Raytheon Company, a principal US defense contractor and industrial corporation, and United Technologies, an American multinational aerospace conglomerate headquartered in Farmington, Connecticut, agreed to combine in $121bn merger of equals. Under the terms of the agreement, Raytheon shareowners will receive 2.3348 shares in the combined company for each Raytheon share. Upon completion of the merger, United Technologies shareowners will own approximately 57%, and Raytheon shareowners will hold about 43% of the combined company on a fully diluted basis.
"Today is an exciting and transformational day for our companies and one that brings with it a tremendous opportunity for our future success. Raytheon Technologies will continue a legacy of innovation with an expanded aerospace and defense portfolio supported by the world's most dedicated workforce," said Tom Kennedy, Raytheon Chairman, and CEO.
U.S. President Donald Trump raised some concerns regarding the merger as it would harm competition and make it more difficult for the U.S. government to negotiate defense contracts.
Citigroup, RBC Capital Markets, and Shearman & Sterling are advising Raytheon. Evercore, Goldman Sachs, Morgan Stanley, and Sullivan & Cromwell are advising United Technologies.
Salesforce, an American cloud-based software company, agreed to acquire Tableau, an interactive data visualization software company, for $15.7bn. Salesforce will acquire Tableau in an all-stock transaction, pursuant to which each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock.
"Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data," said Adam Selipsky, President and CEO of Tableau. "As part of the world's #1 CRM company, Tableau's intuitive and powerful analytics will enable millions of more people to discover actionable insights across their entire organizations. I'm delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities."
Bank of America Merrill Lynch, Morrison & Foerster and Wachtell Lipton Rosen & Katz are advising Salesforce. Goldman Sachs and Cooley are advising Tableau. Sullivan & Cromwell is advising Goldman Sachs.
Shareholders Hudson's Bay Company, a Canadian retail business group, offered to take the firm private in a C$1.7bn all-cash deal. The shareholders, which collectively own approximately 57% of the outstanding common shares of HBC, include Richard A. Baker, Governor and Executive Chairman of HBC, Rhône Capital, WeWork Property Advisors, Hanover Investments, and Abrams Capital Management. The proposed transaction from the Continuing Shareholders represents a premium of 48% to HBC’s closing share price on the Toronto Stock Exchange on June 7, 2019.
“While we continue to believe in HBC’s long-term potential, it has become clear that the significant challenges, risks and uncertainties facing HBC in the rapidly evolving retail environment are best addressed in a private market setting,” Richard Baker said in a statement.
JP Morgan and Blake Cassels & Graydon are advising HBC.
Denham Capital-backed Comstock Resources, an independent energy company, acquired Covey Park Energy, an oil & natural gas company in Dallas, Texas, for $2.2bn in a cash and stock transaction. The acquisition of Covey Park complements and expands Comstock's position in the Haynesville shale and accelerates its progress towards its strategic and financial goals of sustainable free cash flow generation and reduced leverage.
M. Jay Allison, Comstock's Chief Executive Officer, commented: "After a year of evaluating several potential targets in the Haynesville shale, we believe we have found the perfect merger partner. This merger is an excellent fit with our existing acreage and continues our strategic plan of creating significant scale and resource depth in the Haynesville shale basin. The combined company will have a stronger balance sheet, enhanced by a large inventory of high quality, low cost and high return drilling opportunities. In integrating Covey Park we plan to focus on operating efficiency and having a combined drilling program that provides for substantial free cash flow to achieve our goal of reducing our leverage."
Bank of America Merrill Lynch, Barclays, Citigroup, Goldman Sachs and Vinson & Elkins advised Covey Park. BMO Capital Markets, Wells Fargo and Locke Lord advised Comstock Resources.
Roche, a global pioneer in pharmaceuticals and diagnostics, acquired Spark Therapeutics, a fully integrated, commercial gene therapy company dedicated to challenging the inevitability of genetic disease, for $4.8bn. Under the terms of the agreement, Roche will acquire Spark Therapeutics at $114.50 per share. The per share price represents a premium of 122% to Spark’s closing price on Feb. 22, 2019.
