North American dealmaking values were cut by two-thirds in the holiday week, to a total of $5.26 billion from the prior seven-day period’s $16.73 billion. But most of the transactions that were announced had a distinctly international flavor.
Of the top 10 deals in North America, four involved European parties, and four more had either a buyer or seller in South America, Asia, or Australia. As has been the case recently, Canadian companies also were active, according to data provided to CFO.com by mergermarket.
Four billion-dollar-plus transactions in the mix were let by UK-based GlaxoSmithKline plc’s agreement to purchase Reliant Pharmaceuticals Inc. from a group of private investors for $1.65 billion. That was followed by a $1.44-billion arrangement in which Houston-based building-products and vehicular-products maker Quanex Corp. planned to spin off its building products business to shareholders and sell the rest of the company to Brazilian steelmaker Gerdau S.A.
The week’s 34 deals, down from 53 the prior week, brought year-to-date transaction values to $1.45 trillion, still up from the $1.34 trillion worth of deals signed through Nov. 25, 2006. Overall, 4,146 deals have been announced so far this year, down from 4,409 over the same period last year.
GlaxoSmithKline to buy Reliant Pharmaceuticals from Alkermes Inc., Bay City Capital LLC, GS Capital Partners, Invemed Associates LLC, Metalmark Capital LLC, and Versant Ventures for $1.65 billion
Brentford, UK-based pharmaceuticals company GlaxoSmithKline agreed to acquire Reliant, a smaller, Liberty Corner, N.J.- based pharmaceuticals company, from its six owners. Cambridge, Mass.-based Alkermes develops drug-delivery systems. New York-based Invemed is a stock broker and host for other private equity firms, including San Francisco-based Bay City, New York-based GS Capital Partners and Metalmark, and Menlo Park, Calif.-based Versant Ventures. The firms had invested in Reliant since its inception in 1999, and Alkermes will receive up to $174 million in cash for its 19-percent stake, using proceeds to repurchase shares of its common. Alkermes had agreed to acquire the remaining 81 percent of Reliant for about $934 million in March 2002, but the deal was terminated due to general market conditions. Reliant generated revenues of $335 million in 2006, revenues to hit about $500 million in 2007. This transaction, which will be slightly accretive to Glaxo earnings in 2008 and will expand its cardiovascular portfolio in U.S., is expected to close by the end of 2007.
Seller financial advisor: Goldman Sachs, and Merrill Lynch
Buyer financial advisor: Not Available
Seller legal advisor: Latham & Watkins
Buyer legal advisor: Cleary Gottlieb Steen & Hamilton
Gerdau SA to buy Quanex Corp. for $ 1.44 billion
Houston-based Quanex will spin off its Building Products business in a taxable distribution to shareholders, on a one-for-one basis, as the first step in selling the rest of Quanex. Immediately after the spin-off of Quanex Building Products, essentially a debt-free transaction, the Vehicular Products business and MACSTEEL division that remains will be acquired by Floresta, Brazil-based Gerdau S.A. under terms of a definitive agreement. Boards of both companies have approved that merger. Gerdau produces crude steel and related long rolled products, drawn products, and long specialty products for civil construction, manufacturing, and agribusiness markets in Brazil, U.S. and Canada, Chile, Colombia, Peru, Argentina, Uruguay, and Spain. The $39.20 a share to be paid for Quanex represents a premium of 6.7%. The transaction is expected to close by the end of the 2008 first quarter. On May 16 Quanex had retained Lazard Freres & Co. LLC to help review strategic alternatives for its Building Products group.
Seller financial advisor: Lazard
Buyer financial advisor: ABN AMRO; and Citigroup
Seller legal advisor: Fulbright and Jaworski
Buyer legal advisor: Simpson Thacher & Bartlett
J.C. Flowers & Co. LLC to buy 22.7 percent of Shinsei Bank Ltd. for $1.37 billion
J.C. Flowers, the New York-based financial services group, plans a cash tender offer for 22.7 percent of Toyko-based Shinsei. The price of $ 3.86 a share represents a 1-percent pro-rated premium, valuing all of Shinsei at $6.48 billion. Shinsei does not have outstanding convertible bonds. After issuance of new shares by third person allotment, Flowers and its affiliates will hold 32.6 percent of Shinsei. Current senior management members of Shinsei Bank, Thierry Porte, Junji Sugiyama, and other statutory executive officers are expected to be investors.
Seller financial advisor: Morgan Stanley
Buyer financial advisor: Not Available
Seller legal advisor: Not Available
Buyer legal advisor: Not Available
GS Capital Partners and Quadrangle Capital Partners II LP to buy GET AS from Candover Investments plc for $ 1.25 billion
New York-based private equity firms Quadrangle Capital Partners and GS Capital Partners acquired Oslo-based cable-TV operator GET AS from London-based Candover, another private equity house, in a deal that includes debt. GET is a leading cable company in Norway, servicing 370,000 homes in Oslo and the major cities of southern Norway. The company employs 350 staff and for the year 2006 with turnover of $151 million. The transaction is expected to close by year-end 2007.
