Daily Review

Italian car parts maker Magneti Marelli, a unit of Fiat Chrysler, is not expected to cut jobs after a pending takeover by Japan’s Calsonic Kansei, said labor unions. The $7bn acquisition by Calsonic, which is a portfolio company of KKR, was announced in October 2018. The deal is expected to be concluded in the second quarter of 2019.

“There are no production overlaps (with Calsonic) which might have caused fears of (plant) closures or redundancies,” trade unions Fim, Uilm, Fismic, Uglm and Aqcfr said in a statement, adding that the 8.8k Magneti Marelli workers in Italy would see no changes to their contracts.

Legance is advising Magneti Marelli. Deloitte, Morgan Stanley, UBS and Dentons are advising KKR. Deloitte, Morgan Stanley, UBS and Simpson Thacher & Bartlett are advising Calsonic. Goldman Sachs, JP Morgan and Sullivan & Cromwell are advising Fiat Chrysler.

 

Twelve Seas Investment Company, a listed company formed for the purpose of entering into a business combination, and Brooge Petroleum and Gas Investment Company, an oil & natural gas company in the United Arab Emirates, agreed to merge in a $1bn deal.

Mr. Nicolaas Paardenkooper, CEO of BPGIC commented: “We are excited to enter into this agreement with Twelve Seas as it provides us with the ability to enter the US capital markets and provide this unique opportunity to investors globally. The US capital markets are the largest in the world and include sophisticated investors with large investments in similar public companies within our industry. We look forward to the opportunity to demonstrate our industry-leading operations in the emerging global hub for oil at the Port of Fujairah in the UAE. This transaction enables BPGIC to continue its exciting growth and accelerate future opportunities.”

K&L Gates is advising Brooge. Maples & Calder, EarlyBirdCapital and Ellenoff Grossman & Schole are advising Twelve Seas.

 

Boehringer Ingelheim, a research-driven pharmaceutical company, is to acquire a minority stake in SoundTalks, a technology-driven company, improving the health and welfare of livestock animals. Financial terms were not disclosed.

SoundTalks has developed a digital monitoring tool that seeks to improve the healthcare of pigs and helps farmers operate more efficiently. Boehringer Ingelheim plans to install the SoundTalksTM system in select pig barns in the US and other major swine markets this spring in a pilot programme.

"Our two companies share a passion for innovative solutions, technology and animal health. This is just the beginning of a very exciting collaboration,” Dries Berckmans, SoundTalks CEO.

 

Coface, a French credit insurer operating globally, acquired SID - PKZ, the leading credit insurance company in Slovenia. With this strategic acquisition, Coface strengthens its market position in the Adriatic region. Financial terms were not disclosed. 

Xavier Durand, CEO of Coface said: “The acquisition of SID - PKZ marks the first external growth initiative of Coface in more than ten years. It will reinforce our presence in this important part of the world and it is perfectly in line with the objectives of our Fit to Win strategic plan. Through this acquisition, Coface is proud to contribute to enhancing the Slovenian Economy and excited to welcome a very experienced and highly recognized team of 74 experts from SID – PKZ.”

 

Moody's Corporation, a financial services company, acquired a majority stake in Vigeo Eiris, a global leader in environmental, social and governance research, data and assessments. Financial terms were not disclosed.

“Vigeo Eiris has been a pioneer in bringing greater transparency and awareness of ESG and sustainability issues to market participants and has continued to innovate and expand as demand for this information has grown,” said Myriam Durand, Global Head of Assessments at Moody’s Investors Service. “Moody’s acquisition of a majority stake in Vigeo Eiris will contribute to the further development of leading ESG risk assessments, enabling the market to benefit from a global standard in assessing ESG considerations as part of their investment decisions.”

 

Brewin Dolphin, one of the largest British investment management and financial planning firms, is in talks to acquire the Irish wealth management business of Investec, an international specialist banking and asset management group. The company said in a statement following a newspaper report that the discussions were ongoing and there was no certainty that they would lead to a deal.

Brewin Dolphin is competing against Allied Irish Banks to acquire the unit, which is rumored to be valued at approximately €60m ($68m). 

 

Trafigura Group, a multinational commodity trading company, is set to take control of Nykstar, a global multi-metals business, as part of a recapitalization plan. Nyrstar said it would sell its operating group to a newly incorporated subsidiary, NewCo. As part of its recapitalization, Trafigura will be issued 98% share capital of NewCo.

“Nyrstar has been faced with substantial financial and operational difficulties over the last few years, but it also has very solid industrial and mining operations on which we can build a stable future,” Trafigura Chief Executive Officer Jeremy Weir said.

 

Financial Times reported that Vincent Bollore, head of The Bollore Group, the holding company, which holds 28.51% of the voting rights in Vivendi, is seeking to raise his stake in the company. The upcoming massive buyback plan, which was accepted by shareholders on Monday, could allow Vincent Bollore to take greater control of the media conglomerate. Reducing the overall number of outstanding shares in Vivendi would mean that he passively crossed the threshold of 30% of the voting rights, which normally means that a company must make a mandatory takeover bid.

