PE Webinar: Sourcing Strategies fr from ‘Best in Class’ Originators Featured Speakers: Nadim Malik, Founder and CEO, Sutton Place Strategies Heather Madland, Principal-Business Development, Huron Capital David Ramazetti, Managing Director, Vector Capital Sam Valenzisi, Managing Director, Lincoln International Moderator : David M. Toll, Publisher, Private Equity Career News
Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – PE Activity Sponsor Buyouts by Deal Size (EV MM) 1,600 1,400 75 61 169 78 1,200 59 # of Closed Deals 187 165 52 169 1,000 147 473 450 800 490 416 406 600 400 676 605 552 532 511 200 0 2015 2016 2017 2018 2019 10-49 50-249 250-999 1000+ Footnotes: 1: New platforms, all industries, 10+ MM EV, based in North America, with private equity buyers Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – PE Activity Buyouts vs Addons 2,600 2.00 2,400 1.90 1.82 2,200 1.80 2,000 1.70 # of Closed Deals 1.70 1,800 1,600 1.60 1.50 1.48 1,400 1.43 1.50 1,200 1.40 1,000 800 1.30 600 1.20 400 1.10 200 1,196 1,708 1,116 1,649 1,303 1,948 1,393 2,375 1,265 2,306 0 1.00 2015 2016 2017 2018 2019 Buyouts Addons Addons per Buyout Footnotes: 1: New platforms and addons, all industries, 10+ MM EV, based in North America, with private equity buyers Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – PE Activity Industry Breakdown 900 809 807 800 738 723 700 654 634 610 582 600 566 # of Closed Deals 557 480 470 500 461 456 397 400 340 335 325 312 284 300 235 213 197 188 185 175 171 200 141 100 67 33 0 2015 2016 2017 2018 2019 2020 Technology Industrial Healthcare Consumer/Retail Energy Footnotes: 1: New platforms and addons, all industries, 10+ MM EV, based in North America, with private equity buyers Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – PE Activity Sponsor Buyouts by Seller Type ¹ Sponsor Exits by Buyer Type ² 70% 70% 66% 60% 60% 58% 57% 60% 60% 57% 56% 52% 49% 50% 50% 44% 42% 40% 37% 40% 30% 28% 27% 30% 30% 27% 20% 20% 13% 12% 11% 10% 10% 10% 4% 3% 2% 2% 0% 0% Equit ity Buyers Corporate Buyers Priva vate selle llers PE selle lers Carveouts ts Mis isc. 2016 2017 2018 2019 2016 2017 2018 2019 Footnotes: 1: New platforms, all industries, 10+ MM EV, based in North America, with private equity buyers 2: New platforms and addons, all industries, 10+ MM EV, based in North America, with private equity sellers Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – PE Dry Powder Other Buyout $830bn Footnotes: 1: Used with permission from Bain & Co., includes data from Prequin Sutton Place Strategies | 757 Third Ave New York, NY 10017
eses State of the Market – Impact of Covid19 PE Deals Closed in March, YoY 400 300 200 100 0 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Median Deals Sourced by Sponsors in March, YOY 100 80 60 40 20 0 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Footnotes: 1: All deal types, all industries, 10+ MM EV, based in North America, with private equity buyers 2: Median # of deals originated in the month of March, by a consistent sample of generalist private equity buyers Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – Previous Recessions Median IRR of Realized North America Buyouts 1.7x 2.3x MOIC 1.9x 2.3x Footnotes: 1: Used with permission from Bain & Co., includes data from CEPRES Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – PE Multiples Deal Prices In the GFC: Hit New Highs -2X (9.7X to 7.7X) Average EBITDA purchase multiple on LBO transactions USA only Footnotes: 1: Used with permission from Bain & Co., includes data from S&P Capital IQ Sutton Place Strategies | 757 Third Ave New York, NY 10017
State of the Market – Previous Recessions Pre-GFC Post-GFC Median IRR of realized buyouts (‘09 - ’11, North America) Median IRR of realized buyouts (‘05 - ’07, North America) By entry EV / EBITDA By entry EV / EBITDA Footnotes: 1: Used with permission from Bain & Co., includes data from CEPRES Sutton Place Strategies | 757 Third Ave New York, NY 10017
es Deal Sourcing During this Unprecedented Time Sourcing Protips: • Mine your pipeline for stale/broken processes • Look for discounted add-ons to shore up your portfolio • Explore new industry niches to surface time-sensitive opportunities • Schedule every meeting you would have had at Intergrowth as a call in the next month • Identify and reach out to advisors focused on turnarounds relevant to your market Spring Cleaning: • Identify newly active intermediaries relevant to your deal criteria • Prioritize relationships by deals sourced/closed/missed and re-tier accordingly • Contact info will go stale – is SPS integrated with your CRM? • Strategize travel planning for when people are back on the road • Identify active portfolio companies at fellow sponsors that may be coming up for sale Sutton Place Strategies | 757 Third Ave New York, NY 10017
es Preparing for Opportunity Ahead: Product Roadmap – Dashboard Renovation Available late April il 2020 • Five new tiles for applying SPS best practices with as few clicks as possible • Dynamic layout – users choose SPS Community Board – expected in late May 2020 which tiles appear and where • Post companies to sell (8 total) • Investment criteria to buy • Choose multiple report • Open job positions • General market commentary periods, directing each tile from one location Sutton Place Strategies | 757 Third Ave New York, NY 10017
Product Roadmap – Data Access Expansion “One -size-fits- all” usually doesn’t fit anyone that well… Planned for Jul July 20 2020 20, each SPS client will New Use Ne se cas ases: • be able to choose what company types Need to search for le lenders in a new (PE, Lender, Law Firm, etc.) are available industry niche? • across the entire SPS Platform: Curious which la lawyers specialize on • Included in Quic ickSearch distressed deals? • • Exportable profiles Want to see what a competitor’s • Linked to SP SPS S Ale lerts sponsor profile looks like? sp • Backfilled transaction history Sutton Place Strategies | 757 Third Ave New York, NY 10017
es Product Roadmap – 1 Degree Networking tool Available Ju July ly 2020 Sutton Place Strategies | 757 Third Ave New York, NY 10017
Presentation Materials Disclaimer & Usage Sutton Place Strategies, LLC (SPS) analysis and reports have been prepared for informational and marketing purposes only and are not intended to be used as a complete source of information on any particular company or trend in the industry. SPS accepts no liability in contract, negligence or otherwise for any error or omission in the information, data, or analysis provided by SPS. SPS does not make any representations, warranties or covenants of any kind, express or implied, and shall have no responsibility or liability for the business or other decisions based upon the use of SPS’s reports or the results obtained from the use of information and reports provided by SPS, or the analysis or interpretation of content or data used in connection with, resulting from or derived from the use of information or reports provided by SPS. All materials in this presentation remain the intellectual property of Sutton Place Strategies. SPS grants a limited, personal, non-exclusive, non-transferable, revocable license to access, display, and use such reports and downloadable content for non- commercial purposes only. Any republication of Sutton Place Strategies’ reports or downloadable content must include proper citation to SPS or be explicitly approved in writing by Sutton Place Strategies’ authorized personnel prior to republication. All rights not specifically granted herein shall be reserved to SPS. Sutton Place Strategies | 757 Third Ave New York, NY 10017
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