Daily Review

Federal judge ponders monitor use on $69bn CVS, Aetna deal.

Carlyle acquired StandardAero from Veritas Capital for reportedly $5bn. (FS)

Centerbridge acquired Civitas Solutions for $1.4bn. (FS)

Cisco acquired semiconductor company Luxtera for $660m.

 

Pamplona Capital acquired Latham Pool Products from Wynnchurch for $375m. (FS)

Santander increased its stake in Getnet to 100% for $367m.

US regulators approved the BMW, Daimler joint venture.

Ingka Group acquired a 49% stake in Traemand.

Richardson acquired Conagra's Wesson cooking oil.

GlaxoSmithKline, a British pharmaceutical company, and Pfizer, an American pharmaceutical corporation, formed a £9.8bn ($12.7bn) joint venture to create a premier global consumer healthcare company with robust iconic brands. After the deal, GSK plans to split into two businesses — one for prescription drugs and vaccines, the other for over-the-counter products.

The deal announced is ending to a yearlong process by Pfizer to shed its consumer business, as it and other pharmaceutical companies focus more on higher-margin prescription-drugs. Glaxo has been pursuing the same focus, though has until now stayed committed to its consumer business, which its chief executive led before her promotion to the top job. Glaxo will hold a 68% stake and Pfizer the remaining 32% of the new joint venture, which generated combined sales of $12.7bn last year.

Centerview Partners, Guggenheim Securities, Morgan Stanley, Clifford Chance, Wachtell Lipton Rosen & Katz and Skadden Arps Slate Meagher & Flom advised Pfizer. Citigroup, Greenhill, JP Morgan, Kirkland & Ellis and Slaughter & May advised GlaxoSmithKline.

 

Taisho Pharmaceutical, the largest over-the-counter drug company in Japan, acquired Union de Pharmacologie Scientifique Appliquée from Bristol-Myers Squibb, a global biopharmaceutical company, for $1.6bn. UPSA develops and delivers important consumer medicines for patients in France, across Europe and additional countries.

“Today’s announcement marks the culmination of an in-depth strategic review to identify the best option to grow the UPSA business for the long-term,” said Giovanni Caforio, chairman and chief executive officer of Bristol-Myers Squibb. “UPSA is a strong business that deserves the best possible opportunities for its employees and its future development. With Taisho we have found an experienced and reliable buyer with the strategic interest to successfully sustain and grow the business for the future.”

Deutsche Bank, Jefferies, Kirkland & Ellis, Freshfields Bruckhaus Deringer and Baker McKenzie advised Bristol-Myers Squibb.

  

 
Britain’s competition watchdog said on Wednesday that Thermo Fisher Scientific’s $925m acquisition of Roper Technologie’s unit Gatan, a leading manufacturer of instrumentation and software used to enhance and extend the operation and performance of electron microscopes, raised concerns that prices of microscopes could go up and quality could suffer.

“The CMA is concerned that the proposed deal could allow Thermo Fisher to weaken its competitors, enhancing its own already strong market position, and lead to higher prices for customers using electron microscopes,” the watchdog said in a statement. CMA was also concerned that the merger would leave Thermo Fisher with insufficient competition in the market for direct detection cameras.

 

 

Unilever, a British-Dutch transnational consumer goods company, acquired Vegetarian Butcher, a fast-growing Dutch producer of plant-based meat replacements such as vegetarian hamburgers, imitation meatballs and fishless tuna. Financial terms were not disclosed.

The acquisition is a step on Unilever’s journey towards a portfolio with more plant-based products. Currently, Unilever is selling nearly 700 products with V-label in Europe. In the Netherlands, these include products from Unox, Knorr, Hellmann’s, Conimex and Ben & Jerry’s brands.

 

Vegetarian Butcher was advised by OXEYE Advisors.

 

According to Reuters, the sale proceeds will partly fund the $10.5bn acquisition of BHP’s onshore assets that are mostly around oil-producing fields in Texas and Louisiana. BP had said it would sell $5bn to $6bn to finance the deal. Among potential bidders are funds Warburg Pincus and Carlyle Group.

BP is offering seven packages, all of them consisting of shale assets it held before the BHP deal, which include fields in the San Juan basin which straddles the Colorado-New Mexico border, the Cotton Valley field in East Texas, the Arkoma and Anadarko basins in Oklahoma, and the Wamsutter basin in Wyoming.

According to a Reuters report, a federal judge is considering using a court-appointed monitor to make sure CVS Health Corp refrains from fully integrating with insurer Aetna while he examines the companies’ settlement with the government. The $69bn merger was announced in December 2017.

The Justice Department approved the merger of CVS, a US pharmacy chain and benefits manager, and Aetna, an American managed health care company, in October on condition that Aetna sells its Medicare prescription drug plan business to WellCare Health Plans Inc.

