Deals: Sprinting into the Future?

In our M&A Roundup for the week ended May 11, as "near deals" percolate, the two top transactions may foreshadow a bigger move involving Nextel.
Roy HarrisMay 13, 2008

The merger mill continues to grind this week with potential deals-in-the-making — including Hewlett-Packard connecting with EDS, aircraft leasing giant International Lease Finance disconnecting from insurance giant American International Group, and Coca-Cola Co. thirsting for beverage acquisitions. But if such talk was too early-stage for last week’s roundup, the $15.47 billion worth of North American transactions that were announced still made for another active seven days.

Led by $10.6 billion worth of deals involving Clearwire Corp. and Sprint Nextel Corp. — seen by some as a possible preliminary to Sprint’s disconnecting from Nextel — the week featured two other notable deals in Illinois Tool Works Inc.’s $2.24-billion purchase of London-based toolmaker Enodis Plc, and Best Buy Co.’s $2.13-billion purchase of half of Carphone Warehouse Group Plc’s retail business. Some intriguing private equity deals were also included among the 33 transactions reported in data provided to CFO.com by mergermarket.

The dealmaking increased the number of transactions year-to-date to 1,286, worth a total of $251.53 billion, still far below the 1,916 deals last year at this time, valued at $631.51 billion.

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

Clearwire Corp. to buy Sprint Nextel Corp.’s 2.5-GHz spectrum and WiMAX-related assets for $7.40 billion

Kirkland, Wash.-based Internet services provider Clearwire agreed to acquire the two businesses of Reston, Va.-based Sprint, the wireless and wireline communications company in a deal involving 370 million newly issued Clearwire Class B common shares priced at $20 each. Terms call for Clearwire to merge into a newly created indirect subsidiary with Sprint’s 2.5 GHz spectrum and WiMAX related assets, and certain hardware, software, and all WiMax based trademarks and other WiMax related intellectual property. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Citigroup; Lehman Brothers
Bidder financial advisor: JPMorgan; Morgan Stanley
Seller legal advisor: Jones Day; King & Spalding
Bidder legal advisor: Davis Polk & Wardwell; Davis Wright Tremaine; Kirkland & Ellis; Latham & Watkins (Advising Morgan Stanley); Paul Weiss Rifkind Wharton & Garrison

Bright House Networks, Comcast Corp., Google Inc., Intel Corp., and Time Warner Cable Inc. to buy 22 percent of Clearwire for $3.20 billion

The buyers are paying cash for 135 million Class B shares and 25 million Class A shares of Clearwire at $20 each, a 21.5-percent premium. Philadelphia-based Comcast is a cable operator, while Google, of Mountain View, Calif., is a provider of index and web content provider; Santa Clara, Calif.-based Intel makes semiconductor chip producer and markets digital products; and New York City-based Time Warner Cable is a cable operating company. The acquisition is part of the agreement between Sprint Nextel and Clearwire. The transaction is approved by all of the parties’ board of directors and is expected to close in the fourth quarter.
Seller financial advisor: Not Available
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Illinois Tool Works Inc. to buy Enodis Plc for $2.24 billion

Glenview, Ill.-based foodservice equipment and machinery company Illinois Tool Works agreed to acquire the entire outstanding share capital of London-based Enodis, a food and beverage equipment manufacturer. Enodis holders will receive an ex-dividend offer that includes a per-share premium of 15 percent. There is an 8.53-percent premium over another bid to acquire Enodis, from Manitowoc Co.
Seller financial advisor: Credit Suisse; N M Rothschild & Sons
Bidder financial advisor: UBS
Seller legal advisor: Ashurst; Hammonds (Advising N M Rothschild & Sons)
Bidder legal advisor: Hammonds

Best Buy Co. to buy a 50 percent stake in the retail business of Carphone Warehouse Group Plc $2.13 billion

Richfield, Minn.-based consumer electronics retailer Best Buy agreed to acquire a 50 percent stake in the retail business operations of London-based Carphone Warehouse Group for cash and will form a new company with Carphone, with each company holding a 50 percent stake. The transaction is expected to close by Aug. 30.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Shareholders to buy Celera Corp. from Applera Corp. for $940 million

