AMERICAS
According to the US Air Force’s acquisition head, the number of major US defense contractors has shrunk to the point of becoming a national security concern. Earlier, US President Donald Trump expressed concern that United Technologies's plan to combine aerospace business with Raytheon could harm competition and make it more challenging to negotiate defense contracts.
Billionaire investor Daniel Loeb said that his hedge fund, Third Point, will vote against the planned merger, saying there is no “strategic rationale for this transaction.”
Activist investor Bill Ackman, whose hedge fund Pershing Square has a stake of more than $700m in UTC, came out against the deal arguing that the tie-up will lower the quality of its aerospace business.
Raytheon is advised by Citigroup, RBC Capital Markets, and Shearman & Sterling. United Technologies Group is advised by Evercore, Goldman Sachs, Morgan Stanley, Sullivan & Cromwell, and Wachtell Lipton Rosen & Katz. Citigroup is being advised by Cleary Gottlieb Steen & Hamilton.
Cascases, a leader in the recovery and manufacturing of packaging and tissue products acquires assets of Orchids Paper Products in proceedings before the United States Bankruptcy Court for a cash consideration of $207m.
The acquisition will allow Cascades to accelerate the modernization of its tissue asset base, reduce sub-contracting and transportation costs, and increase its geographical footprint to better serve its customers. Cascades will provide additional information following the Bankruptcy Court approval of the agreement.
Arlington Capital Partners, a Washington, DC-based private equity firm, has completed a majority growth investment in Riverpoint Medical, a developer, designer, and manufacturer of medical devices focused on advanced bio-medical textile technologies. Riverpoint's founders and senior management have all made substantial investments as part of the transaction and will continue to lead the company's strategic growth initiatives in the future. Financial terms were not disclosed.
Matt Altman, a Managing Partner at Arlington, says: "Riverpoint's ability to develop innovative technologies coupled with its unique manufacturing processes provide a strong platform to accelerate growth in large addressable markets. Our investment in Riverpoint continues Arlington's history of building differentiated, high-growth medical device manufacturers in partnership with company founders and existing senior management."
Northleaf Capital Partners, a leading private equity fund manager, acquires CSV Midstream, a Calgary-based company offering full services for complete midstream solutions. Financial terms were not disclosed.
As a part of the deal, Northleaf will acquire100 MMcf/day Resthaven gas processing facility and the 60 MMcf/day Pipestone South compressor station, Paramount Resources’ Karr 6-18 facility. CSV Midstream will assume the ongoing operations and construction management of the Karr gas processing plant expansion, bringing the facility’s total capacity to 150 MMcf/d. With the addition of the Karr 6-18 facility, CSV Midstream’s platform is well-positioned to serve a broad spectrum of oil and gas operators in northwestern Alberta.
“We are thrilled to be entering into this strategic ownership relationship with Northleaf,” said Daniel Clarke, CSV Midstream CEO. “We are very fortunate to have their backing and gain access to their deep experience in energy infrastructure and their relationships with the broader investment community. The value of our partnership has been clearly demonstrated by the significant accomplishments that the CSV Midstream team has achieved in a short time frame with the support and guidance of Northleaf.”
Visa, the world’s leader in digital payments, acquired Verifi, a leader in the payments industry, providing innovative, end-to-end payment protection solutions. Financial terms were not disclosed.
Visa will integrate Verifi’s enhanced chargeback tools with Visa’s risk management services, including those delivered by CardinalCommerce and CyberSource. Buyers, sellers, issuers, and acquirers will benefit from greater automation, near real-time communication and data-driven insights through every stage of the customer journey.
“We are thrilled to be joining forces with Visa to scale and expand this offering and further modernize the dispute management process.” Matthew Katz, Verifi CEO.
Incline Equity Partners, a private equity firm, acquires Brown & Joseph, a leading provider of commercial accounts receivable management services primarily focused on insurance end markets. Financial terms were not disclosed.
“Working with Incline provides the opportunity to continue to achieve the meaningful growth we have experienced so far while expanding our capabilities to serve existing and new customers. Incline brings the resources and knowledge needed to tackle strategic initiatives like adding new service lines for existing customers, developing an approach to enter new markets and pursuing add-on acquisitions.” Mark Schabel, Brown & Joseph CEO.
