After taking note of Madrid-based Santander Central Hispano’s purchase of Sovereign Bancorp, there wasn’t much to cheer about in last week’s dealmaking. But private equity players were in the game, with three of the five largest transactions.
In building its ownership of Philadelphia-based Sovereign to 100 percent, Banco Santander’s deal at market price was the week’s lone billion-dollar North American acquisition. The 41 deals in the week, totaling a mere $3.60 billion in value, represented less than a quarter of the prior week’s $12.72 billion — although nearly as few deals (43) were struck in that earlier period.
Still, private equity firms became more active as mid-market buyers in the seven days just past, with Elliott Associates buying Epicor Software; First Reserve taking an undisclosed economic interest in Reliant Energy; and Advent International and a French outfit called Doc@Post purchasing the French transaction processing activities of Experian Plc, according to data provided to CFO.com by mergermarket.
For the year to date, the 3,122 deals struck so far were worth $801.85 billion, far lower than the record pace of this time in 2007, when 4,113 transactions had been struck at this time, with a total value of $1.36 trillion.
Santander Central Hispano SA to buy a 75.6-percent stake in Sovereign Bancorp Inc. for $1.91 billion
Philadelphia-based Sovereign definitively agreed to be acquired by Madrid-based Banco Santander in a stock-for-stock transaction of 0.2924 American Depository Shares of Santaner for each Sovereign common share. With a valued of $3.81, there was no premium offered in the transaction, which is expected to close in the first quarter of 2009. The deal will give 100-percent control of Sovereign to Santander, which now owns 24.3 percent.
Seller financial advisor: Barclays Bank
Bidder financial advisor: Goldman Sachs; JPMorgan; Lazard; Merrill Lynch
Seller legal advisor: Cuatrecasas – Goncalves Pereira, Castelo Branco; Milbank Tweed Hadley & McCloy; Sullivan & Cromwell
Bidder legal advisor: Davis Polk & Wardwell; Skadden Arps Slate Meagher & Flom (Advising JPMorgan; Merrill Lynch)
Elliott Associates LP to buy Epicor Software Corp. for $764 million
Elliott, a New York City based hedge fund with over $14 billion of capital under management, made an offer for Irvine, Calif.-based Epicor, a provider of integrated enterprise resource planning, customer relationship management, supply chain management, and professional services automation software, after Epicor rejected an Elliott proposal. Elliott already owns 10.2 percent and $28.7 million of Epicor common shares and convertible notes, respectively. The latest offer is $9.50 a share, providing a premium of 39.7 percent. Before including debt, the implied equity value of the transaction is about $566 million.
Seller financial advisor: UBS
Bidder financial advisor: Internal
Seller legal advisor: Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: Paul Weiss Rifkind Wharton & Garrison
First Reserve Corp. to buy an undisclosed economic interest in Reliant Energy Inc. for $350 million
Greenwich, Conn.-based private equity firm First Reserve agreed to acquire 350,000 shares of preferred convertible stock of Reliant, a Houston-based power producer. Terms call for a purchase price of $1,000 per share. Newly issued shares will have equal voting rights as the common stock and pay quarterly cash dividends at an annual rate of 14 percent. Freferred shares will be convertible into common stock, with a conversion price set between $8 and $11 per common share, subject to various adjustments.
Seller financial advisor: Goldman Sachs; Morgan Stanley
Bidder financial advisor: Not available
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Simpson Thacher & Bartlett
Advent International Corp. and Doc@Post to buy the transaction processing activities in France of Experian Plc for $274 million
Boston-based private equity firm Advent and Paris-based document processing company Doc@Post agreed to acquire the s-based transaction processing activities of Experian, a Dublin-based information services company. The transaction is expected to close before the end of the year 2008.
