SEE WHAT’S NEW AND NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 104 - July 19, 2013: - Exit Deal For Grohe’s PE Backers - Buyout Fundraising Climbs to Highest Levels In Four Years - M&A in Financial Technology Dips in 2013 - PE Strategies That Outperform: E&Y Study - Valuation Algorithms: New Markit Technology - Quote of the Week: Silicon Valley Upswing

1. SEE WHATS NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 98
DIGEST104
July 19, 2013
1
2
3
4
Exit Deal For Grohe’s PE Backers
Buyout Fundraising Climbs to Highest Levels
In Four Years
M&A in Financial Technology Dips in 2013
PE Strategies That Outperform: E&Y Study
Valuation Algorithms: New Markit
Technology
Quote of the Week: Silicon Valley Upswing

2. 2
www.DealMarket.com/digest
Exit Deal For Grohe’s PE Backers
(Image Source: EMPEA Deal Dashboard
This week’s deal of the week is a private equity exit worth up to USD 4 billion, namely the acquisition
of German bathroom and kitchen fixtures maker Grohe from its private equity backers, according to
Reuters. The company has attracted takeover interest from Thailand’s Siam Cement and Switzerland’s
Geberit. Grohe is currently owned by TPG and Credit Suisse.
(Image source: Grohe)
Buyout Fundraising Climbs to
Highest Levels In Four Years
PE fundraising hit a high in the US and Europe in the first half of the year, according to LBO Wire, citing
based Dow Jones LP Source data. Almost 300 US-based private equity funds raised USD 103.19 bil-
lion, up roughly 16% from the USD 88.89 billion raised by 258 funds during the same period last year.
A reshaping of portfolios to balance public and private holdings, as well as an increase in exits and
distributions helped to drive money into new funds, said LBO Wire. European figures for PE fundrais-
ing were for the most part up, a trend driven by improved debt conditions and an open IPO exit window.

3. 3
www.DealMarket.com/digest
M&A in Financial Technology Dips
in 2013
Berkery Noyes, an independent mid-market investment bank, says that M&A in the financial technol-
ogy market sector this year is not keeping pace with the peaks of 2012. Its latest study looks at M&A
in the past six months compared to previous half year periods. This market includes information and
technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial
services. Deal volume underwent an eight percent decrease in first half 2013. Transaction value fell 42
percent over the past six months, from USD18.99 billion to USD10.95 billion.
Both volume and value throughout the past two-and-a-half years reached their respective peaks
in second half 2012. When compared to first half 2012, volume increased seven percent and value
dropped 11 percent in first half 2013. The median revenue multiple between second half 2012 and first
half 2013 decreased from 3.0x to 2.1x, while the median EBITDA multiple declined from 11.0x to 9.8x.
The segment with the largest half-to-half year increase in volume was Insurance, driven by large sized
acquisitions by SAP and Oracle.
Trends behind the M&A include taking advantage of big data, addressing holes in data security, adapt-
ing to new regulations, and mobile banking.

4. 4
www.DealMarket.com/digest
New Trend: LPs Seek Local Manag-
ers in Emerging Markets; PEI
PE Strategies That Outperform :
E&Y Study
A new study of North American private equity (PE) by Ernst&Young reveals that growth strategies are
“in” and cost-cutting and value-preservation are “out”. This shift has set the stage for positioning
companies well at the outset of the deal to achieve successful, higher value exits while also driving
higher returns, according to the value creation study. In a volatile M&A environment, PE firms have
consistently proven to be opportunistic investors, utilizing readily available financing to acquire busi-
nesses and refinance portfolio companies, says E&Y.
As a result of the value creation strategies and organic revenue growth, returns are outperforming
comparable public market returns. For exits in the 2006 to 2012 periods, PE has outperformed by a
factor of 5.4, with PE’s strategic and operational improvement initiatives driving a large proportion of
the overall return. In Europe, PE has outperformed public markets by a factor of 3.5 for exits over the
eight-year period from 2005–12, with PE’s strategic and operational improvements accounting for the
largest component of returns. Similar results were found in emerging markets. E&Y’s study of value
creation in Africa, for example, found that PE value creation generated returns of almost double the
Johannesburg Stock Exchange All-Share Index, and in Latin America, PE outperformed the iBovespa
index by a factor of 2.4.

