Deal Capsule Transactions in Chemicals & Pharmaceuticals April 2017
“
M&A in Life Sciences continued apace, particularly with strong interest for biotech assets in oncology. Consolidation in the paints and coatings sector drives high levels of Chemicals M&A.
”
VIR LAKSHMAN | HEAD OF CHEMICALS & PHARMACEUTICALS, KPMG IN GERMANY
HIGHLIGHTS
FIGURE 1: TRENDS IN PHARMACEUTICALS M&A
—— M&A continues to be brisk with the number of completed deals in both sectors remaining at a high level. One pharmaceutical deal completed in Q1 2017 broke the $10 billion mark. Chemicals saw a deal above $20 billion being announced. —— Big pharma players continue to acquire biotechs, particularly in the oncology area. Venture Capital is also increasing investments in biotech assets. —— Transactions in Chemicals focused on paints and coatings and plastics. —— US and China remain the most active countries. Japanese companies were more active and participated in some large deals. —— KPMG’s Deal Thermometer indicates that the environment for M&A activity will remain moderately strong in both pharmaceuticals and chemicals.
755
722
100
79
2011
2012
797
697
821
778 204
69
170
298
2013
2014
2015
Deal Value in $ bn.
180
36
28
185
2016 Q1 2016 Q1 2017 Number of Completed Deals
Sources: Thomson One, KPMG Analysis
FIGURE 2: TRENDS IN CHEMICALS M&A
883
872
83
34
2011
2012
829
776
806
53
60
76
2013
2014
2015
Deal Value in $ bn.
774
72
181
183
14
10
2016 Q1 2016 Q1 2017 Number of Completed Deals
Sources: Thomson One, KPMG Analysis
DEAL THERMOMETER Q1 2017 KPMG’s Deal Thermometer signals the environment for M&A deals in chemicals and pharmaceuticals. It combines the appetite for deals (changes in forward P/E ratios) with the capacity to fund deals (changes in Net Debt/ EBITDA multiples). ‘Hot’ signifies an environment conducive to deal-making. HOT
PHARMACEUTICALS DEAL APPETITE (Forward P/E ratio)
DEAL CAPACITY (Net debt/EBITDA)
CHEMICALS DEAL APPETITE (Forward P/E ratio)
MODERATE
15.1
14.9
14.3
16.0
DEAL CAPACITY (Net debt/EBITDA)
1.3x 0.9x
0.8x 0.5x 37%
6% 31 Mar 2016
31 Mar 2017
31 Mar 2017
Sources: Capital IQ, KPMG Analysis
4% 31 Mar 2018
COOL
31 Mar 2016
31% 31 Mar 2017
31 Mar 2017
Sources: Capital IQ, KPMG Analysis
31 Mar 2018