M&A Roundup

Sears Holdings and Sears Canada; Universal Computer Systems and Reynolds and Reynolds; Aramark Corp. and Joseph Neubauer and investors; Amerisource...
Helen ShawAugust 10, 2006

•The Ontario Securities Commission has said that Sears Holdings’ $775 million buyout offer for its unit Sears Canada did not met disclosure obligations. It did not disclose its support agreements with banking stakeholders that own a significant block of shares. The ruling requires Sears Holdings to exclude votes on the deal by its bank shareholders, Scotia Bank, Bank of Nova Scotia, Royal Bank of Canada, and Vornado Realty Trust. The ruling follows dissident shareholder requests that banks’ shares be excluded from the count toward bid thresholds.

•Universal Computer Systems Inc. will acquire Reynolds and Reynolds Co. for $2.8 billion, including debt. The two largest car dealership management services companies will form a company under the Reynolds name that will be based in Dayton, Ohio. Shareholders are expected to vote in the fourth quarter of 2006 on the deal, which is also subject to regulatory approval.

•Aramark Corp., a food-service and facilities management company, has agreed to a $6.3 billion buyout by its chairman and chief executive officer Joseph Neubauer, and funds managed by GS Capital Partners, CCMP Capital Advisors, J.P. Morgan Partners, Thomas H. Lee Partners, and Warburg Pincus. The offer is higher than the same group’s bid in May. Including debt, the deal is valued at $8.3 billion. It is expected to close by late 2006 or early 2007.

•AmerisourceBergen Corp. and Kindred Healthcare Inc. have agreed to merge their institutional pharmacy businesses into an independent, publicly-traded company that would be one of the industry’s largest with $1.9 billion in sales. The companies expect to sign a definitive agreement by September 30 and close the transaction in the first quarter of 2007.

•CommScope Inc., a producer of cables that deliver high-speed data and phone services, has offered to purchase Andrew Corp., a telecom gear manufacturer, for approximately $1.5 billion. In May, ADC Telecommunications announced it would acquire Andrew Corp., but it has not scheduled a shareholder vote on the deal, which was expected to close this fall. CommScope asked for a response to its offer by August 11.

•Texas Pacific Group, a buyout firm, has agreed to acquire Aleris International, a producer and recycler of aluminum and zinc products, for $1.7 billion. In addition, Texas Pacific will assume Aleris’ $1.6 billion of debt. Pending stockholder and regulatory approval, the deal is expected to close in early 2007.

•Deutsche Boerse has restated its interest in a merger with Euronext, the European stock-exchange operator. Euronext has already agreed to merge with NYSE Group in a $10 billion deal that shareholders will vote on this fall. A report on both the NYSE and Deutsche Borse offers by the French financial lobbying group Paris Europlace is expected to be released.

•The Forbes family has sold a significant minority stake in Forbes Media, which includes the Forbes.com Web site and smaller media properties, to private equity group Elevation Partners. Deal terms were not disclosed. Proceeds from the transaction will be invested in the business and paid out to family members. The company had been seeking a partnership since 1999.