United Insurance acquires 81% stake in Applied Underwriters, a workers’ compensation insurer that has been stuck under a cloud of multiple regulatory investigations, from Berkshire Hathaway. Financial terms are not disclosed.
One of the largest sellers of workers’ compensation insurance in the US, Applied Underwriters has been accused of being a “reverse Ponzi scheme” in a pending civil suit filed in 2016 by ex-clients - an accusation the company has denied.
Brenntag, the global market leader in chemical distribution, acquires B&M Oil Company, a regional lubricants distributor. Financial terms were not disclosed.
"B&M is a bolt on acquisition for J.A.M. Distributing, our Brenntag Lubricants business platform in the central US region and will expand our offering in the growing Oklahoma marketplace.” Markus Klaehn, Brenntag CEO.
Givex, a leading Point of Sale company, acquires Owen Business Systems, the Canadian provider of retail and hospitality solutions. Financial terms were not disclosed.
“Both Givex and Owen Business Systems are dedicated to providing clients with solutions that safeguard their investment of time and money, growing as their business does,” says Don Gray, CEO of Givex. “I look forward to integrating our technology platforms and wowing our retail partners with the strength of the combined Givex solution.”
Anheuser-Busch InBev, the world's biggest brewer, acquires Babe Wine, which was co-founded by Instagram influencer Josh Ostrovsky, known by his handle “The Fat Jewish.” Financial terms were not disclosed.
With Babe, Anheuser-Busch is acquiring a brand that resonates with younger consumers on social media. The beermaker is betting it can drive sales with increased distribution in a category with a shortage of name brands.
Tree Island Steel, a leading manufacturer of wire products, has been advised of the intentions of Futura Corporation and Arbutus Distributors, to make an unsolicited non-binding proposal by way of a plan of arrangement to acquire all of the common shares of the company.
The board of directors of the Company has met and appointed a special committee of the board made up entirely of directors who are independent of both management and the offerors.
Elliot Management building on ownership strategy. (FS)
According to an FT report, hedge fund Elliot Management Corporation is increasingly moving from buying stakes in companies to trying to acquire them outright. The firm, founded by the billionaire Paul Singer, hired Paul Best, a former Warburg Pincus managing director, to oversee Elliott’s European private equity strategy. The shift into PE was spurred by a series of deals that Elliott missed out on when they sought to partner with private equity firms to acquire a few companies, including Riverbed Technology, a networking equipment maker.
Howard Hughes exploring a potential sale.
Real estate developer Howard Hughes Corp is working with Centerview Partners to explore strategic options including a potential sale of the company. The shares jumped 37% after the announcement.
Howard Hughes is working with advisors on the review. Other options also include a sale or spinoff of certain assets, a recapitalization or changes in the corporate structure.
Adaptive Biotechnologies valued $5bn in IPO.
Adaptive Biotechnologies, a leading health care firm which offers testing instruments for diagnosing, treating, and monitoring disease, was valued $4.9bn in its Nasdaq IPO.
The company has a grand vision of building a map of the immune system that would allow doctors to diagnose virtually any disease from Lyme to multiple sclerosis to cancer, ideally in the earliest stages through a simple blood draw.
Neoenergia to release 239m voting shares valuing equity of the business at $977m.
Brazil’s largest private power distributor Neoenergia, controlled by Spanish utility Iberdrola, is set to release 239m voting shares valuing equity of the business at $977m.
It’s the biggest IPO this year in Brazil and the first since Grupo SBF in mid-April. Neoenergia shares will begin trading on the Sao Paulo stock exchange.
Bank of America, JPMorgan Chase, Credit Suisse, Citigroup, and HSBC Holdings are advising Iberdrola.
The RealReal rose 45% after a $300m IPO.
After a $300m initial public offering, online luxury reseller The RealReal rose 45% on its first day of trading. After rising as much as 50%, the RealReal's shares closed up at $28.90 in New York trading, which gave the company a market value of $2.4bn. The
RealReal sold 15m shares for $20 each on Thursday after marketing them for $17-19.
Credit Suisse, Bank of America and UBS led the offering.
