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AMERICAS
Shareholders of Raytheon and United Technologies approved the merger of defense contractors. The merger would create Raytheon Technologies Corporation, a premier systems provider with advanced technologies to address rapidly growing segments within aerospace and defense.
The transaction is expected to close in the first half of 2020, subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals.
"I am pleased that the shareowners of Raytheon and UTC voted in favor of our powerful strategic combination," Tom Kennedy, Raytheon Chairman, and CEO.
Citigroup, RBC Capital Markets, Cleary Gottlieb Steen & Hamilton, Joele Frank, and Shearman & Sterling are advising Raytheon. Evercore, Goldman Sachs, Morgan Stanley, Wachtell Lipton Rosen & Katz, Maitland, and Sullivan & Cromwell are advising United Technologies.
HGGC, a middle-market private equity firm, completed the acquisition of Monotype Imaging Holdings, a provider of imaging solutions for $825m.
Monotype Imaging Holdings provides text imaging solutions. The company offers technologies and fonts enable the display and printing of digital text on a variety of consumer electronic devices, including laser printers, digital copiers, mobile phones, digital televisions, set-top boxes, and digital cameras as well as in numerous software applications and operating systems.
“Today marks the beginning of the next exciting chapter for Monotype. The company’s world-class culture and a unique combination of design and technology perfectly position it to succeed in an evolving and demanding market. Through our partnership, we will look to further Monotype’s industry-leading reputation by pushing boundaries with next-generation font technology and creative, customer-centric solutions.” Rich Lawson, HGGC CEO and Co-Founder.
JP Morgan, Goodwin Procter, and Joele Frank advised Monotype. Deutsche Bank, Kirkland & Ellis, and Stanton PRM advised HGGC. Deutsche Bank is the debt provider to HGGC.
Private equity firms TA Associates and Charlesbank Capital Partners are set to invest in HelpSystems, a provider of IT operations management, security, and analytics solutions. Financial terms were not disclosed.
The firms will join existing investors, HGGC, management, and employees. The transaction is expected to close in November 2019, pending customary regulatory approvals and closing conditions.
"With this additional investment from TA and Charlesbank, we will seek to carry on our well-known tradition of listening closely to customers and delivering exceptional software that is based on their requirements, as well as those of the industries they serve, and that also addresses their complex challenges.” Jim Cassens, HelpSystems President.
Kirkland & Ellis is advising HelpSystems. Ropes & Gray is advising Charlesbank. Goodwin Procter and BackBay Communications are advising TA Associates.
Cornell Capital, a private equity firm, is set to acquire Spectrum Automotive Holdings, an agent, marketer and administrator of finance and insurance products, from private equity firm Southfield Capital. Financial terms were not disclosed.
Spectrum is the sole distribution company in the F&I industry providing a full suite of proprietary and third-party extended warranty and ancillary products to more than 1.4k dealer, administrator, and original equipment manufacturer partners.
"Cornell Capital's operational experience and intricate knowledge of our business and the opportunities present in the market make them the ideal partner for Spectrum's next stage of growth as we continue to expand what we can deliver to our clients, employees, and partners." Jim Polley, Spectrum CEO.
Joele Frank is advising Cornell. Sandler O'Neill + Partners, Finn Dixon & Herling and PwC are advising Southfield Capital.
Carroll Capital, a private equity firm, completes the acquisition of Elevator Services, an independent elevator services provider. Financial terms were not disclosed.
Elevator Service is a successful elevator services provider specializing in preventative maintenance and testing, mission-critical repair, and highly sophisticated elevator modernizations.
"We are excited to partner with Carroll Capital and believe their resources and business-building capabilities will enable us to accelerate the growth of the business while continuing to provide world-class service to the market." Brett McCay, Elevator Service President.
Hungerford Nichols and Varnum are advising Elevator Service. Baker Tilly and Ice Miller are advising Carroll Capital.
Ducommun, which delivers value-added innovative manufacturing solutions to customers in the aerospace, defense, and industrial markets, closed its $77m acquisition of Nobles Worldwide, the global leader in the design and manufacture of high-performance ammunition handling systems for military aircraft, helicopters, ground vehicles, and shipboard systems.
“I am delighted to welcome Nobles Worldwide to Ducommun as we continue to add high value engineered products to our portfolio. As communicated previously, Nobles Worldwide continues to advance the Company’s strategy of offering more customized, value-driven engineered products with aftermarket support. In addition, the acquisition expands our current footprint into another segment of the defense market, ammunition delivery, and handling systems.” Stephen G. Oswald, chairman, President, and chief executive officer of Ducommun.
