M&A

Deals: Starting at a Snail’s Pace

In our M&A Roundup for the week ended Jan. 6, North American dealmaking was 57 percent lower than last year, although buyout activity shows some life.
Roy HarrisJanuary 7, 2008

From a mergers-and-acquisition standpoint, 2008’s first week was, well, weak.

Led by $684-million offer to purchase of a 35.15-percent stake in Delta Petroleum Corp. by Tracinda Corp., entrepreneur Kirk Kerkorian’s investment arm, it was one of only seven deals in nine figures, and the $3.1 billion volume total of transactions proposed was 57 percent lower than the 2007 week’s volume total of $7.14 billion, in our study of the top 10 deals in North America. Last week there were 41 deals struck, down from 89 in a year-earlier period that kicked off a record first-half of North American M&A, according to data provided to CFO.com by mergermarket.

The last week of 2007 had also been slow for M&A, although there had been several weeks of unusual activity during the fourth quarter, in which natural resources deals and foreign investment in U.S. companies boosted overall totals.

After the Tracinda-Delta deal, among the top transactions last week were several private buyouts by management, led by a $400-million purchase of Ohio packaging and systems and products maker Ranpak Inc.

Tracinda Corp. to buy 35.15 percent of Delta Petroleum Corp. for $684 million

The offer in the Delta stake by Kirk Kerkorian’s Beverly Hills-based investment arm values all of the Denver-based oil and gas exploration and production company’s share capital at $1.94 billion. Terms call for Tracinda to acquire 36 million Delta primary shares at $19 each, a premium of about 22.5 percent. The capital infusion will allow Delta to speed up drilling activities in its core areas of Piceance and Paradox basins. The transaction will be voted on by Delta holders in February.
Seller financial advisor: Merrill Lynch; and Morgan Stanley
Bidder financial advisor: Not Available
Seller legal advisor: Davis Graham & Stubbs; and Brownstein Hyatt Farber Schreck
Bidder legal advisor: Christensen, Glaser, Fink, Jacobs, Weil & Shapiro

Oceanico Group to buy Little River Golf & Resort for $500 million

The deal struck by Alcantarilha, Portugal-based Oceanico for Little River, a Carthage, N.C.-based resort and golf course, follows the previous purchase of five golf courses in Portugal last March. The developer and manager of resorts and golf courses has a strategy of expanding in the U.S. and creating golf courses and accommodation for golfers and non-golfers.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not available

Odyssey Investment Partners LLC to buy Ranpak Inc. from American Capital Strategies Ltd. for $400 million

Management of Ranpak, a Painesville, Ohio-based maker of in-the-box packaging systems and products, has acquired the company in a buyout backed by New York City-based private equity firm Odyssey. Terms call for American Capital to provide $410m as first and second lien loans along with revolving credit facility, while debt financing is provided by Apollo Investment Corp. In December 2005 American Capital acquired Ranpak for $284m.
Seller financial advisor: Banc of America Securities; and Wachovia
Bidder financial advisor: Not Available
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Latham & Watkins

Westside Energy Corp. to buy Crusader Energy Corp. for $361 million

Dallas-based Westside, involved in exploration and development of oil and gas properties, agreed to acquire Oklahoma City-based Crusader in a stock deal that includes $68 million of debt. Terms call for Westside to offer 152.4 million shares, valued at $1.92 a share, for the oil and gas exploration and production company. Westside could issue another 19.3 million shares to reflect possible additional cash contributions into Crusader of up to $58 million. Prior to closing, Westside will also issue 35 million options to Crusader managers at an exercise price of $3 per share. The combined company will be renamed Crusader Energy Group Inc., with Westside’s board of directors being replaced by Crusader’s candidates. The transaction is expected to close by the second quarter.
Seller financial advisor: Not Available
Bidder financial advisor: Tudor, Pickering, Holt & Co Securities
Seller legal advisor: Not Available
Bidder legal advisor: Not Disclosed

WuXi PharmaTech to buy AppTec Laboratory Services Inc. for $163 million

The price being paid by the Shanghai-based WuXi PharmaTech, a pharmaceutical and biotechnology research and development outsourcing company, includes $11.7 million of assumed debt of St. Paul-based AppTec, which provides testing, contract R&D, and manufacturing services for the biopharmaceutical and medical device industries. The transaction is expected to be immediately accretive to WuXi’s EPS, excluding amortization of acquired intangible assets and one-time charges. The transaction is expected to close in the first quarter.
Seller financial advisor: Not Available
Bidder financial advisor: JPMorgan
Seller legal advisor: Not Available
Bidder legal advisor: O’Melveny & Myers; and Winstead Sechrest & Minick

QBE the Americas to buy North Pointe Holdings Corp. for $146 million

Sydney-based QBE Insurance Group Ltd. through its New York City-based general and reinsurance subsidiary, will pay $16 a share for Southfield, Mich.-based financial services company North Pointe. The price is a premium of about 50.2 percent. QBE intends to fund the transaction from existing excess capital in the U.S. The transaction is expected to close in the first half.
Seller financial advisor: JPMorgan
Bidder financial advisor: Not Available
Seller legal advisor: Honigman Miller Schwartz & Cohn
Bidder legal advisor: Not Available

Managers of Commerce Insurance Services Inc. to buy the company from Commerce Bancorp Inc. for $125 million

The management of Cherry Hill, N.J.-based insurance and brokerage company acquired the Commerce Insurance from the bank holding company in a buyout led by chairman George E. Norcross III and president Michael Tiagwad, who will continue in those positions.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Not Available
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Not available

Brooks Instrument LLC to buy the Brooks Instrument division of Emerson Electric Co. for $100 million

New York City-based private equity fund American Industrial Partners Capital Fund IV, through a holding company named Brooks Instrument LLC, acquired the Hatfield, Pa.-based supplier of flow measurement and control devices from St. Louis-based Emerson, the manufacturer of electrical, electromechanical, and electronic products. John Becker, a partner of American Industrial, will be Brooks’s chairman after the transaction, funded by HSBC and GMAC Commercial Finance..
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not available

Allscripts Healthcare Solutions Inc. to buy Extended Care Information Network Inc. from William Blair Capital Partners for $90 million

Chicago-based Allscripts, a provider of clinical software and information solutions paid cash to Chicago private equity firm William Blair for Extended Care, a Chicago-based provider of software products and services and consulting resources. The acquisition will be financed through cash on hand and $50 million through borrowings under a new $60 million credit facility.
Seller financial advisor: Not Available
Bidder financial advisor: Houlihan Lokey
Seller legal advisor: Not Available
Bidder legal advisor: O’Melveny & Myers (Advising Houlihan Lokey)

Oversee.net to buy Moniker Online Services LLC from Seevast Corp. for $70 million

Los Angeles-based Oversee.net is a provider of domain and online marketing services. It agreed to acquire Pompano Beach, Fla.-based internet domain auction company Moniker from Seevast, an online advertising company and search engine and online marketing..
Seller financial advisor: The Jordan Edmiston Group
Bidder financial advisor: JPM Securities
Seller legal advisor: Not Available
Bidder legal advisor: Not available

source: mergermarket

4 Powerful Communication Strategies for Your Next Board Meeting