North American dealmaking slid precipitously back toward cautious second-half levels last week after several periods of surprising strength. The 29 transactions in the week ended Oct. 14 totaled $7.55 billion, down from the $20.67 billion that 61 offers had produced in the prior seven days.
What might have become the largest deal, reflecting Oracle Corp.’s $6.7 bid for BEA Systems, didn’t qualify for our list because there was no actual tender offer from the acquisitive, fast-growing business software provider. Wall Street, meanwhile, was expecting rival bidding activity for the attractive BEA in what has become one of the more active markets for M&A.
The leading transactions in our survey of the top 10 North American deals was AT&T Inc.’s $2.5-billion agreement to buy 12 megaherz of wireless spectrum capacity from Aloha Partners LP, followed by Kohlberg Kravis Roberts & Co.’s $1.28-billion deal to use a Turkish subsidiary to buy U.N. Ro-Ro Isletmeleri AS of Istanbul. Ro-Ro provides intermodal transportation services. Falling just short of the KKR deal’s size was Newmont Mining Corp.’s agreement to buy Miramar Mining Corp. for $1.24 billion. Both operated gold properties.
Year-to-date transaction totals of $1.4 trillion still run far ahead of the $1.1 trillion over the same 2006 period, on the strength of blockbuster dealmaking in this year’s first half. That was before the mid-year credit crunch created a day-and-night scenario, which only occasional flurries of billion-dollar-plus transactions have enlivened.
AT&T Inc. to buy 12 MegaHerz of spectrum from Aloha Partners LP for $2.5 billion
AT&T’s purchase of wireless spectrum from Providence-based Aloha is designed to enable San Antonio-based AT&T to meet the increasing demand for mobile services. The additional spectrum covers 196 million people in 281 markets. The transaction is expected to close in six to nine months.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Not Disclosed
Bidder legal advisor: Arnold & Porter
Kohlberg Kravis Roberts & Co. to buy a 97.6 percent stake in U.N. Ro-Ro Isletmeleri AS for $1.28 billion
The acquisition is through KKR’s Istanbul-based Trieste Bidco Denizcilik ve Tasimacilik A.S. acquisition vehicle. The Istanbul-based target provides intermodal transportation services. As part of the acquisition, Trieste Bidco also took majority stakes in each of Ro-Ro Isletmeleri’s affiliates: U.N Deniz Tasimaciligi A.S., U.N Deniz Isletmeciligi A.S., and U.N Gemicilik Sanayi ve Ticaret A.S. These companies, together with Ro-Ro Isletmeleri, constitute the U.N Ro-Ro Group. The transaction was for cash, and debt free for KKR, based in New York. Debt financing has been arranged by the Turkish banks Garanti Bankasi and Turkiye Is Bankasi. The transaction is part of KKR’s strategy to invest in Turkey and develop U.N. Ro-Ro’s business. U.N. Ro-Ro will continue to be based in Turkey and keep transporting truckers and exporters between Turkey and Europe. Completion is expected to take place before the end of 2007.
Seller financial advisor: Citigroup
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Norton Rose; and Özel & Özel
Bidder legal advisor: White & Case; and Simpson Thacher & Bartlett
Newmont Mining Corp. to buy Miramar Mining Corp. for $1.24 billion
North Vancouver, B.C.-based Miramar signed a definitive agreement for Denver-based Newmont to pay $6.33 a share, a premium of 19.7 percent. Both boards have approved the merger between Miramar, which explores for and develops gold-bearing mineral properties, and Newmont, primarily a gold producer with significant assets or operations in the U.S., Australia, Peru, Indonesia, Ghana, Canada, Bolivia, New Zealand, and Mexico. Newmont sees prospects for establishing a new core-mining district in Canada’s Nunavut Territory, along with an opportunity to build a focus for Newmont’s exploration and project development teams on a long-term deposit with competitive operating costs. It considers the gold deposits being acquired to be among the top undeveloped deposits globally. It also sees an opportunity to reduce technical risk by drawing on Newmont’s historic investment in, and understanding of, the Hope Bay Project, and the opportunity for Newmont to control and explore a roughly 80-by-20 kilometer greenstone belt with substantial exploration potential.
Seller financial advisor: BMO Capital Markets
Bidder financial advisor: Citigroup; Genuity Capital Markets; and JPMorgan
Seller legal advisor: Dorsey & Whitney; and Gowling Lafleur Henderson
Bidder legal advisor: Goodmans; and Wachtell Lipton Rosen & Katz
Textron Inc. to buy United Industrial Corp. for $950 million
Hunt Valley, Md.-based United Industrial, a designer and producer of aerospace and defense systems, definitively agreed to merge with Providence-based Textron for $81 a share, a premium of 7.1 percent. Textron operates in helicopter, business jet, golf/turf, automotive, and finance markets worldwide. The transaction is expected to close by the end of the year.
