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Deals: Steel and Germs, but No Guns

In our M&A roundup for the period ended Aug. 17, Russia's Novolipietsk Steel makes the biggest buy, with a drug deal and a drug-store deal right behind it.
Roy Harris, CFO.com | US
August 18, 2008

The celebrated 1996 book studying "the fates of human societies," Jared Diamond's "Guns, Germs and Steel," came close to describing last week in dealmaking.

Russia's Novolipietsk Steel agreed to buy steel pipe and tube company John Maneely Co. from Carlyle Group and family owners for $3.53 billion, for the biggest North American transaction. Meanwhile, Australia's CSL Limited said it would pay $3.10 billion for Talecris Biotherapeutics Inc., a North Carolina company that makes and markets vaccines and medications. And also in the vicinity of the germs business, the Number Three deal was CVS-Caremark Corp.'s $2.75-billion agreement to buy Longs Drug Stores Corp.

Too bad Remington or Colt — or Lockheed Martin, for that matter — weren't in play. The remaining transactions didn't have anything to do with weaponry. But many reflected the global consolidation trend, according to a compilation of the top 10 North American deals and other data provided to CFO.com by mergermarket. All but 3 of the 10 were cross-border transactions, in fact.

The next-largest deals, for example, were led by Permira Advisers LLP and News Corp.'s agreement to buy NDS Group Plc for $2.06 billion. NDS is a UK-based supplier of digital technology for pay television. And along with media and entertainment giant News Corp., the other buyer was a UK-based private equity concern.

Total deal volume of $13.06 was up sharply from the prior week's $7.05 billion, although the number of deals struck plunged to 28 from 52. Year-to-date deal value is now $625.61 billion, based on 2,385 transactions through Aug. 17. That's down from $1.25 trillion based on 3,328 transactions.

Novolipetsk Steel to buy John Maneely Co. from The Carlyle Group LLC; and The Zekelman family for $3.53 billion
Novolipetsk Steel, of Lipetsk, Russia, agreed to acquire Collingswood, N.J.-based pipe and tube manufacturing company John Maneely private-equity concern Carlyle, along with the Zekelman family and other shareholders. The price is on a debt and cash free basis, and the transaction is expected to close in the fourth quarter.
Seller financial advisor: GMP Securities; Goldman Sachs; JPMorgan
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Latham & Watkins
Bidder legal advisor: Debevoise & Plimpton ; Stikeman Elliott

CSL Limited to buy Talecris Biotherapeutics Inc. from Ampersand Ventures, Cerberus Partners LP for $3.10 billion
Victoria, Australia-based CSL, which develops, manufactures, and markets vaccines and medications of biological origin, agreed to acquire Talecris Biotherapeutics, of Research Triangle Park, N.C. It is a producer of critical care treatments for life-threatening disorders. Cerberus Partners and Ampersand Ventures, the sellers, are U.S. private equity firms.
Seller financial advisor: Goldman Sachs; Morgan Stanley
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Arnold & Porter ; Sullivan & Cromwell
Bidder legal advisor: Allens Arthur Robinson; Covington & Burling; Simpson Thacher & Bartlett

CVS/Caremark Corp. to buy Longs Drug Stores Corp. for $2.75 billion
Longs, a Walnut Creek, Calif.-based retailer and pharmacy benefits company, definitively agreed to be acquired by CVS/Caremark, of Woonsocket, R.I. Both boards approved the merger at $71.50 a share, a premium of 32.3 percent. CVS/Caremark is a provider of prescriptions and related healthcare services. Longs's pharmacy benefits operations are under the name RxAmerica. The transaction is expected to close in the fourth quarter.
Seller financial advisor: JPMorgan
Bidder financial advisor: Deutsche Bank; Lehman Brothers
Seller legal advisor: Wachtell, Lipton, Rosen & Katz
Bidder legal advisor: Davis Polk & Wardwell; Hogan & Hartson; Mintz Levin Cohn Ferris Glovsky and Popeo

