Deals: Paced by the Pit, Paper, and Pepsi

In our M&A Roundup for the week ended March 23, M&A volume doubles as the three biggest deals bring new owners for the New York Merc, Weyerhauser a...
Roy HarrisMarch 24, 2008

Three healthily priced transactions — a $9-billion deal for the owner of the New York Mercantile Exchange, a $6-billion agreement between International Paper Co. and Weyerhauser Co., and Pepsico’s $1.46-billion purchase of a Russian juice brand — gave a big boost to last week’s merger-and-acquisition totals. But after that trio, most dealmaking settled back into the tepid mid-to-small-sized acquisition model that took hold in the first blush of the credit squeeze eight months ago.

The purchase of NYMEX Holdings by Chicago-based CME Group creates a commodities-exchange giant, while International Paper’s purchase of the containerboard, packaging, and recycling business of Weyerhauser consolidates like operations at the Memphis-based paper, packaging, and forest-products concern. In the third-largest of the top 10 North American transactions, Pepsi adds the brands of Lebedyansky JSC, according to data provided to CFO.com by mergermarket.

A mere 29 transactions this week — 8 fewer than the prior seven days — still resulted in a near-doubling of total value. The week produced $18.76 billion of M&A, compared to $9.78 billion in the prior week.

CME Group to buy NYMEX Holdings Inc. for $9.00 billion

New York-based NYMEX Holdings, signed a definitive agreement to be acquired by Chicago-based CME Group in a merger approved by both boards. Inc., a Delaware corporation. The New York Mercantile Exchange is the world’s largest physical commodities exchange, offering futures and options trading in energy, metals, and other contracts, along with clearing services for more than 400 off-exchange contracts. CME lets participants trade futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, and alternative investment products such as weather and real estate. About $60 million of annual synergies is expected in the transaction, in which .
$36 and 0.1323-share of CME will be exchanged for each share of NYMEX, a total value of $100.30, representing premium of 5.21 percent.
Seller financial advisor: JPMorgan; Merrill Lynch; andSandler O’Neill & Partners
Bidder financial advisor: Lehman Brothers; Goldman Sachs; and William Blair & Co.
Seller legal advisor: Weil, Gotshal & Manges; and Davis Polk & Wardwell
Bidder legal advisor: Skadden Arps Slate Meher & Flom

International Paper Co. to buy Weyerhaeuser Co.’s containerboard, packaging, and recycling business for $6.00 billion

International Paper agreed to pay cash for the businesses of Weyerhauser. The transaction is expected to be completed in the third quarter.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Lazard; and UBS
Seller legal advisor: Cravath Swaine & Moore
Bidder legal advisor: Debevoise & Plimpton

PepsiCo Inc. to buy Lebedyansky JSC for $1.46 billion

PepsiCo and its Pepsi Bottling Group agreed to jointly acquire the stake in Russia’s leading branded juice company, JSC Lebedyansky, in a deal in which PepsiCo and Pepsi Bottling will be split ownership 75 percent and 25 percent, respectively. The transaction will be conducted through a mandatory public offer under Russian law, giving shareholders of Lebedyansky $88.02 in cash per share, a discount of 3.32 percent.
Seller financial advisor: Deutsche Bank
Bidder financial advisor: Renaissance Capital; Morgan Stanley; and Dresdner Kleinwort Capital
Seller legal advisor: Clifford Chance
Bidder legal advisor: Chadbourne & Parke

W.L. Ross & Co. LLC to buy Option One Mortgage Corp.’s mortgage loan servicing business from H&R Block for $1.10 billion

W.L. Ross, through AH Mortgage Acquisition Co, its acquisition vehicle, agreed to acquire the Option One’s mortgage servicing business, a subsidiary of H&R Block under terms providing that WL Ross will acquire all the assets and certain liabilities related to Option One’s servicing business, including $1.07 billion in servicing advances that the company makes to owners of securities and the assets of Option One’s call center subsidiary in India.
Seller financial advisor: Lazard
Bidder financial advisor: Not Available
Seller legal advisor: Jones Day
Bidder legal advisor: Weil Gotshal & Manges

