Offshore-i

Offshore-i report

Offshore-i is an Appleby report that analyses offshore deal data and provides expert insight into the world of offshore transactions.  Read our latest report findings on the first half of 2016 below, if you would like to read the report in full, please contact us.

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Download a PDF summary version of the latest H1 2016 Offshore-i report below

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Summary

H1 2016: Snapshot

 

First half 2016

Welcome to our latest edition of Offshore-i for 2016, and our review of the offshore M&A markets this year. In this report we are looking back on the first half of 2016 and have crunched the numbers to identify trends and themes emerging from deal activity in the offshore region.

2015 was an outstanding year for transactions offshore, with over 3,000 deals being announced during the course of the 12-month period worth a combined USD444bn, setting records for both volume and value.

Key findings of H1 2016:

  • There were 1,406 deals involving offshore targets in the first half of the year, down 10% on the second half of 2015. This total is likely to edge higher as late transactions are added to the figures.
  • There has now been a consistent run of over 1,400 deals per half starting in the second half 2013.
  • The total value of deals involving offshore targets in the first half of the year was USD101bn, with an average deal size of USD72m.
  • The top 10 deals were each worth in excess of USD2bn, with the biggest deal being the USD4.8bn acquisition of China’s CITIC Real Estate and BVI-incorporated Tuxiana Corporation by Hong Kong’s China Overseas Land & Investment. Six of the top 10 deals are in the technology and software sectors.
  • Once again, the financial services and insurance sector was the biggest sector offshore by value as well as volume. In all, 20 subsectors recorded deal value in excess of USD1bn.
  • The most popular deal type was capital increases, with 474 such deals in the half. The most value went on acquisitions, where USD47bn was spent in H1.
  • Cayman continued to be home to the largest number of deals, although Jersey and the BVI were the only offshore jurisdictions to see more deals in this half than the last.
  • While no large IPOs completed in the first half of the year, there was much more positive news about IPOs when looking at the numbers being announced. With no fewer than 115 potential stock market debuts of offshore companies publicised, the first half of 2016 was among the most active Appleby has seen.
  • The top sector for announced IPOs was property development, with companies in Bermuda, Mauritius and Cayman among those seeking to list, while financial services was also popular, with several securities dealing firms intending to debut on the stock markets imminently.
  • The offshore region as an acquisition force is enjoying a bumper period and has become a regular participant in some of the biggest global transactions.
  • The offshore region remains ranked sixth in the world by deal volume for H1 2016, and still ranks fourth for value activity. Average deal size remains strong, and continuing from 2015, offshore still has the highest average deal size of any region worldwide.

Main Contact

Cameron Adderley
Cameron Adderley
Partner and Global Group Head | Corporate

+1 441 298 3229

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When we look at all M&A across the six-month period, it is once again the financial services sector that dominates. There is no doubt the industry is the dominant one in offshore markets, even if the start of 2016 did see a resurgence of activity in the mining space, and a strengthening of Technology, Media and Telecommunications (TMT) activity.

Financial & insurance activities

492 deals, 31bn

Information & Communication

131 deals, 19bn

Construction

68 deals, 11bn

Wholesale & Retail Trade

110 deals, 7bn

Manufacturing

296 deals, 17bn

Mining & Quarrying

65 deals, 5bn

Top target sectors by volume and value

 

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Top Target Sectors by Volume and Value H1 2016

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Latest Offshore-i report summary version H1 2016

Download a PDF summary version of the latest H1 2016 Offshore-i report by clicking the image to the left. To read the report in full please contact us.

 

Target Countries

Bermuda
Bermuda

Bermuda reported a total of 196 deals in the first half of 2016

British Virgin Islands
British Virgin Islands

BVI saw 238 deals in total in the first half of 2016, 14% of an increase in comparison to H2 2015

Cayman Islands
Cayman Islands

Cayman was once again the primary target of offshore deals: the islands saw 459 transactions worth a cumulative USD41bn

UK Crown Dependencies
UK Crown Dependencies

Jersey reported 94 deals with an aggregate deal value of USD3.9bn. Guernsey, 87 deals valued at USD2.8bn and the Isle of Man saw an increase in deal value in the first half of 2016 with a total of 28 deals valued at USD1.2bn

Hong Kong
Hong Kong

Second to Cayman by volume was Hong Kong, with 263 deals in the first half of 2016

Mauritius & Seychelles
Mauritius & Seychelles

Combined, Mauritius and the Seychelles announced 47 deals during H1 2016, totalling an aggregate deal value of USD1.2bn

Latest Report

Latest Offshore-i report summary version H1 2016

Download a PDF summary version of the latest H1 2016 Offshore-i report by clicking the image to the left. To read the report in full please contact us.