Houlihan Lokey, Winston & Strawn, and Darrow Associates advised Ducommun.
Pattern Energy, an independent power company, is set to acquire Henvey Inlet and Grady Wind windmill farms for $260m.
"These acquisitions increase our portfolio by 13% to 4.4GW of operational capacity across 28 renewable energy facilities," Mike Garland, Pattern Energy CEO.
LodeRock Advisors is advising Pattern Energy.
Highview Capital-backed National Fire & Safety, an end-to-end fire protection, and life safety solutions platform, is set to acquire RCI Systems, a contractor of fire-sprinkler services. Financial terms were not disclosed.
RCI will join National Fire & Safety’s existing brands, Frontier Fire Protection, and Elite FPS, which are chief providers of fire safety solutions in the US Mountain West/Southwest regions and Texas, respectively. The National Fire & Safety platform plans to continue expanding geographically through both organic growth and additional acquisitions.
“This is an exciting step forward for the entire RCI team which will allow us to expand into new geographies and additional product offerings and further our relationships with key customers. I am confident that with Greg and the rest of the Highview team’s collaboration, RCI will continue to grow and flourish as part of National Fire & Safety.” Todd Little, RCI President.
Sard Verbinnen is advising Highview.
Abertis, a Spanish toll road manager, and GIC, a private equity firm, are set to acquire a 70% stake in Red de Carreteras de Occidente (RCO), a Mexican toll road operator from Goldman Sachs Infrastructure Partners for $3.8bn.
Abertis is facing several lucrative concessions coming up to the end of the term. RCO acquisition is part of the Abertis plan to replenish its backlog of attractive concession projects to counter this effect. Abertis will finance the transaction with available cash and existing committed bank facilities. The closing of the transaction is expected during the first half of 2020 through a tender offer.
“This purchase is an important growth deal for the Abertis Group, which enters into a country that strongly promotes public-private partnerships. The deal has been possible thanks to the support of our shareholders." José Aljaro, Abertis CEO.
Harborside, a cannabis enterprise, completed the acquisition of San Leandro Wellness Solutions, a healthcare dispensary, from Dark Heart Nursery, a cultivator of cannabis plants. Financial terms were not disclosed.
Harborside previously owned 50% of the dispensary under a joint venture with Dark Heart Nursery and would have provided management services to the store. San Leandro will carry both medical and adult-use products, including Harborside's KEY line of cannabis products, and will also offer delivery services.
"This additional retail opportunity will allow us to further engage with consumers and secure our reputation as a trusted resource for all cannabis needs. We are delighted to be in San Leandro and be part of its thriving community." Andrew Berman, Harborside CEO.
Uber, the ride-hail giant, is set to acquire a majority stake in Cornerstone, a grocery provider. Financial terms were not disclosed.
The investment is expected to close in early 2020, subject to regulatory approval. Cornershop is the largest home delivery platform in Mexico and Chile. The app allows users to order groceries from a variety of stores such as Costco, Petco, Walmart, bakeries, and pharmacies.
“We’re excited to partner with the team at Cornershop to scale their vision, and look forward to working with them to bring grocery delivery to millions of consumers on the Uber platform.” Dara Khosrowshahi, Uber CEO.
Cisco, a software solutions firm, acquired CloudCherry, a Customer Experience Management company. Financial terms were not disclosed.
CloudCherry provides predictive analytics, rich customer journey mapping, and sophisticated survey capabilities. Together, Cisco and CloudCherry will help companies transform their contact centers from delivering reactive care to providing predictive support and move from isolated customer interactions to cohesive, engaging experiences for improved business outcomes.
"We're thrilled to add CloudCherry's market-leading customer experience management technology to our collaboration portfolio, This is the next step in realizing our vision for cognitive collaboration in the contact center, enabling the delivery of the best, most personalized customer experiences, ultimately improving customer loyalty and lifetime value." Vasili Triant, Cisco Vice President and General Manager.
Avangrid and PPL in talks to merge business in a $67bn deal.
US utility groups Avangrid and PPL are in advanced talks to merge, which would create a company worth more than $67bn, including debt, Financial Times reported.
If the two companies decide to merge their entire operations, it will form one of the largest publicly traded utilities in the US and the deal will rank as the most prominent utility tie-up this year.
It is unclear whether it would include an investment from Iberdrola, the Spanish utility company that owns more than 80% of Avangrid. There is no certainty that the deal would be reached.
BP faces $3bn impairment charges.
