Daily Review

 

 

 

 

Escalate Capital Partners holds a first close of Escalate IV at $282m. (FS, People)

 

 

 

 

Versum Materials, a leading materials supplier to the semiconductor industry, announced that Chinese regulators cleared its $6.5bn acquisition by Merck. Subject to the satisfaction of other customary closing conditions, Versum expects the merger to close on Oct. 7, 2019. The deal was announced in January 2019.

 

"With this transaction, Merck KGaA, Darmstadt, Germany, will be optimally positioned to capitalize on long-term growth trends in the electronic materials industry. Our combined business shall deliver leading-edge innovations to our customers around the globe," Stefan Oschmann, Merck Chairman of the Executive Board and CEO.

 

Citigroup, Lazard, Simpson Thacher & Bartlett, Skadden Arps Slate Meagher & Flom and Latham & Watkins are advising Versum. EY, Goldman Sachs, Guggenheim Partners and Sullivan & Cromwell are advising Merck. BNP Paribas, Bank of America Merrill Lynch and Deutsche Bank are providing debt financing.

 

 

Warburg Pincus-backed Citizen Energy agreed to acquire Roan Resources, an independent oil and natural gas company headquartered in Oklahoma City, for $1bn.

 

"This transaction is the culmination of our board's extensive review of strategic alternatives to maximize value for our stockholders, including a comprehensive process during which we engaged with a considerable number of counterparties. Ultimately, the board unanimously determined that an all-cash transaction with Citizen Energy is in the best interests of our stockholders and the company and will deliver value to our stockholders at a premium to our recent share price." Joseph A. Mills, Roan's Executive Chairman of the Board.

 

Citigroup, Jefferies & Company and Vinson & Elkins are advising Roan Resources. Bank of America Merrill Lynch and Latham & Watkins are advising the buyers. BMO Capital Markets, Bank of America Merrill Lynch, JP Morgan and TD Securities are providing debt financing.

 

 

United States Steel Corporation, an American integrated steel producer headquartered in Pittsburgh, agreed to acquire a 49.9% interest in Big River Steel, an Arkansas-based steel producer, for $700m, with a call option to acquire the remaining 50.1% within the next four years. KM BRS and TPG Furnace, an affiliate of TPG Growth, would remain preferred equity holders of Big River.  

 

"Our new partnership with Big River is designed to accelerate our strategy to offer our customers the 'best of both' by bringing together the capabilities of integrated and mini-mill steel production. Big River operates the most advanced, state-of-the-art and sustainable mill in North America, and our investment would ultimately strengthen our competitive positioning in highly strategic steel-end markets, creating an unmatched value proposition for our stakeholders." David B. Burritt, President and Chief Executive Officer of US Steel.

 

Goldman Sachs, JP Morgan and Baker Botts are advising Big River Steel. Barclays and Milbank are advising United States Steel Corporation. Jones Day is advising KM. Debevoise & Plimpton is advising TPG.

 

 

Hudson's Bay Co's shareholder Paradise Developments decided to oppose Chairman Richard Baker's $1.3bn take-private offer for the department store operator, calling it inadequate. The investor, which holds a 0.6% stake, urged the board to negotiate for a better price or recommend that the "insider offer" be rejected.

 

A special panel of Hudson's Bay reviewing the offer proposed by Chairman Richard Baker and a group of shareholders has said it was inadequate based on an initial analysis.

 

JP Morgan, Centerview Partners and Blake Cassels & Graydon are advising Hudson's Bay Co.

 

 

Blackstone agreed to acquire 65% of Great Wolf Resorts, a leading owner and operator of family-oriented entertainment resorts, from Centerbridge Partners. As part of the transaction, Blackstone and Centerbridge will form a new $2.9bn joint venture to own the company.

 

"We are enthusiastic about partnering with Blackstone to continue accelerating the growth of the company. Blackstone is one of the most experienced and successful investors in the hospitality and leisure industries, and is highly supportive of Great Wolf's growth potential and each lodge's ability to provide unparalleled experiences for families." William D. Rahm, a Senior Managing Director and Global Head of Real Estate at Centerbridge.

 

Citigroup, Goldman Sachs and Simpson Thacher & Bartlett are advising Great Wolf Resorts. Fried Frank Harris Shriver & Jacobson is advising Blackstone. Kekst CNC is advising Centerbridge.