Seller financial advisor: UBS
Bidder financial advisor: Hawkpoint Partners; Rothschild
Seller legal advisor: Linklaters
Bidder legal advisor: Latham & Watkins
GlaxoSmithKline plc to buy the Egyptian mature products business of Bristol Myers Squibb Co. for $210 million
Middlesex, UK-based healthcare group GlaxoSmithKline agreed to acquire the Egyptian pharmaceutical and mature products business of New York City-based Bristol Myers Squibb, a biopharmaceutical company and related health care products company in a transaction expected to close by the end of October.
Seller financial advisor: Citigroup
Bidder financial advisor: Not Disclosed
Seller legal advisor: DLA Piper
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Slaughter & May
Electro Scientific Industries Inc. to buy Zygo Corp. for $199 million
Portland, Ore.-based Electro Scientific, a developer and supplier of photonics microengineering products and laser systems, agreed to acquire Middlefield, Conn.-based Zygo, which makes optical systems and components. The $10.30-a-share calls for Zygo holders to get 1.0233 shares of Electro shares for each Zygo share in a tax-free transaction. After completion, Electro Scientific will issue approximately 18.1 million shares on a diluted basis, and Zygo will own 40 percent of the combined company. The transaction is expected to be completed in the first quarter of 2009.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Needham & Company
Seller legal advisor: Stoel Rives
Bidder legal advisor: Fulbright & Jaworski
Mercury Casualty Co. to buy Auto Insurance Specialists from Aon Corp. for $155 million
Brea, Calif.-based Mercury, the auto insurance subsidiary of Los Angeles-based Mercury General Corp., agreed to acquire private, Chicago-based Auto Insurance Specialists from Chicago-baed Aon, which provides insurance and risk management, human capital consulting, and insurance underwriting products, in a transaction expected to close in the first quarter of 2009.
Seller financial advisor: Aon Corporation
Bidder financial advisor: Internal
Seller legal advisor: Sidley Austin
Bidder legal advisor: Latham & Watkins
Taylor Made Golf Company Inc. to buy Ashworth Inc. for $74 million
Carlsbad, Calif.-based TaylorMade, a subsidiary of the adidas Group, agreed to acquire Carlsbad-based Ashworth, a retailer of golf apparel for $1.90 a share, while assuming about $46.34 million of Ashworth debt. With the offer valuing outstanding share capital at $28.02 million, the price represents a premium of 9.83 percent. The acquisition is expected to close in the fourth quarter.
Seller financial advisor: Kurt Salmon Associates Inc
Bidder financial advisor: Barclays Bank Plc
Seller legal advisor: Gibson Dunn & Crutcher
Bidder legal advisor: Sheppard, Mullin, Richter & Hampton
Canadian Storage Partners ULC to buy InStorage REIT for $63 million
Columbia, Mo.-based Canadian Trading Partners ULC, a subsidiary of privately held TKG-StorageMart Group, is a property owner, developer and operator. It launched an offer to acquire the 80.43 percent stake of the Toronto-based InStorage REIT, a real investment trust fund, that it doesn’t own for $3.21 cash, a premium of 123.2 percent.
Seller financial advisor: Brookfield Financial; RBC Capital Markets
Bidder financial advisor: Banc of America Securities; BMO Capital Markets
Seller legal advisor: McCarthy Tetrault
Bidder legal advisor: Davies Ward Phillips & Vineberg; Van Matre, Harrison, Volkert, and Hollis
Ener1 Inc. to buy an 83-percent stake in Enertech International Inc. $55 million
New York City-based Ener1, which develops lithium batteries for hybrid vehicles and fuel cells for various applications, agreed to acquire the stake in Enertech, a privately held Seoul-based lithium-ion battery cell producer, in a deal in which Ener1will issue 5 million new common shares and 2.56 million warrants with a two-year maturity, and exercisable into shares of Ener1 stock at a strike price of $7.50 per warrant and $600,000 in cash.
Seller financial advisor: Not available
Bidder financial advisor: Internal
Seller legal advisor: Not available
Bidder legal advisor: Mazzeo Song
source: mergermarket