Brookfield and CDPQ in $13.2bn deal acquired Power Solutions business of Johnson Controls.
Brookfield Asset Management and CDPQ have reached an agreement whereby Brookfield and CDPQ will acquire 100% of Johnson Controls’ Power Solutions business for approximately $13.2bn. In fiscal 2018, Power Solutions generated $8bn in revenue and $1.68bn in earnings before interest, taxes, depreciation and amortisation. The transaction price of $13.2bn represents a multiple of 7.9x trailing twelve month EBITDA.
"The sale of our Power Solutions business will create value for investors by streamlining our portfolio and giving us the increased financial flexibility to strengthen our balance sheet, return capital to shareholders and create optionality in our Buildings business. This focused portfolio will allow us to capitalise on secular growth trends and to deliver strong financial performance through improved free cash flow conversion, lower capital intensity and continued margin expansion." Said Johnson’s chairman and chief executive officer George Oliver.
Centerview Partners and Barclays served as financial advisors to Johnson Controls, and Simpson Thacher served as legal advisors.
Financing will be led by a syndicate of banks including Barclays, Credit Suisse, JPMorgan Chase, BofA Merrill Lynch, BMO Capital Markets, CIBC Capital Markets, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, RBC Capital Markets, The Bank of Nova Scotia and TD Securities, who are each (other than Barclays) also acting as financial advisors to Brookfield.
Davis Polk & Wardwell LLP is acting as lead deal counsel to Brookfield. Also, Baker McKenzie is providing non-US legal advice, Cahill Gordon & Reindel LLP is providing compliance advice and Weil, Gotshal & Manges LLP is providing consortium advice to Brookfield. Kirkland & Ellis is acting as legal counsel to CDPQ.
Qualtrics International Inc. is the global pioneer of the experience management (XM) software category that enables organisations to thrive in today’s experience economy. The vendors in the transaction are Sequoia Capital, Insight Venture Partners, Accela Inc. and the Smith family, founders of Qualtrics.
Under the terms of the agreement, SAP will acquire all outstanding shares of Qualtrics for $8bn in cash. SAP has secured financing in the amount of €7bn ($7.9bn) to cover the purchase price and acquisition-related costs. The purchase price includes unvested employee incentive compensation and cash on the balance sheet at the close. The acquisition is expected to close in the first half of 2019.
SAP CEO Bill McDermott said: “The combination of Qualtrics and SAP reaffirms experience management as the groundbreaking new frontier for the technology industry. SAP already touches 77% of the world’s transactions. When you combine our operational data with Qualtrics’ experience data, we will accelerate the XM category with an end-to-end solution with immediate global scale."
Based on the stockholders' section of the prospectus, the Smiths will make about $3.3bn from the deal. Venture firm Accel's shares are worth about $1.5bn, followed by $1.35bn for Insight Venture Partners and $910m for Sequoia.
Qatalyst Partners and Goodwin Procter advised Qualtrics, while JP Morgan and Jones Day advised SAP.
A global leader in infrastructure solutions for communications networks has agreed to acquire ARRIS International plc, a global leader in entertainment and communications solutions, in an all-cash transaction for $31.75 per share, or a total purchase price of approximately $7.4bn.
In addition, The Carlyle Group, a global alternative asset manager, has reestablished an ownership position in CommScope through a $1bn minority equity investment as part of CommScope’s financing of the transaction.
The combination of CommScope and ARRIS would create a company with approximately $11.3bn in revenue and adjusted EBITDA of approximately $1.8bn.
“After a comprehensive evaluation of our business and the evolving industry we operate in, we are confident that combining with ARRIS is the best path forward for CommScope to grow and provide the greatest returns for shareholders." Eddie Edwards, CommScope President and CEO.
CommScope was advised by Allen & Company, Deutsche Bank, JP Morgan Chase, BofA Merrill Lynch, Alston & Bird, Latham & Watkins, Cravath, Swaine & Moore, Pinsent Masons, and Skadden, Arps, Slate, Meagher & Flom. ARRIS was advised by Evercore, Troutman Sanders, Herbert Smith Freehills, and Hogan Lovells. Carlyle was advised by Simpson, Thacher & Bartlett. JP Morgan Chase, Deutsche Bank, and BofA Merrill Lynch provided financing for the transaction.