 

 

Permira completed its investment in Axiom, the global leader in specialized on-demand legal talent. The deal was announced in September. Financial terms were not disclosed.

 

"Our industry is in the early days of a complete transformation, away from the historical law firm paradigm toward nimble, technology-powered solutions. Axiom has been leading that transformation, and this partnership is about preparing for faster innovation, more disruption and extending our lead." Elena Donio, Chief Executive Officer of Axiom.

 

Goldman Sachs and Cooley advised Axiom.  Bank of America Merrill Lynch and Skadden Arps Slate Meagher & Flom advised Permira. Barclays provided debt financing and was advised by Weil Gotshal and Manges.

 

 

Lantheus, a leader in the development, manufacture and commercialization of innovative diagnostic imaging agents and products, agreed to acquire Progenics, an oncology company developing innovative medicines and artificial intelligence to find, fight and follow cancer. Progenics shareholders will receive 0.2502 shares of Lantheus Holdings stock for each share of Progenics stock, representing approximately a 35% aggregate ownership stake in the combined company. The exchange ratio implies a 21.5% premium to Progenics' 30-day volume-weighted average closing stock price.

 

"Today marks the beginning of an exciting new chapter for Progenics. This combination unlocks additional value for stakeholders and stockholders alike through Lantheus' enhanced resources and R&D capabilities, proven commercial expertise and complementary portfolio of products. The transaction also creates value for Progenics stockholders through a significant premium and the opportunity to participate in the future growth of Lantheus." Mark Baker, Chief Executive Officer of Progenics.

 

Jefferies & Company, O'Melveny & Myers and Joele Frank are advising Progenics. SVB Leerink, White & Case and Sard Verbinnen & Co are advising Lantheus.

 

 

 

Warburg Pincus agreed to acquire Petplan, a leading pet health insurance provider in North America. Financial terms were not disclosed.

 

"This investment is a game-changer for Petplan. It enables us to catapult the product innovation and customer experience that our company was founded upon and introduce the very best pet health insurance to millions of pet parents in North America," Paul Guyardo, CEO, Petplan.

 

Cozen O'Connor is advising Petplan. Wachtell Lipton Rosen & Katz is advising Warburg Pincus.

 

 

The Ensign Group, the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, home health care, hospice care, senior living and other post-acute related companies, completed the spin-off of The Pennant Group. In the spin-off, Ensign stockholders received one share of Pennant common stock for every two shares of Ensign common stock held at the close of business on September 20, 2019.

 

"We are thrilled to complete the spin-off of Pennant and couldn't be more optimistic about their future and the future of Ensign. This is the second spin-off we have completed in the last five years and believe that this transaction, much like the spin-off of CareTrust REIT in 2014, will be a great long-term benefit to our many stakeholders. Our guiding principle in this transaction has always been to make sure both Ensign and Pennant would not only be very healthy in terms of their balance sheets, but that both would be poised to drive the enormous organic growth potential within all our respective operations while having enough dry powder to continue acquiring and transforming underperforming healthcare operations." Ensign's Executive Chairman, Christopher Christensen.

 

Bank of America Merrill Lynch and Kirkland & Ellis advised Ensign.

 

 

The Chernin Group, a privately held, independent media company, invested $83m in Food52, the premier kitchen and home brand.

 

"This injection of new capital unlocks tremendous growth opportunities, allowing us to reach new markets, create new retail channels, and invest in technologies that will serve our community better," Amanda Hesser, Food52 Co-founder and CEO.

 

GCA Altium and Lowenstein Sandler advised Food52. Gibson Dunn & Crutcher advised The Chernin Group.

 

 

AVALT, a family office that makes direct private equity investments, agreed to acquire Ned Stevens, a leading provider of residential gutter cleaning and essential exterior home services. Financial terms were not disclosed.

 

Ned Stevens was founded in 1965 and provides gutter cleaning, soft wash and other related, non-discretionary residential services in 15 states. The company has grown rapidly, fueled by its reputation for high-quality service, expansion into new markets and the addition of complementary service offerings.

 

"Our management team is very excited about our new partnership with AVALT. Our business has grown quickly and the AVALT team brings all the right skills, experience and expertise to launch us to the next level. Like Ned Stevens, AVALT is a highly collaborative, energetic team with goals and objectives perfectly aligned with ours." Rob Rapuano, Ned Stevens CEO.