Permira Advisers LLP and News Corp. to buy NDS Group Plc for $2.06 billion
NDS definitively agreed to be acquired by London-based private-equity concern Permira and New York City-based News Corp. The boards of directors of both companies have approved the merger at a price of $63 a share for Series A and B shares, a premium of 26.8 percent. For A shares that breaks down to $47.42 in cash and $15.58 of A shares. NDS is based in West Drayton, Middlesex, and supplies open end-to-end digital technology and services to digital pay-television platform operators and content providers. Excluding assumed cash from the deal, the implied equity value of the transaction is about $2.79 billion. The transaction is expected to close in the end of the year or early 2009.
Seller financial advisor: Citigroup ; Goldman Sachs; Morgan Stanley
Bidder financial advisor: JPMorgan
Seller legal advisor: Allen & Overy ; Clifford Chance; Weil Gotshal & Manges
Bidder legal advisor: Hogan & Hartson ; Skadden Arps Slate Meagher & Flom


Borealis Infrastructure Management Inc. and GIC Special Investments Pte Ltd. to buy a 19.75-percent stake in the electrical transmission/distribution business of Oncor Electric Delivery Co. LLC from Energy Future Holdings Corp. for $1.25 billion
Toronto-based Borealis is an investment company that invests in and manages infrastructure assets, while GIC Special Investments is a Singapore-based sovereign wealth fund. They are buying the stake in the transmission/distribution business of Dallas-based Oncor, an electrical power distribution company, from Dallas-based Energy Future Holdings.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Lehman Brothers
Seller legal advisor: Baker & McKenzie; Simpson Thacher & Bartlett
Bidder legal advisor: Bracewell & Giuliani; Heller Ehrman White & McAuliffe ; Torys

Ultrapar Participacoes SA to buy the fuels marketing business in Brazil from Chevron Corp. for $730 million
Ultrapar Participacoes, of Bela Vista, Brazil, is engaged in LPG distribution, and chemical and petrochemical production, as well as transportation and storage of related products. Chevron's fuels marketing business is based in Brazil, while Chevron itself is in San Ramon, Calif.
Seller financial advisor: Citigroup
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Jones Day
Bidder legal advisor: Freshfields Bruckhaus Deringer

Li & Fung Limited to buy Kathy Van Zeeland for $495 million
Hong Kong-based fashion group Li & Fung agreed to acquire New York City-based handbag retailer Kathy Van Zeeland, with the transaction expected to closed Sept. 2.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Not available
Bidder legal advisor: Not available

Terex Corp. to buy the port equipment business of Fantuzzi Industries Sarl for $321 million
Terex, a manufacturer of construction, mining, and other heavy equipment, and provider of financing and related services for equipment purchases, won an auction to acquire port equipment businesses of Italian maker and designer of port equipment, systems, plants, and industrial truck lifts Fantuzzi Industries. Completion is expected to close by the fourth quarter.
Seller financial advisor: Not Available
Bidder financial advisor: UniCredit Group
Seller legal advisor: Simmons & Simmons
Bidder legal advisor: Bryan Cave

JDA Software Group Inc. to buy i2 Technologies Inc for $320 million
Dallas-based i2 Technologies definitively agreed to be acquired by Scottsdale, Ariz.-based JDA Software for $14.86 a share, a premium of 4.9 percent, with both boards approving the merger. i2 Technologies provides application software and hosted software products for supply chain management. JDA provides software products for supply and demand chain requirements of global consumer products companies, manufacturers, distributors, and retailers, along with government and aerospace defense contractors and travel, transportation, hospitality, and media organizations. The transaction is expected to close in the fourth quarter.
Seller financial advisor: JP Morgan Securities
Bidder financial advisor: Citigroup
Seller legal advisor: Munsch Hardt Kopf & Harr
Bidder legal advisor: DLA Piper; Stikeman Elliott

Ameriprise Financial Inc. to buy H&R Block Financial Advisors from H&R Block Inc for $315 million
Minneapolis-based financial planning, products, and services provider Ameriprise agreed to acquire H&R Block Financial Advisors, of Kansas City, Mo., from Kansas City-based H&R Block in a deal expected to close in the first quarter of 2009.
Seller financial advisor: Lazard
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Wachtell Lipton Rosen & Katz

source: mergermarket




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