Financial Times reported that BP would take an impairment charge of up to $3bn after it agreed to sell a parcel of US assets for a value lower than it had on its books. BP recently sold four packages of legacy gas assets from its US shale business and its Alaskan business to Hilcorp for $5.6bn. BP said it expects to take a non-cash, non-operating, after-tax charge of $2bn to $3bn in its third-quarter earnings due to be published later this month.
Sempra considers a $3bn sale of Chilean business.
Sempra, a US power company, is near an agreement to sell its Chilean business to State Grid for $3bn, the latest deal in its bid to shed non-core assets, Reuters reported.
Sempra’s Chilean businesses include Chilquinta Energía, the third-largest distributor of electricity in the country, and Tecnored, which provides construction services to Chilquinta.
China, whose booming economy over the past two decades has driven up demand for South America’s raw materials, has been investing more in Chile as it seeks to secure resources.
PG&E rejected a $2.5bn offer from San Francisco municipality.
PG&E rejected a $2.5bn offer from the San Francisco municipality to buy the bankrupt Californian company’s power lines and other infrastructure within the city, calling the offer inadequate.
The offer significantly undervalued the assets and a deal would not be in the best interest of the company’s customers, expressed PG&E CEO.
“Although we cannot accept your offer, we want to clearly communicate that PG&E intends to continue working with the City to best serve the citizens and businesses of San Francisco,” Bill Johnson, PG&E CEO.
Blackstone considers buying a stake in Citadel. (FS)
The Blackstone division that invests in alternative asset managers held talks about buying a stake in Citadel, Ken Griffin’s flagship hedge fund, Bloomberg reported.
The investment pertains to Citadel’s flagship hedge-fund firm and its securities-trading operations. Citadel executives estimate the hedge fund to be worth between $5bn and $7bn.
Thoma Bravo considers raising a $15bn fund in 2020. (FS)
Thoma Bravo, a technology-focused private equity firm, is considering raising a new $15bn fund early next year, after gathering $12.6bn for its latest pool in January, Bloomberg reported.
The firm could begin fundraising for its 14th flagship fund as soon as the first half of 2020. Executives at the firm believe there is sufficient software deal flow on the horizon to justify a new fund.
EQT in talks to acquire EdgeConneX for $2.5bn. (FS)
EQT, a private equity firm, is in advanced talks to acquire EdgeConneX, a data center firm, for $2.5bn, Bloomberg reported.
EdgeConneX, founded in 2009, builds data center solutions ranging from 40kW to 40MW. The company since 2013 has built over 40 data centers across North America, Europe, and South America.
WeWork discusses a $5bn debt package with lenders.
WeWork, the office-sharing company, is in talks with lenders led by JPMorgan Chase about a $5bn debt package, seeking to ease a cash crisis, Bloomberg reported.
The company considers raising $3bn or more of the debt package through the sale of high-yield bonds. The financing could start to more formally come together as early as next week, but it may take longer for its structure and terms to be finalized.
Ginkgo Bioworks to launch a $350m Biotech Spinoff Fund. (FS)
Ginkgo Bioworks announced the launch of a $350m private investment vehicle for funding spinoff companies in the biotech space.
Dubbed the Ferment Consortium, the fund is supported by a commitment from Ginkgo's current major investors, including Viking Global Investors, General Atlantic, and Bill Gates' Cascade Investment.
"Strategic partners will support these new joint ventures with keystone investments alongside Ferment Consortium, and contribute market intelligence and critical channel access," Ginkgo said.
IAC proposes to spin-off ownership stake in Match.
InterActive intends to spin off its ownership stake in Tinder-owner Match Group, resulting in the full separation of the two companies.
The two entities, “New Match” and “New IAC”, post the separation will function as two independent public companies. “New Match” will be responsible for some liabilities and certain real estate assets of IAC.
EMEA
UK regulators launched a probe into the £3bn ($3.7bn) acquisition of pub company Ei Group by the private-equity-backed Stonegate Pub Company. The Competition and Markets Authority said that it would investigate whether the merger would "result in a substantial lessening of competition."
Simon Townsend, the chief executive of Ei Group, who will leave once the merger is completed, said that the inquiry was "exactly as expected" and "in line with the timetable."
Deutsche Bank, Rothschild & Co, CMS, and Tulchan Communications are advising Ei Group. Barclays, Goldman Sachs, Nomura, TDR Capital, Kirkland & Ellis, Shearman & Sterling, Ashurst, Instinctif Partners, and Tulchan Communications are advising Stonegate Pub Company.
Orienta Partners, an Italian private equity firm, is set to acquire Virosac, a bin bags manufacturer, from Alto Partners, DVR Capital, and the founding Virago and Rossetto families. Financial terms were not disclosed.