Seller financial advisor: JPMorgan
Bidder financial advisor: Merrill Lynch; and Rothschild
Seller legal advisor: Proskauer Rose
Bidder legal advisor: Latham & Watkins (Advising Merrill Lynch); and Skadden Arps Slate Meagher & Flom
NBC Universal Inc. to buy Oxygen Media LLC from Europ@web for $925 million
New York-based NBC Universal, a unit of General Electric that develops and produces entertainment, news, and information, is purchasing Oxygen Media from Paris-based Europ@web, a venture capital fund and a subsidiary of French private equity firm Groupe Arnault SAS. Oxygen, also based in New York, is an Internet portal that provides news, media services, and lifestyle links. LVMH Moet Hennessy Louis Vuitton SA, the Paris-based luxury goods and alcoholic beverages group, acquired Oxygen through Europ@web in December 1999. NBC plans to fund the acquisition through the sale of noncore assets, including two independent Telemundo television stations, KWHY in Los Angeles and WKAQ in Puerto Rico. NBC has a strategy of enhancing market reach among young, female viewers, and the acquisition complements NBC’s existing cable channels. Oxygen will be integrated with NBC’s entertainment cable division. The acquisition, which is expected to be accretive for NBC’s full-year earnings up to $35 million for 2008, is expected to close by November.
Seller financial advisor: Allen & Company; and Bear Stearns & Co
Bidder financial advisor: JPMorgan
Seller legal advisor: Debevoise & Plimpton
Bidder legal advisor: Weil Gotshal & Manges
Blackstone Group Holdings LLC to buy Alliance Hospitality Management LLC from Whitehall Funds for $875 million
Blackstone, the New York private equity firm, won an auction to acquire Raleigh-based Alliance, a hotel management company. The seller is New York-based Whitehall Funds, a real estate investment fund managed by Goldman Sachs. Whitehall Funds are managed by Archon Group, a full-service investment management and support-services company that is a wholly owned Goldman subsidiary. Other bidders were French insurer AXA SA and French travel, tourism and hotel business operator Accor SA. Alliance Hospitality manages 46 hotels in Europe.
Seller financial advisor: CB Richard Ellis Services; and Goldman Sachs
Bidder financial advisor: Not Disclosed
Seller legal advisor: Not Disclosed
Bidder legal advisor: Kirkland & Ellis
Electronic Arts Inc. to buy VG Holding Corp. from Elevation Partners LP for $620 million
Menlo Park, Calif.-based Electronic Arts, the gaming software developer, agreed to acquire Menlo Park-based video-game developer VG from private-equity firm Elevation Partners LP, also of Menlo Park, for a price that excludes earnouts of $155 million. Terms call for EA to pay the $620 million in cash and make an additional payment of $155 million in stock to VG employees based on future performance. EA also agreed to lend VGH $35 million at closing, which is expected by January 2008. The acquisition includes the purchase of Canadian electronic entertainment company BioWare Corp. and U.S. gaming entertainment company Pandemic Studios, which together have about 800 employees. The acquisition aims to let EA strengthen its position in the interactive entertainment segment. The transaction has received the approval from VG’s board and from shareholders, and is expected to be completed by January 2008.
Seller financial advisor: Not Disclosed
Bidder financial advisor: Not Disclosed
Seller legal advisor: Simpson Thacher & Bartlett
Bidder legal advisor: Wilson Sonsini Goodrich & Rosati
Rusoro Mining Ltd. to buy the Venezuelan assets of Gold Fields Ltd. for $532 million
Vancouver-based Rusoro agreed to a complex deal that includes payment of $150 million in cash, $140 million in equity, and $30 million in convertible debt for the Venezuelan mining assets of Johannesburg-based Gold Fields, a gold exploration and development company. Rusoro also signed an overnight marketing agreement for a vendor take-back loan to raise $160 million for three years at an interest rate of 7 percent, convertible at a premium of 33 percent. The deal includes a stake in Choco 10 gold mines and contiguous mineral rights owned by Gold Fields. Gold Fields will have a stake of 38 percent in Rusoro after the transaction. Rusoro aims to have the ability to expand its market in gold production, while acquisition of the Choco 10 gold mines will help it to increase its production activity while reducing costs and study production ramp-up alternatives. The transaction is expected to close in early December.
Seller financial advisor: Orion Securities
Bidder financial advisor: Canaccord Adams; and GMP Securities
Seller legal advisor: McCarthy Tetrault
Bidder legal advisor: Anfield Sujir Kennedy & Durno
Hexagon AB to buy NovAtel Inc. for $428 million
Stockholm-based Hexagon, which provides engineering technology products and services, agreed pay Alberta, Canada-based NovAtel, a maker Global Positioning System receivers and related components, for $50 per share, a premium of 17.8 percent. Concurrent with offer, Hexagon will acquire 19.9 percent of the current issued and outstanding primary shares of NovAtel in a private placement. The acquisition expected to close in the fourth quarter.
Seller financial advisor: Not Disclosed
Bidder financial advisor: Morgan Stanley
Seller legal advisor: McCarthy Tetrault; and Orrick Herrington & Sutcliffe
Bidder legal advisor: Stikeman Elliott; and Paul Weiss Rifkind Wharton & Garrison
ABM Industries Inc. to buy OneSource Services Inc. for $379 million
San Francisco-based ABM, a services contractor, definitively agreed to acquire Atlanta-based outsourced-facilities service provider OneSource for cash. OneSource has the option as part of the consideration to be paid in the form of a pre-closing dividend of up to $50 million. If the companies choose to do so, before the closing of the transaction OneSource must form a new subsidiary with a capitalization of up to $50 million, with shares of the new entity to be distributed to Onesource holders. After the closing, expected in November, shares of the new entity will then be listed on AIM in London. The transaction has been approved by OneSource’s 74-percent shareholder, Lord Ashcroft KCMG, who also is chairman.
Seller financial advisor: Cenkos Securities
Bidder financial advisor: Lazard
Seller legal advisor: Allen & Overy
Bidder legal advisor: Jones Day
source: mergermarket