A federal judge is nearing a surprise move to block CVS’ $77bn acquisition of Aetna, an American managed health care company that sells traditional and consumer-directed health care insurance and related services. The deal was first announced in December 2017. The judge might reject the mega-merger on concerns that it could raise prices and kill choices for consumers.
Under the terms of the merger agreement Aetna shareholders are to receive $145 per share in cash and 0.8378 CVS Health shares for each Aetna share. The transaction values Aetna at approximately $207 per share or approximately $69bn. Including the assumption of Aetna's debt, the total value of the transaction is $77bn.
Allen & Company, Evercore, Lazard, Davis Polk & Wardwell, Simpson Thacher & Bartlett and Sloane & Company are advising Aetna. Bank of America Merrill Lynch, Barclays, Centerview Partners, Goldman Sachs, Dechert, McDermott Will & Emery, Shearman & Sterling and Kekst & Company are advising CVS. Bank of America Merrill Lynch, Goldman Sachs and Barclays are providing financing. Sullivan & Cromwell and Weil Gotshal and Manges are advising the debt providors.
Financial Times reported that T-Mobile’s $26bn takeover of Sprint, an American telecommunications company that provides wireless services, is facing a new threat from a group of US states who have sued to block the deal even if it wins regulatory approval from Washington. The move by the state attorneys-general led by New York and California comes as the US Department of Justice continues to review the transaction, which would reduce the number of nationwide wireless operators to three by swallowing up America’s smallest carrier. Opponents of the deal have said T-Mobile and Sprint are the two scrappiest players in the wireless market who compete aggressively on price and quality, particularly in the retail mobile space.
Sprint is advised by Centerview Partners, JP Morgan, Mizuho Securities, SMBC Nikko, The Raine Group, Goodwin Procter, Morrison & Foerster, Potter Anderson & Corroon, Simpson Thacher & Bartlett, and Skadden Arps Slate Meagher & Flom. Deutsche Telekom is advised by Deutsche Bank, Evercore, Goldman Sachs, Morgan Stanley, PJT Partners, Allen & Overy, DLA Piper, Hogan Lovells, Latham & Watkins, Richards Layton and Finger, and Wachtell Lipton Rosen & Katz. Softbank is advised by Morrison & Foerster.
Alternative investment manager Apollo Global Management offered to acquire Shutterfly, a leading retailer and manufacturing platform dedicated to helping capture, preserve, and share life’s important moments, for $2.7bn. The $51 per share cash offer represents a premium of 31% when compared to Shutterfly’s unaffected closing stock price of $38.91 on April 23, 2019.
“We are extremely excited for our funds to acquire Shutterfly,” said David Sambur, Senior Partner at Apollo. “At a time when billions of photos are taken every day, Shutterfly has led the charge as a pioneer of personalized photo products and school photography, helping consumers capture, preserve and share life’s most important moments. We look forward to working with Shutterfly’s talented employees and supporting further investments in technology to drive the continued growth and success of the business.”
Morgan Stanley and Fenwick & West are advising Shutterfly. Barclays, Citigroup, SunTrust Robinson Humphrey, LionTree Advisors, UBS, Evercore and Paul Weiss Rifkind Wharton & Garrison are advising Apollo Global. Barclays, Citigroup and SunTrust Robinson Humphrey are providing debt financing.
Book distribution company Readerlink is considering making a bid for Barnes & Noble, the bookseller with the largest number of retail outlets in the United States and a retailer of content, digital media, and educational products. The offer would top the one from hedge fund Elliott Management Corp, which was made last week. Elliott Management offered to acquire the firm for $683m which represents a 43% premium to the 10-day volume weighted average closing share price of Barnes & Noble’s common stock ended June 5, 2019.
Evercore, Guggenheim Securities, Baker Botts and Paul Weiss Rifkind Wharton & Garrison are advising Barnes & Noble. Credit Suisse and Debevoise & Plimpton are advising Elliott.
