VideoWith the air now officially out of the 2007 merger-and-acquisition balloon, North American dealmaking continued to languish in the week ended Sept. 2, with 39 proposed transactions valued at a total of $5.52 billion. For the second straight week, none of the reported value came from leveraged buyouts.
The number of deals actually rose from 36 in the prior week, when the proposed transactions were worth $9.68 billion. But relative to the routine $50-billion-plus weeks of the first half, such variations were little to shout about. Indeed, in that prior week the total value of deals reflected $5.86 billion in deals the Dubai government did with MGM Mirage Inc.
Last week, there was no such multi-billion-dollar M&A among the top 10 transactions on the continent, according to data provided to CFO.com by mergermarket . The largest proposed deal was Medco Health Solutions Inc.'s $1.26-billion agreement with PolyMedica Corp., a provider of diabetes testing supplies. The only other $1-billion proposal: a $1.12-billion offer from UK-based Central African Mining & Exploration Co. for Toronto-based Katanga Mining.
As has been the case in recent weeks — it's been a month now since dealmaking approached $25 billion over a seven-day period — the year-to-date value of proposed transactions hardly budged. The 3,076 deals this year now total $1.32 trillion, compared with 3,315 deals valued at $974.48 billion in the prior year.
As for private equity, which played a starring role in 2007's first-half performance, last week there were only two deals, for which the value wasn't reported. In the prior week, three deals with undisclosed values were included in the listings. For the year-to-date, when private equity was king, however, 540 such transactions accounted for a reported $496.15 billion of dealmaking.
Medco Health Solutions to buy PolyMedica for $1.26 billion
Under the definitive agreement Medco is offering $53 a share, a premium of 17 percent for the Wakefield, Mass.-based diabetes testing supply and products concern. It operates through two segments: diabetes and pharmacy. Medco, based in Franklin Lakes, N.J., provides pharmacy benefit management services in the U.S. and Puerto Rico. Medco currently manages more than $6.5 billion in drug spending for 2.8 million patients under treatment for diabetes, while PolyMedica has one million members under care in its focus on diabetes-related pharmacy care. The transaction is expected to close late this year.
Seller financial advisor: Deutsche Bank
Bidder financial advisor: Lazard
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Sullivan & Cromwell
Central African Mining & Exploration Co. to buy Katanga Mining for $1.19 billion
Katanga, based in Toronto, is a copper producer. Central African Mining, based in London, is an integrated exploration, mining, trading, and investment company that already owns 22 percent of Katanga's outstanding stock. Central African's offer is to exchange 17 of its shares for each remaining Katanga common share, representing about $17.83 per share, a discount of nearly 18 percent for Katanga. The maximum number of shares to be issued is approximately 343.6 million. Holdings & After completion, Central African will maintain its current listing on AIM and apply also for a listing on a Canadian Stock Exchange.
Seller financial advisor: CIBC World Markets; GMP Securities
Bidder financial advisor: Seymour Pierce Group
Seller legal advisor: Cassels Brock & Blackwell
Bidder legal advisor: SALANS
Chicago Bridge & Iron NV to buy ABB Lummus Global from ABB Ltd. for $950 million
Chicago Bridge, an engineering company based in Hoofddorp, the Netherlands, has an agreement Zurich-based ABB covering Lummus, a Bloomfield, N.J.-based construction management and engineering services provider. Lummus Global employs about 2,400 people and holds 70 proprietary technologies and more than 1,000 patents. Chicago Bridge estimates that Lummus will have revenues of about $1 billion in 2007, and says that the combined entity will be able to provide clients with a full range of hydrocarbon-related services, from proprietary technology to engineering. The acquisition, representing ABB's strategy of focusing on its core business in power and automation technology, is expected to close in the fourth quarter.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Skadden Arps Slate Meagher & Flom
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