A spokesperson for Vivendi said: “Vivendi and the Bollore Group always take great care to act in the interests of all shareholders. It is definitely beneficial to Vivendi to have one stable reference shareholder who takes a long-term view of the company’s development.”

In related news, Vivendi confirmed that it would sell its 50% stake in Universal Music Group, an American global music corporation. The stake could be valued at approximately $45bn.

 

German car manufacturer Audi is looking to offload its stakes in two development service providers. The company has recently faced overcapacity in development and wanted to shed its 49% stake in PSW Engineering and divest its subsidiary CSI Entwicklungstechnik.

In a statement, Audi said that its active portfolio management can lead to adjustments in ownership structure.

 

Reuters reported that stock price of EDF, a French electric utility company largely owned by the French state, jumped 4.3% on hopes that a partial re-nationalization of the firm will unlock value. The strategy committee of EDF’s board will review a restructuring plan for the 83.7% state-owned group on May 28.

The French government has for some time been looking at how to restructure EDF to isolate its volatile nuclear business from the pressures of a stock market listing and provide a boost to the rest of the company. It wants to return EDF’s nuclear operations to the public sector but does not necessarily want to buy out minority shareholders in EDF’s other business activities.

 

Italian fashion group Only The Brave is planning to invest €200m ($226m) over the next three years, potentially in acquiring other brands, after boosting its financial strength in 2018, Reuters reported. OTB Chief Executive Ubaldo Minelli said in a statement the group had reorganized its business over the past year after previous slips in profitability.

OTB has recently started negotiations with struggling Italian luxury brand Cavalli, which filed for creditor protection last month and is looking for new investors.

 

HQ Equita, the private equity direct investment arm of HQ Capital, raised €308m ($347m) for its fifth fund. HQ Equita V will invest in small and medium-sized buildings in German-speaking Europe. The fund’s limited partners include entrepreneurial families, foundations and select institutional investors.

“Our strategy of developing partnerships to further advance and create value for German-speaking SMEs attracted great interest from investors. We will leverage our team’s deep experience and our broad network to support our portfolio companies’ growth and generate value for both the companies and our investors. With Fund V, we will continue to invest in SMEs, seek to expand our team and advance our strategic development even further,” said Christine Weiß, Partner and Managing Director at HQ Equita

 

Waste Management, the leading provider of comprehensive waste management environmental services in North America, agreed to acquire Advanced Disposal Services, the fourth largest solid waste company in the US, for $4.9bn. Under the terms of the deal Waste Management will acquire all outstanding shares of Advanced Disposal for $33.15 per share in cash, which represents a premium of 22.1% to Advanced Disposal’s closing share price as of April 12, 2019.

“We are pleased to have reached this milestone agreement with Waste Management to deliver an immediate cash premium to Advanced Disposal stockholders. We view Waste Management as an industry leader with one of the most respected brands in the nation,” said Richard Burke, Chief Executive Officer of Advanced Disposal. “This acquisition stands as a testament to the strength of the Advanced Disposal business and brings together two strong waste management teams with extensive environmental services expertise to better serve our customers and communities.”

Centerview Partners, Simpson Thacher & Bartlett and Vedder Price are advising Waste Management. UBS, Mayer Brown and Shearman & Sterling are advising Advanced Disposal Services. Sullivan & Cromwell is advising UBS.

 

Private equity firm Siris Capital acquired Electronics For Imaging, a world leader in customer-focused digital printing innovation, for $1.7bn. Under the terms of the Agreement, which has been unanimously approved by EFI’s Board of Directors, an affiliate of Siris will acquire all the outstanding common stock of EFI for $37 per share in cash. The purchase price represents an approximately 45% premium over EFI’s 90-day volume-weighted average price ended on April 12, 2019.

Commenting on the transaction, Frank Baker, a Siris Co-Founder and Managing Partner, said: “EFI is at the forefront of the digital transition in the imaging and print industry, underpinned by a strong software heritage and culture of innovation. We believe that, by partnering with Siris, EFI will be well positioned to capture this transformational opportunity associated with increased digital inkjet penetration, industrial automation and software enablement. We are eager to partner with management to help the company achieve its strategic objectives.”

Greenhill, Morgan Stanley and O'Melveny & Myers are advising Electronics For Imaging. RBC, Kirkland & Ellis and Sidley Austin are advising Siris. RBC, Deutsche Bank, KKR, Credit Suisse, Macquarie and Barclays are providing debt financing.

 

Catalent, the leading global diversified provider of advanced delivery technologies and development solutions for drugs, biologics and consumer health products, is to acquire Paragon Bioservices, a leading viral vector development and manufacturing partner for gene therapies, for $1.2bn.

"Paragon's unparalleled expertise in the rapidly growing market of gene therapy manufacturing will be a transformative addition to our business that we believe will accelerate our long-term growth. Paragon brings to Catalent a complementary capability that will fundamentally enhance our biologics business and our end-to-end integrated biopharmaceutical solutions for customers," said John Chiminski, Catalent's Chair & Chief Executive Officer. "We look forward to working with Paragon's incredibly talented team and world-class customers to complete the significant ongoing investments into expanded state-of-the-art facilities and deliver revolutionary, life-saving treatments to patients."