Virosac is an Italian company and a market leader in the production of biodegradable plastic bags for domestic household and industrial waste.
Deloitte, Crédit Agricole Group, Grant Thornton, White & Case, Gitti and Partners, Indigo Capital, and Russo de Rosa Associati are advising Orienta Partners. GCA Altium, and Gattai, Minoli, Agostinelli & Partners are advising Alto Partners and the other sellers.
Financial Times reported that Silvio Berlusconi's Mediaset had suffered a blow to its plan to create a pan-European broadcaster after a Spanish court halted the merger of its Italian and Spanish businesses.
The court has suspended decisions taken at last month's extraordinary meeting of Mediaset Espańa shareholders, who voted to approve the merger transaction. The approval was pending a final judgment in a claim lodged by Vivendi, which is an investor in Mediaset. Mediaset España said it "deeply disagrees" with the preliminary ruling and would immediately appeal.
Banca IMI, JP Morgan, Citigroup, and Mediobanca are advising Mediaset.
MUFG Investor Services, the global asset servicing arm of Mitsubishi UFJ Financial Group, is set to acquire the fund administration business of Maitland, a privately owned global advisory, administration, and family office firm. Financial terms were not disclosed.
When completed, the acquisition will add approximately $20bn in assets under administration to MUFG Investor Services, bringing the total AUA to over $600bn and expanding the firm’s market share in major markets. The assets consist of hedge funds and private equity funds.
“By adding Maitland’s capabilities and technology, we are able to reaffirm our commitment to the alternative asset servicing space and ensure our clients continue to receive the best possible support.” John Sergides, MUFG Investor Services CEO.
Prosek Partners is advising MUFG.
Latour, a Swedish investment firm, is set to acquire Caljan, a provider of automation technology for parcel handling in the logistics and e-commerce sectors. Financial terms were not disclosed.
The acquisition, which requires approval from European authorities, is expected to close in December. The product offering of Caljan includes telescopic conveyors, automatic label, and document handling, and solutions for logistics depots.
“I am delighted to embrace Latour as our new owners. They are a long-term industrial owner that can support Caljan’s plans for expanding into new technologies and new markets,” Henrik Olesen, Caljan CEO.
Barrick Gold's $1bn Zambian mine attracts bidders.
China Minmetals, Jiangxi Copper, and Zijin Mining Group are among companies considering bids for Barrick Gold's Zambian copper mine that could fetch about $1bn, Bloomberg reported.
China Molybdenum and Aluminum of China, known as Chinalco, were also invited to bid.
Nyrstar to sue Trafigura for $1.63bn.
Minority shareholders in Nyrstar, a zinc producer, are seeking €1.48bn ($1.63bn) in damages from Trafigura, a global commodities trader, over the restructuring of the Belgian firm.
Trafigura has a 24.4% stake in Nyrstar. As part of the deal to save Nyrstar, lenders had to write off part of their debt or agree to extended repayment schemes while all the firm’s operating assets were transferred into a new subsidiary called Newco 2, in which Trafigura holds a 98% stake.
“We have publicly launched the suit and the formal filing will be put to the Brussels commercial court just after the shareholders general meeting on Nov. 5,” said Laurent Arnauts, Watt Legal, representing about 100 shareholders.
VW considers options for the Lamborghini brand.
Volkswagen is considering options for its Lamborghini supercar brand, aiming to double its market value and getting ahead of an expected industry shakeout, Bloomberg reported.
VW intends a sale or stock listing. Chief Executive Officer Herbert Diess plans to focus future expansion on the group’s dominant global brands - VW, Porsche and Audi - in a push to channel resources more efficiently and avoid duplicated efforts.
Global Gas and EG Group consider IPO. (FS)
EG Group, one of the world's largest independent gas station and convenience store chains, is considering an IPO next year that could value it at more than £10bn ($12.4bn), Bloomberg reported.
The UK-based company, whose owners include buyout firm TDR Capital, is in early discussions with banks, though no formal mandates have been awarded.
Rangers' owner Dave King banned from takeovers in the UK.
Financial Times reported that Dave King, the chairman of Glasgow's Rangers football club, was blocked from working with regulated entities in the United Kingdom on business deals involving takeovers by the British takeover panel. The Takeover Panel ruled that the South African businessman contravened the City Code on Takeovers and Mergers during a battle with Mike Ashley for control of the Glasgow Rangers.
