M&A

Deals: Party Like It’s 2007

In our M&A Roundup for the week ended May 4, celebration seems in order with $35b in transactions — although $23b for Mars-Wrigley was the real toa...
Roy HarrisMay 5, 2008

It was almost like the old days: $34.81 billion worth of deals in the seven-day period ended Saturday. But you didn’t have to look much beyond the week’s biggest deal — candy-maker Mars Inc.’s tooth-numbing $22.64-billion combination with gum-maker Wm. Wrigley Co. — to see why.

Of course, for every big deal appearing to be won there’s another that fades from sight: in this case Microsoft’s withdrawn $47.5-billion offer for Yahoo Inc. But let’s not let that spoil the deals that did make the list.

Indeed, the week was hardly a slouch even without the Mars-Wrigley transaction, with the number two deal being a $4.1-billion sale of Bristol-Myers Squibb Co.’s ConvaTec unit to private equity companies Avista Capital Partners and Nordic Capital. So maybe Apollo Management’s Leon Black was on to something when he proclaimed to a Milken Institute panel in Beverly Hills that “we’re well on our way” to a recovery in the credit markets. “The banks,” Black said, “will be in business again.”

In all, 42 deals were struck to make up last week’s dealmaking, according to data provided to CFO.com by mergermarket. The 42 deals struck brought total transactions year-to-date to 1,226 worth a total $243.95 billion, still a shadow of the 1,829 deals valued at $599.55 billion at this time last year.

Here are the top 10 North American deals of the week.

Mars Inc. to buy Wm. Wrigley Jr. Co. for $22.64 billion

Chicago-based chewing gum and confectionery-products company Wrigley definitively agreed to be acquired by private candy-maker, food, and pet-care company Mars, of McLean, Va. Terms call for an $80-a-share priced, a premium of 28 percent. The transaction is expected to be completed within six to twelve months.
Seller financial advisor: Goldman Sachs; William Blair & Company
Bidder financial advisor: JPMorgan
Seller legal advisor: Latham & Watkins (advising Goldman Sachs); Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Davies Ward Phillips & Vineberg; Paul Hastings Janofsky & Walker (Advising JPMorgan); Simpson Thacher & Bartlett

Avista Capital Partners and Nordic Capital to buy ConvaTec from Bristol-Myers Squibb Co. for $4.10 billion

New York City-based private equity firm Avista and Stockholm-based Nordic Capital Fund VII, agreed to acquire Princeton, N.J.-based ConvaTec, a manufacturer and marketer of ostomy and modern wound and skin care products, from New York-based biopharmaceutical and health-care company Bristol-Myers Squibb. Completion is expected in the third quarter.
Seller financial advisor: Citigroup; Morgan Stanley
Bidder financial advisor: Bear, Stearns & Co
Seller legal advisor: Cravath Swaine & Moore
Bidder legal advisor: Weil Gotshal & Manges; White & Case

Stone Energy Corp. to buy Bois d’ Arc Energy Inc. for $1.71 billion

Houston-based Bois d’Arc Energy, an independent oil and natural gas exploration company with operations in the Gulf of Mexico, definitively agreed to be acquired by Stone Energy Corp. Lafayette, La.-based Stone is an independent oil and natural gas company. The per-share price of $13.65 and 0.165 of a Stone share, for a total of $24.84 a share, offers a discount of 4.36 percent. The transaction is expected to close in the third quarter.
Seller financial advisor: Raymond James & Associates; Scotia Capital; Banc of America Securities
Bidder financial advisor: Tudor, Pickering, Holt & Co Securities
Seller legal advisor: Locke Lord Bissell & Liddell; Shearman & Sterling (advising Banc of America Securities)
Bidder legal advisor: Andrews Kurth; Vinson & Elkins

ING Group NV to buy CitiStreet LLC from Citigroup Inc. and State Street Corp. for $903 million

Amsterdam-based banking, insurance, and asset management services company ING agreed to acquire CitiStreet, of North Quincy, Mass., a portfolio management and investment advisory company. The sellers are New York-based financial services giant Citigroup and Boston-based investment management concern State Street. The transaction is expected to close in the third quarter.br>
Seller financial advisor: Citigroup; Goldman Sachs
Bidder financial advisor: Lazard
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: WilmerHale

