M&A

Deals: An Uptick, but Far from a Trend

In our M&A Roundup for the week ended Oct. 21, three billion-dollar deals help the total climb, but still short of $10 billion.
Roy HarrisOctober 22, 2007

Merger activity perked up a bit, with 36 total North American proposed transactions last week totaling $9.21 billion. But the level of dealmaking remained far short of the pre-credit-crunch first half.

The largest deal appearing among the top 10 North American deals of the week was Danaher Corp.’s agreement to buy test and measurement equipment-maker Tektronix Inc. for $2.72 billion. Behind that, though, were only two acquisitions worth more than $1 billion: Munich American Holding Corp.’s arrangement to buy insurer Midland Co. for $1.26 billion and Vestar Capital Partners’s $1.1-billion plan to take Radiation Therapy Services Inc. private.

The M&A results were measured in data provided to CFO.com by mergermarket.

In the prior week, 29 deals were struck, for a total value of $7.55 billion. For the year through last Saturday, $1.42 trillion of North American transactions occurred, up from $1.13 trillion for the prior year year-to-date.

Danaher Corp. to buy Tektronix Inc. for $2.72 billion

Tektronix definitively agreed to Danaher’s cash tender offer of $38 a share for all outstanding common, a premium of 34.5 percent. Both boards have approved the deal for Tektronix, a Beaverton, Ore.-based supplier of test, measurement, and monitoring products for the communications, computer, consumer electronics, and education industries, which also serves the defense, semiconductor, and other industries. Washington, D.C.-based Danaher makes instrumentation, medical technologies, industrial technologies, and tools and components. Tektronix would become part of Danaher’s Electronic Test platform, joining Danaher’s Fluke and Fluke Networks businesses, and nearly doubling the platform’s revenues. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Morgan Stanley
Seller legal advisor: O’Melveny & Myers (Advising Goldman Sachs); Stoel Rives
Bidder legal advisor: Wachtell Lipton Rosen & Katz

Munich American Holding Corp. to buy Midland Co. for $1.26 billion

Cincinnati-based specialty insurance-products provider Midland signed a definitive agreement to be acquired for $65 a share, a 13.5-percent premium, with the boards of both approving. The acquirer is the U.S. subsidiary of Germany’s Munich Re and is headquartered in Princeton, N.J. Closing is expected in next year’s first half.
Seller financial advisor: UBS
Bidder financial advisor: Lehman Brothers
Seller legal advisor: Cleary Gottlieb Steen & Hamilton; Keating, Muething & Klekamp
Bidder legal advisor: Dewey & LeBoeuf

Vestar Capital Partners to buy Radiation Therapy Services Inc. for $1.1 billion

Radiation Therapy definitively agreed to be acquired for $32.50 a share, a premium of 51 percent, and directors approved the deal. Private equity acquirer Vestar manages funds with committed capital of about $7 billion. Thee provider of radiation therapy services to cancer patients is based in Ft. Myers, Fla. The transaction is expected to close in next year’s first quarter.
Seller financial advisor: Wachovia; Morgan Joseph & Co
Bidder financial advisor: Internal
Seller legal advisor: Shumaker Loop & Kendrick; Holland & Knight; McDermott Will & Emery (Advising Morgan Joseph & Co)
Bidder legal advisor: Kirkland & Ellis; Kennedy Covington Lobdell & Hickman

Berlian Laju Tanker Tbk PT to buy Chembulk Tankers from American Marine Advisors Inc. for $850 million

Jakarta-based Berlian Laju Tanker Tbk, a shipping company, agreed to acquire Chembulk Tankers of Westport, Conn. The deal is intended to help Berlian Laju Tanker enter the North American market with its stainless steel chemical tanker operation. The acquisition will be funded by cash and committed bank loans from several offshore banks. New debt of $750 million, to be raised by both Berlian Laju Tanker and Chembulk, will be used in the acquisition. Chembulk was founded in January by AMA Capital Partners, which acquired the chemical tanker operation from Connecticut-based MT Maritime.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: DnB NOR
Seller legal advisor: Paul Weiss Rifkind Wharton & Garrison; Watson, Farley & Williams
Bidder legal advisor: Clifford Chance

Galenica Ltd. to buy Aspreva Pharmaceuticals Corp. for $591 million

Victoria, B.C.-based Aspreva agreed to a deal in which Berne, Switzerland-based Galenica will pay $26 a share, a premium of 15.6 percent. Both boards have approved the merger. Aspreva is a global company focused on identifying and developing evidence-based medicines for patients living with less-common diseases. Galenica is diversified in the healthcare market developing and making pharmaceutical products and running pharmacies and providing logistical services and access to databases. The Royal Bank of Scotland plc will arrange and underwrite the acquisition facilities. The transaction is expected to close on Jan. 3.
Seller financial advisor: Lazard; Lehman Brothers
Bidder financial advisor: Merrill Lynch; UBS
Seller legal advisor: Cooley Godward Kronish; Farris, Vaughan, Wills & Murphy; McCarthy Tetrault
Bidder legal advisor: Blake, Cassels & Graydon; Kellerhals Hess Attorneys-at-Law

