Deals: A Little Geography Lesson

In our M&A Roundup for the week ended May 25, no deal tops $1b, but smaller transactions touch all corners of the globe — mostly with U.S. interest...
Roy HarrisMay 27, 2008

Dealmaking plummeted to a mere $2.74 billion in the week leading up to the Memorial Day holiday. But the collection of smaller transactions — the largest was $915 million — offered an interesting patchwork of consumer products combinations and global connections involving China, India, Israel, and several European countries.

Only 31 North American transactions were reported in the week, according to data provided to CFO.com by mergermarket. That compares to 46 deals that had totaled a healthy $26.42 billion in the prior seven days — a period for which the M&A Roundup had proclaimed, a bit prematurely, that “The Blockbuster Is Back.” The smallest of last week’s top 10 deals was a mere $80 million combination of two merchant services companies.

Other deals, led by household-appliance maker Salton Inc.’s acquisition of United Pet Group Inc. from Spectrum Brands Inc., did give M&A-watchers some operational blendings to think about, however. And other transactions involved U.S. companies buying Chinese, Indian, Italian, and Dutch interests. In two cases among the top 10, American interests purchased by non-American companies.

Overall, the week’s dealmaking built the full year’s total to 1,403 transactions worth $303.99 billion, well below the 2,114 deals valued at $734.66 billion for the same period of 2007.

Salton Inc. to buy United Pet Group Inc. from Spectrum Brands Inc. for $915 million

Salton Inc., a Miramar, Fla.-based marketer and distributor of branded small household appliances, agreed to acquire Cincinnati-based United Pet Group from Atlanta-based consumer products company Spectrum Brands Inc. in a deal expected to close in August.

Seller financial advisor: Goldman Sachs
Bidder financial advisor: Centerview Partners; Credit Suisse
Seller legal advisor: Skadden Arps Slate Meagher & Flom; Sutherland Asbill & Brennan
Bidder legal advisor: Paul Weiss Rifkind Wharton & Garrison; SJ Berwin

Heckmann Corp. to buy China Water & Drinks Inc for $764 million

Palm Desert, Calif.-based Heckmann, an investment company operating in the bottled water sector, agreed to pay cash and equity for China Water & Drinks, of Shenzhen, China, a producer and distributor of bottled water. The transaction includes an earn-out of $150 million, and is expected to be completed in the fall.
Seller financial advisor: Roth Capital Partners
Bidder financial advisor: Credit Suisse
Seller legal advisor: Thelen Reid Brown Raysman & Steiner
Bidder legal advisor: DLA Piper

Providence Equity Partners Inc. to buy 20 percent of Aditya Birla Telecom Ltd. from Idea Cellular Ltd. for $646 million

Providence, R.I.-based private equity firm Providence Equity agreed to acquire the 20- percent stake in Mumbai-based Aditya Birla, a wireless communications company, from Mumbai-based Idea Cellular. The transaction is expected to close by August.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available

Enstor Inc. to buy Caledonia Energy Partners LLC from Tenaska Power Fund LP for $285 million

Portland, Ore.-based Enstor, a gas storage and hub service facilities firm, is a subsidiary of Iberdrola Renewables, a Bilbao, Spain-based energy company. Caledonia Energy Partners is a gas storage facilities company based in Omaha. Tenaska Power is an Omaha-based fund that invests in energy sector. It is managed by private equity firm Tenaska Capital Management LLC. The transaction is expected to close in the second quarter.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Not available
Seller legal advisor: Locke Lord Bissell & Liddell
Bidder legal advisor: Porter & Hedges

Tower Semiconductor Ltd. to buy Jazz Technologies Inc. for $171 million

Tower Semiconductor, based in Migdal Haemek, Israel, makes integrated circuits. Its offer for Newport Beach, Calif.-based Jazz, a maker of analog and mixed-signal semiconductor devices, is for $42.14 million in stock and the assumption of about $129 million of debt. Tower will issue 1.8 shares for every Jazz share, implying a per-share price of $2.21, a premium of 251 percent. Completion is expected in the second half.
Seller financial advisor: UBS
Bidder financial advisor: Citibank
Seller legal advisor: Cooley Godward Kronish; Meitar Liquornik Geva & Leshem Brandwein
Bidder legal advisor: O’Melveny & Myers; Yigal Arnon and Co

Penn West Energy Trust to buy Endev Energy Inc. for $171 million

Calgary, Alberta-based Penn West, an oil and natural gas producing income trust, agreed to acquire all outstanding shares of Calgary-based Endev, which explores for and develops petroleum and natural gas. Terms call for Penn West to issue 0.041-share for each Endev common share, representing a premium of 38.2 percent. The transaction is expected to close by July.
Seller financial advisor: FirstEnergy Capital
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available

Harleysville National Corp. to buy Willow Financial Bancorp for $161 million

Harleysville National, of Harleysville, Pa., is a bank holding company for Harleysville National Bank and its division, East Penn Bank. It agreed to acquire Wayne, Pa.-based Willow Financial, a holding company for Willow Financial Bank, for $10.28 per share in a transaction expected to close in the fourth quarter.
Seller financial advisor: Sandler O’Neill & Partners
Bidder financial advisor: Janney Montgomery Scott
Seller legal advisor: Dechert
Bidder legal advisor: Bybel Rutledge

CBaySystems Holdings Ltd. to buy a 69.5 percent stake in MedQuist Inc. from Koninklijke Philips Electronics NV for $134 million

CBaySystems, of Annapolis, Md., provides medical transcription and receivables management services. It agreed to acquire the stake in Mount Laurel, N.J.-based MedQuist Inc, a provider of medical transcription services, from Amsterdam-based Koninklijke Philips, electronics company and producer of medical systems, for $11 per share. The deal is expected to close during the third quarter.
Seller financial advisor: Bear Stearns
Bidder financial advisor: Jefferies & Co; Goldman Sachs
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Not available

Wabtec Corp. to buy POLI SpA for $82 million

Wilmerding, Pa.-based Wabtec, which provides technology-based products and services for the rail industry, agreed to acquire POLI SpA, of Camisano, Italy, a manufacturer of brake equipment, in a transaction expected to close in the third quarter.
Seller financial advisor: Not available
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Reed Smith

Pipeline Data Inc. to buy COCARD Marketing Group LLC for $80 million

Quincy, Mass.-based Pipeline Data, which provides merchant payment processing services and related software products, agreed to acquire Nashville-based COCARD Marketing, a small and medium-sized retail merchant services company, for cash and notes.
Seller financial advisor: Not available
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available

source: mergermarket