&A activity as the cost of debt remains attractive to both private equity and strategic buyers.

• Insurance companies will continue to divest underperforming and non-core legacy businesses. Run-off transactions, the sale of long-tail legacy liabilities for companies that are no longer writing certain types of policies, will continue to be an impactful part of the insurance M&A marketplace.

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This research is not offered as advice or guidance for investment purposes. The research contained herein has been compiled from publicly available sources at the time of publication and may be subject to change without notice.

© COPYRIGHT Winchester Capital 2020. ALL RIGHTS RESERVED.

ABOUT WINCHESTER CAPITAL Founded in 1986 from the Harriman Family Office, Winchester Capital focuses on global strategic research and advisory services for multinational corporations, private equity funds, asset managers, and family offices. We are based in Central London and New Haven adjacent to the Campus of Yale University. We have received six Distinguished International Awards by our industry peer group, M&A Advisor. We offer the highest quality research and generation of direct, non-auction acquisition or joint venture opportunities for our Clients. We also develop and execute divestiture strategies for non-core strategic assets and private equity funds who seek investor liquidity. We have transacted in over 40 countries and have a proven history of cross border expertise and knowledge. Please visit our website at www.winchestercapital.com or contact David Bowen, Ph.D. Managing Director at David.Bowen@winchestercapital.com.

M&A Global MarketInsight & Trends

2020

• Increased defense budgets globally and rising geo-political tensions will create increased M&A activity in the aerospace, technology and defense sectors.

• In the consumer sector, key industry conglomerates will continue to acquire innovative and emerging brands in developed and developing markets, which should continue to drive M&A volume and value in the foreseeable future. We forecast high continued activity in the spirits, technology, luxury goods and leisure sectors.

• We forecast 2020 to be a record year for SPAC IPOs as the quality of the sponsors continues to improve as private equity executives and successful corporate executives utilize SPACs to bring companies public faster than a traditional IPO process.

• The energy sector will see significant investment in 2020. Continued tension in the Middle East could increase oil and gas prices resulting in an increase in M&A activity. Additional investment into renewable projects by corporations and asset managers, combined with advancing technologies that lower costs, will increase the demand for renewable energy acquisitions and support geopolitical energy independence.

• Global growth may diminish in the second half of 2020 according to recent IMF reports, which indicate decreases in growth in emerging markets. This suggests that the timing for both acquisitions and divestitures during the first half of 2020 remains good for valuations given the combination of low prevailing interest rates and buoyancy in international capital markets.