AMERICAS
California attorney general Xavier Becerra’s office will not appeal a court’s decision that a merger of wireless carriers Sprint and T-Mobile can go forward, Reuters reported. The notice said that the state reached a settlement with the companies but did not detail it.
California and New York had led a fight by more than ten states to stop the merger on grounds it would lead to higher prices but lost in February. New York has already said it will not appeal the defeat.
Sprint is advised by Centerview Partners, JP Morgan, Mizuho, SMBC, The Raine Group, Morrison & Foerster, Potter Anderson & Corroon, Simpson Thacher & Bartlett, and Skadden Arps Slate Meagher & Flom. SoftBank is advised by Morrison & Foerster. Deutsche Telecom is advised by Deutsche Bank, Evercore, Goldman Sachs, Morgan Stanley, PJT Partners, Allen & Overy, Hogan Lovells, DLA Piper, Latham & Watkins, Richards Layton and Finger, and Wachtell Lipton Rosen & Katz.
Renewable power producer Pattern Energy won shareholders' approval to be taken private by CPPIB for $6.1bn.
Water Island Capital, which manages funds that own over 4m shares of Pattern Energy, last month urged investors to reject CPPIB’s offer, citing that the bid undervalued the renewable power firm.
Pattern Energy is advised by Evercore, Goldman Sachs, Blake Cassels & Graydon, Paul Weiss Rifkind Wharton & Garrison, Gibson Dunn & Crutcher, Joele Frank, and LodeRock Advisors. CPPIB is advised by Bank of America Merrill Lynch, Shearman & Sterling, and Finsbury. Riverstone is advised by Sullivan & Cromwell and Kekst CNC. Debt financing is provided by BMO Capital Markets, Citigroup, and RBC Capital Markets.
Two US lawmakers expressed serious concern about the effect of a $2.6bn planned merger of college textbook publishers Cengage and McGraw-Hill Education, saying the deal would create a new industry leader with nearly half the market, Reuters reported.
Representatives David Cicilline, chair of the House Judiciary Committee's antitrust panel, and Jan Schakowsky, chair of an Energy and Commerce consumer protection panel, urged the Justice Department to scrutinize the merger to ensure it is legal under antitrust law. In the letter, Cicilline and Schakowsky noted how few college textbook makers were left in the market and that prices had risen 184% since 1998.
Cengage is advised by Freshfields Bruckhaus Deringer and Wachtell Lipton Rosen & Katz. McGraw-Hill is advised by Morgan Lewis & Bockius, Paul Weiss Rifkind Wharton & Garrison, and Edelman.
Cleveland-Cliffs and AK Steel Holding, announced the approval of the $3bn merger by all of the respective shareholders to complete the previously announced acquisition of AK Steel by Cliffs.
“The shareholders of Cliffs and the stockholders of AK Steel have spoken, and delivered an outstanding victory in support of our transaction. I thank you all for your unequivocal demonstration of support. The new Cleveland-Cliffs is a lot stronger than either Cliffs or AK Steel individually,” Lourenco Goncalves, Cleveland-Cliffs Chairman, President and CEO.
AK Steel is advised by Goldman Sachs and Weil Gotshal and Manges. Cleveland-Cliffs is advised by Credit Suisse, Moelis & Co, Jones Day, Squire Patton Boggs, and Alston & Bird. Debt financing is provided by Credit Suisse.
Private equity firm Veritas Capital is set to acquire government and healthcare technology service provider US State & Local Health Services from DXC Technology, an end-to-end IT services and solutions company, for $5bn.
The transaction is expected to close no later than December 2020, subject to the satisfaction of customary closing conditions, including the receipt of certain third-party consents and regulatory approvals. The sale is not subject to any financing condition or shareholder approval.
“DXC’s US State and Local Health and Human Services business is a leading player in a highly complex market that continues to benefit from technological innovation. By combining the business’ talented employees with our extensive industry experience, we plan to build on the business’ unwavering commitment to its customers and leadership in mission-critical healthcare technology to drive continued improvement in the quality of healthcare for citizens nationwide. We look forward to welcoming the business and its employees into the Veritas portfolio," Ramzi Musallam, Veritas Capital CEO and Managing Partner.
Veritas is advised by Goldman Sachs, Schulte Roth & Zabel, and Sard Verbinnen & Co. DXC is advised by Guggenheim Partners, JP Morgan, and Latham & Watkins. Guggenheim Partners and JP Morgan are advised by Cravath, Swaine & Moore.