 

Alvarez & Marsal and Ropes & Gray are advising AVALT. Audax Group, Carlyle Global Credit and Twin Brook Capital Partners are providing debt financing.

 

 

MI Windows and Doors, a leading manufacturer of precision-built vinyl and aluminum windows and sliding patio doors, agreed to acquire Milgard Windows & Doors from parent company Masco for c. $725m. The deal is expected to close by the end of the year.

 

The acquisition combines two leading brands in the residential window industry, both born from humble beginnings – MI as an insect screen fabricator and Milgard as a glass shop. Today, MI is well known throughout the eastern and southern United States, while Milgard is one of the most trusted names in the western US.

 

"This acquisition aligns with our strategies to diversify our product offering, balance the end markets we serve, and expand our presence in growing markets. Milgard's dedication to manufacturing high-quality, market-preferred windows and doors makes it a natural fit for MI, as both companies share a family-first culture where team member and customer satisfaction are top priorities. We are pleased to welcome the Milgard team to the MI family, and we are confident they will help us achieve our Vision to be the most valuable brand in the fenestration industry." Matt DeSoto, MI CEO.

 

Davis Polk & Wardwell is advising Masco.

 

 

Cable One, an American Internet and cable service provider, closed its $526m acquisition of Fidelity Communications, a family-owned cable operator. The deal was announced in April 2019.

 

"We are thrilled to welcome Fidelity associates and customers to the Cable ONE family," said Julie Laulis, President and CEO of Cable ONE. "Fidelity is a fantastic geographical, cultural and business fit. Its operating philosophy and customer-centric focus are similar to our own. That, coupled with future growth opportunities within or near our existing footprint, makes this an exciting acquisition."

 

Cravath Swaine & Moore advised CableOne.

 

 

AssetMark, a leading provider of extensive wealth management and technology solutions, agreed to acquire OBS Financial, an established turnkey asset management platform delivering academically constructed, structured investment strategies to independent advisors, bank Trust officers and their clients. Financial terms were not disclosed.

 

"This transaction will allow us to give our clients broad access to AssetMark's compelling and curated platform while providing continuity and support of the OBS investment portfolios, accelerating our ability to deliver the comprehensive capabilities to advisors and bank Trust officers who require and deserve these enhanced capabilities. The OBS team is looking forward to working closely with AssetMark to integrate our platforms and provide a market‐leading foundation that is proven to help advisors and Trust officers grow and prosper." John Henry, President and CEO of OBS.

 

ECHELON Partners is advising OBS.

 

 

 

Next Fifteen Communications Group, a digital marketing and communications group, agreed to acquire the US division of Health Unlimited, a leading global health consultancy and communications agency advancing landmark developments in some of the most complex and challenging areas in health. Financial terms were not disclosed.

 

"The acquisition is a major milestone for Next Fifteen as it adds another specialist business to the portfolio and greatly expands our international footprint in the healthcare sector. We see significant complementary opportunities for both businesses," Tim Dyson, CEO of Next Fifteen Communications Group.

 

 

Moody's Corporation, an American business and financial services company, agreed to acquire ABS Suite Business, a software platform used by issuers and trustees for the administration of asset-backed and mortgage-backed securities programs, from Deloitte, a multinational professional services network. Financial terms were not disclosed.

 

"The acquisition of ABS Suite deepens Moody's Analytics' presence with issuers of securitized transactions. Adding the expertise and experience of the ABS Suite team to our already formidable capabilities enables us to provide more and better solutions that improve funding decisions, increase operational efficiency and promote transparency and efficiency in the securitization financial markets." Mark Almeida, President of Moody's Analytics.

 

 

AmWINS Group, a global distributor of specialty insurance products and services, agreed to acquire Stealth Partner Group, an Arizona-based, independent full-service general agent specializing in medical stop-loss insurance. Financial terms were not disclosed.

 

"The partnership between Stealth and SLIS will generate incredible value and opportunity for group benefits brokers and their clients. We look forward to working with Rebecca Bocek, Gerry Gates and the entire team at SLIS. Together, our two firms will provide us with unique access to all of the leading stop-loss markets and enable us to build a wide range of other value-added capabilities that support our carrier partners, retail brokers, and their self-funded clients." Harley Barnes, co-founder of Stealth.

