Deals: How’s the Weather? Ask GE, and PE

In our M&A Roundup for the week ended July 6, NBC Universal's acquisition of the Weather Channel — along with Blackstone and Bain — tops a tepid se...
Roy HarrisJuly 7, 2008

While $40-million-plus hostile grabs for Anheuser-Busch and Yahoo dominate this week’s news — with Belgium’s InBev and Microsoft, respectively, as potential buyers — the rest of North America’s dealmaking has been relatively lackluster. The two billion-dollar-plus deals struck over the last seven days involved private equity, led by a sale of TV’s Weather Channel to General Electric Co.’s NBC Universal, in league with Blackstone Group Holdings and Bain Capital.

Three of the top 10 North American deals were in the energy sector: topped by Dominion Resources Inc.’s $910-million sale of Peoples Natural Gas and Hope Gas, to Babcock & Brown Infrastructure Fund, according to data provided to CFO.com by mergermarket.

With 53 transactions signed, the week featured one more deal than in the prior seven days. But the volume of those deals plunged from $20.44 billion to $8.87 billion. For the year-to-date, 2,020 deals now have been struck, with a total value of $452.11 billion. Last year at this time — well before the precipitous third-quarter fall-off in dealmaking occurred — the volume of the 2,748 transactions had just crossed $1 trillion.

Blackstone Group Holdings LLC, Bain Capital LLC, and NBC Universal Inc. to buy Weather Channel Properties from Landmark Communications Inc for $3.50 billion

General Electric Co.’s NBC Universal, the New York City-based media and entertainment company — along with New York-based Blackstone Group and Boston-based Bain Capital, both private equity firms — agreed to acquire the Weather Channel Cos. from Norfolk, Va.-based media service company Landmark Communications. The price of the leverage buyout was not disclosed, but was widely estimated to be about $3.5 billion. Some reports said the three buyers would hold about one-third each, although the parties were not disclosing many details. The sale, which concludes a long auction process, is expected to be completed later this year.
Seller financial advisor: JPMorgan
Bidder financial advisor: Allen & Company; Credit Suisse; Deutsche Bank
Seller legal advisor: Kilpatrick Stockton; Skadden Arps Slate Meagher & Flom; Venable; Wilcox & Savage
Bidder legal advisor: Ropes & Gray; Weil Gotshal & Manges

Lone Star Funds to buy the Home Lending Business of CIT from CIT Group Inc. for $1.50 billion

Dallas-based private equity firm Lone Star Funds agreed to acquire the Home Lending Business of New York City-based CIT, a commercial finance company under terms that include $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other liabilities relating to the business. The sale is scheduled to be completed in July.
Seller financial advisor: JPMorgan; Morgan Stanley; Evercore Partners
Bidder financial advisor: Piper Jaffray
Seller legal advisor: Wachtell, Lipton, Rosen & Katz; McKee Nelson
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

Babcock & Brown Infrastructure Fund North America to buy natural gas distribution utilities Peoples Natural Gas Co. and Hope Gas Inc. from Dominion Resources Inc. for $910 million

San Francisco-based Babcock & Brown Infrastructure Fund, which owns and manages utilities and other infrastructure assets, agreed to acquire Pittsburgh-based Peoples Natural Gas and Clarksburg, W. Va.-based Hope Gas from Dominion, a Richmond, Va.-based company that transmits and distributes electricity and natural gas.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Internal
Seller legal advisor: McGuireWoods
Bidder legal advisor: Dewey & LeBoeuf

Allied World Assurance Co. Holdings to buy Darwin Professional Underwriters Inc. for $543 million

Farmington, Conn.-based specialty insurer Darwin Professional Underwriters definitively agreed to be acquired by Bermuda-based Allied World Assurance, with both boards approving the merger. Allied, a global provider of insurance and reinsurance solutions, is paying $32 a share, a premium of 5.9 percent. The transaction is expected to close in the fourth quarter.
Seller financial advisor: UBS
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Cleary Gottlieb Steen & Hamilton; Covington & Burling; Dewey & Leboeuf
Bidder legal advisor: Willkie Farr & Gallagher

Trident IV LP to buy a 51 percent stake in Fiserv Insurance Solutions Inc. from Fiserv Inc. for $540 million

Greenwich, Conn-based private equity fund Trident IV, managed by Stone Point Capital, agreed to acquire the interest in Fiserv Insurance, a Cedar Rapids, Iowa-based provider of software and outsourcing products for the insurance industry. The seller is Fiserv Inc., a Brookfield, Wis.-based provider of information management systems and services to the financial industry. The transaction is expected to close in July.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Internal
Seller legal advisor: Sullivan & Cromwell
Bidder legal advisor: Debevoise & Plimpton

MDU Resources Group Inc. to buy Intermountain Gas Co. from Intermountain Industries Inc. for $328 million

Bismarck, N.D.-based natural resources services provider MDU Resources agreed to acquire Boise, Idaho-based natural gas services provider Intermountain Gas from Intermountain Industries, engaged in oil and gas production. The transaction is expected to complete in the fourth quarter of 2008.
Seller financial advisor: Citigroup
Bidder financial advisor: JPMorgan
Seller legal advisor: Willkie Farr & Gallagher
Bidder legal advisor: Thelen Reid Brown Raysman & Steiner

AIG Vantage Capital to buy the Personal Communications Division of UTStarcom Inc. for $240 million

New York City-based investment holding company AIG Vantage Capital, a subsidiary of private equity firm AIG Global Investment Group agreed to acquire the Personal Communications Divisions of Alameda, Calif.-based UTStarcom. The seller is a developer and manufacturer of broadband, wireless, and terminal solutions to network operators. It is expected to close within two business of the agreement’s signing.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Internal
Seller legal advisor: Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: Goodwin Procter

BP Alternative Energy Inc. to buy Whiting Clean Energy Power Plant from NiSource Inc for $210 million

Houston-based wind power generation company BP Alternative agreed to acquire the Whiting plant from NiSource, based in Merrillville, Ind.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Veronis Suhler Stevenson to buy an undisclosed majority stake in Brand Connections LLC from Cypress Group LLC for $158 million

New York City-based private equity firm Veronis Suhler Stevenson acquired a majority stake in New York City-based advertising and marketing firm Brand Connections from Cypress. a New York-based private equity firm for cash.
Seller financial advisor: Petsky Prunier
Bidder financial advisor: Internal
Seller legal advisor: Dow Lohnes; Reed Smith
Bidder legal advisor: Proskauer Rose

Starbase International Ltd. to buy a 4.95-percent stake in Smithfield Foods Inc. for $122 million

British Virgin Islands-based investment holding company Starbase is a unit of Hong Kong-based China Foods Ltd., a Hong Kong-based agricultural trading and processing company. Smithfield, Va.-based pork processor Smithfield Foods. The price is for Smithfield common on the pricing date for an offering of the company’s Convertible Senior Notes, and equates to 7,000,000 shares of Smithfield Foods.
Seller financial advisor: Not Available
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Hogan & Hartson; McGuireWoods
Bidder legal advisor: Davis Polk & Wardwell

source: mergermarket