The year’s North American dealmaking edged over $1 trillion last week, 10 weeks ahead of when that mark was reached in 2006. At this point last year, there had been $682 billion in M&A, on the way to a final year-end tally of $1.47 trillion.
Last week’s $40.65-billion total did not include the biggest private-equity deal of the year so far: the $32.6-billion buyout of Canadian telecommunications giant BCE Inc. It was announced Saturday, falling just outside our “official” June 29 week.
The top ten transactions featured a familiar mix of foreign companies purchasing U.S. assets, and mid-sized private-equity buyouts, according to data provided to CFO.com by mergermarket. Leading the top ten was Basell NV of the Netherlands purchasing Salt Lake City chemical company Huntsman Corp. for $9.15 billion, followed by Madrid-based energy concern Iberdrola SA buying Energy East Corp. for $8.51 billion. Holding company Energy East, of New Gloucester, Maine, has interests in transmission, distribution, and generation operations, along with natural gas businesses in the Northeast.
The leading private equity deal was the $5.57-billion purchase of Allison Transmission from General Motors Corp. by Carlyle Group LLC and Onex Partners LP, which helped buyout activity account for $380.2 billion of the year-to-date total.
Basell NV to buy Huntsman for $9.15 billion
The definitive agreement, unanimously approved by both boards, calls for Huntsman holders to get $25.25 a share, a premium of 33.6% for the maker and marketer of differentiated, inorganic, and commodity chemical products. Basell produces polypropylene and advanced polyolefins products, supplies polyethylene and catalysts, and develops and licenses polypropylene and polyethylene processes. Entities controlled by Matlin Paterson and the Huntsman family, who collectively own 57% of Huntsman’s common stock, have agreed to approve the transaction, expected to close in the fourth quarter. Conditions: HSR (USA), EC (Europe), and Huntsman shareholder approval. Expected
Seller financial advisor: Merrill Lynch; Cowen & Co.
Bidder financial advisor: Citigroup
Seller legal advisor: Vinson & Elkins; Sherman & Sterling
Bidder legal advisor: Skadden Arps Slate Meagher & Flom; Curtis, Mallet-Prevost, Colt & Mosle
Iberdrola to buy Energy East for $8.5 billion
Both boards have approved the definitive agreement, offering $28.50 a share, for a premium of 20.9 percent. Regulatory approvals must be received, and Iberdrola will analyze different financing alternatives for the transaction. After the close, expected in 2008, Energy East’s utility subsidiaries will continue to operate under their current names (Berkshire Gas Co., Central Maine Power Co., Connecticut Natural Gas Corp., New York State Electric & Gas Corp., Rochester Gas and Electric Corp., and Southern Connecticut Gas Co.)
Seller financial advisor: Greenhill & Co; JPMorgan
Bidder financial advisor: ABN AMRO; Banc of America Securities
Seller legal advisor: Davis Polk & Wardwell (Advising Greenhill & Co and JPMorgan); LeBoeuf, Lamb, Greene & MacRae
Bidder legal advisor: Latham & Watkins; Uria Menendez
Carlyle Group and Onex Partners to buy Allison Transmission from GM for $5.57 billion
Buyers are Carlyle Partners IV LP, the U.S.-based Carlyle fund, along with the Canadian Onex Partners II fund that is part of the Canadian private-equity arm of the listed Onex Corp. Canadian conglomerate, with Carlyle and Onex making equal contributions for an equity investment of approximately $1.5 billion. The agreement covers substantially all of Allison Transmission, including its distribution network, sales offices, and seven manufacturing facilities in Indianapolis. The transaction is in line with GM’s strategy of strengthening liquidity and supporting investment in developing new products and technology. It expects to expand through the financial resources of Carlyle and Onex. Completion is expected by the third quarter, and is subject to union and customary regulatory approvals.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Citigroup
Seller legal advisor: Jenner & Block
Bidder legal advisor: Latham & Watkins
AT&T Inc. to buy Dobson Communications Corp. for $ 4.73 billion
Boards of directors of both companies have approved the definitive agreement for purchase of Oklahoma City-based Dobson, third-largest U.S. provider of GSM wireless services. AT&T, based in Bedminster, N.J., will pay $13 a share, a 16.9 percent premium.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Lehman Brothers
Seller legal advisor: Mayer Brown Rowe & Maw
Bidder legal advisor: Sullivan & Cromwell
