Daily Review

Emirates NBD, one of the largest banking groups in the Middle East, is to acquire Denizbank, a large private bank in Turkey, from Sberbank, a state-owned Russian banking and financial services company, for $2.8bn. The transaction is expected to complete by the end of Q2 2019, subject to obtaining the required regulatory approvals. The purchase price represents a 20% discount to the price the firms agreed on in May 2018.

The transaction will help Emirates NBD diversify its business and establish itself as a leading bank in the region, the bank’s vice chairman Hesham Abdulla al-Qassim said.

 

Emirates NBD was advised by Binder Grosswang Rechtsanwalte, Clifford Chance and Yegin Ciftci Attorney Partnership. Sberbank was advised by FTI, Herbert Smith Freehills, Paksoy and Sberbank.

 

Workers at Thyssenkrupp, a German conglomerate with a focus on industrial engineering and steel production, demanded employment guarantees from the company even if a planned joint venture with India’s Tata Steel falls apart. The two companies last year agreed to combine their European steel activities in a move that would create the continent’s second-largest steelmaker.

“Should a joint venture - in theory - not happen we demand the same protection for our employees and our plants,” Tekin Nasikkol, head of Thyssenkrupp Steel Europe’s works council, said. “Nine months after the signing there is still no clarity - that creates great uncertainty among employees.”

EY, ALRUD, Bredin Pat, De Brauw Blackstone Westbroek, Hengeler Mueller and Slaughter & May are advising Tata Steel. Ramboll, Chestnut Corporate Finance, Deutsche Bank, EY, Goldman Sachs, JP Morgan, Macquarie, Rothschild & Co, Linklaters and Finsbury are advising Thyssenkrupp.

 

 

Private bank Julius Baer will be removed from the Swiss Market Index after Novartis, a Swiss multinational pharmaceutical company, completes the spinoff of its eye care division Alcon. The completion date is set to April 9.

Novartis has estimated Alcon’s value at around $25bn. By contrast, Baer’s value has tumbled by a third in a year to $9.3bn. It will instead be included in the SMIM index, replacing Aryzta, SIX Swiss Exchange said after Tuesday’s market close.

 

The executive board of Commerzbank will meet on April 9 to decide whether to intensify merger talks with Deutsche Bank or back away from a deal. Deutsche Bank supervisory board chairman Paul Achleitner said that the banks aim to announce more concrete steps on the merger by late April.

The news come amidst recent speculation that a sale of the 15.6% stake in Commerzbank by the German government would cost German taxpayers billions of euros. Germany is looking to get rid of the stake to avoid future risks for the budget if Commerzbank should merge with its larger rival.

 

A specialist fund run by BlackRock could be given extra time to bid for troubled Italian lender Carige, Reuters reported. Carige was placed under special administration at the start of the year after its top investor blocked a planned capital raising, derailing an industry-financed rescue plan. BlackRock has remained as the only buyer still known to be considering a bid as US fund Varde Partners this week decided to walk away after due diligence showed Carige was not a good investment opportunity for the Minnesota-based fund.

 

Mediaset, an Italian mass media company, expressed interest in merging with ProSiebenSat.1,  a German mass media company, in a cross-border deal. Mediaset’s top executives have repeatedly raised the idea of creating a pan-European TV player to fend off competition from established rivals and online content providers.

A ProSieben spokeswoman, asked about Mediaset’s comments about a possible merger, said the Munich-based broadcaster preferred to cooperate in the context of an existing European Media Alliance.

ProSieben shares were up more than 4%, while Mediaset gained 2.6% in response to the news.

 

Reuters reported that Saudi Arabia’s Al Rajhi Holding Group and Dubai’s Al Ghurair, two large family conglomerates, formed a consortium to bid for Saudi Arabian state grain buyer SAGO’s flour mills. The mills are being sold as one of Saudi Arabia’s first privatizations. 

SAGO previously said it would sell its milling operations by placing them in four specially formed corporate entities while retaining other functions. The entities would each hold grain silos, feed factories and flour mills.

 

According to a Reuters report, German bank NordLB will hold onto its property lender Deutsche Hypo after weighing to sell the profitable division. Rumors of a potential disposal of Deutsche Hypo surfaced in February.

The bank’s largest shareholder, the German state of Lower Saxony, has repeatedly said NordLB should be profitable after its restructuring. The company is currently struggling with writedowns on bad shipping loans.

 

Swiss bank UBS Group is evaluating options for its asset management unit, including a partial sale or merger of the business. UBS is also considering buying Deutsche Bank’s DWS Group asset manager and potentially combining it with its own business and spin off the two as a separate entity.

