Daily Review

KKR exits First Data Corporation in a $22bn all shares merger with Fiserv. (FS)

Sears chairman Eddie Lampert prevailed with $5.2bn rescue bid. (FS)

 

Husky received majority support for $6.4bn MEG takeover.

Koch and Golden Gate Capital invested $1.5bn in Infor. (FS)

Osram sold its North American business to WESCO for $100m.

Farallon Capital closing in on $403m Odebracht's toll roads business acquisition. (FS)

 

DSV, a Danish freight firm, made a $4bn bid for Panalpina, a provider of forwarding and logistics services, specializing in intercontinental air and ocean freight and associated supply chain management. The consideration consists of 1.58 DSV shares and $55 in cash for each Panalpina share. Based on closing prices as of 11 January 2019, the value of the offer is $170 per share, representing a 24% premium.

A combination of DSV and Panalpina would create a leading global transport and logistics company with significant growth opportunities and potential for value creation. A combination presents a unique opportunity for both companies and their respective stakeholders including shareholders, employees, customers and suppliers.

 

Salesforce, an American cloud-based software company, headquartered in San Francisco, is in talks to acquire US-Israeli software developer ClickSoftware Technologies for up to $1.5bn. ClickSoftware is currently owned by Francisco Partners, which acquired the company in 2015 for $438m.

If a deal goes ahead, it would be the second significant acquisition by Salesforce in Israel in less than a year after it paid $850m for Datorama, an Israeli cloud-based artificial intelligence marketing platform.

 

The European Court of Justice canceled the European Commission’s veto of the €5.2bn ($5.9bn) takeover of TNT, an international courier delivery services company, now a subsidiary of FedEx, causing UBS to sue the EU regulators for €1.7bn ($2bn). The Commission terminated the deal saying UPS had not offered sufficient concessions to allay concerns that the deal would hurt consumers.

The court said the Commission had infringed UPS’s rights of defense by using a different econometric model in its analysis than that used in its exchange of views and arguments with UPS.

 

Internet Gold, a principal communication service group in Israel, failed to receive any binding offers for B Communications, Israel’s largest telecoms group, in an auction that ended on Tuesday. The company was under severe pressure from bondholders to sell the stake.

“The company’s board continues to explore the possibility of selling its BCom shares, continues with discussions with the potential bidders, and continues to explore possibilities for strengthening the company’s capital structure,” Internet Gold said. “The company has sufficient reserves to service its debt in 2019.”

 

Deutsche Bank stock price spiked sharply after EU regulators said they would prefer the German lender to merge with an European rival rather than local competitor Commerzbank. The European Central Bank favors a cross-border combination to drive integration in the region’s financial markets.

Shares in Deutsche Bank, which hit their lowest level on record last month, were up 7.6% yesterday.

 

General Atlantic is buying a minority stake in Germany’s powercloud, an energy software company. General Atlantic plans to assist the company in its expansion plans, as powercloud caters to large and medium-sized utilities but wants to expand into other markets. Financial terms of the investment will not be disclosed.

“General Atlantic will help powercloud become a partner and supporter of the international power sector,” Achim Berg, operating partner at General Atlantic, said. “The plan is to gradually increase the scope of services in very close cooperation with the customers.”

 

Louis Dreyfus Company, a global merchant firm that is involved in agriculture, food processing, international shipping, and finance, said it would sell or wind down its small dairy business by the middle of this year as the company focuses on commodities such as grain and oilseeds. 

“The business accounted for roughly 1% of our revenues in 2018 and demanded substantial working capital resources,” Chief Financial Officer Federico Cerisoli said.

The company’s biggest divestment has been the sale of its profitable metal trading business for $466m last year. It has also sold fertilizer distribution activities and previously earmarked its orange juice business for a possible spin-off.

 

KKR exits First Data Corporation in a $22bn all shares merger with Fiserv. (FS)

Fiserv, a US provider of financial services technology, and First Data Corporation, a global leader in commerce-enabling technology, agreed to a $22bn merger to create a global leader in FinTech and payments.