Equinox Gold and Leagold Mining, two gold mining companies, completed their merger in $584m deal. After closing, Equinox Gold and Leagold shareholders own approximately 55% and 45% of the merged company respectively.
"We have created a major gold producer by combining the assets and leadership teams of Equinox Gold and Leagold, with a peer-leading growth profile and powerful financial, technical and operational management. Equinox Gold now has six producing mines, two development projects, two expansion projects and the financial capacity to fund its development plans," Ross Beaty, Equinox Gold Executive Chair.
Equinox Gold was advised by Scotia Capital, Fasken Martineau DuMoulin, and Veirano Advogados. Leagold was advised by BMO Capital Markets, Blake Cassels & Graydon, and Pinheiro Neto.
PepsiCo, an American multinational food, snack, and beverage corporation, agreed to acquire Rockstar Energy Beverages, the energy drink maker, for $3.9bn.
"As we work to be more consumer-centric and capitalize on rising demand in the functional beverage space, this highly strategic acquisition will enable us to leverage PepsiCo's capabilities to both accelerate Rockstar's performance and unlock our ability to expand in the category with existing brands such as Mountain Dew. Over time, we expect to capture our fair share of this fast-growing, highly profitable category and create meaningful new partnerships in the energy space," Ramon Laguarta, PepsiCo Chairman and CEO.
PepsiCo is advised by Centerview Partners, Gibson Dunn & Crutcher and Davis Polk & Wardwell. Rockstar is advised by Goldman Sachs and King & Spalding.
MutualFirst Financial, the holding company of MutualBank, an Indiana-based financial institution, received the requisite approvals of its stockholders for the pending $346m merger with Northwest Bancshares, a full-service financial institution, at a special meeting on March 6, 2020.
Completion of the merger remains subject to regulatory approvals and other customary closing conditions. Upon completion of the transaction, each outstanding share of the Company's common stock will be converted into the right to receive 2.4 shares of Northwest common stock. The transaction is expected to close in the second quarter of 2020.
MutualFirst is advised by Keefe Bruyette & Woods and Silver Freedman Taff & Tiernan. Northwest is advised by B. Riley FBR and Luse Gorman.
Shareholders of Curetis, a developer of molecular diagnostic solutions, voted to approve the business combination with OpGen, a precision medicine company.
“We are pleased that Curetis shareholders have voted to approve the planned business combination of OpGen and Curetis. The vast majority of OpGen shareholders who have already voted have also been supportive of the combination. In the coming weeks, we anticipate securing the additional votes needed to complete the combination of our two companies,” Evan Jones, OpGen Chairman and CEO.
OpGen is advised by Crosstree Capital and Ballard Spahr. Curetis is advised by HC Wainwright and Linklaters.
First American Financial, a provider of title insurance, settlement services and risk solutions for real estate transactions, completed the acquisition of Docutech, a provider of document, eClose and fulfillment technology for the mortgage industry, for $350m.
“The acquisition of Docutech reflects our steadfast commitment to invest in and grow our core business. We’re excited to soon welcome to First American the people of Docutech, a highly respected leader in the document technology solutions industry. Together, we will accelerate the evolution of real estate closings,” Dennis J. Gilmore, First American Financial CEO.
Docutech was advised by Raymond James. First American was advised by Bank of America Merrill Lynch. Bank of America Merrill Lynch was advised by Sullivan & Cromwell.
Jefferson Capital Systems, a purchaser and servicer of consumer charged-off and bankruptcy receivables in the US and UK, completed the acquisition of Canaccede Financial Group, the largest buyer of charged-off consumer receivables and insolvencies in Canada, from JC Flowers, a private investment firm. Financial terms were not disclosed.
"The acquisition of Canaccede will further strengthen Jefferson Capital’s track record of consistent growth and profitability, founded on industry leading advanced analytics, modeling, and multi-channel collections capabilities. Canaccede’s strength in Canada is unmatched, and their proven history of strong performance and desire to innovate made them an obvious candidate for collaboration. The two companies already share common products and services, a similar market approach and a mission to be the best option for creditor grantors to maximize the value of their consumer receivables,” David Burton, Jefferson Capital Founder and CEO.
Jefferson was advised by Stikeman Elliott and Weil Gotshal and Manges. JC Flowers was advised Lambert & Co.