 

CVC, Engie and Verbund refrained from bidding for Eneco, one of the largest producers and suppliers of natural gas, electricity and heat in the Netherlands. Other unnamed private equity investors also refrained from bidding as there was an indication from the company that a strategic buyer would be preferred.

Remaining in the race for Eneco, which is valued at approximately €3bn ($3.3bn), are Royal Dutch Shell, Dutch pension fund manager PGGM, French oil and gas company Total, Italy’s Enel, Mitsubishi Corporation and Macquarie.

 

Saint Gobain, a French multinational manufacturing corporation, is exploring a potential sale of a 60% stake in its Pont-A-Mousson unit to Chinese company XinXing Ductile Iron Pipes. 

“We are in the very early stages of the process and it is far too early to go into further details at this stage,” said a Saint Gobain spokeswoman.

Saint Gobain stock rose by 2.9% in response to the news.

Roche, a global pioneer in pharmaceuticals and diagnostics, said that it expects its $4.6bn takeover of Spark Therapeutics, a fully integrated, commercial gene therapy company, to successfully close by June. The deal was first announced in February. Under the terms of the agreement, Roche will acquire Spark Therapeutics for $114.50 per share. The per share price represents a premium of 122% to Spark’s closing price on Feb. 22, 2019.

“The deal is not in doubt at all and we expect it will be completed according to our guidance in the first half of 2019. There needs to be more than 50% of the shares to be tendered, but we believe our offer to be full and fair and it has been recommended by the board of Spark,” Roche spokesman said.

Centerview Partners, Cowen & Co and Goodwin Procter are advising Spark Therapeutics. Citigroup and Davis Polk are advising Roche.

 

American Family Insurance, a private mutual company that focuses on property, casualty, and auto insurance, is to acquire Ameriprise Auto & Home, a Wisconsin-based property-casualty insurance provider that primarily sells its products through a partnership with wholesale retailer Costco, for $1.1bn. The acquisition is expected to close during the second half of 2019.

The acquisition continues American Family’s strategy to complement its exclusive agents with distribution channels for customers who prefer to handle their insurance matters in different ways. The acquisition also broadens American Family’s business on a geographic basis, which spreads out storm risk and helps further strengthen the company’s financial position.

Keefe Bruyette & Woods and Foley & Lardner are advising American Family Insurance. Skadden Arps Slate Meagher & Flom and Credit Suisse are advising Ameriprise.

 

Private equity firm Wind Point Partners completed the disposal of Paragon Films, a leading manufacturer of high-performance transit packaging films within North America, to Wellspring Capital Management. The deal was announced on March 6. Financial terms were not disclosed.

Alex Washington, Managing Director at Wind Point, commented: “Paragon is a case study in Wind Point’s investment strategy of assisting family-owned companies to affect a successful leadership transition and unlock additional areas for equity value creation.”

Robert Baird, Rothschild & Co and Kirkland & Ellis advised Paragon Films. McDermott Will & Emery advised Wellspring Capital Management. Antares Capital, Blackrock Kelso, NXT Capital and Newstone Capital provided debt financing. 

 

American Industrial Partners, a New York-based private equity firm, successfully completed the acquisition of Current, a leading provider of energy efficiency and digital productivity solutions, from General Electric, an American multinational conglomerate. The deal was announced on November 5, 2018. Financial terms were not disclosed.

“GE’s history of innovation, quality, reliability and deep domain expertise is an ideal fit with our investment strategy,” said Eric Baroyan, a Partner of AIP. “We look forward to continuing that legacy by supporting Current’s management team on the key growth initiatives, building upon Current’s extensive product portfolio and leading digital solutions that are helping customers gain energy savings and greater insights into their environment through a sophisticated intelligent ecosystem platform.”

UBS, Greentech Capital Advisors, Wells Fargo and Sidley Austin advised General Electric. Barclays, McGuireWoods and Ropes & Gray advised American Industrial Partners. Arnold & Porter Kaye Scholer advised Current.

 

Skyknight and Clearlake-backed symplr, a leading healthcare governance, risk and compliance software-as-a-service platform, closed the acquisition of API Healthcare, a leading provider of healthcare human capital management software solutions, from Veritas Capital. The deal was announced on February 20. Financial terms were not disclosed.

"This is a transformational acquisition that further expands our healthcare software footprint and broadens our SaaS offerings by strengthening symplr's existing GRC platform and adding new workforce management capabilities," said Rick Pleczko, CEO, and Tres Thompson, COO & CFO, of symplr. "Together with API, symplr will continue to pursue the mission of providing software solutions that help healthcare organizations meet regulatory compliance requirements and increase operational efficiency. This is a powerful combination for our customers, partners and team."