The merger has been delayed due to US, UK scrutiny. The UK Competition and Markets Authority (CMA) has opened an investigation. The British regulator’s separate inquiry is aimed at determining whether the CMA considers it has jurisdiction over Roche’s acquisition, and if so, whether it could hurt competition in Britain.
Centerview Partners, Cowen & Company, and Goodwin Procter are advising Spark. Citigroup and Davis Polk & Wardwell are advising Roche.
Thermo Fisher Scientific, an American biotechnology product development company, and Roper Technologies, a leading diversified technology company, said they have mutually agreed to terminate Thermo Fisher’s deal to buy Roper’s unit Gatan for $925m, owing to challenges in obtaining regulatory approval in the United Kingdom. The deal was announced in June 2018. The CMA has raised concerns that the agreement could enhance Thermo Fisher’s “already strong market position” and that prices of microscopes could go up and quality could suffer.
Wilmer Hale advised Thermo Fisher.
Merck & Co, a German multinational pharmaceutical, chemical, and life sciences company, agreed to acquire Tilos Therapeutics, a privately held biopharmaceutical company developing treatment of cancer, fibrosis and autoimmune diseases, for $773m.
“At Merck, we continue to enhance our robust pipeline through active execution of our business development strategy," said Dr. Dean Li, senior vice president, discovery and translational medicine, Merck Research Laboratories. “Tilos has developed a compelling portfolio of candidates that employ a novel approach to modulating the potent signaling molecule TGFβ by binding to latency-associated peptide, with potential applications across a range of disease indications.”
Finnish engineering firm Metso acquires McCloskey International, a Canadian mobile crushing and screening equipment manufacturer for C$420m ($317m) to expand its product range and client base.
The acquisition is subject to customary closing conditions, including anti-trust approvals. Closing is expected to take place during Q4 2019.
“This acquisition is in line with Metso’s profitable growth strategy. It strengthens our aggregates business in key growth areas. The different cycles of aggregates balance our previously more mining focused Minerals portfolio well,” Pekka Vauramo, Metso President and CEO.
Nordea Bank served as debt provider to Metso.
Hartree Bulk Storage, an independent storage, terminalling, and related infrastructure platform company funded by Hartree Partners and Oaktree Capital Management, agreed to acquire natural gas storage assets of Martin Midstream Partners, a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region, for $215m. The assets consist of approximately 50bn cubic feet of working capacity located in northern Louisiana and Mississippi.
“We are excited about the opportunity for Hartree Bulk Storage to acquire the Natural Gas Storage Assets and operate them as independent facilities,” said Steve Semlitz, co-founder of Hartree Partners, “the Natural Gas Storage Assets are high-performing facilities strategically located in the Gulf Coast. Hartree Bulk Storage plans on further optimizing these facilities and their capabilities in the near-term, to better serve customers in the ever-growing Gulf Coast region.”
Wells Fargo and Locke Lord are advising Martin Midstream Partners.
Tilray, a Canadian pharmaceutical, and cannabis company, and Privateer, an American private equity company that invests in the legal cannabis industry, announced a merger deal. Under the terms of the deal, the parties will effect a downstream merger of Privateer with and into a wholly-owned subsidiary of Tilray, with the Tilray subsidiary surviving the merger.
Mark Castaneda, Chief Financial Officer of Tilray, said: “We appreciate the long-term confidence that Privateer has in the Tilray business, and we look forward to having their investors as part of our stockholder base. We believe this transaction will give Tilray greater control and operating flexibility while allowing us to effectively manage our public float.”
Logi Analytics, a developer of a platform allowing users to embed analytics into commercial and enterprise applications, has acquired Zoomdata, a data visualization and analytics software platform company. Financial terms were not disclosed.
“By joining forces with Logi, our groundbreaking analytics software will be embedded in more applications. Many more people will be able to analyze billions of rows of data in seconds, even across multiple data sources, within the applications they use all day, every day.” Nick Halsey, Zoomdata CEO.
Catapult Advisors acted as financial advisor to Logi Analytics. Marlin & Associates acted as financial advisor to Zoomdata.
South Korean aviation firm Hanwha Aerospace agreed to acquire EDAC Technologies, which provides design, manufacturing, and services for tooling, fixtures, molds, jet engine components, and machine spindles in the aerospace, industrial, semiconductor, and medical device markets, for $300m.