TEGNA, an American publicly traded broadcast, digital media and marketing services company headquartered in Tysons, Virginia, agreed to acquire Dispatch Broadcast Group’s TV stations in Indiana and Ohio for $535m. The two stations, WTHR and WBNS, are the dominant #1 station in their respective markets.
“We have long admired the talented and award-winning teams at WTHR and WBNS’ television and radio stations and are honored that the Wolfe family has entrusted us to build on each station’s commitment to high-quality journalism and serving the greater good in their community,” said Dave Lougee, president and CEO of TEGNA. “These stations are an excellent strategic and financial fit with our portfolio of leading big four affiliates and brands in top markets. We continue to invest in growth and remain true to our track record of acquiring highly attractive assets that create immediate value for shareholders.”
Greenhill & Co and Nixon Peabody are advising TEGNA.
DLH Holdings, a leading provider of innovative healthcare services and solutions to federal agencies, agreed to acquire Social & Scientific Systems, a leading public health service organization providing solutions in clinical and biomedical research, epidemiology, health policy, and program evaluation, for $70m in cash.
"This is an exciting addition to DLH and one that aligns perfectly with our strategy to expand the Company's Public Health & Life Sciences focus area, diversifying our portfolio and bringing scale to support growth. In addition, we'll augment our executive team with the high caliber leadership demonstrated by Kevin Beverly," said Zachary Parker, DLH President & CEO. "With over 40 years in business, SSS is a nationally-recognized technology-enabled health research organization that collects, manages, and analyzes large-scale health data in support of critical public initiatives – complementing and broadening the markets we serve within the federal government."
Houlihan Lokey and Saul Ewing Arnstein & Lehr advised Social & Scientific Systems. Baker Tilly, Lockton Companies, The Avascent Group, KippsDeSanto & Co. Hogan Lovells and Becker & Poliakoff advised DLH. FNB and M&T Bank provided debt financing.
Wells Fargo, an American multinational financial services company, sold Eastdil Secured, its private real estate investment banking division, to Guggenheim Partners, a global investment and advisory financial services firm, and Temasek, a Singaporean holding company. Financial terms were not disclosed.
“The breadth and depth of Wells Fargo’s Commercial Real Estate platform is unmatched in the industry, and our CRE team looks forward to partnering closely with the new REGAL investment banking coverage group to continue delivering a comprehensive and seamless suite of financing solutions and advice to commercial real estate clients,” said Mark Myers, head of Wells Fargo Commercial Real Estate.
Wells Fargo Securities and Sullivan & Cromwell advised Well Fargo.
Private equity firm BBRC Private Equity made a minority investment in Plant Therapy, a leading direct-to-consumer supplier of essential oils and accessories. Financial terms were not disclosed.
Chris Jones, Plant Therapy’s CEO, said: “Choosing BBRC Private Equity as a financial partner became clear when we saw they shared our dedication to providing the highest quality products at reasonable prices with an unwavering focus on safety and education. At Plant Therapy, our goal is to have the greatest possible impact on as many people as possible and BBRC can help us achieve that objective.”
Green Hasson & Janks, Focal Point Partners and Glaser Weil advised Plant Therapy. CohnReznick and Seward & Kissel advised BBRC.
Private equity firm EQT Partners agreed to sell Press Ganey, a leading provider of safety, quality, patient experience and workforce engagement solutions for healthcare organizations in the US, to a consortium of funds managed by affiliates of Ares Management Corporation, Leonard Green & Partners, and other co-investors. Financial terms were not disclosed.
Eric Liu, Partner at EQT Partners and Investment Advisor to EQT VII, said: “Press Ganey plays an integral role in the US healthcare system and we have been proud to support its mission of delivering safe, high quality care for patients, and supporting the caregivers that serve them. It has been a pleasure to partner with the management team, which has done a fantastic job in continuing to advance thought leadership and product innovation across the industry.”
Barclays, Goldman Sachs and Simpson Thacher & Bartlett are advising Press Ganey and EQT. Sullivan & Cromwell is advising Ares.
