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1. DIGEST140
May 09, 2014
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Buoyant: MENA M&A Gains Momentum
Fire Sale: PE Bidders Sought in Billion Dollar
Minimax Deal - Draft
Price is No Object in Silicon Valley’s Race for
Technology Dominance
Big Deals: SWFs, Family Offices Go Directly
Into Euro Venture Capital Market
First-Time PE Fundraising Bottoming Out?
Quote of the Week: Getting Emotional Post-
M&A

2. 2
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BUOYANT: MENA M&A GAINS MOMENTUM
First quarter M&A dealmaking in the
Middle East (excl. Israel) was up to
USD 2 billion, double the Q4 2013 val-
ue of USD 1bn, according to Merger-
market data. The region is definitely
trending upward after hitting a low in
2011.
The report said that a mere five trans-
actions represented 85.3% of the total
M&A value in the region during Q1
2014, which means that deal size is
also growing. The top deal was the
acquisition of the Qatari based Bar-
wa Bank by Qatari Diar Real Estate
Investment Company, for USD 0.7 bil-
lion. Foreign investments into the reg-
ion have seen a dramatic increase at over twelve times the value seen in Q1 2013. The Netherlands
invested almost half of the total inbound value in the region. Outbound deals were also dramatically up
104.2% compared to Q1 2013. Excluding 2008, the United Arab Emirates has been the most active out-
bound investor for eight years, accounting for a total of USD 4.4bn (67% of the total outbound value).
Private equity funds are expected to flow to key markets, such as Saudi Arabia, UAE and Turkey, and
the favored sectors are consumer, healthcare and education. (Image source: mergermarket)
FIRE SALE: PE BIDDERS SOUGHT IN BIL-
LION DOLLAR MINIMAX DEAL
This week’s buyout of the week is a rumored sale of Minimax, a Germany-based fire extinguisher
systems and device manufacturer. It is up for sale for USD 1.8 billion in a transaction initiated by its
current PE owner, according to unnamed sources reported by Reuters. Bids are hoped to come from
the likes of Blackstone, Cinven, Permira, CVC and Onex. The valuation would enable its current owner,
IK Investments, to double the money it invested in the group. The Minimax has a little over billion in
revenues. If one of the PE groups win the bidding, it will be the third time the company has been traded
amongst PE owners since Investcorp first purchased it in 2003. (Image source: Minimax website)

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A new study by PrivCo, a data and information provider,
ranks private company ac- quirers by number of acquisi-
tions in 2013. YAHOO! was the top acquirer last year and
it also paid hefty multiples for its purchases, according to
Privco. For example, it paid USD 1.1 Billion for Tumblr,
which was an 84.6x multiple of the previous year’s revenue.
Google was number two with 19 deals. And Autodesk, which
has a very long and very active tradition of acquiring
rivals and innovators, was number three with 11 deals.
The tech M&A is enabled by the high stock prices of
publicly traded tech compa- nies who use their stock as
currency for expensive acqui- sitions and increasing the size
of their “war chests”. Com- ing in at number nine was the
only PE company that made the ranking, Marlin Equity
Partners, which was actually tied in 2013 with IBM, Groupon
and Twitter. See more here. (Image source: Privco)
PRICE IS NO OBJECT IN SILICON VALLEY’S
RACE FOR TECHNOLOGY DOMINANCE
In recent weeks, many of the larger trans-
actions in the European venture capital
market have been led by US investors
and other “unusual” investors, such as
Sovereign Wealth Funds and family of-
fices, according to the latest analysis from
Go4Venture Advisors. Some of the inves-
tors named are Victory Park Capital (credit
investment), Fidelity International (large
institutional investor), GIC Private Limited
(sovereign fund), Vulcan Capital and MSD
Capital (both family offices of high-profile
tech entrepreneurs). Clearly, this is a much more diverse set of investors representing a deep pool
of capital. These developments show how much the European market is maturing, says Go4Venture,
albeit from a base that is far below that of Silicon Valley. The analysts note that there the European
VC market is seeing a “high-energy, cross-border, international” dynamic with a focus on sizable exit
opportunities, rather than risk mitigation, which is more typical for European venture. (Image source:
Go4Venture Monthly Bulletin)
BIG DEALS: SWFS, FAMILY OFFICES GO
DIRECTLY INTO EURO VENTURE CAPITAL
MARKET

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FIRST-TIME PE FUNDRAISING BOTTOM-
ING OUT?
LP sentiment has waned significantly for maiden vehicles in recent years but that may change this
year, according to the latest analysis of fundraising data from Preqin. Since 2011, the amount raised by
first time fund managers has been on a steady year on year decline. While the trend is a tad depress-
ing, there are still some first-time funds that are able to reach a successful close, say the analysts.
An example from 2014 YTD is SwanCap Investment Management which raised USD 1.2bn for its debut
vehicle, SwanCap Opportunities Fund, a secondary buyout fund. The reluctance to invest by LPs stems
from the risks associated with placing their money with a firm that does not have any track record of
success in private equity fund management, says Preqin.
The analysts at Preqin seem optimistic about a change in LP sentiment this year, saying that there are
still three-quarters of the year to go and 2014 “already seems to be painting a promising picture for
first-time fundraising”, with much potential for last year’s figure of USD 35 billion. In other words, the
downward trend may be bottoming out after hitting its peak year in 2007 when first-time private equity
fund managers raised an aggregate USD 96 billion for investment. (Image source: Preqin)
QUOTE OF THE WEEK - UNCORRELATED
RETURNS
The penny really drops when teams can see a shared vision of what the new company looks like. It
shows that the leaders mean business, and creates a sense of excitement about the ambition of the
new organisation.
Who said it: Martin Clarkson, Chairman and Founder of The Storytellers
in Context: With M&A markets heating up to record breaking levels, this quote from
Clarkson is timely. The main focus during due diligence for M&A is often on financials

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and governance, but considering cultural difference is critical factor too, and often overlooked, says a
report recently pub- lished by Mergermarket
and The Storytellers, which is where we found
this quote.
Post-merger, the most important factor
leading to success is “integrating systems
and processes”, and second most important is
“integrating people and cultures”, says the
report, which was based on a survey of 100
senior executives with experience of the
M&A process using a mixture of quantitative and
qualitative questions. The survey results reveal
that making employ- ees feel “emotionally at-
tached” and “proud” of the new organization
created are key factors for an easy integration and “high level of synergies”. Clarkson, who is a high-
profile UK-based corporate communications and management consultant, knows how emotional fac-
tors contribute to M&A success stories. He’s built a thriving He’s built a thriving consulting company
based on helping business leaders do just that and his company website has published case studies to
prove it. His thesis is that if business leaders get the emotional part right, they can drive a workforce
that is determined to achieve a successful outcome. And just how long does it take to get employee
“buy in”? It takes about 48 days, according to 93% of respondents. See the graphic (left) for more in-
sight from Clarkson and his colleagues.
Where we found it: The Storytellers Report - The Missing Chapter

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Editor: Valerie Thompson, Zurich
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