Roche Holding AG offers to buy Ventana Medical Systems Inc. for $ 2.77 billion
The Swiss healthcare giant’s tender offer for Tucson-based Ventana, resisted by the medical equipment company, is for $75, a 45 percent premium. Roche had approached Ventana in January about a possible equity investment, and Ventana’s board considered was not interested. It then rejected the proposal of a merger, and hasremained unwilling to engage in any meaningful discussion.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Citigroup; Greenhill & Co
Seller legal advisor: Sidley Austin
Bidder legal advisor: Davis Polk & Wardwell
CommScope Inc. to buy Andrew Corp. for $2.57 billion
The definitive agreement for the purchase of Westchester, Ill.-based Andrew, a provider for the global communications infrastructure market, was approved by both boards. The combined company expects to generate annual pretax cost savings of about $90 million to $100 million in the second full year after completion, expected by the end of 2007, including $50 million to $60 million in the first year. Terms call for $13.50 in cash for each Andrew share, with an additional $1.50 per in either cash, CommScope shares, or a combination of both, a premium of 15.6 percent. Andrew will become a wholly-owned subsidiary of CommScope with Frank Drendel remaining as Chairman and CEO of CommScope.
Seller financial advisor: Citigroup; Merrill Lynch
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Mayer Brown Rowe & Maw; Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Baker & McKenzie; Cahill Gordon & Reindel; Duff & Phelps; Fried Frank Harris Shriver & Jacobson; Robinson Bradshaw & Hinson
Bain Capital LLC to buy Guitar Center Inc. for $ 2 billion
A definitive agreement for purchase of the Westlake Village, Calif.-based Guitar Center has been approved by both boards. The price is $63 a share, a premium of 25.8 percent. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Goldman Sachs; Peter J Solomon Company
Bidder financial advisor: JPMorgan; Lehman Brothers
Seller legal advisor: Bingham McCutchen; Latham & Watkins; Sullivan & Cromwell; Willkie Farr & Gallagher (Advising Peter J Solomon Company)
Bidder legal advisor: Kirkland & Ellis
Fidelity National Information Services Inc. to buy eFunds Corp. for $ 1.69 billion
Both boards approved the definitive agreement for the purchase of Scottsdale, Ariz.-based eFunds, which delivers risk management, electronic payment, and related outsourcing solutions. Fidelity National is a Jacksonville, Fla.-based provider of processing services to financial institutions. The acquisition provides FIS with scale and extends its presence in U.S. and international banking markets while expanding the distribution channel for its core processing and risk analytic services. It expects to realize about $65 million in annual cost savings, and with synergies the transaction should be accretive to cash earnings per diluted share in 2008. The $36.50-a-share price offers a a premium of 5.5 percent. FIS plans to fund the purchase with a combination of cash on hand and recently secured long- term debt commitments. It is expected to close in the third quarter.
Seller financial advisor: BlackRock; Goldman Sachs
Bidder financial advisor: Banc of America Securities LLC; Bear, Stearns & Co
Seller legal advisor: Fried Frank Harris Shriver & Jacobson
Bidder legal advisor: LeBoeuf, Lamb, Greene & MacRae
People’s United Financial to buy Chittenden Corp. for $ 1.65 billion
Burlington, Vt.-based Chittenden signed a definitive agreement for the deal with People’s, headquartered in Bridgeport, Conn., and holding company for People’s United Bank, with assets of $14 billion. The $37-a-share price is about 55 percent cash and 45 percent stock, representing a 31-percent premium. People’s United expects the transaction to be immediately accretive to earnings and to have an IRR of approx. 13 percent after it closes in next year’s first quarter.
Seller financial advisor: JPMorgan; Lehman Brothers
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Goodwin Procter
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Thacher Proffitt & Wood
Western Digital Corp. to buy Komag Inc. for $972 million
San Jose, Calif.-based Komag has signed a definitive agreement to be acquired by Western Digital, the Lake Forest, Calif.0 designer and manufacturer of hard drives. Komag, designs and makes thin-film media (disks) that are incorporated into disk drives. The $32.25 price offers a premium of 9 percent. The transaction is expected to close in the third quarter.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: O’Melveny & Myers