Private equity firm L2 Capital sold LSC Environmental Products, which manufactures and provides products and equipment for catering the environmental challenges of erosion, odor, land reclamation, waste cover, seeding, and dust, to Ancor Capital Partners. Financial terms were not disclosed.
“This successful exit exemplifies how L2 Capital works with portfolio companies. Over the course of our investment, L2 recruited a new CEO and CFO, worked with management to craft a broader go-to-market strategy, and completed a synergistic add-on acquisition. We are very proud of what we and the team have accomplished,” commented Bob Levine, a Managing Partner at L2. “All this was achieved while ensuring that the team and the Company had the resources and investment required. We always knew LSC’s products delivered best in class performance; the LSC team built upon that foundation to lead the Company to its current level. We are confident in their continued success.”
Delancey Street Partners and Pepper Hamilton advised L2 Capital.
Sheridan Capital Partners invested in Atlantic Vision Partners, a vision practice management company. In the transaction, Sheridan invested alongside AVP’s founders and management, who will retain a meaningful ownership stake in the business. Financial terms were not disclosed.
“We believe Sheridan represents the perfect partner for us given their history in this kind of setting,” said Michael Holton, Chief Executive Officer of AVP. “The investment team has extensive experience building leading physician practice management businesses, and we look forward to growing AVP together with our team of doctors and managers.”
McGuireWoods advised Sheridan Capital Partners. Twin Brook Capital Partners provided debt financing.
Angeles Equity Partners, a private investment firm, acquired Mini Pharmacy Enterprises, a pharmacy specializing in providing diabetic supplies. Financial terms were not disclosed.
“Mini Pharmacy is recognized as a leading provider of diabetic supplies in its core California market,” said Jordan Katz and Timothy Meyer, Co-founders and Managing Partners of Angeles Equity Partners. “We see a tremendous opportunity to build upon Mini’s legacy, leveraging the depth of Mini’s customer relationships and implementing several customer-focused initiatives designed to improve the patient experience.”
Intrepid Advisors and Sheppard Mullin Richter & Hampton advised Mini Pharmacy Enterprises. Nelson Hardiman advised Angeles Equity Partners.
H&R Block, an American tax preparation company, acquired Wave Financial, a company that provides a suite of financial services and online software for small businesses, for $405m in cash.
“I’m extremely excited to welcome Wave, an innovative company with an outstanding team, to H&R Block,” said Jeff Jones, president and CEO of H&R Block. “Bookkeeping and cash flow management are significant pain points for small business owners and essential to successful annual tax preparation. Wave addresses these concerns by delivering financial solutions and a simple user experience on a single platform. Wave provides us the opportunity to accelerate our small business strategy and is a great strategic fit, as both companies can leverage each other's capabilities to bring tax and financial solutions to small business owners, serving more clients in more ways.”
Global private equity investment firm HIG Capital acquired Cardinal Logistics, which provides fully outsourced transportation and logistics solutions to customers across diverse end markets. Financial terms were not disclosed.
“Partnering with HIG Capital enables Cardinal to continue delivering excellent service while also pursuing growth opportunities with both existing and new customers,” said Vin McLoughlin, Cardinal’s Chairman. Cardinal's CEO Tom Hostetler added, “We are excited about Cardinal’s growth prospects and believe our clients and employees will benefit immensely from HIG’s support as we embark on our next growth phase.”
Harris Williams advised Cardinal Logistics.
Gryphon Investors-backed Water's Edge Dermatology, a leading provider of comprehensive dermatology services through 37 Florida locations, acquired Coast Dermatology, a medical/cosmetic dermatology practice in Venice, Florida. Terms of the transaction were not disclosed.
"We are pleased to add another first-rate dermatology practice to the Water's Edge portfolio," said Gryphon Healthcare Operating Partner Kevin Blank. "Coast Dermatology has a robust team of medical professionals delivering high-quality and high-demand services in a key market, and we will continue to identify additional dermatology practices that meet our stringent standards."