William Blair advised API Healthcare and Veritas Capital. Schulte Roth & Zabel advised Veritas Capital. Cooley and Owen Blicksilver PR advised symplr. Robert Baird advised Clearlake Capital Partners and symplr. Antares Capital, Bain Capital Credit, Golub Capital, Adams Street Partners and New Mountain Finance Corporation provided debt financing.

 

The Middleby Corporation, a global leader in the foodservice equipment industry, closed the acquisition of the cooking solutions unit of Standex, which consists of the well-known brands APW Wyott®, Bakers Pride®, BKI® and Ultrafryer®. The deal was announced on February 27. Financial terms were not disclosed.

“The Standex cooking brands are well recognized and respected in the foodservice industry. This acquisition adds to the product portfolio and expands the customers and markets which Middleby serves. BKI has a strong presence in the retail segment, a market in which Middleby has historically had limited representation, providing for a complementary fit and growth opportunities within this customer segment which can extend to other Middleby products. Ultrafryer’s unique high efficiency and high capacity frying technology broadens our product offerings and expands our customer opportunity,” said Tim FitzGerald, CEO of The Middleby Corporation. 

Skadden Arps Slate Meagher & Flom advised Middleby Corporation. Robert Baird advised Standex.

 

Investment firm Centerbrige Partners and Stephen Smith, one of Canada’s leading financial services entrepreneurs, completed the acquisition of Walmart Canada Bank, a financial services arm of Walmart Canada. The deal was announced on May 17, 2018. Financial terms were not disclosed.

 

"The closing of this transaction represents a new and exciting phase for the bank, our talented associates, and our customers," said Trudy Fahie, Chief Executive Officer of Walmart Canada Bank. "We look forward to working together with Stephen and the Centerbridge team, who bring deep financial services expertise, as we execute our long-term growth strategy for the bank while continuing to stay true to our mission of providing value-driven financial products that are clear and simple."

Simpson Thacher & Bartlett advised Centerbridge and Stephen Smith.

 

Private equity firms Wafra Partners and Landmark Partners acquired a minority stake in Siris Capital Group, a leading private equity firm focused on investing and driving value creation in mature technology companies. Financial terms were not disclosed.

Russell Valdez, Chief Investment Officer of Wafra, said: "Driven by a talented investing team with deep domain expertise, Siris has the right infrastructure in place to skillfully execute on its differentiated investment strategy.  Together with our partners, we look forward to the firm's continued success."

Goldman Sachs, Berkshire Capital and Kirkland & Ellis advised Siris. Fried Frank advised Wafra.

 

Private equity firm The Jordan Company acquired Michigan-based ARCH Global Precision, a maker of precision cutting tools, precision machined industrial components and medical implants and instruments. The sellers were Strength Capital Partners and Main Post Partners. Financial terms were not disclosed.

“We are delighted to be partnering with the ARCH management team to support its next phase of growth. ARCH is an industry-leading platform with a best in class management team. We will continue to invest heavily in the business to support organic growth and strategic acquisitions,” commented Mike Denvir, Partner at The Jordan Company.

Lincoln International and Jaffe Raitt Heuer & Weiss advised ARCH Global Precision.

 

Private equity firm Main Post Partners invested in The Happy Planner, a fast-growing, creative lifestyle brand. Financial terms were not disclosed.

"We are excited to partner with Main Post, who understand and support the brand's core mission of empowering people everywhere to embrace the positive and change lives," said Stephanie Fleming, co-founder of The Happy Planner. "This investment provides us with additional resources to continue to build our team and expand the ways the brand has to positively impact our growing community of Happy Planners."

Morrison & Foerster advised Main Post Partners.

 

Long term institutional investor Caisse de dépôt et placement du Québec acquired a 30% stake in Vertical Bridge, the largest private owner and operator of communications infrastructure in the United States. Financial terms were not disclosed.

“With this acquisition, we expand our exposure to telecommunications infrastructure by partnering with a first class operator that is strategically positioned in the market and brings a wealth of knowledge of the industry,” said Emmanuel Jaclot, Executive Vice President, Infrastructure at CDPQ. “We are delighted to work alongside the Vertical Bridge team, and support the company’s next stages of development and long-term growth in an attractive wireless infrastructure sector.”

 

BlackRock invested in US-based CleanCapital, an industry-leading clean energy investment platform. The investment provides for the continued growth of CleanCapital as it expands into new markets and new renewable energy asset classes, with a specific focus on distributed solar and energy storage. Financial terms were not disclosed.

