PE Webinar: Sourcing Strategies fr from Best in Class Originators - - PowerPoint PPT Presentation

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

Sutton Place Strategies | 757 Third Ave New York, NY 10017

State of the Market – PE Activity

Footnotes: 1: New platforms, all industries, 10+ MM EV, based in North America, with private equity buyers 552 511 605 676 532 416 406 450 473 490 169 147 187 169 165 59 52 61 75 78

200 400 600 800 1,000 1,200 1,400 1,600 2015 2016 2017 2018 2019

# of Closed Deals

Sponsor Buyouts by Deal Size (EV MM)

10-49 50-249 250-999 1000+

Sutton Place Strategies | 757 Third Ave New York, NY 10017

State of the Market – PE Activity

1,196 1,116 1,303 1,393 1,265 1,708 1,649 1,948 2,375 2,306

1.43 1.48 1.50 1.70 1.82

1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 1.80 1.90 2.00

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2015 2016 2017 2018 2019

# of Closed Deals

Buyouts vs Addons

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

397 456 634 807 809 185 557 480 582 738 723 171 461 470 566 654 610 141 325 312 335 340 284 67 175 213 188 235 197 33

100 200 300 400 500 600 700 800 900 2015 2016 2017 2018 2019 2020

# of Closed Deals

Industry Breakdown

Technology Industrial Healthcare Consumer/Retail Energy

State of the Market – PE Activity

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

56% 27% 13% 4% 58% 28% 10% 3% 60% 27% 12% 2% 57% 30% 11% 2%

0% 10% 20% 30% 40% 50% 60% 70% Priva vate selle llers PE selle lers Carveouts ts Mis isc.

Sponsor Buyouts by Seller Type¹

2016 2017 2018 2019

52% 49% 60% 42% 57% 44% 66% 37%

0% 10% 20% 30% 40% 50% 60% 70% Equit ity Buyers Corporate Buyers

Sponsor Exits by Buyer Type²

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

Footnotes: 1: Used with permission from Bain & Co., includes data from Prequin

Buyout $830bn Other

eses

Sutton Place Strategies | 757 Third Ave New York, NY 10017

State of the Market – Impact of Covid19

20 40 60 80 100 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020

Median Deals Sourced by Sponsors in March, YOY

100 200 300 400 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020

PE Deals Closed in March, YoY

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

Footnotes: 1: Used with permission from Bain & Co., includes data from S&P Capital IQ

In the GFC:

• 2X

(9.7X to 7.7X)

Deal Prices Hit New Highs

Average EBITDA purchase multiple

• n LBO

transactions USA only

Sutton Place Strategies | 757 Third Ave New York, NY 10017

State of the Market – Previous Recessions

By entry EV / EBITDA By entry EV / EBITDA

Median IRR of realized buyouts (‘05-’07, North America) Median IRR of realized buyouts (‘09-’11, North America)

Pre-GFC Post-GFC

Footnotes: 1: Used with permission from Bain & Co., includes data from CEPRES

es

Sutton Place Strategies | 757 Third Ave New York, NY 10017

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

es

Sutton Place Strategies | 757 Third Ave New York, NY 10017

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

which tiles appear and where (8 total)

• Choose multiple report

periods, directing each tile from one location

SPS Community Board – expected in late May 2020

• Post companies to sell
• Investment criteria to buy
• Open job positions
• General market commentary

Sutton Place Strategies | 757 Third Ave New York, NY 10017

Planned for Jul July 20 2020 20, each SPS client will be able to choose what company types (PE, Lender, Law Firm, etc.) are available across the entire SPS Platform:

• Included in Quic

ickSearch

• Exportable profiles
• Linked to SP

SPS S Ale lerts

• Backfilled transaction history

Ne New Use se cas ases:

• Need to search for le

lenders in a new industry niche?

• Curious which la

lawyers specialize on distressed deals?

• Want to see what a competitor’s

sp sponsor profile looks like?

Product Roadmap – Data Access Expansion

“One-size-fits-all” usually doesn’t fit anyone that well…

es

Sutton Place Strategies | 757 Third Ave New York, NY 10017

Product Roadmap –1 Degree Networking tool

Available Ju July ly 2020

Presentation Materials Disclaimer & Usage

Sutton Place Strategies | 757 Third Ave New York, NY 10017

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

• mission 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.