Veritas Capital and Elliott Management acquired athenahealth for $5.7bn.
Veritas Capital and Elliott Management acquired athenahealth, a publicly traded American company that provides network-enabled services for healthcare and point-of-care mobile apps, for $5.7bn in cash. Under the terms of the agreement, athenahealth shareholders will receive $135 in cash per share. The per share purchase price represents a premium of approximately 12% over the company's closing stock price on November 9, 2018.
Following the closing, Veritas and Evergreen, an affiliate of Elliott, expect to combine athenahealth with Virence Health, the GE Healthcare Value-based Care assets that Veritas acquired earlier this year. The combined business is expected to be a leading, privately-held healthcare information technology company with an extensive national provider network of customers and world-class products and solutions to help them thrive in an increasingly complex environment.
"After a thorough strategic review process, we have decided to enter this agreement with Veritas, which we believe maximises value for our shareholders and accelerates our goal to transform healthcare," said Jeff Immelt, Executive Chairman of athenahealth.
Centerview Partners, Lazard and Weil Gotshal and Manges advised athenahealth. Deutsche Bank, RBC Capital Markets and Gibson Dunn & Crutcher advised Elliott Management Corporation. Schulte Roth & Zabel advised Veritas Capital.
II-VI acquired Finisar, a manufacturer of optoelectronic components, for $3.2bn.
II-VI, a manufacturer of optical communication components and subsystems, acquired Finisar, a global leader in engineered materials and optoelectronic components, for $3.2bn. Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, Finisar’s stockholders will receive $15.60 per share in cash and 0.2218x shares of II-VI common stock, valued at $10.40 per share based on the closing price of II-VI’s common stock of $46.88 on November 8, 2018. The transaction values Finisar at $26.00 per share, or approximately $3.2bn in equity value and represents a premium of 37.7% to Finisar’s closing price on November 8, 2018. Finisar shareholders would own approximately 31% of the combined company.
The combination of II-VI and Finisar would unite two innovative, industry leaders with complementary capabilities and cultures to form a formidable industry leading photonics and compound semiconductor company capable of serving the broad set of fast-growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment and life sciences. Together, II-VI and Finisar will employ over 24,000 associates in 70 locations worldwide upon closing of the transaction.
Barclays and O'Melveny & Myers advised Finisar. Bank of America Merrill Lynch, K&L Gates and Sherrard German & Kelly advised II-VI.
Vista Equity acquired Apptio for $1.94bn.
Apptio Inc. is a Bellevue, Washington-based company founded in 2007 that develops technology business management software as a service application. Apptio shareholders will receive $38.00 in cash per share, representing a 53% premium to the unaffected closing price as of November 9, 2018.
"Today, with companies across sectors increasingly depending on technology to stay competitive, IT is becoming a critical component for every business on the planet, and Apptio has created the leading platform to help customers manage this new paradigm," said Brian Sheth, co-founder and president of Vista. "We're thrilled to partner with Sunny and the entire Apptio team on the next chapter in the company's growth."
Qatalyst Partners and Wilson Sonsini Goodrich & Rosati advised Apptio. Kirkland & Ellis advised Vista Equity.
CJ CheilJedang, a South Korean food company, based in Seoul, acquired a majority stake in Schwan's Company, which sells frozen foods from home delivery trucks, in grocery store freezers, by mail, and to the food service industry, for $1.84bn. The transaction will include 80% of Schwan’s Company and specific subsidiaries that focus on foods sold in retail and grocery channels and food-service venues. The Schwan family will retain 20% ownership in the businesses being sold to CJCJ and will also retain 100% ownership in Schwan’s Home Service, Inc., which represents the legacy home-delivery business that Marvin Schwan launched in 1952.
“We are entering a new and exciting era at Schwan’s, and we look forward to working closely with our new team members to further strengthen our operations and accelerate growth for the benefit of consumers, customers and employees,” said Schwan’s CEO Dimitrios Smyrnios. “CJ CheilJedang is an extraordinarily world-class and innovative company well-known for their success worldwide, and we are very impressed with their global growth plans and investments in the United States. The future for Schwan’s and our people are very bright.”
