0. European M&A Market Trends Outlook for the UK, France, Germany and Italy May 11th, 2011

1. 1 | The M&A Market in the UK 2 2 | The M&A Market in France 8
Table of contents
1 | The M&A Market in the UK 2
2 | The M&A Market in France 8
3 | The M&A Market in Germany 12
4 | The M&A Market in Italy 16

2. 1 The M&A market in the UK Arnaud Lambert Partner – Paris
Tel.:
Erik van Duijvenvoorde
Partner – Paris, London
Tel.: 2 2

3. M&A Activity in the UK 2006-Q1 2011
Economic/market situation in the UK
Economic environment
Economic Indicators
GDP dropped significantly between Q and Q due to the financial crisis but started improving slowly afterwards; however it has still not returned to pre-crisis levels.
GDP increased by 0.4 per cent in Q (to the level in the third quarter of 2010), following an unexpected decrease of 0.5 per cent in Q4 2010, claimed partly to be due to poor weather conditions.
Uncertainty remained the overriding theme for Q1 2011, as the recovery struggled against difficult economic conditions and government austerity drives.
In March 2011, the independent Office for Budget Responsibility (OBR) forecast 1.7% growth in GDP in 2011.
Chart title
Source: Office for National Statistics
M&A Activity in the UK 2006-Q1 2011
2010 showed signs of recovery for UK M&A activity, and the market continues to recoup from the financial crisis. Distressed-driven and insolvency-related transactions were up at the end of 2009 and boosted overall M&A activity.
2010 saw an increase in the number of announced deals (914 deals, up by roughly 45% in comparison to 2009). The total value of the 573 deals for which the deal value was known was c. £81 bn, in line with 2009.
Should the economic fog clear, one could expect M&A activity to pick-up strongly in the second half of 2011.
Source: Mergermarket data; Accuracy analysis

4. Deal size split 2007 – Q1 2011 – Volume
Economic/market situation in the UK
Deal characteristics
Deal size split 2007 – Q – Volume
In 2010, 32 transactions valued at £500m+ were announced, compared to just 17 in 2009, thanks to improved liquidity conditions, growing buy-side confidence and a renewed interest for large-caps.
In Q1 2011, 225 deals have been announced, 10 of which valued at £500m+.
Transactions valued at £500m- have increased by 66% in 2010, illustrating that corporate valuations are firming and helping to bridge the vendor / buyer price gap.
Source: MergerMarkets
Sector splits - Q Q1-2011
Over the past 15 months, the volume of M&A activity was primarily driven by the Business Services, TMT, Industrials and Chemicals, and Consumer sectors, which accounted for over half of the transactions.
In value, the Energy, Mining and Utilities and Financial Services sectors were the highest contributors, thanks to large deals such as the acquisition of EDF’s distribution network in the UK by the CIH-led consortium or the acquisition by Resolution Limited of the UK life and pensions businesses from AXA SA.
Growth in 2011 is expected to be generated by the Financial Services, Business Services, and Consumer goods sectors.
Volume
Value
Source: MergerMarkets

5. Focus on PEs PE Buyouts PE Exits
Economic/market situation in the UK
Focus on PEs
PE Buyouts
Private Equity activity has picked up since the low in 2009 and has showed signs of recovery over H
However, uncertainty remains as there has been a slowdown in the last quarter, for PE buy-outs (although less than in other countries).
Notable private equity-backed buy outs over Q include The Priory Group (£0.9bn), IDH (£0.5bn), and Wagamama (£0.3bn).
Average EV/EBITDA multiples have increased from 10.3x in 2009 to 12.2x in 2010 (13.5 x in 2008).
Uncertainty in debt capital markets remains, and large deals are likely to be seldom over 2011, at least for the 1st half.
Current leverage levels in LBOs remain relatively low, at 3.5 to 4.0x EBITDA.
Average equity contribution in % of the transaction value has increased from 40% in 2008 to 50% in 2010; sponsors are expected to commit more on equity in LBOs.
In 2010, 70% of LBO transactions involved senior debt only; the remainder was a mix of senior and mezzanine.
In 2011, competition is expected from large corporates that have amassed substantial amounts of cash.
PE Exits
Volume
Value
Source: Mergermarket data; Accuracy analysis