Hastings Funds Management Ltd. and IIF BH Investment LLC to buy seven gas-fired plants from Black Hills Corp. for $840 million

Melbourne, Australia-based Hastings and Australia’s IIF BH Investment, a subsidiary of an investment entity advised by JPMorgan Asset Management, agreed to acquire the seven independent power production gas-fired plants from integrated energy company Black Hills, of Rapid City, S.D. The transaction is expected to close by late in the second quarter or early in the third quarter.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Lehman Brothers
Seller legal advisor: Morgan Lewis & Bockius
Bidder legal advisor: Hogan & Hartson; Linklaters

United Online Inc. to buy FTD Group Inc. for $722 million

Downers Grove, Ill.-based FTD, a provider of floral-related consumer and retail products signed a definitive agreement to be acquired by Woodland Hills, Calif.-based United Online, which provides consumer Internet and media services. The price per share is $7.34 in cash and $3.31 principal amount of United 13-percent senior secured notes due 2013, and 0.4087 United shares, a $15.08 value that offers an 11.7-percent premium. United may elect to substitute the senior secured notes for a $2.81 per share cash increase, in which case FTD shareholders would receive $10.15 in cash and 0.4087 of a share, representing a value of $14.58 for each FTD share. The transaction is expected to close in the third quarter of 2008.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: JPMorgan
Seller legal advisor: Jones Day (Advising Goldman Sachs); Latham & Watkins
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

Honeywell International Inc. to buy Metrologic Instruments Inc. from Elliott Associates LP and Francisco Partners for $720 million

Morristown, N.J.-based technology and manufacturing company Honeywell agreed to acquire Metrologic Holdings Corporation, the Blackwood, N.J.-based holding company for Metrologic, which specializes in optical- image capture and processing products. The sellers are San Francisco-based private equity firm Francisco Partners and New York City-based hedge fund and investment adviser Elliott Associates. The transaction is expected to close in the second quarter.
Seller financial advisor: Not Disclosed
Bidder financial advisor: Internal
Seller legal advisor: Paul Weiss Rifkind Wharton & Garrison; Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: Jenner & Block

Essar Steel Ltd. to buy Esmark Inc. for $668 million

Mumbai-based steelmaker Essar Steel agreed to acquire Chicago Heights, Ill.-based steelmaker and distributor Esmark in a deal valued at $17 per share in cash, representing a premium of 13.5 percent. . In addition, Essar agreed to provide Esmark $110 million in long-term loans to refinance an existing term loan, and to provide additional liquidity. Expected to be funded by the middle of May, the transaction has been accepted by Esmark’s board.
Seller financial advisor: UBS
Bidder financial advisor: JPMorgan
Seller legal advisor: McGuire Woods
Bidder legal advisor: Shearman & Sterling

Total SA to buy Synenco Energy Inc. for $465 million

Total E&P Canada Ltd. is a unit of Calgary-based Total, part of a Paris-based integrated international oil and gas company. It agreed with Calgary-based Synenco, an oil sands company, on a $9-a-share cash deal that represents a premium of 16 percent. Both companies’ boards approved the merger.
Seller financial advisor: Merrill Lynch; TD Securities
Bidder financial advisor: CIBC World Markets
Seller legal advisor: Bennett Jones; Borden Ladner Gervais
Bidder legal advisor: Macleod Dixon; Sullivan & Cromwell

MedAssets Inc. to buy Accuro Healthcare Solutions Inc. from Welsh, Carson, Anderson & Stowe for $350 million

Alpharetta, Ga.-based MedAssets, a provider of supply chain and revenue cycle products and services agreed to acquire Dallas-based Accuro, which provides revenue cycle management products. The seller is New York City-based private equity firm Welsh Carson. The price includes debt of $100 million, and terms call for about $207 million in cash and the remaining $125.76 million to be paid via 8,850,000 shares. Additionally, MedAssets agreed to pay a deferred $20 million, due 12 months after closing. Welsh, Carson will have a 12.8 percent stake in MedAssets. The acquisition expected to be accretive to earnings per share in 2009, and should close in 60 to 90 days.
Seller financial advisor: Citigroup; William Blair & Company
Bidder financial advisor: Lehman Brothers; Morgan Stanley
Seller legal advisor: Ropes & Gray
Bidder legal advisor: Willkie Farr & Gallagher

source: mergermarket