Under the terms of the agreement, First Data shareholders will receive a fixed exchange ratio of 0.303 Fiserv shares for each share of First Data common stock they own, for an equity value of $22bn. This represents $22.74 based on closing prices as of January 15, and a premium of 29% to the five-day volume weighted average price as of that date. Following the close of the transaction, Fiserv shareholders will own 57.5% of the combined company, and First Data shareholders will own 42.5%, on a fully diluted basis. An affiliate of KKR, which controls approximately 39% of the outstanding First Data common stock will own approximately 16% of the newly formed company. KKR owned First Data since 2007 when it jointly acquired it with Bain Capital for $27.5bn.

“Through this transformative combination, we expect to redefine the manner in which people and institutions move money and information,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “We admire First Data for its excellence in merchant acquiring and global issuing services, and the tremendous progress they have made under Frank’s leadership. We expect this combination to catalyze and support an enhanced value proposition for our collective clients and their customers.”

Bank of America Merrill Lynch, Evercore, Latham & Watkins and Simpson Thacher & Bartlett advised First Data Corp. JP Morgan and Sullivan & Cromwell advised Fiserv. Kirkland & Ellis advised KKR.

 

Eddie Lampert, chairman of Sears, an American chain of department stores, prevailed in the bankruptcy auction for the company with a $5.2bn rescue bid. The offer was made through ESL Investments, the hedge fund owned by Mr. Lampert. Sears had believed that previous bids fell short of covering the bills the retailer has racked up since filing for bankruptcy protection in October.

Weil Gotshal and Manges advised Sears. Bank of America Merrill Lynch, Citigroup and RBC provided debt financing.

 

 

 

Koch Industries and Golden Gate Capital invested $1.5bn in Infor, a global leader in business cloud software specialized by industry. This investment builds on Koch's investment of more than $2bn in early 2017, and it represents an important milestone as Infor considers a potential IPO in 2019 or 2020, subject to market conditions.

“Koch was a customer of Infor before we became an investor in the company, and Koch Industries’ companies continue to move their most mission-critical applications to Infor CloudSuites,” said Jim Hannan, Koch Executive Vice President and CEO of Enterprises for Koch Industries. “Infor’s innovative products have helped lead our digital transformation as we continue to deploy them globally for 120,000 employees.”

 

Osram Licht, a multinational lighting manufacturer, sold its North American business to WESCO, a multinational electronics distribution and services company based in Pittsburgh, for $114m. The sale of Sylvania Lighting Solutions, which makes annual sales of more than $100m and employs about 220 staff, is expected to close in the first quarter of 2019.

“Osram is increasingly focusing on intelligent technologies in the field of visible and invisible light for the market fields of visualization, sensor technology and treatment,” the group said.

 

Hedge fund Farallon Capital Management is reaching a deal to buy a controlling stake in a toll road operator owned by Brazilian conglomerate Odebrecht for $403m. The deal could be finalized as early as this month.

The deal would entail converting the debt to equity, and an undisclosed mix of cash and an additional variable amount that depends on the performance of the road, which is located in the state of Sao Paulo.

Apax Partners acquired a minority stake in Fractal Analytics, an Indian analytics service provider, for $200m. Founded in 2000 with the vision of powering every human decision in the enterprise, Fractal Analytics is a strategic analytics & AI partner to the most admired Fortune 500 companies globally. The company will use the investment by the Apax Funds to accelerate growth, both organically and through M&A, and to invest further in AI products and research.

Rohan Haldea, Partner at Apax Partners, said: “The data and analytics sector is attractive and growing rapidly as companies increasingly see it as a core strategic function of their business. We are delighted to partner with Fractal Analytics who are extremely well-regarded in this space due to their cutting-edge advanced analytics and AI capabilities which help their blue-chip client base solve complex problems. Srikanth and Pranay have done an excellent job building a differentiated company with a clear vision. We look forward to working with them to scale the business further.”