Seller financial advisor: Merrill Lynch
Buyer financial advisor: Goldman Sachs
Seller legal advisor: Clifford Chance
Buyer legal advisor: Linklaters
Applied Materials Inc. to buy Baccini SpA for $330 million
Santa Clara, Calif.-based technology company Applied Materials Inc. agreed to acquire Treviso, Italy-based Baccini, a supplier of automated metallization and test systems for cash as part of a plan to help cut manufacturing costs and to make solar energy competitive with grid electricity. Completion is expected in early 2008.
Seller financial advisor: Morgan Stanley
Buyer financial advisor: Internal
Seller legal advisor: Internal
Buyer legal advisor: Cooley Godward Kronish
Petrobank Energy & Resources Ltd. to buy Peerless Energy Inc. for $328 million
Calgary-based Petrobank, an oil and natural gas explorer and producer, has agreed to exchange $0.89 in cash and 0.08 shares of Petrobank for each Class A share of Peerless, a Calgary-based oil and gas producer and explorer. For each Class B share, the cash portion will be $9.82. It is expected that approximately 4 million Petrobank shares will be issued. The offer price per Class A share represents a 26-percent premium.
Seller financial advisor: Clarus Securities; and Tristone Capital
Buyer financial advisor: Haywood Securities; and TD Securities
Seller legal advisor: Heenan Blaikie
Buyer legal advisor: McCarthy Tetrault
Macquarie Capital Alliance Group and Macquarie Global Opportunities Partners to buy a 45 percent of Universal Weather and Aviation Inc. for $329 million
Sydney-based Macquarie Capital, the private equity firm, and its counterpart Macquarie Global, a subsidiary of Macquarie Group Ltd., agreed to acquire the 45 percent stake in Houston-based Universal Weather, which provides weather briefings and global tour services, for a price of $160 million before including debt. Under the agreement the two companies will acquire 22.5-percent stakes, investing $80 million each, with Macquarie Capital funding its part of the deal from existing resources. Greg Evans, current sole owner of Universal, will retain the remaining 55 percent and will continue as chairman, and current executive-team members also will remain. Two Macquarie officers will join the Universal board. Universal will maintain its operational autonomy and independent brand after the transaction, expected to close within 60 days.
Seller financial advisor: Jefferies & Company
Buyer financial advisor: Macquarie Bank
Seller legal advisor: Not Available
Buyer legal advisor: Not Available
Halla Climate Control Corp. to buy a stake in three Visteon Corp. plants for $ 300 million
Daeion, Korea-based Halla, a manufacturer of automotive components, agreed to acquire stakes in plants in Alabama, China, and India from Visteon, the Van Buren Township, Mich.-based automotive components manufacturer that supplies climate control systems, instrument panels, suspension systems, automotive glass, and powertrain control systems. The price, not disclosed, was estimated at $300 million. Halla Climate Control is a 70-percent-owned subsidiary of Visteon.
Seller financial advisor: Citigroup; and JPMorgan
Buyer financial advisor: Not Available
Seller legal advisor: Not Available
Buyer legal advisor: Not Available
Votorantim Metais Ltda to buy US Zinc Corp. from Aleris International Inc. for $295 million
Sao Paulo, Brazil-based Votorantim, a mining and steelmaking group that is part of conglomerate Grupo Votorantim, agreed to acquire Houston-based US Zinc, a zinc recycler, from Beachwood, Ohio-based Aleris. The seller, recycler and processor of aluminium and zinc, has said it is focusing on its aluminium business and reducing its leverage. In August 2006, private-equity group TPG LLP acquired Aleris for $1.64 billion. The transaction is subject to regulatory approvals and customary closing conditions.
Seller financial advisor: KeyBanc Capital Markets
Buyer financial advisor: Citigroup
Seller legal advisor: Fried, Frank, Harris, Shriver & Jacobson
Buyer legal advisor: Not Available
Middleby Corp. to buy New Star Holdings International Inc. from Weston Presidio Capital for $188 million
The Elgin, Ill.-based Middleby, a maker of commercial food service equipment, agreed to acquire New Star from Boston-based private equity firm Weston Presidio Capital in a deal that Middleby will finance through a new senior revolving credit facility with Bank of America. The acquisition will enable Middleby to expand in the fast casual dining, bakery-café, and convenience-store segments, and will compliment Middleby’s portfolio of commercial-foodservice brands. It is expected to be accretive to earnings in 2008 after closing in mid-December 2007.
Seller financial advisor: Harris Williams & Co
Buyer financial advisor: Not Available
Seller legal advisor: Latham & Watkins
Buyer legal advisor: Skadden Arps Slate Meagher & Flom
source: mergermarket