“As the clean energy space evolves, the distributed generation sector is expanding and plays an increasingly important role in the US energy transition,” said Martin Torres, Head of the Americas for the Renewable Power Group at BlackRock. “This partnership allows us to access CleanCapital’s platform capabilities as we seek to invest in the assets meeting the demand for clean energy while delivering value to our clients.”

 

HGGC, a leading middle market private equity firm, made a strategic growth investment in American Megatrends International, an American hardware and software company. Financial terms were not disclosed.

“AMI is perfectly situated in the system software ecosystem to deliver world-class products and services to its customers and to continue to lead a rapidly evolving industry in innovation,” said Bill Conrad, Principal of HGGC. “We are very excited to work with Shankar and the senior leadership of AMI to continue to grow the company by developing new products and solutions critical to their customers’ success.”

 

Miami-based investment firm 777 Partners acquired a 25% stake in Flair Airlines, Canada’s only independent ultra-low-cost carrier. Financial terms were not disclosed.

“The aviation sector continues to be ripe for innovation and Flair is well-equipped to provide affordable airfare for Canada’s underserved market,” said Steve Pasko, Co-Founder and Managing Partner of 777 Partners. “Despite having a strong potential market for ULCCs, Canada lags behind the rest of the world in this space. Through this investment, we want to create a viable alternative for consumers in the region, who have faced a lack of air transportation choice until now.”

 

VSS-backed Coretelligent, a leading provider of comprehensive managed IT and private cloud services, acquired United Technology Group, a managed services IT firm. Financial terms were not disclosed.

With this acquisition, Coretelligent cements their nationwide reach by adding an office in Atlanta, joining the four current Coretelligent locations including their Boston headquarters and offices in New York, Philadelphia and San Francisco. The acquisition brings together two organizations that are focused on creating a superior service model for their clients and extends Coretelligent's White Glove service model throughout the Southeast.

 

Accenture, a global management consulting and professional services firm, acquired New York-based Droga5, one of the world’s most innovative and influential creative agencies. The New York-based agency will become part of Accenture Interactive, boosting its capabilities as an Experience Agency able to design, build and run customer experiences that grow brands and businesses. Financial terms were not disclosed. 

The acquisition will give Accenture Interactive a distinct marketplace position, further enabling it to lead brands into the future. The news represents an evolution in Accenture Interactive’s journey to build a new agency model — one with the power to engineer transformative brand experiences and infuse those experiences with the emotional and inspirational power of brand thinking and creativity.

 

US Legal Support, the nation’s leading provider of litigation support services, acquired First Choice Reporting & Video Services, which provides comprehensive legal support services throughout Florida. Financial terms were not disclosed.

“The opportunity to bring First Choice into the US Legal Support family was an exciting possibility for us. We had long admired the professionalism of their team and knew they would be an ideal fit to continue our rapid growth in Florida,” said Charles Schugart, President and Chief Executive Officer. “This acquisition further solidifies US Legal Support as the premier provider of litigation support services in the Florida community.”

 

 

UK-based contract development and manufacturing organization Sterling Pharma Solutions, backed by private equity firm GHO Capital, acquired a facility in North Carolina from CiVentiChem, a company that mainly focuses on providing research services to life science companies. Financial terms were not disclosed. 

The new facility, located close to the Research Triangle Park, will allow Sterling to offer a local presence to its US clients and enhance its chemistry development capabilities to support pre-clinical and early phase clinical supply. The acquisition follows Sterling’s record growth, with the company more than doubling its sales since its formation in 2016 following a management buy-out. With the support of its new investor, GHO Capital, the acquisition advances Sterling’s strategy to build a global chemistry services business.

Wombat Capital Markets advised CiVentiChem.

 

Securus Technologies and Inmate Calling Solutions, two inmate calling service companies, agreed to drop a merger bid after US regulators recommended blocking the deal because of significant competitive concerns. Critics said the deal could have led to a market where the vast majority of inmate calls were controlled by two companies and argued that US prisoners already pay inflated prices to make calls.

FCC Chairman Ajit Pai said in a statement that allowing Securus Technologies and Inmate Calling Solutions, which are controlled by private equity firms Platinum Equity and HIG Capital respectively, to merge would not have been in the public interest.

 

 

Allstate, one of the largest insurance providers in the United States, is close to selling an annuity book to smaller peer FGL Holdings. Should the deal go ahead, it would be the latest transaction involving run-off books by insurers, who have been offloading these existing policies to free up cash to help write new business. The asset for sale is expected to be valued at $2.5-3bn.