Deals: A Transactional Patchwork

In our M&A roundup for the period ended Aug. 24, top deals involve banking, insurance, and defense, with energy and natural resources accounting fo...
Roy HarrisAugust 25, 2008

A tepid week of dealmaking featured the top 10 deals being scattered among almost as many industries. If there was a theme, in fact, it was that energy and natural resources deals didn’t dominate the way they have in recent months.

A $3.51-billion banking transaction, a $2.23-billion defense-industry deal, and a $1.8-billion insurance arrangement led the way. But the banking deal was fairly tame: the purchase by Mitsubishi UFJ financial Group Inc. of the remaining 34.6 percent of UnionBanCal Corp. that it didn’t control. It was followed by General Dynamics Corp.’s purchase of aviation services company Jet Aviation Management AG from British private equity company Permira and insurer Aon Corp.’s deal for British firm Benfield Group Limited, according to data provided to CFO.com by mergermarket.

Some mid-sized transactions had strong ties to basic industries like steelmaking, oil exploration, and coal mining, as the total value of the 21 North American deals fell to $5.76 billion (counting only the value of deals in which the target is North American.) The prior week, the total had been $13.06 billion.

Last week’s deals brought year-to-date transactions up to $630.7 billion, still slightly more than half the $1.25 trillion over the same period of 2007.

Mitsubishi UFJ Financial Group Inc. to buy the remaining 34.6-percent stake in UnionBanCal Corp. for $3.51 billion

San Francisco-based UnionBanCal definitively agreement to be acquired by Tokyo-based Mitsubishi UFG, with both boards approving. UnionBanCal, a commercial bank holding company whose major subsidiary is Union Bank of California N.A., will have the shares acquired for $73.50 a share, a premium of 12.23 percent.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Alston & Bird; Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Mori Hamada & Matsumoto; Sullivan & Cromwell

General Dynamics Corp. to buy Jet Aviation Management AG from Permira for $2.23 billion

Falls Church, Va.-based defense systems contractor General Dynamic agreed to acquire the Zurich-based business aviation services company Jet Aviation. The seller is Dreamliner Lux S.a.r.l, a company controlled by the London-based private equity firm Permira Funds. The transaction is expected to closed by the end of the year.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Gleacher Partners/ Gleacher Shacklock
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Freshfields Bruckhaus Deringer; Homburger; Jenner & Block

Aon Corp. to buy Benfield Group Limited for $1.82 billion

Chicago-based risk management services company Aon agreed to acquire London-based Benfield, a reinsurance and risk intermediary for $6.52 a share, a premium of 29.1 percent.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Credit Suisse
Seller legal advisor: Debevoise & Plimpton
Bidder legal advisor: Clifford Chance

Severstal OAO to buy PBS Coals Limited for $1.3 billion

Cherepovets, Russia-based steel producer Severstal, the through its subsidiary Severstal Resources, agreed to acquire Friedens, Pa.-based coal mining company PBS Coals through the acquisition of Penfold Capital Acquisition Corp., a capital pool company. The transaction will occur after Penfold acquires PBS, with the combined company being listed on the Toronto stock exchange. Terms call for a cash price of $7.81 a share. The transaction is expected to be close in mid-October.
Seller financial advisor: Haywood Securities; Cormark Securities
Bidder financial advisor: RBC Capital Markets
Seller legal advisor: Borden Ladner Gervais; Gowling Lafleur Henderson
Bidder legal advisor: Torys

Vision Service Plan to buy Marchon Eyewear Inc. for $735 million

Rancho Cordova, Calif.-based eyecare plans provider Vision Service acquired Marchon, a Melville, N.Y.-based manufacturer and distributor of eyewear products and management solution services.
Seller financial advisor: Blackstone Group Holdings
Bidder financial advisor: Internal
Seller legal advisor: Paul Weiss Rifkind Wharton & Garrison
Bidder legal advisor: Reed Smith

Denbury Resources Inc. to buy Conroe Fields for $600 million

Plano, Tex.-based oil and natural gas Denbury agreed to acquire a 91.4 percent stake in Houston-based oil and gas producing area Conroe Fields for cash. Terms call for an additional consideration above $600 million if oil prices exceed $121 a barrel during the next three years. The seller will receive an additional $7.2 million per one dollar increase in the oil futures price above that level, with a maximum total incremental consideration of $125 million. The transaction is expected to close in early October.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Lone Star Funds to buy IKB Deutsche Industriebank AG from KfW Bankengruppe for $386 million

Dallas-based private equity firm Lone Star, through its German subsidiary, agreed to acquire a 90.8 percent interest in IKB Deutsche Industrie Bank, based in Dusseldorf, from the Main, Germany-based KfW Bankengruppe, a state-owned development bank. Lone Star Funds intends to launch a mandatory offer for the remaining stake. The transaction is expected to close by October.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: HSBC
Seller legal advisor: Clifford Chance
Bidder legal advisor: Mayer Brown

Woodward Governor Co. to buy MPC Products Corp. for $359 million

Woodward Governor, a Fort Collins, Colo.-based designer, manufacturer, and service provider for energy control and optimization products, agreed to acquire Skokie, Ill.-based MPC Products, an engineer and manufacturer of electromechanical motion control systems, primarily for aerospace applications. The stock deal is expected to close by October.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: McGuireWoods
Bidder legal advisor: Jones Day

Eli Lilly and Co. to buy the Polilac branc from Monsanto Co. for $300 million

Indianapolis-based pharmaceutical products developer Lilly agreed to acquire rights to the Posilac brand from St. Louis-based Monsanto, a provider of technology-based and agricultural products, in a transaction expected to close in the beginning of the fourth quarter.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Not Available
Seller legal advisor: Bryan Cave
Bidder legal advisor: Latham & Watkins

Nuance Communications Inc. to buy SNAPin Software Inc. from Frazier Technology Ventures; Hunt Ventures LP, Oak Investment Partners, and Trilogy Equity Partners for $180 million

Burlington, Mass.-based Nuance, which develops voice-browsing products and development tools for telephone access, agreed to acquire Bellevue, Wash.-based SNAPin, which is engaged in software development. Seller Frazier Technology, based in Seattle, is a venture capital fund, while Bellevue-based Trilogy is a venture capital firm, Westport, Conn.-based Oak is a private equity firm, and Dallas-based Hunt Ventures is a venture capital firm. The transaction is expected to close by October.
Seller financial advisor: Internal
Bidder financial advisor: Needham & Company
Seller legal advisor: Perkins Coie
Bidder legal advisor: Wilson Sonsini Goodrich & Rosati

source: mergermarket