Allen & Company, Evercore, Lazard and Davis Polk advised Aetna. Bank of America Merrill Lynch, Centerview, Barclays, Goldman Sachs, Dechert, McDermott Will & Emery, Shearman & Sterling and Sullivan & Cromwell advised CVS.

 

Carlyle acquired StandardAero, a global provider of aftermarket engine maintenance, repair and overhaul services for the aerospace and defense industries, from Veritas Capital. Financial terms were not disclosed however, StandardAero's value was rumored to be around $5bn.

Russell Ford, CEO of StandardAero, said: “We are excited to partner with The Carlyle Group, and we thank Veritas Capital for its support and partnership. We look forward to working with Carlyle to further our aggressive growth trajectory as we continue providing world-class services to our customers as one of the world’s best and largest independent MRO service providers.”

Goldman Sachs, Morgan Stanley and Skadden Arps Slate Meagher & Flom advised Standard Aero. Credit Suisse, Macquarie, RBC and Latham & Watkins advised Carlyle. Barclays, Credit Suisse, Goldman Sachs, Macquarie, Jefferies, Nomura and RBC provided debt financing.

 

Centerbridge Partners acquired Civitas Solutions, the leading national provider of home- and community-based health and human services to must-serve individuals with intellectual, developmental, physical or behavioral disabilities and other special needs, for $1.4bn. Under the terms of the agreement, Centerbridge will acquire all outstanding shares of Civitas common stock for $17.75 in cash per share. The offer price represents a 27% premium to the 30-day volume-weighted average price as of December 18, 2018.

“We are excited about this transaction, which follows a thorough review of alternatives by our Board of Directors,” said Bruce Nardella, President and Chief Executive Officer of Civitas. “This transaction delivers significant value for our shareholders and strengthens our ability to execute our long-term growth strategy and fulfill our mission through the expansion of high-quality, cost-effective services.

Barclays and Kirkland & Ellis advised Civitas. Goldman Sachs, UBS, KeyBanc Capital Markets, Goodwin Procter and Simpson Thacher & Bartlett advised Centerbridge. Goldman Sachs, UBS, KeyBanc Capital Markets and RBC Capital Markets provided debt financing.

 

Cisco, an American multinational technology conglomerate, acquired Luxtera, a semiconductor company based in Carlsbad, California, for $660m.

"With Cisco's 2018 Visual Networking Index projecting that global Internet traffic will increase threefold over the next five years, our customers are facing an exponential demand for Internet bandwidth," said David Goeckeler, executive vice president and general manager, Networking and Security Business at Cisco. "Optics is a fundamental technology to enable this future. Coupled with our silicon and optics innovation, Luxtera will allow our customers to build the biggest, fastest and most efficient networks in the world.”

Citigroup advised Cisco.

 

 

 

Santander Brasil, part of Banco Santander Group, increased its stake in Getnet, a Brazilian card processor, to 100% for $367m. The bank acquired the remaining 11.5% from minority shareholders Manzat Inversiones and Guilherme Alberto Berthier.

The bank’s full takeover of Getnet could add fuel to already fierce competition in the card processing sector, as it could make more aggressive offers to its customers.

 

The deal was announced on March 28, 2018. Daimler and BMW, two German automotive corporations, formed a mobility joint venture to offer customers a single source for sustainable urban mobility services. Each company will hold a 50% stake in a joint-venture model comprising both companies’ mobility services. They will remain competitors in their respective core businesses. Financial terms were not disclosed.

The aim of this transaction is to become a leading provider of innovative mobility services. Both automotive manufacturers aim to shape the mobility of the future to be able to offer their customers unique experiences and support their partners, such as cities and communes, in achieving sustainable urban mobility. With the newly gained approval, the companies expect to complete the deal by the end of January.

Hogan Lovells advised Daimler.

 

Ingka Group, a holding company based in Leiden, which controls 315 of the 360 outlets of IKEA, acquired a 49% stake in Traemand, a US-based kitchen service company, with an option to buy the remaining shares. Financial terms were not disclosed.

“We know our customers appreciate our affordable, inspiring and functional kitchen range, in addition, the investment in Traemand makes it possible to integrate the planning and the installation service in the purchase, offering customers an even easier and more convenient experience when investing in a kitchen,” said Marcus Baumgartner, Customer Fulfilment Manager, Ingka Group.

 

Canada’s biggest grain handler, Richardson, acquired Wesson, a retail brand of canola and vegetable oils, from Conagra Brands, a North American packaged foods company headquartered in Chicago, Illinois. Financial terms were not disclosed however, Conagra had previously agreed to sell Wesson to Smucker for $285m before that deal collapsed.

Acquiring Wesson, the top-selling US cooking oil brand, adds to Richardson’s diversification into food products from bulk grain handling, said Jean-Marc Ruest, the company’s senior vice president of corporate affairs. The deal is expected to close in the first quarter of 2019.