In a statement, Mr. King accepted that he had breached the takeover code. However, he underlined the panel's comments that he had "invested substantial amounts of money in Rangers solely for the love of the club," not for financial gain, and said the decision would not affect his position as chairman and a director at Rangers.
Mapletree Investments to acquire two UK student housing properties for $119m. (Real-Estate)
Mapletree Investments, backed by Singapore state investor Temasek Holdings, has acquired two student housing properties from UK-based Unite Students, a provider of students accommodation, for £96m ($119m).
Unite said the disposal of the two assets is aligned to the company's strategy of recycling its capital and re-investing into its development pipeline.
"This transaction takes Unite's share of disposals in the year to date to £250m ($308m) and supports our ongoing strategy of recycling assets to enhance our portfolio quality and maintain financial discipline. We intend to dispose of approximately £150-200m ($185m-$246m) of assets per annum over the next three years," Richard Smith, Unite Students Chief Executive.
APAC
Wumei Technology Holdings, a Chinese operator of supermarkets and departmental stores, is set to acquire an 80% stake in Metro China operations from Metro, a food products wholesaler and retailer.
“After assessing various options, we have chosen a path that will further strengthen Metro China’s role for consumers. We welcome the investment of the new majority owner for Metro China, who shares our values and is committed to building on our track record and footprint in China. This transaction also forms a strategic partnership that will result in greater competitive advantages for METRO China." Olaf Koch, Metro CEO.
Citigroup, JP Morgan, and Baker McKenzie are advising Metro.
Tokyo Century, a provider of lease financing for equipment needs, is set to acquire a 14.9% stake in Advantage Partners, a private equity firm. Financial terms were not disclosed.
As part of the transaction, which is expected to close in January 2020, Tokyo Century will acquire new and existing shares in the general partner and secure a seat on its board.
"Tokyo Century has been an important and valued investor in AP Funds over many years. All of us at the AP Group feel very fortunate and pleased to have them now support us as a strategic investor in our firm, bringing significant balance sheet capital to ensure the future stability of the firm" Taisuke Sasanuma, AP Representative Partner.
Bank of Baroda, a state-owned bank, is set to merge its mutual fund business with BNP Paribas Asset Management Asia, a subsidiary of the banking giant BNP Paribas. Financial terms were not disclosed.
Baroda Asset Management India will merge with BNP Paribas Asset Management India, while BNP Paribas Trustee India’s merger with Baroda Trustee India. The transaction is subject to regulatory approvals.
The merger will help in growing BoB’s mutual fund business further by leveraging on both BNP Paribas’ global asset management know-how and the public-sector lender’s experience in running Indian retail networks to further grow the business.
Bain and Carlyle to bid for Hitachi Chemical. (FS)
Hitachi has narrowed bidders for its $6.8bn chemical unit to a handful of companies, including Bain Capital and Carlyle Group, Reuters reported.
Bain is teaming up with Tokyo-based private equity firm Japan Industrial Partners in its offer. Nitto Denko, a maker of materials for chips and automotive products, is also among the shortlisted bidders for Hitachi Chemical.
Each bidder is seeking to buy all shares in Hitachi Chemical, which is 51.2% owned by Hitachi.
Indiabulls Group considers reworking exit plan for the real estate business.
Embassy Group would like to remain as an investor in IBREL with a 14% stake even if it does not buy the remaining 14% stake from the promoter, said Jitu Virwani, Embassy Chairman and Managing Director.
Chinese state firms to launch a $774m science & tech fund in Shanghai. (FS)
Shanghai state-owned Assets Supervision and Administration Commission, China Construction Bank and Bank of Shanghai have jointly set up a fund of funds with CNY5.5bn ($774.40m) in initial capital to back tech investments.
The fund aims to create a pool of industry sub-funds worth a total of CNY20bn ($2.81bn) for investments in six major areas, namely integrated circuits, smart manufacturing, aviation and aerospace, innovation in medicine, autonomous vehicles, and big data.
"The launch of the FoF and sub-funds in Shanghai will further enhance capital's role in promoting the development of real economy, helping to realize the deep integration between finance and technology," said Bai Tinghui, Shanghai State-Owned Assets Supervision and Administration Commission Director.
Tencent looking to invest $500m in Hillhouse's healthcare company. (FS)
Tencent Holdings, a Chinese tech powerhouse, considers investing $500m in Hillhouse Capital's retail pharmacy business.
The transaction would put a valuation of $2.5bn on the Asia-focused private equity firm's health care arm. The deal, which has not yet closed, also reflects Tencent's efforts to diversify from its core entertainment businesses, where growth has softened amid China's economic downturn and stricter government oversight.
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