M&A

Deals: A Maple Leaf Melody

In our M&A roundup for the period ended Aug. 3, Canadian minerals and tobacco products account for much of the activity, although KKR has its day.
Roy HarrisAugust 4, 2008

Canada’s mining interests — not to mention the wafting smoke from its tobacco products — were at the center of much of the dealmaking last week. Kohlberg Kravis Roberts & Co., though, weighed in with a $2.3-billion arrangement to by its private equity fund management company.

The top deal was Teck Cominco Ltd.’s $11.10-billion purchase of Fording Canadian Coal Trust. But also, Philip Morris International Inc. bought Toronto’s Rothmans tobacco products concern for $2.03 billion, to name two of the five deals with a Canadian flavor.

Overall, deal volume was more active, nearly hitting $20 billion, compared to the $12.16 billion of the prior week. Mergers and acquisitions were peppered with non-Canadian transactions — the sale of a Unilever laundry business here, a SunGard Data Systems software purchase there — but basically, the activity was in the great northland, according to data on the top 10 North American transactions provided to CFO.com by mergermarket.

The 44 deals that were struck last week brought the year-to-date transaction total to $601.64 billion, still less than half the volume of dealmaking that had been done at this time last year, when 3,035 companies were purchased. In the prior week, 41 transactions were arranged.

Teck Cominco Ltd. to buy Fording Canadian Coal Trust for $11.10 billion

The Calgary, Canada- based open-ended mutual fund coal trust definitively agreed to be acquired by Teck Cominco, of Vancouver, Canada, which is engaged primarily in exploring for and developing natural resources. Both boards approved the merger for $82 and 0.245 of a Teck Cominco share for the 80-percent interest in Fording Canadian that Teck Cominco does not own. The price, totaling $91.66 a share, provides a premium of 11.1 percent for a deal that is expected to close in late October.
Seller financial advisor: National Bank Financial; RBC Capital Markets
Bidder financial advisor: CIBC World Markets; Merrill Lynch
Seller legal advisor: Osler Hoskin & Harcourt
Bidder legal advisor: Lang Michener; Paul Weiss Rifkind Wharton & Garrison; Stikeman Elliott

Kohlberg Kravis Roberts & Co. to buy KKR Private Equity Investors L.P (KPE) for $2.30 billion

New York City-based private equity firm Kohlberg Kravis Roberts agreed to acquire the KKR Private Equity Investors fund management operation based in St. Peter Port, the Channel Islands, in a reverse takeover. Completion is expected in the fourth quarter.
Seller financial advisor: Citigroup; Lazard
Bidder financial advisor: Morgan Stanley; Goldman Sachs
Seller legal advisor: Cravath, Swaine & Moore; Bredin Prat; Weil Gotshal & Manges
Bidder legal advisor: Davis Polk & Wardwell; Simpson Thacher & Bartlett

Philip Morris International Inc. to buy Rothmans Inc. for $2.03 billion

Toronto-based manufacturer and distributor of tobacco products Rothmans definitively agreed to be acquired by New York City-based Philip Morris International for $30.26 a share, a premium of 14.6 percent. The tender offer is expected to be completed by 30-Sept-08.
Seller financial advisor: BMO Capital Markets
Bidder financial advisor: JPMorgan
Seller legal advisor: Gowling Lafleur Henderson; Davies Ward Phillips & Vineberg
Bidder legal advisor: Wachtell, Lipton, Rosen & Katz; Heenan Blaikie

Vestar Capital Partners Inc. to buy the North American Laundry Business of Unilever PLC for $1.45 billion

New York City-based private equity firm Vestar agreed to acquire the North American laundry business of London-based Unilever, the manufacturer of international manufacturer of brands in foods, home care, and personal care. The transaction is expected to close later this year.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Lehman Brothers; JPMorgan
Seller legal advisor: Cravath, Swaine & Moore
Bidder legal advisor: Kirkland & Ellis

Goldcorp Inc. to buy Gold Eagle Mines Ltd. for $1.16 billion

Toronto-based gold exploration company Gold Eagle Mines definitively agreed to be acquired by Vancouver, Canada-based Goldcorp for $6.65 a share and 0.146 of a Goldcorp share, a premium of 19.38 percent. The transaction is expected to close in September 2008.
Seller financial advisor: BMO Capital Markets
Bidder financial advisor: Macquarie Capital Markets; JPMorgan
Seller legal advisor: Fraser Milner Casgrain
Bidder legal advisor: Cassels Brock & Blackwell

Gran Tierra Energy Inc. to buy Solana Resources for $675 million

Calgary, Canada-based oil and natural gas explorer, developer, and producter Solana Resources definitively agreed to be acquired by Gran Tierra, another Calgary-based oil and gas concern for $5.84 a share, a 25.3-percent premium.
Seller financial advisor: Tristone Capital
Bidder financial advisor: Blackmont Capital
Seller legal advisor: Davis
Bidder legal advisor: Blake, Cassels & Graydon; Cooley Godward Kronish

SunGard Data Systems Inc. to buy GL Trade SA for $663 million

Wayne, Pa.-based software company SunGard launched a mandatory public offer for Paris-based GL Trade, a supplier of computer software solutions for electronic trading. The offer of $64.70 per share represents a premium of 24.4 percent.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Lehman Brothers; Goldman Sachs
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Sempra Energy to buy EnergySouth Inc. for $612 million

Mobile, Ala.-based EnergySouth, a holding company for subsidiaries in the midstream services and distribution segments of the natural gas industry, definitively agreed to be acquired by San Diego-based Sempra, an energy services holding company. The price of $61.50 a share represents a premium of 22.6 percent. The transaction is expected to close by 31-Dec-08.
Seller financial advisor: JPMorgan; Berenson & Company
Bidder financial advisor: Internal
Seller legal advisor: Alston and Bird; Armbrecht Jackson
Bidder legal advisor: Latham & Watkins

Schneider Electric SA to buy Xantrex Technology Inc. for $427 million

Xantrex , a Burnaby, Canada-based designer, manufacturer, and marketer of power electronic products for renewable energy applications, definitively agreed to be acquired by Schneider, based in Rueil-Malmaison, France. The company specializes in electricity distribution and automation management. Terms call of a price of $14.68 a share, a premium of 11.1 percent. This transaction is expected to close in third quarter.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Stikeman Elliott; Dorsey & Whitney
Bidder legal advisor: Blake, Cassels & Graydon

Greenhill Capital Partners LLC and Metalmark Capital LLC to buy a 96.02 percent stake in BreitBurn Energy Co. from Provident Energy Trust for $305 million

New York City-based private equity concerns Metalmark and Greenhill City based private equity firms, along with BreitBurn managers, agreed to acquire the stake in Los Angeles-based BreitBurn, which owns producing and non-producing crude oil reserves. The seller is Calgary-based Provident Energy Trust, an energy income trust. The transaction is expected to be completed mid-August.
Seller financial advisor: Internal
Bidder financial advisor: Lehman Brothers
Seller legal advisor: Gibson, Dunn & Crutcher
Bidder legal advisor: Thompson & Knight; Davis Polk & Wardwell

source: mergermarket