“The company aims to expand its aircraft engine parts business based on the acquisition of EDAC and to become a risk and revenue sharing program global partner in global aircraft engine markets,” Hanwha Aerospace said in a statement.
Tilray, a Canadian pharmaceutical, and cannabis company, and Privateer, an American private equity company that invests in the legal cannabis industry, announced a merger deal. Under the terms of the deal, the parties will effect a downstream merger of Privateer with and into a wholly-owned subsidiary of Tilray, with the Tilray subsidiary surviving the merger.
Mark Castaneda, Chief Financial Officer of Tilray, said: “We appreciate the long-term confidence that Privateer has in the Tilray business, and we look forward to having their investors as part of our stockholder base. We believe this transaction will give Tilray greater control and operating flexibility while allowing us to effectively manage our public float.”
Apollo Global is closing in on a $2.9bn deal to buy Shutterfly. (FS)
Apollo Global Management is closing in on a deal to acquire Shutterfly, an American Internet-based company, headquartered in Redwood City, California. The deal would reportedly value the firm at $2.9bn, including debt.
A deal would be the culmination of several years of private equity interest in Shutterfly, which allows customers to make photo books, cards, and gifts from their photos. Silver Lake Partners and Thoma Bravo have previously approached the company about a potential acquisition.
Morgan Stanley is advising Shutterfly.
Brazil's Petrobras says CEF to sell $1.86bn stake.
According to a report by
Reuters, Brazil’s state-run oil company Petroleo Brasileiro said Caixa Econômica Federal(CEF) would sell a stake worth 7.2bn reais ($1.86bn) in the company based on the shares’ June 7 closing price.
Petrobras executives may now present to investors, in the roadshow related to the second offering, a final Supreme Court decision allowing the company to sell subsidiaries and assets. Caixa will sell 241.3m common shares in the oil company in a secondary share offering.
Caixa, UBS Group, Morgan Stanley, Bank of America and XP Investimentos will manage the offering.
Tax breaks bring a higher return to Silicon Valley.
According to a
Bloomberg report, Silicon Valley entrepreneurs, venture capital firms, and early startup employees are using the Qualified Small Business Stock, or QSBS, provision to partially or totally wipe out their tax bills. The provision has caused a boost in the tech sector, leading to a wave of IPOs. Shares are eligible for QSBS if they’re issued when a company has gross assets of $50m or less. The incentive was created after the recession of the early 1990s and expanded during the financial crisis that began in 2008 to help young companies attract capital.
“Folks are doing quite well at some of these IPOs, but they’re creating real value in the economy,” said Justin Field, senior vice president of government affairs at the National Venture Capital Association. By targeting companies smaller than $50m, QSBS helps bring funding to startups “at a much more vulnerable point in their cycle.”
Peloton's IPO is hampered by legal battles.
Peloton Interactive, an American exercise equipments, and media company filed confidentially for an IPO with the Securities and Exchange Commission. The number of shares it expects to sell, their price range, and the date of the IPO has not been disclosed.
Due to copyright issues, music producers have filed a lawsuit against Peloton, seeking damages of $150m. The lawsuit claims Peloton would not be able to play voices or videos of James Brown, Justin Timberlake & Drake, to name a few; this could risk the growth rate.
And there’s another obstacle. A review board within the U.S. Patent and Trademark Office will take a second look at the validity of three Peloton patents after finding that Flywheel Sports has established a “reasonable likelihood” of winning its argument that the patents cover old ideas.
Insys files chapter 11 bankruptcy after corruption charges.
Pharmaceutical company Insys Therapeutics filed for Chapter 11 bankruptcy protection less than a week after pleading guilty to federal fraud charges and agreeing to pay $225m to resolve allegations tied to its addictive opioid painkiller.
The government had been pursuing criminal and civil claims against the company over its role, promoting the opioid during an epidemic of abuse. Insys is also struggling to fund liabilities after being named in about 1,000 lawsuits, with potentially more to come. Insys Therapeutics CEO John Kapoor and four other executives were found guilty in the fentanyl bribery case.
Insys said it plans to use the bankruptcy process to arrange a sale of its assets that would allow it to continue operating.