Kongsberg Automotive ASA to buy Global Motion Systems from Teleflex Inc. for $560 million

Kongsberg, Norway-based automotive company Kongsberg Automotive agreed to pay cash for the Global Motion division of Limerick, Pa.-based Teleflex, which designs, makes, and distributes specialty engineered products for commercial, medical, and aerospace industries. Global Motion has about 8,000 employees, and for the fiscal year 2006 generated annual revenue of $855 million and EBIT of $52 million. The transaction is expected to close before the end of the year.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Carnegie Group
Seller legal advisor: Ballard Spahr Andrews & Ingersoll; Eversheds
Bidder legal advisor: Miller Canfield Paddock & Stone

Global Brass and Copper Holdings Inc. to buy the Metals business of Olin Corp. for $400 million

KPS Capital Partners LP, the New York City-based private equity firm is making the purchase through the newly formed Global Brass and Copper. The cash deal has been agreed to by Clayton, Mo.-based Olin, which makes copper alloys, ammunition, and chlorine and caustic soda. The acquisition includes all Olin’s worldwide metals operations, including the manufacturing facilities in East Alton, Ill.; Montpelier and Bryan, Ohio; Waterbury, Conn.; and Cuba, Mo., in addition to its A. J. Oster metals service centers and joint ventures in Japan and China. In 2006 the metals business generated revenues of $2.1 billion. Global Brass and Copper and its subsidiaries will sell products under the Olin Metals, Olin Brass, and Chase Brass brands. The transaction is expected to close in the fourth quarter of 2007.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Internal
Seller legal advisor: Cravath Swaine & Moore
Bidder legal advisor: Paul Weiss Rifkind Wharton & Garrison

Honeywell International Inc. to buy Hand Held Products Inc. for $390 million

Morristown, N.J.-based Honeywell, the aerospace products maker and services provider, agreed to acquire Hand Held of Skaneateles Falls, N.Y., a manufacturer of data collection products and communication solutions. Hand Held had 2006 sales of about $285 million. Hand Held will become part of Honeywell’s Security Group in its Automation and Control Solutions business, giving Honeywell an entry into the Automatic Identification and Data Collection market and expanding its wireless expertise.
Seller financial advisor: Deutsche Bank
Bidder financial advisor: Internal
Seller legal advisor: Jones Day; Latham & Watkins (Advising Deutsche Bank)
Bidder legal advisor: Internal

Apria Healthcare Group Inc. to buy Coram Inc. from Cerberus Partners LP, Goldman Sachs Credit Partners LP, and Wells Fargo Foothill Inc. for $350 million

Lake Forest, Calif.-based Apria is a provider of home healthcare products and services, including oxygen and respiratory equipment, home delivered respiratory medications, and home infusion therapies and medical equipment. In buying Denver-based Coram it would add its infusion and pharmacy distribution services. The sellers are Goldman Sachs Credit, the financing arm of the Goldman Sachs investment bank; Wells Fargo Foothill, a subsidiary of Wells Fargo & Co.; and private equity firm Cerberus. Coram was acquired by the three in December 2004. Apria is expected to generate about $500 million in revenue in 2008, and will be dilutive to net after-tax earnings by approximately $3.5 million to $5.5 million that year, according to the buyers. It will be accretive to 2009 net after-tax earnings by about $5 million to $6 million. The transaction is in line with Apria’s strategy of adding to a broad network of ambulatory infusion suites and adding services, while improving pharmacy services and expanding managed-care service and diversifying payor and product mix. The transaction is expected to close by mid-November.
Seller financial advisor: MTS Health Investors
Bidder financial advisor: Credit Suisse
Seller legal advisor: Wachtell Lipton Rosen & Katz
Bidder legal advisor: Gibson Dunn & Crutcher

Discovery Communications Inc. to buy HowStuffWorks Inc. for $250 million

Silver Spring, Md.-based Discovery, a media and entertainment company, agreed to acquire Atlanta-based HowStuffWorks, a Web portal and online publishing company. HowStuffWorks has 11 million unique visitors monthly, having grown 25 percent over the past year. Through HowStuffWorks, Discovery will hold a majority of HSW International, a separate and publicly traded entity that has the local language rights to the HowStuffWorks content and brand in Brazil and China.
Seller financial advisor: Allen & Company
Bidder financial advisor: Lehman Brothers
Seller legal advisor: Alston & Bird
Bidder legal advisor: Debevoise & Plimpton

source: mergermarket