Cayman remains leader in offshore dealmaking


The Cayman Islands has kept its position as the most popular offshore jurisdiction for dealmaking in the third quarter of 2013, according to a report released by Appleby, a provider of offshore legal, fiduciary and administration services.

The jurisdiction experienced a 20 percent uptick in the number of deals completed and a 32 percent increase in total deal value over the previous quarter, according to the latest edition of Offshore-i, which provides data and insight on merger and acquisition activity in major offshore financial centres.

Overall, the report struck a cautiously optimistic tone suggesting a return of investor confidence as indicated by the even
distribution of deals, an increase in the number of acquisitions and a shift of investment value from minority to majority stake purchases.

“The Cayman Islands accounted for 39 percent of total offshore deal value in the third quarter of 2013 and its attractiveness continues to grow,” said Bryan Hunter, managing partner of Appleby’s Cayman Islands office. “Cayman
has consistently recorded the most deals of the offshore markets this year and we’re confident it will remain the top offshore jurisdiction for dealmakers around the globe.”

The jurisdiction accounted for 26 percent of all the deals done and 39 percent of the total deal value, with 140 of the 538 offshore deals and $13.5 billion of the $34.5 billion deal value. Average deal size in Cayman Islands for Q3 was $96.3 million, well above the overall average value of $64 million.

 “Cayman continues to be the most attractive jurisdiction for dealmaking and we continue to see deep and sophisticated deals involving Cayman more so than any other offshore market examined in our third quarter report,” said Simon Raftopoulos, a Cayman-based corporate partner at Appleby. “Cayman is also where the largest transactions of the third quarter occurred.” Cayman was home to the three largest offshore transactions and four of the top five overall. In the quarter’s biggest deal, Baidu, China’s largest search engine, revealed plans to acquire Cayman-incorporated mobile app distribution company 91 Wireless Websoft from NetDragon for $1.9bn. In the second-largest deal, Chinese semiconductor company Spreadtrum Communications, which is Cayman-incorporated, agreed to be acquired by Tsinghua Holdings for $1.8bn. A third Cayman-incorporated target rounds out the top three deals with British manufacturing business Edwards Group the subject of an acquisition by Sweden’s Atlas Copco for $1.6 billion.

In private equity deals, the Cayman Islands attracted the biggest institutional buyout of this quarter, which saw Blackstone Group pay $500 million for Cayman Islands banking services software developer Pactera Technology. In total, Q3 2013 saw three institutional buyouts with a combined worth of $834 million. The return of these deals – the most common private equity structure for mid to large transactions – marks a positive step forward for the private equity industry, where offshore activity in recent years has been heavily focused on smaller management buyout deals.

Cayman Funds