6. Selected transactions Q1 2011
Focus on Q1 2011
Transactions
Selected transactions Q1 2011
£1bn + deals
Central Networks acquired by Western Power in order to expand regulated electricity distribution business in the UK.
The vendor E.ON initiated the transaction is a part of its €15bn divestment strategy to be achieved by end of 2013.
Allied Irish Banks Plc, the listed Ireland-based banking and financial services group, acquired Anglo Irish Bank Corporation Limited's deposits in the UK and Ireland, Anglo Irish Bank Corporation PLC, for cash consideration of €3.5bn.
Rationale for AIB is to improve liquidity and reduce its loan to deposit ratio.
General Electric Company acquired the well support division of John Wood Group plc, the listed UK-based energy services company, for cash consideration of USD 2.8bn.
Complement GE’s business model of high technology engineering, manufacturing and services. Allows John Wood to focus on its core engineering and operations & maintenance activities in its Engineering & Production Facilities and Gas Turbine Services divisions.
Anglo American Plc and Lafarge SA formed a 50:50 joint venture to provide construction materials.
Expected results: enhanced logistics services, operational efficiency and geographic reach.
Source: Mergermarket

7. Accuracy’s recommendations
Approach of the UK M&A market
Accuracy’s Analysis
2011 outlook
Accuracy’s recommendations
High value transactions expected in the Energy sector but moderate growth in volumes due to economic uncertainty in Europe in H1 with acceleration in H2.
Growth in the number of transactions, fuelled by Financial Services, Business Services, and Consumer goods sectors.
PE deal volume increasing due to:
Continuing deals in distressed debt;
PE firms’ desire to realize investments that were held longer as a result of the financial crisis;
Improving economic environment and liquidity conditions.
Come-back of strategic buyers with cash reserves.
Transaction multiples expected to stabilize.
Continued focus on mid-size deals.
Increase in Asian bidders (particularly Indian and Chinese).
Value creation should be driven by economic/industrial factors rather than financial ones.
Stay current with UK business environment: local debt market, restructuring environment, local lawyers.
Selective targeting with considerable time spent on analysing synergies in Business Plans.
Some UK financial investors looking to partner with local players, particularly in distressed situations or on asset backed deals.
In the short-run, significant uncertainty remains, in the market hence the relevance to ask for:
a well-seasoned and sector-focused partner to work closely with you and your team on a given transaction
Full access to information and management to ensure due diligence is satisfactorily completed.

8. 2 The M&A market in France Stéphane Perrotto Partner Paris
Tel.: 8 8 8 8

9. M&A Activity in France 2006-Q1 2011
Economic/market situation in France
Economic environment: signs of recovery, upward trend in M&A activity
Economic Indicators
GDP: after a drop of 2.5% in 2009, strong growth in Q (1.4% compared to Q4 2009);
Slightly improving level of confidence (Insee business climate index : recovery from the strong decrease in Q4 2008)
Economic environment has been steadily improving during 2010, but some tensions are expected due to commodity driven inflation.
The level of insolvencies still remains high with 65,900 in 2010 (+2% compared to 2009). An improvement is expected by Euler Hermes in 2011 with 62,700 insolvencies (-5% compared to 2010).
Sources: Bloomberg, Insee
M&A Activity in France 2006-Q1 2011
GDF – Suez: 66 €bn
Lehman collapse
Robust recovery
The financial and economic crisis heavily impacted M&A activity.
Despite a slow start in Q1 2011, French transactions are following an upward trend, having increased in value for three consecutive quarters.
Compared to Q1 2010, Inbound and domestic deals decrease; outbound increases.
The Industrial & Chemicals sector made up 40% of transactions value (23% of volumes) in Q This includes two major deals (Converteam and Imerys) for 5,2 €bn out of a total of 8,8 €bn. 9
Sources: Mergermarket French M&A Round-up for Q1 2011, 11 April 2011 9

10. Selected transactions 2010 and Q1 2011
Current situation and trends
Number of transactions and volumes are increasing…
Selected transactions 2010 and Q1 2011
Current situation
In Q1 2011, 4 deals with a value over €500m : three less than in Q
Banks are easing financing conditions
Market volatility limits the number of IPOs
Resilient sectors such as Pharma, Infrastructure and Financial Services drive the market
Trends
Domestic growth will be impacted by austerity programs (to reduce debt) and potential fear of commodity driven inflation.
Cross-border deals and private equity investment should support the market in the near future. A lot of M&A processes are on-going or expected soon.
Source: …
Note: [1] …
Source: …
Note: [1] … 10
Source: Merger Market database, Merger Market French M&A Roundup Q1 2011, M&A DATABASE 10