Norwalk, Conn.-based Applera’s board agreed to spin-off the Alameda, Calif.-based Celera Group division, a diagnostic business of the life sciences company. The price is based on 79.646 million shares of Celera at $12.58 per share. Terms call for the separation to be conducted through redemption of all of the outstanding shares of Applera-Celera tracking stock. The transaction is expected to close on July 1.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Carlyle Group LLC to buy 73.54 percent of Neochimiki L.V. Lavrentiadis S.A. from Lavrentis Lavrentiadis for $747 million

Carlyle, the Washington, D.C.-based private equity firm, acquired the stake in Athens-based Neochimiki L.V. Lavrentiadis, a group of companies engaged in the production and trade of chemical products. Neochimiki holders will be entitled to a cash per-share that offers a 2.7-percent premium.
Seller financial advisor: Deutsche Bank; Dresdner Kleinwort
Bidder financial advisor: ABN Amro; Sal. Oppenheim jr & Cie
Seller legal advisor: Not Available
Bidder legal advisor: Clifford Chance; Karatza & Partners

Schlumberger Ltd. and First Reserve Corp. to buy Saxon Energy Services Inc. for $654 million

Calgary-based Saxon Energy Services reached its agreement with Sword Canada Acquisition Corp., which is indirectly jointly owned by Schlumberger and investment funds affiliated with First Reserve. Certain members of Saxon’s management will have an equity position in Sword. Saxon is an emerging international oilfield services company. First Reserve is a private equity firm focusing on the energy industry. Houston-based Schlumberger is an oilfield services company. The price of $6.95 a share represents a 0.1-percent premium. The transaction should be completed by late July or early August.
Seller financial advisor: Thomas Weisel Partners Group
Bidder financial advisor: RBC Capital Markets
Seller legal advisor: Not disclosed
Bidder legal advisor: Davies Ward Phillips & Vineberg; Osler Hoskin & Harcourt; Simpson Thacher & Bartlett

Carlyle to buy a 71.50-percent stake in NH Techno Glass Corp. from Hoya Corp. and Nippon Sheet Glass Co. for $558 million

Carlyle’s acquisition of the stake in NH Techno Glass is part of a management buyout from owners Hoya and Nippon Sheet Glass, both of Tokyo. Terns call for Carlyle to form a special purpose vehicle to acquire the company, with Nippon offloading its entire 50-percent stake for $377.58 million and Hoya offloading a 21.5-percent stake for $162.75 million. The transaction is expected to close by June.
Seller financial advisor: UBS
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Nishimura & Asahi; Tsar & Tsai Law Firm

OmniSource Corp. to buy a 75-percent stake in Recycle South LLC for $508 million

OmniSource, a Fort Wayne, Ind.-based scrap metal recycling unit of Steel Dynamics Inc., agreed to acquire the 75 percent of Spartanburg, S.C.-based Recycle South that OmniSource doesn’t now own. Recycle South provides metal recycling services. The $370 million price, before including $138 million of net debt, consists of $138 million in stock and $232 million in cash. As a part of the equity consideration Recycle South holders would receive about 3.93 million shares of Steel Dynamics common stock value at $35.27 a share. The transaction is expected to close by the end of the second quarter.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Rainbow Media Holdings LLC to buy Sundance Channel from General Electric Co., CBS Corp., and NBC Universal Inc. for $496 million

Rainbow Media is the New York City-based television programming and entertainment company and subsidiary of Cablevision Systems Corp., the Bethpage, N.Y., media, entertainment, and telecommunications company. Its purchase of New York City-based Sundance cable channel is from Fairfield, Conn.-based GE, and New York City-based CBS and NBC Universal, and actor and private investor Robert Redford, of Salt Lake City. Terms call for payment exchanging about 12.7 million shares of GE held by Rainbow Media, with a cash adjustment at closing, and with CBS and Redford receiving cash in exchange for their stakes.
Seller financial advisor: UBS
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Allen & Overy; Dewey & LeBoeuf; Jackoway Tyerman Wertheimer Austen Mandelbaum & Morris (Advising Robert Redford)
Bidder legal advisor: Sullivan & Cromwell

source: mergermarket