Energizer, an American manufacturer of batteries, headquartered in Town and Country, Missouri, acquired the auto care business of Spectrum Brands, a global consumer products company offering a broad portfolio of leading brands, for $1.25bn, which is comprised of $937.5m of cash and $312.5m of Energizer Holdings Inc. equity.
“The GAC business is a terrific complement to Energizer’s existing auto care business, and they have the resources and capabilities to increase investment to grow the business furtherw,” said David Maura, Executive Chairman and Chief Executive Officer of Spectrum Brands Holdings. “Energizer is a highly respected operator, and we believe they will be a great steward of the GAC business and its employees while allowing us to delever and focus on our remaining businesses.”
Spectrum Brands also announced today that it has entered into an amended acquisition agreement with Energizer for the previously announced sale of its Global Battery and Lighting Business, to address a proposed remedy that Energizer has submitted for consideration to the European Commission for review, including a potential downward adjustment to the purchase price of up to $200m. Contingent upon the EC’s approval of the proposed remedy, Spectrum Brands continues to expect this transaction to close at the beginning of calendar year 2019.
The RBC Capital Markets, Credit Suisse and Paul, Weiss, Rifkind, Wharton & Garrison LLP advised Spectrum in connection with the Global Auto Care transaction, while Evercore and Bryan Cave Leighton Paisner advised Energizer. Barclays, Citigroup and JP Morgan provided debt financing.
On the Global Battery and Lights transaction, RBC Capital Markets and Kirkland & Ellis LLP advised Spectrum, while Barclays advised Energizer. Debt financing was provided by Barclays and JP Morgan.
Pan American Silver acquired silver miner Tahoe for $1.1bn.
Pan American Silver, a mining company, based in Canada with operations in Latin America, acquired Tahoe Resources, a mining company and intermediate precious metals producer with silver and gold mines in Canada, Guatemala and Peru, for $1.1bn. Pursuant to the Arrangement, Tahoe shareholders may elect to receive $3.40 in cash or 0.2403 Pan American shares for each Tahoe share, subject in each case to pro-ration based on a maximum cash consideration of $275m and a maximum number of Pan American shares issued of 56.0m, totalling US$1,067m. The Base Purchase Price represents a premium of 34.9% to Tahoe's volume weighted average price for the 20-day period ending on November 13, 2018.
Commenting on the transaction, Michael Steinmann, President and Chief Executive Officer of Pan American Silver, said: "The combination of Pan American and Tahoe will establish the world's premier silver mining company with an industry-leading portfolio of assets, superior growth opportunities and attractive operating margins. This transaction doubles our silver reserves and further improves our cost profile. We will build on that strong foundation, optimising these high-quality assets to deliver profitable growth and superior returns."
Tahoe was advised by BMO, Trinity Advisors Corporation, Cassels Brock & Blackwell and Neal Gerber & Eisenberg. Pan American Silver was advised by CIBC World Markets, TD Securities, Borden Ladner Gervais and Skadden Arps Slate Meagher & Flom.
Dell raised its offer by $5bn to buy back shares tied to VMware.
Dell Technologies raised its offer to buy back shares tied to its interest in software maker VMware to $120 per share, sweetening the deal for shareholders with an additional $5bn in cash.
The revised terms, announced ahead of a scheduled vote on the deal on Dec. 11, cap 1-1/2 weeks of negotiations between Dell and its private owners, and several large shareholders such as Elliott Management.
In July, the computer maker offered to pay $21.7bn, or $109 per share, in cash and stock to buy back shares tied to its interest in VMware, returning Dell to the stock market without an initial public offering.
Hedge fund manager Carl Icahn, who owns a 9.3% stake in Dell, had resisted the initial plan, saying the proposed deal massively undervalues the tracking stock.
Blackstone eyes General Electric assets as it seeks to decrease leverage.