11. Accuracy’s recommendations
Approach of the French M&A market
Accuracy’s Analysis
Opportunities
Accuracy’s recommendations
Corporates are still ready to do deals but they need (i) to secure value creation and (ii) to keep close control over their debt ratios
Some jumbo deals will necessarily lead to significant disposals hence acquisition opportunities (e.g. GDF Suez announced they would divest circa €10 billion)
Some groups are committed to reducing their debt (e.g. Lafarge) and others need to deliver shareholder value (e.g. Carrefour)
French companies are actively looking for acquisition targets in growth areas (i.e. BRICs) and some may need to divest non core activities to finance acquisitions and decrease their dependence on European growth / profitability
Leading French corporates are still very active and may be willing to seize opportunities abroad thanks to their war chest (LVMH/Bulgari, Lactalis/Parmalat)
After a 2-year period of turmoil in the LBO business, there is pressure on PE firms to put some of their assets on the market (e.g. when the fund reaches maturity date or when bullet debt approaches maturity date)
FSI (French sovereign fund) now becomes also seller
Some significant PE portfolio companies were acquired by strategic buyers who accepted to pay high prices for strategic targets (e.g. Converteam/GE, Souriau/Esterline…)
Although many companies go for dual track, very few finally go public
Thoroughly research and analyse your potential targets: anticipate. Don’t wait for opportunities, find them!
Be reactive and flexible: PE firms have huge amount of cash (€18,3 billion in dry powder!) and they are ready to go fast when they know the target (fad for pre-emptive processes)
But remain prudent on long term fundamentals (It's only when the tide goes out that you learn who's been swimming naked – Warren Buffet)
Local PE funds (Astorg, Rothschild, Atria, Activa) have significant portfolios that represent investment opportunities (especially in the mid market which represents 40% of total market). In France, 5,500 companies have a PE fund in their capital: companies will inevitably change hands in the next 5 years.
Do not hesitate to go for distress companies but not at any price and not alone. In case of financial distress, French law encompasses a wide range of tools to help you through the crisis.
Knowledge of French business environment is highly necessary: you may miss a deal in some sectors for not having the French touch. 11 11

12. 3 The M&A market in Germany David Cayet Managing Partner Frankfurt
Tel.: +49(0)
Christian Axmann
Senior Manager Frankfurt
Tel.: 12 12

13. Economic/market situation in Germany
Economic environment: Strong economic growth and M&A activity gaining momentum
Development of Key Economic Indicators
The German economy has shaken off the 2009 crisis level
A strong growth year in 2010 (3.6% GDP growth): driven by exports, inventory cycles, fiscal stimulus and postponed investment effects
Unemployment currently at all-time low of 7%
Consumer confidence practically at 15 year average level
German economic growth will peak in H1 2011; growth will then return to a sustainable rate beyond 2011 once one-off effects disappear
Nevertheless German growth still conditioned by Euro-Zone macro environment in terms of financial stability, interest rates, currency and inflation
The financial crisis had a strong impact on
M&A activity in Germany, but recovery is strong …
Strategic transactions are dominating the M&A landscape in Germany
Q M&A volume (announced) at nearly 80% of FY 2010 level: numerous mid- and large-cap deals
2010/2011 with lots of ‘non standard’ transactions: complex carve-outs, asset deals, D/E swaps out of insolvencies
Favorable environment for corporates: strong earnings and moderately low interest rate levels
Financial investors are back on the route: numerous exits especially through secondary sales, also price expectations of sponsors and sellers are narrowing
Sources: German Federal Statistical Office, ifo Institute, Reuters
Notes: GDP base year 2005, ifo business climate index base year 2000
M&A Activity in Germany 2006-Q1 2011
Sources: Zephyr (completed deals except for 2011)
Note: (*) Values for Q are based on announced transactions

14. Selected transactions Q4 2010-2011 YTD
Current situation and trends
M&A activity increasing, interaction between Germany/Spain still moderate
Selected transactions Q YTD
Current situation
Significant activity of corporates, but still few mega deals
Key Industries: consumer goods, energy/Infrastructure, chemicals, financial services
Financial investors with secondary sales and in some instances IPOs
Stabilizing / increasing multiples (especially for automotive businesses)  more favorable deal environment
Improved financing conditions: 3.5x-5.5x EBITDA for PEs, average equity share 50% (min. 30%), interest levels still favorable
Trends 2011
Uncertainty still present in global markets: Fear of double-dip recession in the USA, real estate bubble in China, European sovereign debt crisis
Both strategic and financial investors with massive dry powder: need for deal opportunities will drive activity
Financial investors are back: significant amount of buy- and sell-side activity expected; IPOs might become more likely exit option provided macroeconomic stability
Strong momentum expected in automotive, business services and consumer goods, financial services
Source: …
Note: [1] …
Source: …
Note: [1] …
Source: Merger Market
Note: ACS/Hochtief bid not included since bid was launched prior to Q4 2010

