Deals: Cracking the $40 Billion Ceiling

In our M&A Roundup for the week ended June 8, Alltel sure can hear Verizon now, as its $28b bid leads transactions to the biggest week of the year ...
Roy HarrisJune 9, 2008

Verizon Wireless Inc.’ $28.10-billion acquisition of Little Rock, Ark.-based Alltel Corp. led North American dealmaking to its first $40-billion-plus week of 2008. In all, three transactions worth more than $3 billion were signed, and six more than $1 billion.

Alltel, now owned by private equity concern Atlantis Holdings, will be coming out of the private world a mere seven months after its leveraged buyout at $27.5 billion. The partners involved with its purchase were TPG Capital and a unit of Goldman Sachs Group, and the lenders who financed the LBO were led by an arm of Goldman Sachs, Citigroup, Barclays PLC, and Royal Bank of Scotland Group.

The other two $3-billion transactions in North America’s top 10, according to data provided to CFO.com by mergermarket, were J.M. Smucker Co.’s purchase of the Folgers coffee brand from Procter & Gamble Co. for $3.30 billion, and oilfield services company Smith International’s acquisition of Houston neighbor W-H Energy Services.

Dealmaking came close to the $40-billion mark in the week April 28, when the activity was led by confectioner Mars Inc.’s $22.64-billion purchase of gum-maker Wm. Wrigley Jr. Co. How close did the week’s total come? Very, with 74 deals adding up to $39.994 billion.

Last week’s 60 transactions, totaling $40.27 billion, brought year-to-date M&A to 1,553 deals worth $382.90 billion. That compares with 2,335 transactions valued at $836.59 billion and the land-office dealmaking business as of June 8, 2007.

Verizon Wireless Inc. to buy Alltel Corp. from Atlantis Holdings LLC for $28,10 billion

Basking Ridge, N.J.-based network operator Verizon Wireless agreed to acquire Alltel Corp. from private-equity firm Atlantis Holdings. Alltel, based in Little Rock, is the voice and data services provider. The transaction is expected to close by the end of the year.
Seller financial advisor: Citigroup ; Goldman Sachs; Royal Bank of Scotland Group
Bidder financial advisor: Morgan Stanley; UBS
Seller legal advisor: Wachtell Lipton Rosen & Katz; Cleary Gottlieb Steen & Hamilton ; Ropes & Gray
Bidder legal advisor: Debevoise & Plimpton; Milbank Tweed Hadley & McCloy

J. M. Smucker Co. to buy Folgers from Procter & Gamble Co. $3.30 billion

Cincinnati-based P&G agreed to split off Folgers, the coffee brand that is part of its food and beverage division, while simultaneously merging the company with Orrville, Ohio-based food company Smucker.. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Blackstone Group Holdings ; Morgan Stanley
Bidder financial advisor: Banc of America Securities ; William Blair & Company
Seller legal advisor: Cadwalader, Wickersham & Taft ; Jones Day
Bidder legal advisor: Calfee, Halter & Griswold ; Latham & Watkins ; Weil Gotshal & Manges

Smith International Inc. to buy W-H Energy Services Inc. for $3.02 billion

Houston-based oilfield service company W-H Energy Services moved to merge with Houston-based Smith International, a supplier of products and services to the oil and gas exploration and production industries. The board of directors of both the companies approved the deal at $56.10 a share in cash and 0.48-share of Smith for each W-H share, a premium of 9.36 percent. The transaction is expected to be completed in third quarter of 2008.
Seller financial advisor: UBS
Bidder financial advisor: JPMorgan
Seller legal advisor: Bracewell & Giuliani; O’Melveny & Myers
Bidder legal advisor: Simpson Thacher & Bartlett; Wachtell Lipton Rosen & Katz

