VideoDealmaking in North America plummeted 73 percent in the week ended Aug. 12 — the second straight period of sharp declines — offering further evidence of the severe damage to merger-and-acquisition activity being caused by tight credit.
The largest deals were Campbell Group Inc.'s $2.38-billion purchase of timber acreage from Temple-Inland Inc., and Pride International Inc.'s $1-billion sale of drilling and exploration businesses to Brazilian private equity interests. And the largest corporate combination was Bangalore, India's Wipro Technologies information-technology company paying $529 million for Infocrossing Inc., an IT infrastructure firm based in Leonia, N.J.
In the last week of July — a much more typical seven-day period in what had started as a huge year for M&A — 9 of the top 10 deals exceeded $1 billion, and the top transaction approached $20 billion. Last week's 34 deals were valued at a total of $6.49 billion, nudging year-to-date volume to $1.29 trillion, according to data provided to CFO.com by mergermarket .
There are few signs that downslide will ease any time soon, however, although at the recent weak levels, even one large deal could appear to turn things around.
Campbell Group to buy 1.55 million timberland acres from Temple-Inland for $2.38 billion
The agreement to calls for Austin, Texas-based Temple-Inland, a paper products and building materials maker, to receive payment almost entirely in installment notes from Portland, Ore-based Campbell. The sale by Temple-Inland, which had been under press from investor Carl Icahn, includes a 20-year fiber supply agreement for pulpwood and a 12-year fiber supply agreement for saw timber, with fiber to be purchased at market prices. Timberlands will continue to be managed and certified by a third-party. . The transaction is expected to close in fourth quarter.
Seller financial advisor: Goldman Sachs; Citigroup
Bidder financial advisor: Internal
Seller legal advisor: Sutherland Asbill & Brennan
Bidder legal advisor: Morrison & Foerster; Schwabe, Williamson & Wyatt
GP Investments Ltd. to buy Land Drilling and exploration and production services businesses from Pride International Inc. for $1,000 million
Under the terms of the agreement, the price is being funded by 60% debt and 40% equity by GP, the Brazilian private-equity fund.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Citigroup
Seller legal advisor: Baker Botts
Bidder legal advisor: Cravath Swaine & Moore
Capital One Financial Corp. to buy NetSpend Holdings Inc. from Gefinor Ventures and Oak Investment Partners for $700 million
Capital One believes the purchase of NetSpend Holdings, parent of prepaid-debt-card marketer and processor NetSpend Corp., will be accretive to earnings in its fiscal year 2009. NetSpend adds to Capital One’s distribution channel extending their solutions to the retail sector. The transaction is expected to close in the fourth quarter.
Seller financial advisor: JPMorgan; William Blair & Company
Bidder financial advisor: Deutsche Bank
Seller legal advisor: Baker Botts; Finn, Dixon & Herling (counsel to shareholder)
Bidder legal advisor: Gibson Dunn & Crutcher; Skadden Arps Slate Meagher & Flom (Advising Deutsche Bank)
Wipro Technologies to buy Infocrossing Inc. for $529 million
Wipro Technologies, part of Bangalore, India-based Wipro Ltd., is paying price $18.70 per share, a premium of 5.5 percent. Infocrossing would be merged with Wipro Technologies. The transaction is in line with Wipro’s strategy to enhance its market reach of the data center and mainframe capabilities and increase business-process and other products to healthcare customers. It also expects to enhance the shareholder returns and customer base of Infocrossing. Completion of the transaction is expected by the fourth quarter.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Citigroup
Seller legal advisor: Gibson Dunn & Crutcher
Bidder legal advisor: Wilson Sonsini Goodrich & Rosati
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