Global M&A recovery to continue into Q1 2020, says new report

BY Fraser Tennant

Global M&A activity over the six months ending Q1 2020 is expected to increase by around 6 percent year-over-year (YOY), according to a new Intralinks report.

In its ‘Deal Flow Predictor’, a quarterly prediction of future trends in the global M&A market, Intralinks forecasts a continuing M&A recovery – a major uptick from the  7 percent YOY decline in worldwide deal announcements in H1 2019.

The report’s insight is based on analysis by financial markets data and infrastructure provider Refinitiv and Intralinks, using predictive models to forecast the volume of new deal M&A announcements worldwide over the next six months.

Drilling down, in Europe, the Middle East & Africa (EMEA), Intralinks’ predictive model forecasts that the number of announced M&A deals is expected to increase by around 5 percent YOY over the six months ending Q1 2020. In North America, the number of announced M&A deals is forecast to increase by approximately 7 percent YOY over the same period.

Among other key findings, the strongest growth in deal announcements is expected to come from the technology, media and telecoms (TMT), materials and energy & power sectors.

“The Deal Flow Predictor forecasts the volume of future M&A announcements by tracking early-stage M&A activity – sell-side M&A transactions across the world that are in preparation or have begun their due diligence stage,” said said Philip Whitchelo, vice president of Intralinks. “These early-stage deals are, on average, six months away from their public announcement.”

Report: Deal Flow Predictor: forecast of global M&A activity through Q1 2020

eBay sells StubHub to viagogo in $4.05bn deal

BY Fraser Tennant

In a combination that forms a global live experiences marketplace, eBay is to sell its ticket exchange and resale company StubHub to online ticket marketplace viagogo in a deal valued at $4.05bn.

The definitive agreement is expected to see the complementary marketplaces of San Francisco-based StubHub and London-based viagogo sell hundreds of thousands of tickets daily across more than 70 countries.

“We believe this transaction is a great outcome and maximises long-term value for eBay shareholders,” said Scott Schenkel, interim chief executive of eBay Inc. “Over the past several months, eBay’s leadership team and board of directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub.“

Founded in 1995, eBay is one of the world's most vibrant marketplaces. In 2018, it enabled $95bn of gross merchandise volume.

“It has long been my wish to unite the two companies,” said Eric Baker, founder and chief executive of viagogo and co-founder of StubHub. “I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future. Buyers will have a wider choice of tickets and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans – more choice and better pricing.”

Mr Baker co-founded StubHub while in business school but left before the business was sold to eBay for $310m in 2007.

“Bringing StubHub and viagogo together will allow us to drive further expansion and innovation, and create a more competitive offering for live event fans globally,” added Sukhinder Singh Cassidy, president of StubHub. “This provides a great opportunity to expand our business, pursue new partnerships and execute our strategy. We expect a seamless transition for all our employees, partners and customers, and we are excited for what the future holds.”

The sale of StubHub is expected to close by the end of the first quarter of 2020, subject to regulatory approval and customary closing conditions.

News: EBay to sell ticketing unit StubHub for $4.05 billion

LVMH goes shopping at Tiffany’s

BY Richard Summerfield

The world’s biggest luxury group LVMH has agreed to acquire US jeweller Tiffany & Co in a deal worth $16.2bn.

The deal will see Tiffany shareholders receive $135 per share held in cash, a premium of 7.5 percent over Tiffany’s closing share price on Friday, and more than 50 percent above where it stood before LVMH’s interest emerged. The acquisition of Tiffany will strengthen LVMH’s position in the jewellery space and further increase its presence in the US.

LVMH first approached Tiffany in late October with a $14.5bn bid which was rejected as too low. The higher offer has been approved by the boards of both companies but is still subject to the approval of Tiffany’s shareholders. The deal is expected to be completed by the middle of next year.

“We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewellery world, to the LVMH family,” said Bernard Arnault, chairman and chief executive of LVMH. “We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”

“Following a strategic review that included a thoughtful internal process and expert external advice, the Board has concluded that this transaction with LVMH provides an exciting path forward with a group that appreciates and will invest in Tiffany's unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders,” said Roger N. Farah, chairman of the board of directors of Tiffany.