15. Current/Upcoming deal opportunities Buy-side opportunities in Germany
Approach of the German M&A market
Accuracy’s German market intelligence
Current/Upcoming deal opportunities
Our recommendation
Buy-side opportunities in Germany
‘Big tickets’
Hochtief Concessions (infrastructure): likely start in H1 2011
Siemens hearing aid division: postponed
Tognum: sale process ongoing
ProSieben Sat 1: possibly dual-track
IPOs: Osram, Evonik (likely in H2 2011), Deutsche Annington
‘Mid cap’
Largest mid-cap base and highly attractive players (>1.000 ‘world leaders’) that are potentially willing to divest
Numerous opportunities on the market: consumer goods/retail, automotive, plant manufacturing, business services
Suitability for Spanish investors looking for growth opportunities to diversify/expand revenue base
Industrial partnership approach, build up
Long term investment horizon, value creation driven more by industrial/economic rather than financial engineering
Knowledge of German business environment (especially for “Mittelstand” targets) is key
Selecting the right advisors to go ahead with the ‘right deals’:
Understanding of your needs/strategy
Cross-boarder team staffing
Market and functional know-how

16. 4 The M&A market in Italy Alessandro Reitelli Managing Partner Milano
Tel.: 16 16

17. M&A Activity in Italy 2006-Q1 2011
Economic/market situation in Italy
Economic environment: signs of recovery, stabilizing M&A activity
Economic Indicators1
IMF: GDP dropped 5% in FY09 and grew 1,3% in FY10,
In terms of “lost quarters” of GDP, the last turmoil scored 34, compared to 9 for and 8 for 74-75;
Economic environment should remain unchanged at least for 2 years. Latest IMF forecast of growth in GDP for 2011 is 1,1%;
Unemployment limits consumption, low productivity limits exports, on top of euro rise
6,5m registered companies…small is beautiful, but is also inefficient…
Italian hedge: innovation, flexible organization
Italian issues: geography, infrastructures, tax burden, HR, gearing, governance, grey market
Sources: Istat Database
Notes: [1] GPD base year 2006,
M&A Activity in Italy 2006-Q1 2011
The financial and economic crisis heavily impacted M&A activity, especially for private equity and construction industries
A moderate recovery end of FY10, followed by a drop in Q1 FY11
Currently, the market is on stand-by
Only one forecasted IPO for Moncler by The Carlyle Group
Consumer goods, financial services and leisure are the promising sectors for future deals
Sources: Merger Market database

18. Selected transactions Q1 2011
Current situation and trends
Number of transactions and volumes are increasing…
Selected transactions Q1 2011
Current situation
Market is recovering from distressed M&A back to high quality targets and/or secured businesses
Liquidity for PEs and banks is waiting for allocation
Procrastination of IPOs opens for M&A opportunities
Price level:
recovery in average multiples (x6 to x10,1 EBITDA)
decreasing gap in price expectations of sellers and buyers
extreme selection for targets, both for investors and banks
Access to debt is getting less restrictive but financing conditions remain tight: banks still demand a 50% equity stake, no mezzanine, 7-year senior bullet at bps
Trends
For PEs,
2011 and 2012 should be years for equity M&A and/or capital increase to strengthen their portfolio companies
Asset allocation is more restrictive in terms of geography
The need for differentiation goes through specialization or the ability to sustain the international development of their portfolio companies
For Corporates,
Opportunities for defensive/offensive M&A
Focus on targets which can represent a saving in R&D
Source: …
Note: [1] …
Source: …
Note: [1] …
Source: Merger Market database

19. Accuracy’s recommendations
Approach of the Italian M&A market
Accuracy’s Analysis
Opportunities
Accuracy’s recommendations
companies will face generational issues in the next 10 years
Creation of a sovereign fund (Fondo Italiano d’Investimento) and other regional initiatives (Futurimpresa) + turnaround
For PEs,
Threat regarding the covenants of their LBOs which still face a flat market
But there is an opportunity to renegotiate the debt terms & conditions to seek for a lower rate
Strong M&A potential in classic markets:
Services to Financial institutions
Consumer goods
Leisure (especially branded)
Mechanical equipment
Packaging
But also in the renewables and utilities sectors:
Italy is n°3 in Europe in wind farms with Mw installed
Wave of privatization of gas, water, etc.
Distressed opportunities will arise in 2011 and 2012, since the refinancing of 2009 was underestimated compared to the slow recovery path in GDP
Construction
Leisure, textile, shoes
Home furnishing
Selective targeting
Collaborative approach
Industrial partnership approach, building value through process implementation and new management
Consider the generational issue  earn-out formula
Knowledge of Italian business environment (advisors of the seller, restructuring procedures…) is key
To avoid unnecessary concern
Not to underestimate the details
Be patient…