Severstal OAO to buy Sparrows Point LLC from ArcelorMittal USA for $810 million

Severstal, the Russian steel manufacturing and mining company, agreed to acquire the Sparrows Point steel mill, from ArcelorMittal USA, formerly Mittal Steel USA and the U.S.-based arm of ArcelorMittal NV, the Luxembourg based steel company. The transaction is expected to be accretive in the first year. The transaction has been carried out under a court judgment settling a complaint filed by the U. S. Department of Justice after the merger agreement between Mittal and Arcelor SA in 2006. The acquisition is expected to close in the second quarter of 2008.
Seller financial advisor: Internal
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Internal
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

BMC Software Inc. to buy BladeLogic Inc. for $695 million

Lexington, Mass.-based BladeLogic, a provider of data center automation software to enterprises, service providers, government agencies, and others, definitively agreed to be acquired by Houston-based BMC Software. Terms call of a $28 price, an 18.6 percent premium.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Goodwin Procter
Bidder legal advisor: Latham & Watkins

Misys Healthcare Systems to buy Allscripts Healthcare Solutions Inc. for $606 million

Misys plc, a UK-based developer and licensor of software products for banking and securities, healthcare, and the retail financial services sector, is a subsidiary of private equity concern ValueAct Capital. Together with Allscripts, a provider of clinical software and information, it has agreed to merge Misys into a new entity, Allscripts-Misys Healthcare Solutions Inc., which will provide information management software for physicians and hospitals. Under terms of the agreement, Misys plc will contribute $330 million and acquire 54.5 percent of Allscripts-Misys in a transaction expected to be completed in the third quarter.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Deutsche Bank; and Lehman Brothers
Seller legal advisor: Sidley Austin
Bidder legal advisor: Allen & Overy; and Debevoise & Plimpton

Walgreen Co. to buy I-trax Inc. for $244 million

Drugstore chain Walgreen agreed to acquire I-trax, a provider of worksite health services, for cash. Terms include assumption of about $18.3 million in net debt, along with $225 million cash, equal to $5.40 a share and representing a premium of 38.5 percent. The transaction is expected to close within 60 days.
Seller financial advisor: Triple Tree
Bidder financial advisor: Peter J Solomon Co
Seller legal advisor: Not Available
Bidder legal advisor: Kirkland & Ellis

Synopsys Inc. to buy Synplicity Inc. for $227 million

Synopsys, a provider of software and intellectual property for semiconductor design and manufacturing offered $8 a share, or a premium of 52 percent, for Synplicity, a supplier of software systems for the design and verification of semiconductors. The price includes net cash of $188m. Post-acquisition, the transaction is expected to be financially as well as operationally accretive for Synopsys.
Seller financial advisor: Deutsche Bank Securities
Bidder financial advisor: Internal
Seller legal advisor: Wilson Sonsini Goodrich & Rosati; Heller Ehrman White & McAuliffe; O’Melveny & Myers LLP
Bidder legal advisor: Fenwick & West

Valley National Bancorp to buy Greater Community Bancorp for $166 million

Valley National, the holding company for Valley National Bank, agreed to acquire Greater Community Bancorp, holding company of Greater Community Bank. Terms call for Greater Community holders to receive 0.95-share of Valley for each Greater Community share. Additionally, Valley will issue one warrant to buy one share of Valley common stock at $2 above Valley’s average closing stock price for each ten shares of Greater Community held. The offer represents a premium of approximately 25 percent. The transaction is expected to complete in the third quarter.
Seller financial advisor: Sandler O’Neill & Partners; and The Kafafian Group
Bidder financial advisor: MG Advisors; and Stifel, Nicolaus & Company
Seller legal advisor: Quarles & Brady
Bidder legal advisor: Day Pitney

source: mergermarket