 

 

Downhole Technology, the leading manufacturer of high-quality, composite frac plugs used in plug-and-perf multizone fracturing operations, and Resource Well Completion Technologies, a leading innovator and developer of market-leading technologies, completed their merger, creating The WellBoss Company. Financial terms were not disclosed. The deal was announced in August.

 

"This is an incredible opportunity to combine two highly-successful, innovative businesses," said Jeff McNamara, President of Downhole Technology. "WellBoss will be better positioned to increase the velocity of new completion solutions to the market, thereby increasing the value we offer for our oil and gas partners around the world. Our intense focus on solving the oil and gas industry's completion challenges combined with an execution mindset will separate us from the competition and better serve our customers."

 

 

HCP, a Real Estate Investment Trust, investing primarily in real estate serving the United States healthcare industry, agreed to acquire the 51% joint venture interest of Brookdale Senior Living, which owns and operates over 1k senior living communities and retirement communities in the United States, for $510m.

 

"We are pleased with the outcome of this mutually beneficial transaction, which reflects the collaboration and partnership we share with Brookdale. This transaction will allow HCP to improve its operator diversification, as well as strengthen its remaining Brookdale triple-net portfolio." Tom Herzog, President and Chief Executive Officer of HCP.

 

 

Wynnchurch Capital, a leading middle-market private equity investment firm, invested in Eastern Metal Supply, a leading value-added distributor of aluminum extrusions and related products. Financial terms were not disclosed.

 

"We have built and grown EMS by providing our customers with exceptional service, just-in-time delivery and a wide breadth of value-added products. Wynnchurch shares this commitment and we are excited to partner with them as we continue that mission and pursue our next phase of growth," Greg Weekes, President and Co-Founder of EMS.

 

 

Relativity Space, the company building the world's first autonomous rocket factory and launch services for satellites, raised $140m in Series C funding round led by Bond and Tribe Capital. The Series C round includes participation by new investors Lee Fixel, Michael Ovitz, Spencer Rascoff, Republic Labs, and Jared Leto, with participation from current investors Playground Global, Y Combinator, Social Capital, and Mark Cuban.

 

"Relativity was founded with the long term vision of 3D printing the first rocket made on Mars and expanding the possibilities for human experience in our lifetime. With the close of our Series C funding, we are now one step closer to that vision by being fully funded to launch Terran 1 to orbit as the world's first entirely 3D printed rocket. Bond and Tribe are unrivaled partners in leading this funding round, and we are excited to build this important future together with our entire team." Tim Ellis, Cofounder and CEO of Relativity Space.

 

 

Broadridge Financial Solutions, a $4bn global Fintech leader, agreed to acquire Shadow Financial Systems, a provider of multi-asset class post-trade solutions for the capital markets industry. Financial terms were not disclosed.

 

"The acquisition of Shadow Financial Systems is the latest example of Broadridge building upon our industry-leading capital markets solutions. We look forward to bringing real benefits to a new set of market participants as well as new capabilities to our existing client base." Michael Alexander, co-head of North American Wealth and Capital Markets Solutions for Broadridge.

 

 

County Bank Corp, the parent company of Lakestone Bank & Trust, completed its merger with ChoiceOne Bank, the parent company of ChoiceOne Bank. The deal was announced in September.

 

"We received strong shareholder support for this partnership. We believe that the positive shareholder response we received today validates the significant opportunity we see for our collective communities, customers, and employees while adding significant value for the shareholders of our two organizations. With limited overlap and disruption, the combined company will present efficiencies and new growth opportunities in our expanded network across Michigan." Kelly Potes, President and Chief Executive Officer of ChoiceOne Financial Services.

 

 

Hub International, a leading global insurance brokerage, agreed to acquire Saskatchewan-based Regency Advisory Corporation, an employee benefits consulting firm that provides innovative and proprietary benefit solutions to move clients to more cost sustainable and value-added benefits programs. Financial terms were not disclosed.

 

"We continue to build on our efforts to add talented organizations like Regency to boost our employee benefits and pension capabilities in Canada. Regency has been involved in many facets of employee benefits, and will be a great collaborator for innovation and drive client-centric services and solutions." Keith Jordan, President and CEO of Hub International Manitoba.