EMEA
A consortium led by Lego owners Kirkbi, Blackstone, and CPPIB agreed to acquire Merlin Entertainment, which operates 127 attractions, 19 hotels and 7 holiday villages in 27 countries, for $6bn.
The offer will be made by a newly incorporated company which has been formed on behalf of the members of the Consortium, with each of KIRKBI and the Blackstone/CPPIB group owning 50% upon completion. After the completion of the deal, Merlin would de-list from London Stock Exchange. The offer price represents a premium of 36.8% to the closing price per Merlin share on 22 May 2019.
“We are pleased to partner with KIRKBI and CPPIB to acquire a business we know very well. We are prepared to commit the substantial resources required to support the long-term objectives of Merlin, which will require significant investment to ensure its long-term success. We believe we are uniquely placed through our Core private equity strategy to make this investment alongside our partners at KIRKBI and CPPIB." Joe Baratta, Blackstone, Global Head of Private Equity.
Barclays, Citigroup, Goldman Sachs, Slaughter & May, and Brunswick Group are advising Merlin. Lazard, Clifford Chance, and FTI Consulting are advising KIRKBI. Lazard, Bank of America Merrill Lynch, Kirkland & Ellis, and FTI Consulting are advising Blackstone. Lazard and Latham & Watkins are advising CPIB.
Advent International acquires a majority stake in Transaction Services Group, a leading global revenue management solutions company that provides business management software, integrated payments, and value-added services to clients around the globe, from Calera Capital. The deal valued the firm at $1bn.
“TSG represents a unique platform at the nexus of business management software and payments, which is well positioned for future growth. We are excited to support TSG to drive product innovation and further expand its geographical footprint”, Jeffrey Paduch, Advent International Partner.
EY Parthenon, Harris Williams, KPMG, William Blair, and Skadden Arps Slate Meagher & Flom are advising Transaction Services Group. Allens, Alix Partners, Bain & Company, EY, FT Partners, First Annapolis, Goldman Sachs, UBS, and Weil Gotshal and Manges are advising Advent International. Prosek Partners, Harris Williams, Wiliam Blair, and Skadden Arps Slate Meagher & Flom are advising Calera Capital.
Mid Europa Partners, the private equity investor in Central and Eastern Europe, closed its acquisition of a majority stake in Mlinar, a Croatian bakery retail and wholesale business from its founder, Mato Škojo. Financial terms were not disclosed. The deal was announced in April and was completed on 27th of June.
Andrej Babache, Partner of Mid Europa, said: "We plan to help the Company expand internationally, and we look forward to our partnership with Mr. Škojo as he continues to support Mlinar's growth." Mato Škojo, Founder of Mlinar, commented: "I look forward to working with Mid Europa as a strong and credible partner with an excellent track record in food production and retail."
UniCredit, Dechert, Šavorić & Partners, KPMG, BCG, and Beragua advised Mid Europa.
Sonans Gruppen acquires Bjorknes Hogskole, a popular college in Norway focusing on quality education services. Financial terms were not disclosed.
Sonans currently has 14 private schools throughout the country in addition to online studies. In the autumn, the new schools open in Bodø, Hamar, and Lillestrøm. With the takeover of Bjørknes Högskole, Sonans extends its offer to those who want a college education.
"Sonans is a very professional player who is concerned that the students will achieve the goals they set. I am convinced that Sonans will help us get an even wider and better study offer and look forward to good collaboration," Cia Dunstorm, Bjorknes College Principal.
Mars Edge, a subsidiary of Mars, acquires Foodspring, a direct-to-consumer targeted nutrition company based in Berlin. Financial terms were not disclosed.
On completion of the transaction, Foodspring will remain a standalone business led by the founders within Mars Edge. It will continue to operate out of its headquarters in Germany.
“We are looking forward to accelerating the growth of our business by drawing on Mars’ global infrastructure, marketing and science capabilities, as well as its expertise in quality and food safety.” Philipp Schrempp, Foodspring Founder & CEO.
Houlihan Lokey and Lacore Rechtsanwalte are advising Foodspring. BDT & Company and Freshfields Bruckhaus Deringer are advising Mars Edge.
Sony Imaging Products & Solutions acquires a minority stake in Nevion, a provider of virtualized media, media network and broadcast infrastructure. Financial terms were not disclosed.