Private equity firm CIP Capital completed the investment in 3Pillar Global, a developer of innovative digital products. Financial terms were not disclosed.
"3Pillar has established itself as a leader across the product development lifecycle and has tremendous potential to accelerate growth. This strategic partnership allows us to supercharge our go-to-market approach and expand our ability to deliver great services to our current and future clients. We're excited to partner with CIP Capital to fuel the next phase of incredible work from our 3Pillar team," David DeWolf, 3Pillar Global CEO.
3Pillar was advised by SunTrust Robinson Humphrey and Cooley. CIP was advised by Willkie Farr & Gallagher.
Gladstone Investment, a publicly-traded business development company, agreed to acquire The Maids International, a provider of house cleaning services. Financial terms were not disclosed.
“The Maids is a brand with an outstanding legacy, established in 1979, and reputation in its market. We look forward to working with the management team and our investment partner, Dan Kirwan, to build on that foundation as The Maids enters its next phase of growth,” Erika Highland, Gladstone Investment Managing Director.
The Maids International is advised by D.A. Davidson & Co.
Court Square-backed Offen Petroleum, an independent fuel distributor, agreed to acquire Bosselman Energy, a fuel distributor, and Bosselman Carriers, a trucking company. Financial terms were not disclosed.
"This transaction affords us the opportunity to strengthen our Colorado operations while expanding into new geographies and business lines. Nebraska, Kansas and Iowa are adjacent to our core footprint, allowing us to work with our existing suppliers in new territories. We are eager to add propane operations and services to our product offering. The opportunity to deliver propane directly to residential customers complements Offen's purpose of providing energy to improve people's lives," Bill Gallagher, Offen Petroleum CEO.
Offen Petroleum is advised by Chris Tofalli.
Invitae, a medical genetics company, agreed to acquire YouScript, a privately held clinical decision support and analytics platform, for $79m, and Genelex, a privately held pharmacogenetic testing company, for $21m.
"Adding pharmacogenetics to Invitae's services enables us to offer greater value to our existing customers and helps us expand into new customer types and clinical areas. Despite its broad utility, the incorporation of pharmacogenetic information into routine medical care has been slow. We believe that Invitae's business model and technological capabilities, combined with an offering designed for ease of use in supporting clinical care, can accelerate the use of pharmacogenetic information. This is an exciting next step in our mission to bring comprehensive genetic information into mainstream medical care," Sean George, Invitae Co-Founder and CEO.
Frontier Oilfield Services, an enterprise specializing in the safe disposal of non-oil fluids and particulate matter, completed the acquisition of TRICCAR, a biomedicine company. Financial terms were not disclosed.
"Since founding TRICCAR, the management team has sought to take the company public. We sought public visibility and transparency for our planned work with both the United States Drug Enforcement Administration and Food and Drug Administration and to offer our employees the potential long-term benefits of public company ownership," Bill Townsend, TRICCAR Founder.
The Wesbell Group of Companies, a provider of services to the telecommunications industry, completed the acquisition of Vista Telecom Networks, a provider of telecommunication infrastructure. Financial terms were not disclosed.
"Wesbell and Vista have worked together on many projects over the past ten years. The familiarity with the Vista team makes this acquisition such a natural fit. This is another significant step for Wesbell in its expansion to better serve its customers across Canada and the United States," Nick Mazze, The Wesbell Group of Companies President and CEO.
The Riverside Company, a private equity firm, completed an investment in National Flavors, a manufacturer of flavours for use in the food industry. Financial terms were not disclosed.
"The market for flavor manufacturing businesses is highly attractive, and it is a great time for founders to sell. During our investment period, we will look to strengthen NF’s research, development and application capabilities through organic and inorganic growth initiatives to continue delivering innovative custom flavors and leading customer service. We are actively pursuing add-ons of other leading flavor houses to complement NF,” Loren Schlachet, Riverside Managing Partner.
FirstGroup launches formal sale of North American businesses.
UK transport company FirstGroup has formally put its North American businesses up for sale after coming under pressure from a major activist shareholder.
There had been “significant interest” in its First Student and First Transit businesses, which the company aims to sell by the second half of the year, Matthew Gregory, chief executive said.
The sale process was announced alongside a trading update that showed a 7.5% increase in group revenues from the end of September 2019 to the end of February.
Goldman Sachs is open to acquisitions. (FS)
Goldman Sachs Group Chief Financial Officer Stephen Scherr said the bank is “very open” to acquisitions, especially those that would speed the growth of its existing businesses.