Private equity firm Clearspring Capital Partners acquired a majority stake in Voyages Traditours, a Québec leading group tour operator, from Entrepreneur Capital. Financial terms were not disclosed.
"Our investment strategy is based on a medium to long-term approach and targets industry-leading companies with seasoned, ambitious management teams who have demonstrated robust results and show strong growth opportunities. Our team quickly identified Traditours as meeting our investment criteria given its impressive historical growth, as well as its leadership position in niche markets where it offers its distinctive expertise," explained Marie-Claude Boisvert, partner at Clearspring Capital Partners.
Audax Private Equity-backed TPC Wire & Cable, an industry leader in premium electrical wire and cable solutions, acquired EZ Form Cable Corporation, a provider of coaxial cable based in Hamden, Connecticut. Financial terms were not disclosed.
TPC President & CEO Jeff Crane explained: “We are very excited to have EZ Form join the TPC family. Our combined expertise will enhance our growth strategy, diversify our end markets and allow us to expand our innovative product and service solutions for our customers. TPC continues to execute on its aggressive growth strategy. Our organic initiatives are driving sustained above market growth in parallel with an acceleration of our strategic M&A activity.”
Hub International, a leading global insurance brokerage, acquired British Columbia-based Porchlight Financial, a full-service group retirement plan consulting firm. Financial terms were not disclosed.
"With the addition of Porchlight Financial, Hub continues to create a robust Canadian benefits and pension solution for our clients," said Dave Terry, President and CEO of Hub International Canada West ULC. "Their expertise will deepen Hub's services to help clients create a more comprehensive benefits package in order to attract the talent they need and want."
CloudBees the enterprise DevOps leader, acquired San Francisco-based Rollout, a secure feature management company providing software specifically targeted for developers and product teams. Financial terms were not disclosed.
“Our goal is to help organizations deliver great, feature-rich software efficiently while minimizing risks associated with the deployment process,” said Sacha Labourey, CEO and co-founder of CloudBees. “The acquisition of Rollout gives CloudBees customers the flexibility to decouple features from software versions. Using Rollout on their trusted enterprise platform allows developers to test and merge changes with more confidence than ever before.”
Riviera Partners, the leader in technology-assisted retained search for senior engineering and product talent, acquired WorthyWorks, that specializes in searches for engineering and product leaders within the blockchain ecosystem. Financial terms were not disclosed.
“We are in a phase of hyper-innovation in the technology market,” said Will Hunsinger, CEO of Riviera Partners. “Established companies are embarking on digital transformation initiatives while startups and growth companies are embracing new technologies and approaches to deliver better products, faster. Tech is the fastest growing segment of the $16bn recruiting market with 12m jobs in the US. We are experiencing the highest demand for our services in our history. Adding experienced operators like Ryan and Kyle helps us scale to meet the demand. We intend to continue to lead this market in focused search services for tech leaders.”
JMI Equity, a growth equity firm, made a minority investment in Unanet, the leading project-based Enterprise Resource Planning software provider. Financial terms were not disclosed.
“JMI will be an exceptional partner for Unanet’s next phase of growth,” said Fran Craig, Founder and CEO of Unanet. “Its shared customer-centric culture, network, and expertise in scaling market-leading SaaS companies will provide greater opportunities to Unanet’s employees, customers, and partners. All will benefit from an even stronger product, service offering, and overall customer experience.”
Unilever, a British-Dutch transnational consumer goods company, signed an agreement to acquire Tatcha, a modern skincare brand. The transaction is expected to close in Q3 2019. Financial terms were not disclosed.
Victoria Tsai, Founder of Tatcha said: “When creating Tatcha, our dream was to make a brand that would live for at least 100 years; that dream can come true in our new home with Unilever. We are overjoyed to have found a parent to grow globally with, and to have a purpose-driven partner to ensure we can have a positive impact in our communities as we grow."