LVMH expects the deal, which will be financed by bond issues, will add around €500 to €600m to its operating profits in the first 12 month.

The deal for Tiffany is the latest in a succession of notable deals for LVMH, which has built up a large portfolio of luxury brands across different retail sectors, including Moët & Chandon, Dom Perignon, Givenchy and Louis Vuitton.

News: LVMH aims to restore Tiffany's sparkle with $16.2 billion takeover

Demand for M&A insurance grows

BY Richard Summerfield

There has been a notable increase in demand for M&A insurance, according to a new report from Aon.

The report, ‘Insurance for M&A: a coming of age and an exciting future ahead’, notes that following a decline in M&A activity after the 2008 financial crisis, the volume of deals reached pre-recession values in 2015 and has increased ever since. The recent economic environment has been favourable for M&A, as interest rates have remained low, company balance sheets are stronger, and deal activity has risen significantly among private equity firms.

According to the report, 3200 deals were transacted globally using warranty and indemnity (W&I) insurance in 2018. W&I insurance is the largest insurance product by premium volume, however buyers and sellers are also looking to tax insurance, litigation and contingency insurance, and bespoke products that include environmental or cyber policies. The market value for transactional liability solutions reached $2.3bn in 2018, a 35 percent increase from 2014.

“Buyers, sellers, and legal and professional service firms are fully aware of the value of insurance during the transaction process, and this has culminated with improved infrastructure within the insurance market,” said Alistair Lester, chief executive of Aon M&A and Transaction Solutions for EMEA. “Insureds now have access to more sophisticated products, a wider choice of providers, larger coverage limits, lower premiums, and services such as capital advisory and consultancy.”

“For an insurer or an MGA, working out how best to capture the opportunities begins with an understanding of the likely evolution of the marketplace. We have developed forecasts for the growth of the marketplace in Europe, including the products that will dominate, evolutions in coverage and how local markets will operate,” said Rohan Dixon, chief executive and president of Aon Inpoint. “This enables us to help insurers identify where the opportunities are, how to access them and how they can improve their capabilities and offerings to better serve buyers and sellers in the M&A environment.”

Report: Insurance for M&A: a coming of age and an exciting future ahead

Blackstone takes £3bn majority stake in MagicLab

BY Fraser Tennant

As part of its push to invest in companies with robust growth profiles, PE firm Blackstone is to acquire a majority stake in dating app startup MagicLab for $3bn.

Founded in 2006 by its chief executive Andrey Andreev, MagicLab’s suite of brands – which includes the dating and social networking apps Bumble and Badoo – has connected and transformed the lives of over 500 million people around the world across dating, social and business.

Constantly seeking new ways to drive long-term growth, Mr Andreev has been at the forefront of innovation in the dating industry and has continued to invest in finding the most talented entrepreneurs and tech visionaries to mentor.

“Blackstone presented MagicLab with a great opportunity to further develop the brands and platform, and I am confident Blackstone will take MagicLab to the next level in terms of growth and expansion,” said Mr Andreev. “I am incredibly proud of the company, and of how we have connected millions of people around the world.”

As part of the acquisition, Mr Andreev will be selling his stake and stepping down from the business. He will be replaced as chief executive by Whitney Wolfe Herd, founder and chief executive of Bumble, who, together with Blackstone, will work to accelerate the business’ growth even further.

“At MagicLab, I have had the pleasure of working with some of the best and most talented entrepreneurs,” continues Mr Andreev. “My aim now is to ensure a smooth and successful transition before I embark on a new business venture in search of innovative leaders with new and exciting ideas. I am grateful for all the support of my partners and employees over the years as we could not have gotten to this point without them. I wish MagicLab and Blackstone every success.”

Mr Wolfe Herd added: “This transaction is an incredibly important and exciting moment for Bumble and the MagicLab group of brands and team members. Blackstone is world-class at maximising the success of entrepreneur-led companies, which presents a tremendous opportunity.”

Martin Brand, a senior managing director at Blackstone, concluded: “We look forward to partnering with MagicLab to help fuel the company’s continued expansion in the years ahead.”

News: Blackstone acquires dating apps Bumble, Badoo