“This strategic partnership with Sony is a real vote of confidence in Nevion, its vision, its strategy, its people and its IP-based media network solutions. We look forward to working closely with Sony to maximize the benefits for our customers.” Geir Bryn-Jensen, Nevion CEO.
M.M. Warburg, a leading private bank, acquires Warburg Invest Holding from NORD/LB. Financial terms were not disclosed.
With this acquisition, Warburg unites the two capital management companies Warburg Invest Kapitalanlagegesellschaft and Warburg Invest under the umbrella of Warburg Invest Holding.
Barratt Developments, one of the largest residential property development companies in the United Kingdom, acquired Oregon Timber Frame, one of the UK's largest timber frame manufacturers. Financial terms were not disclosed. Steven Boyes, Chief Operating Officer, Barratt Developments, commented:
"We are delighted to announce that we have successfully acquired Oregon Timber Frame, one of the leading timber frame manufacturers in the UK. Barratt is committed to increasing the number of homes we build using offsite construction as part of our overall volume growth aspirations and to mitigate the current skills challenges facing the industry. Oregon is the perfect company to help us do that, with a highly experienced management team, a skilled workforce and a high quality product."
Brunswick Group is advising Barratt.
FTI Consulting, a global business advisory firm, acquires Andersch, leading independent restructuring advisory firm, assisting companies and their stakeholders. Financial terms were not disclosed.
The acquisition is expected to close during the third quarter of 2019, subject to German regulatory approval and other closing conditions. With the addition of approximately 90 billable professionals, including seven senior managing directors, Andersch’s restructuring advisory expertise will enhance FTI Consulting’s established strategic communications, economic consulting and construction solutions offerings in Germany. Andersch professionals will go to market under the Andersch and FTI Consulting co-brand and will be part of the firm’s Corporate Finance & Restructuring segment.
“Andersch’s restructuring advisory business has an impressive reputation and track record of client success. We look forward to welcoming Tammo Andersch, Mirko Liebthal and the entire Andersch team to FTI Consulting upon the closing of this transaction,” Steven H. Gunby, FTI Consulting President & CEO.
Denmark's only remaining producer of wool yarn, Garnspinderiet Danspin, acquires an English competitor, Lawton Yarns. Financial terms were not disclosed.
With the purchase, Danspin takes over 300 employees at the more than 100-year-old Lawton Yarns. The company, which operates from West Yorkshire in northern England, will continue as an independent entity under Danspin.
"Together with Lawton Yarns, we become an even stronger and attractive partner in a carpet market, where many business areas are growing." Lars Gantzel, Danspin Director.
Kartell, a manufacturer of household goods and lamps, acquires Just Trays, a leading shower tray manufacturer. Financial terms were not disclosed.
The Kartell investment will enhance the company’s global offering and help to drive its expansion of the brand both in the UK and overseas.
"I am excited to add JT to the Kartell family and look forward to working with the talented team at JT to drive the brand and sales growth to the next level.” Alex Norford, Kartell Founder and MD.
Grant Thornton and Clarion Solicitors are advising Just Trays. Shawbrook Bank, FRP Advisory, and Irwin Mitchell are advising Kartell.
LCI Industries, which through its wholly-owned subsidiary, Lippert Components, acquires Lavet, a leading window blind system manufacturer. Financial terms were not disclosed.
The acquisition of Lavet allows LCI to expand its product portfolio in key, in-demand categories for LCI’s customers and take advantage of synergies between the companies. LCI and Lavet have worked closely with one another for years to service the OEMs of European leisure vehicles, which has helped LCI gain valuable insight into
Lavet’s strong management team and product offerings.
“We are delighted to have succeeded in bringing Lavet into LCI’s European RV family. The experience and professionalism of Lavet’s Managing Director, Maurizio Pieramici, together with the solidity and dynamism of LCI’s European RV division team, will be the engine to innovate and strengthen this product category for LCI’s European RV division in the years to come.” Michele Checcucci, LCI CEO.
Rheinmetall and BAE Systems announced that they have received regulatory approval for their UK-based joint venture specializing in military vehicle design, manufacturing and support business. The new joint venture will be headquartered at BAE Systems’ facility in Telford, England and will sustain over 400 jobs in the UK, as well as preserve key technology and engineering skills.
