8. S&P 500 Index vs. M&A Activity
Total U.S. Deals
S&P Closing Price
Deal Value
14,000
12,000
11,128
8,877
11,730
11,202
1,800
11,876
10,269
9,597
8,935
1,400
7,978
7,812
1,600
1,200
1,000
6,000
800
S&P Price
S&P Price
# of Deals
10,000
8,000
2,000
13,254
600
4,000
400
2,000
0
Total U.S. Deals
S&P Closing Price
Deal Value
200
2003
7,812
1,112
$598
2004
8,877
1,212
$865
2005
8,935
1,248
$1,159
2006
11,128
1,418
$1,460
2007
11,730
1,468
$1,495
2008
9,597
903
$777
2009
7,978
1,115
$771
2010
11,202
1,258
$948
2011
11,876
1,258
$994
2012
13,254
1,426
$901
2013
10,269
1,848
$942
0
_____________________
Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.
Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion. Figures include transactions involving corporate acquirors and corporate targets. Figures exclude transactions involving minority stakes, stock repurchases,
and spin-offs.
7
9. Overall U.S. Financing Market Environment
Annual New-Issue Leveraged Loan Volume
Average LBO Leverage Statistics
Senior Debt / EBITDA
$605
Dollars in billions
$625
$480
$500
6.0x
$465
$265
5.6x
$295
$234
4.5x
4.9x
4.0x
4.2x
5.2x
4.7x
4.3x
4.5x
5.3x
4.8x 5.4x
40%
3.3x
3.0x
$157
$125
Equity Contribution
50%
4.0x
$166
Subordinate Debt / EBITDA
6.2x
5.0x
$375
$375
$250
$535
7.0x
30%
2.0x
$77
1.0x
$0
0.0x
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
20%
2007
2013
2008
2009
2010
Left Column = Less than $50M EBITDA
2011
2012
2013
Right Column = More than $50M EBITDA
_____________________
Source: Standard & Poor’s LCD.
_____________________
Source: Standard & Poor’s LCD..
New-Issue First-Lien Leveraged Loan Yields
New-Issue High Yield Bond Yields
All Loans
9%
BB
B
B
9%
7%
8%
6%
4.9%
4.9%
5%
4%
3.5%
10/19/10
_____________________
Source: Standard & Poor’s LCD.
8
BB
10%
8%
3%
12/31/09
All Bonds
11%
8/7/11
5/25/12
3/13/13
12/31/13
7.3%
6.8%
7%
6%
5.2%
5%
4%
12/31/09
10/19/10
_____________________
Source: Standard & Poor’s LCD.
8/7/11
5/25/12
3/13/13
12/31/13
10. Baird Investment Advisor Co., Ltd., an affiliate of Robert W. Baird & Co. Incorporated.
Robert W. Baird Ltd. and Baird Capital Partners Europe are authorized and regulated in the UK by the Financial Conduct Authority.