GE said it will sell up to 101.2m Baker Hughes shares on the open market and that Baker Hughes, an international industrial service company and one of the world's largest oilfield services companies, will buy 65m of its shares from GE, using a $1.5bn repurchase arsenal Baker it already has authorised. Based on Tuesday’s share price, the sale would raise about $4bn. After the sale, GE will own about 50.4 % of Baker Hughes. Blackstone reportedly is lurking around the asset disposal.
GE bought Houston-based Baker Hughes in July 2017 and agreed to maintain its 62.5% stake until the middle of next year. GE has since focused on debt and its core businesses of jet engines, power plants and renewable energy. “The agreements announced today accelerate that plan in a manner that mutually benefits both companies and their shareholders,” said Lawrence Culp, CEO of GE.
GE shares rose 4.5% to $8.35. Baker Hughes was up 1.6% to $24.01.
WeWork secured an additional $3bn in funding from Japan’s SoftBank.
The latest funding was in the form of a warrant, under which SoftBank will pay WeWork $1.5bn on Jan. 15 and the remaining on April 15.
SoftBank, which runs the world’s biggest private equity fund was in discussions to buy a majority stake in WeWork.
Canadian investment firm Mawer explores C$2bn ($1.5bn) sale.
According to a Reuters report, Canadian asset manager Mawer Investment Management is working with an investment bank to explore a potential sale in a deal that could be worth as much as C$2bn ($1.51bn). Employee-owned Mawer manages more than C$50bn ($38bn) of assets for both individual and institutional clients through 13 mutual funds that cover equities, fixed income, or a combination of the two.
Scotia Bank is said to advise on the potential deal.
BlackBerry looks to buy cybersecurity firm Cylance for $1.5bn.
BlackBerry Ltd is in talks to buy cybersecurity company Cylance Inc for as much as $1.5bn, Business Insider reported on Friday, citing sources familiar with the matter. Irvine, California-based Cylance develops AI-based products to prevent cyber attacks on companies and recently considered filing for an IPO, according to the report.
A deal could be announced as soon as next week, Business Insider reported citing sources, who cautioned the deal could still fall apart.
Cannabis firm Harvest eyes $1.5bn IPO.
US cannabis retailer Harvest Enterprises Inc is set to raise $230m in a deal that would value the company at about $1.5bn when it goes public in Toronto as early as next week, people familiar with the situation told Reuters on Thursday. The Tempe, Arizona-based company had initially targeted $50m through the offer, but increased the deal value to $230m in response to strong demand, the people said. The offer, which is set to be priced at $6.55 per subscription receipt, is expected to close as early as this week. A subscription receipt can be exchanged for shares when the company goes public.
Cannabis stocks received an added boost this week on voter approvals of medical cannabis in Missouri and Utah and recreational marijuana in Michigan, and on the firing of U.S. Attorney General Jeff Sessions, a staunch opponent of federal legalisation.
Eight Capital, GMP Securities and Canaccord Genuity are the lead banks advising Harvest.
Saudi Arabia's PIF eyes a $700m stake in Legendary.
According to a Reuters report, Saudi Arabia’s sovereign wealth fund is exploring the acquisition of up to a $700m stake in Legendary Entertainment, the US movie studio behind films such as “Jurassic World” and “Interstellar”. Legendary is currently owned by Wanda, led by billionaire Wang Jianlin, which paid $3.5bn for the company in early 2016.
Legendary has not had any formal discussions with PIF. Plans of the Saudi fund are presently in an early stage. PIF is in talks to hire a financial adviser to assist it with its bid. Both sides declined to comment.
Berkshire invested in JPMorgan, Oracle and Travelers Cos.
Reuters reports that the holdings were disclosed in a regulatory filing detailing Berkshire’s US-listed stock investments as of Sept. 30, according to which, Berkshire owned about $4.02bn of stock in JPMorgan, $2.13bn of Oracle stock and $460m of Travelers stock.
The JPMorgan investment closes a notable hole in Berkshire’s stock portfolio, which already contained large investments in other financial services companies, including American Express Co, Bank of America Corp, Goldman Sachs Group Inc, US Bancorp and Wells Fargo & Co.
While the filing did not say, who bought which stocks, larger investments are normally made by Buffett, who often buys stock when he cannot find whole businesses to purchase.