”We are ... very open to the proposition of acquisitions that fill gaps or accelerate elements of our growth plan,” Stephen Scherr, Goldman Sachs Group CFO.
Telefonica, TIM plan joint bid for Oi's mobile business in Brazil.
Telefonica Brasil and TIM Participações expressed interest in negotiating a joint offer to buy the mobile unit of bankrupt Brazilian carrier Oi, Reuters reported.
The companies informed Oi’s financial advisor Bank of America Merrill Lynch of their interest in starting negotiations for a potential acquisition of all or part of Oi’s mobile division.
Westbrook Partners forms a $2.5bn real estate fund. (FS)
Westbrook Partners, a real estate investment management company, raised $2.5bn for its eleventh real estate fund. Westbrook Partners raised and invested more than $14bn of equity in over $50bn of real estate transactions in major markets throughout the world.
EMEA
EU regulators are canvassing independent opticians across the continent on whether Ray-Ban maker EssilorLuxottica’s €7.1bn ($8bn) acquisition of GrandVision will drive up the cost of glasses, in a sign that Brussels is stepping up scrutiny of the deal, FT reported.
The EU launched a full-blown probe into the deal in February following concerns among retailers and rival lens makers that it would result in higher prices and less competition.
GrandVision is advised by ING Bank, Bredin Prat and De Brauw Blackstone Westbroek. EssilorLuxottica is advised by BNP Paribas, Citigroup, Goldman Sachs, BonelliErede, Latham & Watkins, Stibbe, Sullivan & Cromwell, Hogan Lovells, Brunswick Group, and Community Group. HAL is advised by NautaDutilh. Debt Financing is provided by Credit Agricole and HSBC.
Elavon, a global merchant acquirer and subsidiary of US Bank, completed the acquisition of Sage Pay, a payments gateway business of The Sage Group, a provider of cloud business management solutions, for $300m.
The acquisition is part of Elavon’s strategy to help its business customers grow as the global economy becomes more digital, and as businesses look to streamline their operations with software that includes payments capabilities. This acquisition also extends Elavon’s market share in the UK and Ireland, particularly for small and medium-sized enterprises where Sage Pay is a highly-trusted payment gateway with a loyal customer base.
“We are a customer-focused company that is helping businesses succeed in a global marketplace that is changing rapidly. This acquisition brings tremendous talent and leading technology to Elavon, which can be leveraged across the European market,” Hannah Fitzsimons, Elavon Merchant Services President and General Manager.
The Sage Group was advised by Citigroup, Morgan Stanley, Rothschild & Co, Allen & Overy, and FTI Consulting.
Pacific Investment Management, a private equity firm, is set to acquire Allianz Real Estate, an investment and asset management firm, from Allianz Group, forming a combined unit with $100bn in assets. Financial terms were not disclosed.
"Real estate has been, and will continue to be, central to the development of our Private Strategies platform, which we consider essential to providing our clients with alternative approaches to achieving their long-term investment objectives. By incorporating Allianz Real Estate into PIMCO’s existing suite of private solutions, we intend to significantly enhance our capabilities in an area that has become a critical component of our clients’ portfolios,” Emmanuel Roman, PIMCO CEO.
Invitae, a medical genetics company, completed the acquisition of Diploid, a privately held Belgian company that developed Moon, an artificial intelligence software capable of diagnosing genetic disorders in minutes based on next-generation sequencing data and patient information, for $95m.
"The addition of Diploid's software to Invitae's best-in-class variant interpretation platform will provide an immediate increase in throughput, improving the customer experience and lowering COGS for our exome offering, further extending the advantage of Invitae's platform to the benefit of clinicians and their patients. More importantly, this technology will help us accelerate progress toward the routine use of whole genome sequencing in addition to panel and exome testing, ultimately helping more patients get the diagnosis they need, sooner," Sean George, Invitae Co-Founder and CEO.
Fincantieri risks an EU antitrust veto against its bid for Chantiers de l’Atlantique because of the difficulty of addressing regulators’ concerns, Reuters reported.
Italy sees the deal by Europe’s largest shipyard as an opportunity to create a European industrial champion in the shipbuilding industry to stave off competition from Asia and other regions.
EU antitrust enforcers however are concerned that the deal between two global leaders in an already concentrated and capacity-constrained market could push up prices for cruise ships.