MidOcean Partners, a middle market private equity firm, exited its investment in Freshpet, a maker of fresh, refrigerated foods for dogs and cats. MidOcean initially invested in Freshpet in 2010, when the MidOcean consumer team identified Freshpet as a “category changer,” introducing “fresh” pet food as a new concept succeeding dry and canned products, and an opportunity for outsized growth. No financial terms were disclosed.
“We are thrilled with the outcome of our investment in Freshpet,” commented Jonathan Marlow, Managing Director of MidOcean. “After detailed analysis of the pet sector, Freshpet was identified early on as an excellent transformative growth opportunity that aligned well with MidOcean’s significant industry knowledge and overall strategy. We are proud to have helped drive the transformational growth and development of the company that Freshpet has become today. We’d like to thank the management team for their tremendous efforts and great partnership during our investment.”
Brookfield raises a $14.5bn infrastructure fund. (FS)
Brookfield Asset Management raised $14.5bn toward a $17bn target for its fourth infrastructure fund. The New York-based asset manager raised $14bn for its third such fund in 2016, exceeding a $10bn target.
Petrobras delayed delivery of bids for LNG unit. (FS)
Brazil’s state-controlled oil company Petroleo Brasileiro delayed the delivery of non-binding proposals for its LPG unit to June 11. The company decided to postpone the delivery to wait for Brazil’s Supreme Court ruling on the need of congressional approval for the sale of subsidiaries.
Among potential bidders interested in acquiring the unit, called Liquigas, are private equity firms Advent International, Warburg Pincus and CVC Capital Partners, as well as Copagaz, Itausa Investimentos Itau, Aygaz, Ultrapar and Mubadala Investment Company.
Quebec not interested in buying Bombardier's regional jet program.
Quebec’s economy minister said that his government has ruled out investing in Bombardier’s weak-selling regional jet program, which could be sold to Japan’s Mitsubishi Heavy Industries. The Quebec government previously invested $1bn for a stake in flagship narrowbody jet program of Bombardier, a multinational manufacturer of regional airliners, business jets, and equipment for public transport.
“Is the Quebec government going to invest $2bn in the CRJ? The answer is no,” Economy Minister Pierre Fitzgibbon said. “It’s not going to happen. It would be foolish for me to take $2bn from Quebec taxpayers to put that in the CRJ program. But I’m working very closely with the company to make sure that we maintain this employment within aerospace.”
Great Point Partners recapitalized Tergus Pharma. (FS)
Great Point Partners recapitalized Raleigh, North Carolina-based Tergus Pharma, a contract development and manufacturing business for topical dermatology pharmaceuticals. No financial terms were disclosed.
“Tergus has differentiated itself as a leader in the complex topical dermatology development space that has been growing at approximately 15% per year,” said Rohan Saikia, Managing Director at Great Point Partners. “Tergus’ reputation within topical dermatology is unparalleled and we are thrilled that Tergus will now be a ‘one-stop-shop’ from clinical development to commercial manufacturing for all of their clients.”
CI Capital and ex-Rexel USA East CEO formed a partnership. (FS)
CI Capital Partners teamed up with Scott McLendon, ex-CEO of Rexel USA East, to invest in the industrial automation distribution sector. The partnership will target companies that have demonstrated B2B distribution success as well as consultative automation and control and electronics service expertise.
Joost Thesseling, Managing Director at CI Capital said: “We are thrilled to have the opportunity to form a partnership with Scott McLendon, an accomplished executive with the experience of working for both suppliers and distributors in the field of manufacturing electronics and automation.”
Alpha Edison seeking to raise $250m second fund. (FS)
Alpha Edison, an early-stage venture capital firm based in Los Angeles, is raising a second $250m fund, according to a filing with the SEC. First raise was not reported.
Brex reached $2.6bn valuation after Series C financing round. (FS)
San Francisco-based fintech start-up Brex closed its Series C financing round at $100m, reaching a $2.6bn valuation. Kleiner Perkins has lead the round via former general partner Mood Rowghani, who left the fund last year to form Bond alongside Mary Meeker and Noah Knauf. Existing investors DST Global, IVP, Y Combinator and Greenoaks Capital have also participated in the round.