5. 5
www.DealMarket.com/digest
New Trend: LPs Seek Local Manag-
ers in Emerging Markets; PEI
Quote of the Week: India’s PE
Market
“Fundraising is globally tough, though India has fallen off quite a bit
because of a simple reason. Because investors are saying: I have put bil-
lions of dollars in India and not only is it not marked up, it’s stuck. I can’t
keep allocating money indefinitely to India; I need to see some return.”
Who said it: Nikhil Raghavan, a principal at private-equity firm Bain
Capital LLC in Mumbai.
Context: IIn an interview published on Moneybeat, a WSJ blog, Ragha-
van describes the cooling of interest in Indian PE markets due to slowing
economic growth and slow exit opportunities. Bain Capital has been
in India since 2008 and has made several investments, one of which it has exited, according to the
article. The article suggests that fundraising is getting more difficult, in the same way it has in most
other regions around the world. Typically emerging markets have been more robust that Europe, for
example, however it looks like even India is experiencing a slowdown. Overall investment activity in
India is expected to fall this year with private-equity funds to allocate USD 5 billion to USD 7 billion into
Indian companies this year. This compares with investments of USD 9 billion made by private-equity
and venture funds in 2012, according to research firm Venture Intelligence in Chennai. As the quote
above suggests what will reignite the market in India is PE investors returning some of the cash to
their funds’ LPs. trends in Silicon Valley. He confirms an up-cycle based on the stock market being
about as “high as it has ever been” and the fact that his law firm set revenue records in each of the last
three years. Other indicators
Where we found it: WSJ Blogs
Valuation Algorithms: New Markit
Technology
An announcement from Markit, a financial information services company, caught our eye this week
because it is evidence of the shift or expansion to online technologies in the PE industry. Markit an-
nounced in a statement that it has launched “ Markit Portfolio Valuations – Private Equity”, a new valu-
ation service for investors in private, unlisted companies. The service includes the provision of valua-
tions for equity investments in growth and buy-out stage companies.
An article in FN contrasts Markit’s software solution with current valuation services offered by ana-
lysts and specialists employed by corporate finance consultancies. FN says these human resources
offer “stiff competition” to the new technology based solution. The idea behind Markit’s software is to
offer an independent and third party figure based on transparent data. It is meant to remove analyst
subjectivity, replacing it with observable inputs and extensive peer comparisons to deliver objective,
market-driven prices.

6. www.DealMarket.com/digest
The Dealmarket Digest empowers members of Dealmarket by providing
up-to-date and high-quality content. Each week our in-house editor sifts
throughscoresofindustryandacademicsourcestofindthemostnotewor-
thynewsitems,scopingtrendsandcurrentseventsintheglobalprivateeq-
uitysector.Thelinkstothesourcesareprovided,aswellasaneditorialized
abstract that discusses the significance of the articles selected. It is a free
servicethatembodiesthevaluesoftheDealmarketplatformdelivers: Pro-
fessional, Accessible, Transparent, Simple, Efficient, Effective, and Global.
To receive the weekly digest by email register on www.dealmarket.com.
Editor: Valerie Thompson, Zurich
DealMarket
DealMarketlaunchedin2011andisgrowingfast.Justoneyearafterlaunch,
DealMarket counts more than 61,000 recurring users from 154 countries,
andover3,000dealsandserviceproviderspromotedorlistedontheplatform.
DealMarketisanonlineplatformenablingprivateequitybuyers,sellersand
advisors to maximize opportunities around the world – a one-stop shop for
Private Equity professionals. Designed by Private Equity professionals for
Private Equity professionals, the platform is easy to use, cost effective and
secure, providing access, choice and control across the investment cycle.
DealMarket’s offering includes
• DealMarketPLACE
, an unfiltered view of the global deal and advice mar
ketplace, where searching is free and postings are the price of a cap
puccino a day (with no commission).
• DealMarketSTORE
offers affordable access to industry-leading third-
party information and services on demand; and
• DealMarketOFFICE
is a state-of-the-art deal flow management tool,
helping Private Equity investors to capture, store, manage and share
their deal flow more efficiently.
DealMarket was voted the “Best Global Private Equity Platform for
2013” by Corporate LiveWire.