KPMG to dispose of the $64bn British Pension advisory business.
According to a report by the Financial Times, KPMG has put its British pensions advisory business up for sale. The company said it had received several approaches from buyers for the division, which had assets worth £50bn ($63.5bn) under management in 2017, but no decision had yet been made on a potential sale.
Offloading the division would underline the complexities that the big four auditors - Deloitte, EY, KPMG, and PwC - are seeking to navigate amid pressure from regulators to reform their profession. If concluded, a sale of the KPMG pensions advisory arm would be among the largest corporate disposals undertaken by one of the UK's major audit firms.
Helical received an offer from Starwood Capital. (FS)
According to Bloomberg, Starwood Capital Group approached Helical, a London-based real estate developer, with a takeover offer. Helical rejected the approach at a very early stage, saying it undervalued the company..
Starwood Capital and Helical aren't currently in active negotiations with Helical, and it's not clear if the discussions will restart. The London-based company has a market value of £438m ($556m).
Volkswagen’s truck unit - Traton, fell in trading debut.
Volkswagen’s trucks unit fell on its first day of trading. Investors took a cautious stance on its global expansion plan, which includes boosting the US footprint and going head-to-head with market leaders Daimler and Volvo.
Traton declined 2.4% to €26.36 ($29.98) after its IPO priced at €27 ($30.71). Volkswagen raised €1.6bn ($1.8bn) from listing a nearly 11.5% stake in a transaction, which valued the truck unit at €13.5bn ($15.4bn).
Standard Industries and private equity firms looking to bid for BASF's chemical unit. (FS)
According to Reuters, Building materials maker Standard Industries and several private equity groups are competing for BASF's construction chemicals business, which the German chemicals group has put on the block to focus on more profitable operations.
Advent, Bain, Cinven, KKR, Lone Star and US-based Standard Industries, which is working in a consortium with Blackstone, are among those who have been chosen to participate in the second round of bidding.
AS PNB Banka to change shareholder structure.
A group of US and European investors have decided to take over the majority shareholding in AS PNB Banka, one of the oldest commercial banks in Latvia. The decision has been taken following the assessment of the economic potential of Latvia and Latvian banking sector. The agreement provides for the acquisition of the controlling stake of the Bank’s majority shareholder Grigory Guselnikov and additional capital support in the future for the Bank.
In the coming weeks the new shareholders and the bank will develop and present to the Financial and Capital Market Commission an updated business development strategy, which will encompass expanding products and services for international and Latvian clients, modern banking technology and a long-term investment strategy.
APAC
FWD Group, a leading all-round insurance provider, acquires Hong Kong operations of MetLife, a leading financial service company, providing insurance services. Financial terms were not disclosed.
The acquisition of MetLife Hong Kong will further increase FWD’s market share in Hong Kong and reinforce its position as a leading life insurer in the city. The company plans to rename and rebrand the MetLife Hong Kong business, the statement said, adding that all existing MetLife Hong Kong policies will continue to be honored by FWD following the change in ownership.
“MetLife Hong Kong is highly complementary to our existing business, and the acquisition is another step towards fulfilling our ambition to build a leading pan-Asian life insurance platform. We look forward to welcoming the agents and employees from MetLife Hong Kong.” Huynh Thanh Phong, FWD Group CEO.
Metro Pacific, a Philippine-based unit investment holding company, offered to acquire a 16.6% stake in Medical Doctors, which operates a tertiary hospital in Makati, Metro Manila, Philippines, for $44m. With this deal Metro Pacific will boost its stake in the firm to 49.9%.
Temasek Holdings, a sovereign wealth fund of the Government of Singapore, acquires a 21.7% stake in Li & Fung's logistics business LF Logistics for $300m. Li & Fung said that as a result of Temasek's investment, it would postpone a previously proposed initial public offering for LF Logistics. It will remain a controlling shareholder of LF Logistics with a 78.3% stake.
"The investment from Temasek will allow us to unlock the value of LF Logistics and accelerate its business growth. It will also enhance Li & Fung’s capital structure and financial flexibility," Spencer Fung, Li & Fung CEO.