Willis Group to buy Hilb Rogal & Hobbs Co. for $2.10 billion

London-based insurer Willis Group agreed to acquire Glen Allen, Va.-based Hilb Rogal & Hobbs, an insurance and risk management services provider for $46 per share, a premium of 57.26 percent. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Sandler O’Neill & Partners
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Wachtell Lipton Rosen & Katz
Bidder legal advisor: Weil Gotshal & Manges

MetLife Inc. Shareholders to buy MetLife’s 52-percent stake in Reinsurance Group of America Inc. for $1.67 billion

New York City-based insurer MetLife agreed to spin-off to its shareholders Metlife’s 52 percent stake in Reinsurance Group of America Inc., a Chesterfield, Mo.-based provider of reinsurance services.
Seller financial advisor: Morgan Stanley; Goldman Sachs; Merrill Lynch
Bidder financial advisor: None Used
Seller legal advisor: Bryan Cave ; Latham & Watkins; Skadden Arps Slate Meher & Flom ; Wachtell Lipton Rosen & Katz
Bidder legal advisor: None Used

GE Commercial Finance to buy Interbanca SpA from Santander Central Hispano SA for $1.55 billion

Norwalk, Conn.-based GE Commercial Finance, a provider of financial services to business and a unit of General Electric Co., agreed to acquire Milan-based bank Interbanca in an asset swap. The swap Santander Central Hispano, of Boadilla del Monte, Spain, a bank offering asset management, private banking, corporate, and investment banking and insurance services, is expected to closed in the fourth quarter.
Seller financial advisor: Rothschild
Bidder financial advisor: Not available
Seller legal advisor: Linklaters
Bidder legal advisor: Slaughter and May

Intercontinental Exchange Inc. to buy Creditex Group Inc. for $625 million

Atlanta-based Intercontinental Exchange, an operator of global derivatives exchanges and over-the-counter markets, agreed to acquire New York City-based e-trading platform Creditex Group.
Seller financial advisor: Evercore Group
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Goodwin Procter
Bidder legal advisor: Sullivan & Cromwell

Cabot Oil & Gas Corp. to buy the Minden oil and gas assets in East Texas for $603 million

Houston-based Cabot Oil & Gas, engaged in the development, exploitation, and exploration of oil and gas properties, has agreed to acquire the oil and gas assets in East Texas.
Seller financial advisor: Not available
Bidder financial advisor: Not available
Seller legal advisor: Not available
Bidder legal advisor: Not available

Tribeca Acquisition Corp. to buy a 74.7-percent stake of Tercica Inc. for $424 million

Tribeca, the newly created investment holding company and wholly-owned subsidiary of Paris-based pharmaceutical company Ipsen SA, agreed to acquire the stake in Tercica. Brisbane, Calif-based Tercica is a biopharmaceutical company. The price is $404 million exclusive of assumed debt. The agreement offers $9 per share for a total of 44,900,000 shares. The offer price represents a premium of over 111.26 percent on the closing price of $4.26 per share of Tercica as on 03 June 2008, the last trading day prior to announcement.
Seller financial advisor: Lehman Brothers
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Cooley Godward Kronish; Morris Nichols Arsht & Tunnell
Bidder legal advisor: Freshfields Bruckhaus Deringer

Gen-Probe Inc. to buy Innogenetics NV for $338 million

San Diego-based Gen-Probe, a developer and manufacturer of rapid, nucleic-acid tests, agreed to acquire Ghent, Belgium-based biopharmaceutical company Innogenetics, which is focused in the specialty diagnostics business, for $9.46 a share, a premium of 6.8 percent. Gen-Probe’s cash offer is a counter offer to Belgium-based chemicals and pharmaceuticals company Solvay SA’s offer of $8.98 a share. Gen-Probe’s offer price is at a 6.09 percent premium over the Solvay’s offer. The transaction, is expected to close by December.
Seller financial advisor: Credit Suisse
Bidder financial advisor: UBS
Seller legal advisor: Not available
Bidder legal advisor: Cooley Godward Kronish; Linklaters

source: mergermarket

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