William Blair, Gordon Feinblatt and Kirkland & Ellis are advising Paragon Bioservices. Centerview Partners and Fried Frank are advising Catalent. Leonard Green & Partners are providing financing to Catalent and being advised by UBS and Latham & Watkins.

 

L Catterton, a consumer-focused private equity firm, closed the acquisition of Cholula, a leading producer and distributor of hot sauce. Terms of the transaction were not disclosed.

“We are pleased to have completed our acquisition of Cholula, an iconic brand within the attractive and growing hot sauce category,” said Matt Leeds, Principal in L Catterton’s flagship Buyout Fund. “We look forward to supporting Cholula’s continued expansion in the years to come, and we are excited to welcome such a beloved brand into the L Catterton family.”

VACE Partners and Cravath Swaine & Moore advised Cholula. L Catterton was advised by Joele Frank, Kirkland & Ellis, Creel, McKinsey & Company, PwC, and Alvarez & Marsal.

 

Liberty Mutual, an American diversified global insurer, acquired the surety and credit reinsurance operations of AmTrust, a multinational property and casualty insurer specializing in coverage for small to midsized businesses. Financial terms were not disclosed.

The agreement is an important step in the AmTrust Forward strategic plan to position the company for long-term success. "Earlier this year, we announced our plan to become a leading specialty commercial P&C insurer by focusing on local markets and niche products where we can add significant value," said Barry Zyskind, Chairman and CEO of AmTrust. "The agreement with Liberty Mutual enables us to focus our resources in areas where we can differentiate ourselves through the value we bring to distribution partners and buyers."

Skadden Arps Slate Meagher & Flom advised Liberty Mutual. Bank of America Merrill Lynch and Debevoise & Plimpton advised AmTrust.

 

Red Ventures, a portfolio of digital companies headquartered in Charlotte, acquired HigherEducation, a leading provider of marketing and enrollment services to post-secondary institutions in the United States, from The Vistra Group, an asset management company. Financial terms were not disclosed.

"Online education is a fast-growing industry with enormous scale and significant innovation," said Red Ventures CEO, Ric Elias. "HigherEducation brings a unique mix of high-quality digital assets, well-established partnerships, and deep technical expertise, all of which fit perfectly into the Red Ventures model and provide the ideal entry point into the broader education sector."

K&L Gates advised Red Ventures. Canaccord Genuity advised HigherEducation and The Vistra Group.

 

Jefferies Financial Group, an American multinational independent investment bank and financial services company, is to merge with HomeFed Corporation, a developer and owner of residential and mixed-use real estate properties primarily in California and New York. Jefferies already owns a 70% stake in the company and will acquire the remaining 30% for $189m.

Rich Handler and Brian Friedman, CEO and President, respectively, of Jefferies, said: “We are very pleased that the Special Committee of the Board of Directors of HomeFed has approved the transaction. Merging with HomeFed will allow Jefferies to consolidate HomeFed for tax purposes (which will avoid an extra layer of taxes as HomeFed monetizes its assets), affording greater flexibility as to the timing and form of maximizing value over time. We very much look forward to continuing to work closely with Chris Foulger, Paul Borden and the entire HomeFed team to achieve those goals.”

 

Osceola-backed I&I Sales Group, which provides outsourced sales and marketing services, acquired Cinpak, a provider of outsourced sales and marketing services. Financial terms were not disclosed.

"We are thrilled to have Cinpak join the I&I family. Tony and his team have built a strong business with a reputation for partnering with high-quality manufacturers, adding significant value to its product offering, and generating excellent and consistent customer satisfaction. We look forward to continuing that same level of service post-transaction," said Ben Moe, a Managing Partner at Osceola. "Additionally, Cinpak's geographic footprint will further enable I&I to provide greater value and broader services to our manufacturers and customers across the country."

 

Performance Health, a provider of latex cloth, rubber tubing, cord and bulk sheeting, and pain reliever products and a portfolio company of Madison Dearborn Partners, is soliciting bids for its Biofreeze pain-relief gel in a deal that could be worth more than $1bn. The first round of offers is reportedly due in May, with Johnson & Johnson among the rumored suitors.

 

Lundin Mining, a multinational minerals company, is set to acquire a Brazilian gold-copper mine of Yamana Gold, a Canadian-based gold producer, for more than $1bn. The Chapada mine, located about 270 kilometers (168 miles) northwest of Brasilia, began operating in 2007 and is expected to produce about 54k tonnes of copper and 100k ounces of gold in 2019.

The deal would increase Lundin’s previous copper production outlook for 2019 by 26%, the company said in a statement.

Citigroup advised Yamana Gold.

 

Defy Partners, a Silicon Valley investment firm co-founded by Trae Vassallo and Neil Sequeira, raised $262m for a second venture-capital fund, according to a filing with the SEC. The firm attracted the capital from 49 LPs. Vassallo, formerly a general partner at Kleiner Perkins Caufield & Byers, and Sequeira, formerly a managing director at General Catalyst Partners, raised a $151m first fund in 2017.