Game developer Nexon's founder suspended a $13bn sale. (FS)
According to Bloomberg, Nexon's founder suspended a sale process for his stake in Nexon, an Asian game developing company with a market value of $13bn. South Korean billionaire Kim Jung-ju, who owns nearly half of Tokyo-listed Nexon through his holding company NXC Corp, couldn't reach an agreement on price with suitors. However, it is said that he could still decide to revive the sale at a later date.
Private equity firms Hillhouse Capital, KKR, and Blackstone were among parties considering bids for the Nexon stake earlier in the process, while Tencent Holdings was considering teaming up with other suitors for a joint offer.
Australian Tasplan and MTAA Super explore a $15.4bn merger.
Australian pension managers Tasplan, multi-industry not-for-profit fund managing A$9.5bn ($6.7bn) in assets, and MTAA Super, which oversees about A$13bn ($9.1bn) in retirement savings for workers in the motor trades and allied industries, are considering a merger to create an A$22bn ($15.4bn) fund. The two funds signed an agreement to explore a merger.
FWD looking to acquire Siam's life insurance unit for $3bn. (FS)
FWD, a private equity firm from Hong Kong, is nearing a deal to acquire life insurance operation of Siam Commerical Bank for $3bn.
Talks between FWD and Siam Commercial are advanced after three months of exclusive negotiations, and an announcement could come soon. There’s no certainty the talks would result in a transaction as deliberations are ongoing.
Coca-Cola in preliminary talks to acquire Cafe Coffee Day.
The world's largest beverage company, Coca-Cola is in preliminary talks to acquire a majority stake in Cafe Coffee Day, a Bengaluru based cafe chain operator.
For Cafe Coffee Day, an acquisition by Coca-Cola will mean much-needed funds to reduce the debt on the books of parent Coffee Day Enterprises.
Belle's Sportswear distribution arm filed for $1bn Hong Kong IPO. (FS)
Belle International Holdings, the biggest women's shoe retailer in China, filed for a Hong Kong initial public offering of its unit. The sportswear distribution arm submitted a listing application to the Hong Kong stock exchange.
Bank of America and Morgan Stanley are joint sponsors of the offering.
GFG Alliance targets $700m Australian IPO for steel unit.
According to DealStreetAsia, London-based conglomerate GFG Alliance wants to list parts of its Australian Liberty Steel unit in a deal that could raise about AUD1bn ($701m).
The target is more modest than indicated by Executive Chairman Sanjeev Gupta who said GFG was looking to list some parts of the unit and could sell only a 40% stake, which would value it at about AUD2.5bn ($1.8bn). Even at a smaller valuation, it would be the biggest Australian listing since Viva Energy's $4.9bn IPO last July.
US-focused REIT Prime to be listed on SGX Mainboard.
Prime US Reit, a US-focused REIT, is set to be the third such entity on the Singapore Stock Exchange’s Mainboard after the ARA Hospitality Trust, and Eagle Hospitality Trust.
ARA US Hospitality Trust raised $498m in gross proceeds on the SGX, and Eagle Hospitality Trust proposed to raise $566m, but less than half of the 581m units offered were fully subscribed.
Prime US REIT filed its preliminary prospectus with a proposed offering of 335m units priced at $0.88 apiece and is expected to raise $295m in gross proceeds from the IPO. The timing of the offering has not been finalized.
Indian budget airline GoAir to revive IPO plan.
According to DealStreetAsia, budget airline GoAir, controlled by Wadia Group, revived its plans for IPO and is looking for advisors for the same.
It was reported that GoAir was planning to raise up to INR20bn ($290m) through a public offering. India’s domestic air passenger traffic is expected to grow in the low single digits in 2019-20.
Warburg Pincus closed $4.3bn Asian fund. (FS)
Warburg Pincus, a global private equity firm focused on growth investing, held the final close of Warburg Pincus China-Southeast Asia II, a $4.3bn companion fund that will invest alongside Warburg Pincus Global Growth, a $14.8bn global, growth-focused private equity fund that closed in late 2018.
The Warburg Pincus China-SEA II fund was launched in January 2019, targeting a fund size of $3.5bn. Warburg Pincus China-Southeast Asia II will focus on investing across five sectors – Consumer and Services, Healthcare, Real Estate, Financial Services, and Technology, Media and Telecommunications.
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