Singapore leads with $40b of M&A in SEA, has highest PE/VC deals since ’14

Singapore skyline at night

Singapore had the second highest half yearly deal value in the first half of 2016, and has seen doubling of private equity and venture capital investments from the same period last year, said a report by investment bank Duff & Phelps.

The report takes an in-depth look at transaction and capital markets activities, including mergers and acquisitions, private equity, venture capital and initial public offerings in Singapore, Malaysia and Indonesia over the course of the first six months of 2016 (H1).

Singapore, Malaysia and Indonesia recorded a total deal activity valued at US$54.2 billion spread across 655 deals. That is much lower than the highs seen in 2015 in the same period of time, but higher than the levels seen in the second half of last year.

M&A H1

 

“We saw a record year of M&A deals in 2015 in the global market as well as in China and Singapore. Though we have not seen historical deal making levels this year, the activity has been fairly healthy, with global transactions valued at over US$2 trillion and Singapore deals at over US$40 billion for H1 2016,” said Srividya Gopalakrishnan, Managing Director, Duff & Phelps.

Singapore recorded a total of 383 deals (M&A, PE/VC and IPOs) worth $43.4 billion for H1 2016, compared with 685 deals worth $103.8 billion for full year 2015.

M&A comprised the bulk of the deal volume in Singapore registering 339 deals valued at $40.5 billion. Last year, the country had registered $101.2 billion of such deals in the whole year.

While M&A deal volumes grew 16 per cent in the period, deal values declined by 35 per cent compared to the same period a year ago.

 

PE-VC H1

 

PE/VC investments in Singapore in the first six months were worth $1.6 billion, compared with $2.2 billion for the whole of last year. This amount is the highest for the same period of time since 2014.

Some of the notable investments were that of BOC Aviation by China Investment Corporation and other investors valued at $572 million; GIC, Bain Capital and Advent International’s $350 million investment into Quest Global Engineering; and Baring Private Equity’s $320.1 million privatisation of Interplex Holdings.

Most of the notable deals were minority investments unlike the last 2-3 years, which had a higher percentage of buyouts.

 

PE Snapshot

 

The IPO market has improved markedly, in the first half of this year compared to 2015. Seven IPOs, worth $1.2 billion were raised on the Singapore Exchange, compared with 13 IPOs in 2015 raising US$450.7 billion. The largest contributor the listings was Frasers Logistics & Industrial Trust which raised approximately US$664 million.

Malaysia and Indonesia have bounced back from the lows of last year, recording 222 and 90 deals (M&A, PE/VC and IPOs) worth US$9.4 billion and US$2.6 billion respectively for H1 2016. This compares with 360 and 143 deals worth US$9.7 billion and US$2.8 billion respectively for full year 2015. If the same pace continues, the two countries are likely to see a doubling of deal value over last year.

Looking ahead, there are over 100 deals in the pipeline in the region with potential deal value of over US$20 billion, based on disclosed information. These pipeline and possible deals include the proposed acquisition of Oil Search Ltd by InterOil Corp (potential deal value of US$2.2 billion), the proposed acquisition of Yes Communities by GIC ($2 billion), as well as the potential sale of Chevron’s Asia geothermal assets ($3 billion).

 

IPO Snapshot

 

The first half has given out mixed signals. While M&A activity and investment climate is good, there are apprehensions over slowing growth in the developing markets, modest growth in the mature markets, fear of interest rate hikes, and possibilities of recession in certain economies. Also, not all deals in the pipeline will go through. For instance, Pfizer’s proposed $100 billion acquisition of Allergan was cancelled due to regulatory issues.

“We see a significant interest from Asian and American companies to acquire UK and European assets during the first half of 2016, we cannot but wonder how the “new normal” Brexit situation will impact these going forward. It will be interesting to see how deal making will shape up for the rest of the year and to what extent restructuring would contribute to the transactions landscape going forward,” said Gopalakrishnan.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.