BMC Software, an IT solutions provider, completed the acquisition of RSM Partners, a provider of mainframe services and software with a focus on mainframe security. Financial terms were not disclosed.
"RSM Partners is delighted to be joining forces with BMC to continue offering customers critical solutions for the modern mainframe. For over 14 years, our company has maintained leadership and dedicated focus on mainframe infrastructure and security, helping customers anticipate digital disruption and protect against volatility and risk," Mark Wilson, RSM Partners Technical Director.
FlySafair interested in buying SAA’s arm Mango.
South African carrier FlySafair is interested in buying the low-cost arm of state-owned South African Airways - if it’s put up for sale by the embattled national carrier.
FlySafair management approached SAA’s administrators about a possible acquisition of Mango Airlines, CEO Elmar Conradie said. However, the business-rescue experts made clear their priority is to complete a turnaround plan of the main carrier due at the end of the month, he said.
“The only one that makes sense is Mango,” Elmar Conradie, Mango CEO. A move for SAA Technical, which provides aircraft maintenance, would be “total overkill” given FlySafair’s fleet is already serviced by its parent company, Safair Operations.
Galp Energia prepares gas distributor sale.
Galp Energia, Portugal’s biggest oil company, is planning a sale of its gas distribution assets in a deal that could value the business at as much as €1.5bn ($1.7bn).
The company is working with Bank of America on the potential divestment. Galp plans to send out preliminary information on the business to potential buyers shortly and will invite initial bids in the next few weeks.
Balfour Beatty delays buyback amid virus turmoil.
Balfour Beatty, a construction group, deferred plans for its £200m-plus ($262m) share buyback amid stock market turmoil caused by the coronavirus.
Balfour Beatty had been considering announcing the capital return alongside its annual results.
APAC
Brookfield pauses sale of Australian coal port due to coronavirus. (FS)
Canada’s Brookfield Asset Management put the $2bn sale or potential listing of its coal export terminal in Australia on hold due to travel restrictions amid the spread of coronavirus, Reuters reported. Running a sale and listing process had become impossible given travel bans due to the global outbreak.
The decision makes the Dalrymple Bay Coal Terminal the largest and most high profile corporate transaction in Australia to fall victim to the volatile financial market conditions sparked by the epidemic.
Beijing Capital Agribusiness & Foods weighs sale.
Beijing Capital Agribusiness & Foods Group is exploring a sale of its century-old fermented bean curd brand Beijing Wangzhihe Food Group, Bloomberg reported.
The state-owned company has approached some major domestic companies and private-equity firms to gauge interest for the business. Some potential buyers have so far shown lukewarm interest because of concerns that the brand is losing popularity among young consumers.
JAFCO closes sixth flagship fund at $760m. (FS)
Japanese venture capital firm JAFCO reached the final close for its JAFCO SV6 Fund Series at $760m.
SV6 is JAFCO’s first fund family since it introduced the partnership model, inviting its partners as general partners of the fund, and employees to invest their own capital. The series includes JAFCO SV6 and JAFCO SV6-S, which – the firm said – was “for specific large investors”. JAFCO has invested $284m in the vehicles, and the balance was raised from 75 external investors.
Citigroup ropes in Loretta Ko to head financial institution group. (People)
Citigroup hired Loretta Ko to return to the investment bank and head its financial institutions group for Hong Kong.
Ko was most recently at Banco Santander, where she held the same position that she will take on at the US investment bank. She has previously worked for ANZ and Standard Chartered in Hong Kong. Citigroup’s Valentin Garger and Joy Cheng said the hiring should help the bank grow its market share in FIG transactions.
HSBC appoints new China CEO. (People)
HSBC, which operates the largest franchise among global banks in China, named Mark Yunfeng Wang as president and CEO of its China business as the UK lender reaffirms the commitment to the world’s biggest banking market.
Wang is currently head of global banking and markets China and replaces David Liao, who will take up another senior position in the group.
KKR appoints Chee-Wei Wong as head of global impact for Asia region. (FS, People)
KKR appointed Chee-Wei Wong as Head of Global Impact for Asia. In this role, Wong will be responsible for sourcing investment opportunities and supporting impact-related portfolio companies across the Asia-Pacific. Based in Singapore, he will also serve as a member of the firm’s Global Impact Investment Committee.
The appointment follows KKR Global Impact’s recent international expansion with the appointments of Stanislas de Joussineau as Head of Global Impact for Europe and Sharon Yang as a senior investor for KKR Global Impact in Asia.
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