1. PRIVATE EQUITY ACQUISITIONS
Daily Journal Western M&A/Private Equity Forum
October 11, 2018

2. Craig W. Adas Partner Weil, Gotshal & Manges
Private Equity Panel
John-Paul Bogden
Partner Blake, Cassels & Graydon
Todd Cleary
Partner Wilson Sonsini Goodrich & Rosati
Craig W. Adas Partner Weil, Gotshal & Manges
Michael J. Kennedy
Partner
Paul Hastings
Sanjeet Mitra
Managing Director
Sumeru Equity Partners

3. Competitive Environment
Parties competing with PE Sponsors:
Corporate Buyers
Active Pension Funds
Sovereign Wealth Funds
Family Offices

4. Private Equity Fundraising
Both the number of funds closed and aggregate capital raised in the first half of fell compared to 1H 2017

5. Private Equity Fundraising
Record levels of dry powder available for PE Sponsors

6. Limited Partner Co-Investment
Co-investment by LPs anxious to deploy large amounts of capital continues a trend observed since 2014

7. Deal Trends
Valuation Multiples

8. Deal Trends
Auctions continue to be extremely competitive, and funds continue to explore creative alternatives to traditional processes, exploiting speed, relationships with management, and regulatory certainty to pre-empt traditional auctions.
Valuations, driven in part by hot stock markets, synergies and accumulated cash of strategics, continue to be seen by PE investors as the greatest challenge faced by PE in
Compressed timeline
Impact on due diligence
More third party advisors
Debt financing post-closing
Debt terms

9. Deal Trends
Continued reliance on R&W Insurance

10. Deal Trends Indemnification Deal Certainty remains key consideration
Continued trend for walk-away deals in 2018
Continued trend towards use of R&W Insurance
Special issues with end-of-life funds
Deal Certainty remains key consideration
Seller-favorable antitrust standard
MAE standard for R&W bring-down and MAE definition
Challenges facing foreign buyers
Breakage fees / equity backstops

11. Deal Trends
Increasing proportion of sponsor-to-sponsor deals

12. Other Trends Serial re-financings and dividend re-capitalizations
SPACs