 

Acquirer deals in the first half of 2016

Just as important as our analysis of offshore companies as targets of M&A is coverage of the deals where the acquirer is based offshore. The offshore region works as a place for facilitating transactions smoothly and efficiently, and as such sees a lot of activity both as a target, and as a home for acquisition vehicles. Its prominence as a base for investors buying businesses both onshore and in other offshore locations remains high, and with 1,443 such deals worth a cumulative USD182bn over the period.

In all, the USD182bn that was spent by offshore acquirers in the first half is higher than any other six-month period outside of 2015, and is considerably stronger than the USD101bn spent on offshore targets so far this year. There are clear signs of a trend upwards, and the growing use of offshore acquisition vehicles for major deals: back in 2012, just 1,002 acquisitions originated from offshore in the first half of the year. That figure has gradually risen over time and is now consistently about 50% higher, with around 1,500 deals typical in a six-month period.

At the same time, value has also increased over the period that we have been analysing these figures, and where we used to see rough alignment between the amount of money being spent on offshore targets and that being spent by offshore acquirers, we now see the latter racing ahead. Back in 2012, USD69bn was spent by offshore acquirers; today that figure has nearly trebled, as larger and larger deals are being structured through offshore vehicles.

The most active jurisdiction for offshore acquirers was Hong Kong, which saw 465 deals worth USD46.4bn in H1 2016, representing 32% of deal volume and a quarter of value. Next up was BVI with 365 deals; and then Cayman, with 307 deals.

There were 32 deals worth at least USD1billion where offshore was the acquirer. By comparison, there were 19 billion-dollar deals where offshore was a target in the same period. All of the top 10 outbound deals were each worth in excess of USD3bn, with one giant deal standing out, being the USD32bn acquisition of US pharma group Baxalta by Shire Pharmaceuticals, incorporated in Jersey. As with inbound deals, we see a healthy spread of sectors, with healthcare, TMT and real estate again being well represented.

The companies targeted in the top 10 have a worldwide spread; three involve US targets, while there are two deals for Chinese companies, and then one each for Cayman, Finland, Germany, Japan and Kuwait.

Top 10 Acquirer deals

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Latest Report

Latest Offshore-i report summary version H1 2016

Download a PDF summary version of the latest H1 2016 Offshore-i report by clicking the image to the left. To read the report in full please contact us.

 

Spotlight: Target / Acquirer comparison, 2016

An analysis of the volume of deals in which each country’s businesses are targets, versus the number in which the country’s businesses are the acquirers, gives us an idea of how the jurisdictions are being utilised.

Cayman, as the principal target of investors, is home to many attractive companies, whereas the BVI and Hong Kong are actually more popular places to use as acquisition vehicles for deals onshore. Mauritius also sees far more outbound deals than inbound, highlighting its role as a gateway jurisdiction and acquisition base for deals into Africa and India. The British Crown Dependencies host a wide range of successful companies and are most frequently the acquisition target of companies based elsewhere.

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Latest Report

Latest Offshore-i report summary version H1 2016

Download a PDF summary version of the latest H1 2016 Offshore-i report by clicking the image to the left. To read the report in full please contact us.

Offshore-i previous summary reports
2016
2015
2014
2013
2012

 

If you would like to view any report above in full, please contact us.

Main Contact

Stephen James profile image
Cameron Adderley
Partner and Group Head | Corporate

+13458142053

Latest Report

Latest Offshore-i report summary version H1 2016

Download a PDF summary version of the latest H1 2016 Offshore-i report by clicking the image to the left. To read the report in full please contact us.