Deals: As Merrill Goes, So Goes the Week

In our M&A roundup for the period ended Sept. 21, the Bull's sale to B of A shows up, but not AIG's arrangement with the Fed.
Roy HarrisSeptember 22, 2008

The Week That Shook the Street certainly left its mark on North America’s dealmaking tally. It topped out at $60.26 billion for the seven days ended Sept. 21, on the strength of Bank of America’s $44.35-billion deal to purchase Merrill Lynch. But the total would have been truly astronomical had it included that other buyer: the U.S. government, which plunked down $85 billion to take control of 80 percent of American International Group.

As it was, the high overall value of the week’s 51 deals owed itself to B of A, and to the $9.52-billion purchase of Constellation Energy Group by Berkshire Hathaway’s MidAmerican Energy Holdings. Other than that — and that little AIG deal — there wasn’t a single billion-dollar transaction to be found, according to data provided to CFO.com by mergermarket.

Down in the bottom half of the top 10 deals was Barclays Capital’s purchase of the North American investment banking and capital markets operations of Lehman Brothers Inc. That price: $250 million.

In the prior week, 28 deals that were struck, totaling $15.39 billion. For the year through Sept. 21, 2,766 transactions have led to total mergers and acquisitions of $738.67 billion. That contrasts with 3,758 deals worth $1.30 trillion at this point during the record year of 2007.

Bank of America Corp. to buy Merrill Lynch for $44.34 billion

Merrill, the legendary New York City-based provider of investment, financing, insurance, and related services, agreed to be acquired by B of A, based in Charlotte, N.C., in an exchange of 0.8595 of a B of A share for each Merrill share. The $29-a-share value offers a premium of 70 percent. The transaction is expected to close in the first quarter of 2009.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Banc of America Securities; Fox-Pitt Kelton Cochran Caronia Waller; J.C Flowers & Co
Seller legal advisor: Cravath Swaine & Moore; Shearman & Sterling
Bidder legal advisor: Debevoise & Plimpton; Wachtell Lipton Rosen & Katz

MidAmerican Energy Holdings Co. to buy Constellation Energy Group Inc. for $9.52 billion

Baltimore-based Constellation Energy, which does business through subsidiaries that include Baltimore Gas & Electric Co., tentatively agreed to accept $26.50 a share from Des Moines-based MidAmerican Energy, controlled by Berkshire Hathaway. Billionaire investor Warren Buffett controls Berkshire. Boards of both Constellation and MidAmerican approved the agreement at that price, which provides a 7-percent premium. The implied equity value of the transaction is about $4.73 billion. The transaction is expected to close in the second quarter of 2008.
Seller financial advisor: Morgan Stanley; UBS
Bidder financial advisor: Not Available
Seller legal advisor: Kirkland & Ellis
Bidder legal advisor: Willkie Farr & Gallagher

El Paso Pipeline Partners LP to buy a 20-percent stake in Colorado Interstate Gas Co. and a 15-percent stake in Southern Natural Gas Co. from El Paso Corp. for $736 million

Houston-based El Paso Pipeline, an owner and operator of natural gas transportation pipelines, storage and other midstream assets, agreed to acquire an additional 30-percent stake in Colorado Interstate, and an additional 15-percent stake in Southern National Gas. Colorado Springs, Colo.-based Colorado Interstate is a natural gas supplier, while Southern, based in Birmingham, Ala., is privately held and engaged in the transportation of natural gas. The seller, also of Houston, provides natural gas and related energy products. The transaction is expected to close by Sept. 30.
Seller financial advisor: Not Disclosed
Bidder financial advisor: Not Disclosed
Seller legal advisor: Not Disclosed
Bidder legal advisor: Not Disclosed

Onex Partners LP to buy RSI Home Products Inc. for $636 million

Management of RSI Home, private and based in Anaheim, Calif., agreed to acquire the manufacturer of cabinetry in a buyout backed by Toronto-based Onex. Deal terms call of Onex to acquire a 50- percent stake in RSI in convertible preferred security for $318 million, subject to a minimum preferred return of 10 percent to Onex. Of the total amount invested by Onex, $126 million is in its own equity. The transaction is expected to close in early October.
Seller financial advisor: Wells Fargo & Company
Bidder financial advisor: Internal
Seller legal advisor: O’Melveny & Myers
Bidder legal advisor: Kaye Scholer

Getinge AB to buy Datascope Corp. for $594 million

Montvale, N.J.-based Datascope, which develops, makes, and markets surgical and health-care products, definitively agreed to be acquired by Sweden-based Getinge, a medical technology company with operations in the cardiac surgery and vascular surgery markets. Both boards approved the merger at a price of $53 a share, a premium of 7.7 percent. The implied equity value of the transaction is about $841 million. The transaction is expected to close by Dec, 31.
Seller financial advisor: Lehman Brothers
Bidder financial advisor: Merrill Lynch
Seller legal advisor: Dechert; Weil Gotshal & Manges
Bidder legal advisor: Alston & Bird; Covington & Burling

Telvent GIT SA to buy DTN Holding Co. Inc. for $445 million

Madrid-based Telvent, which is engaged in industrial supervisory control and business process management systems, agreed to acquire private DTN, an Omaha-based provider of business information services in the areas of agricultural, energy, and environment business markets. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Blackstone Group Holdings; Goldman Sachs
Bidder financial advisor: M&A International
Seller legal advisor: Not Available
Bidder legal advisor: Clifford Chance; DLA Piper; KPMG Abogados; Squire, Sanders & Dempsey

Wabtec Corp. to buy Standard Car Truck Co. Inc. for $300 million

Wilmerding, Pa.-based rail equipment supplier Wabtec agreed to acquire private Standard Car Truck, based in Park Ridge, Ill., which designs and manufactures railroad car trucks, stabilizer systems, and locomotive components, for cash. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: McDermott Will & Emery
Bidder legal advisor: Reed Smith

Superior Well Services Inc. to buy certain oilfield service assets of Diamondback Holdings LLC for $270 million

Indiana, Pa.-based Superior, a provider of services to oil and natural gas exploration companies, has agreed to acquire the assets of Diamondback Holdings LLC, an Oklahoma-based investment holding company interested in companies providing services to oil and natural gas exploration companies, for cash. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Internal
Bidder financial advisor: Jefferies & Company
Seller legal advisor: Akin Gump Strauss Hauer & Feld
Bidder legal advisor: Vinson & Elkins

Barclays Capital to buy the North American investment banking and capital markets operations of Lehman Brothers Inc. from Lehman Brothers Holdings Inc. for $250 million

Private, London-based Barclays Capital, the investment banking arm of Barclays plc, agreed to acquire the Lehman assets for cash. The transaction is subject to approval of the U.S. Bankruptcy Court and antitrust authorities, and may be terminated if not completed by Sept. 24.
Seller financial advisor: Lazard
Bidder financial advisor: Barclays Bank; Credit Suisse; Deutsche Bank; JPMorgan Cazenove
Seller legal advisor: Weil Gotshal & Manges; Simpson Thacher & Bartlett
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Clifford Chance

Actuant Corp. to buy Cortland Cos. from Cable Solutions Group Inc. for $230 million

Butler, Wis.-based Actuant, a provider of engineering products for position and motion control systems and branded hydraulic and electrical tools, agreed to acquire the Cortland, N.Y.-based maker of electro-mechanical cables and synthetic rope products Cable Solutions.
Seller financial advisor: Harris Williams & Co
Bidder financial advisor: Wachovia Securities
Seller legal advisor: DLA Piper
Bidder legal advisor: McDermott Will & Emery

source: mergermarket