M&A

Deals: Mostly Domestic, and Dwindling

In our M&A Roundup for the week ended Nov. 9, there are fewer cross-border transactions. And that leads to a sharp overall fall-off.
Roy HarrisNovember 10, 2008

AT&T’s $2.81-billion purchase of Centennial Communications led the North American dealmaking in a week relatively light on cross-border transactions. Indeed, the week was light on transactions of any kind — with the next-largest deal of the 33 done dropping off to $425 million.

That number-two deal, among the top 10 provided to CFO.com by mergermarket was the private-equity investment in Whole Foods Market Inc. made by affiliates of Leonard Green & Partners L.P.

The high volume of activity in recent weeks involving federal investments under the Troubled Assets Relief Program is being excluded from the calculations because of the difficulty in valuing the preferred stock, with warrants attached, being offered in exchange for funding.

In the only deals involving companies outside North America, Corporacion Interamericana de Entretenimiento S.A. de C.V., of Mexico, agreed to pay $393 million for AMC Entertainmnet Inc.’s Grupo Cinemex SA de CV, Monsanto Co. came to terms for a $290-million purchase of Sao Paulo-based Aly Participacoes Ltda. from Grupo Votorantim.

For all of last week, $3.99 billion of North American deals were struck, down from 35 transactions worth $13.55 billion in the prior week. For the year-to-date, 3,222 deals now have been valued at a total of $827.7 billion, still sharply lower than the 4,433 deals, worth $1.41 trillion, over then same period of 2007.

AT&T to buy Centennial Communications for $2.81 billion

Walls, N.J.-based Centennial, a provider of wireless communications and broadband services, definitively agreed to be acquired by San Antonio-based AT&T Inc. the telecommunications services concern, in a deal valued at $8.50 a share, a premium of 144.9 percent . The entire share capital involved is $1.89 million, before including assumed debt. Directors of both companies have approved the merger.
Seller financial advisor: Barclays Capital; Evercore Partners
Bidder financial advisor: Not Available
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Sullivan & Cromwell

Green Equity Partners to buy an undisclosed economic interest in Whole Foods Market for $425 million

Green Equity Investors V L.P. and Green Equity Investors Side V L.P., Los Angeles-based affiliates of private equity firm Leonard Green & Partners L.P., agreed to acquire Series A preferred stock in Austin, Tex.-based Whole Foods Market Inc., the food retailer, for $425 million in cash. The Series A preferred stock is due 2020, and represents 17 percent of Whole Foods common stock. The preferred stock will have an 8-percent dividend payable quarterly in cash or by increasing the liquidation preference, and will be convertible to common stock at an initial price of $14.50 per share. Whole Foods can redeem the preferred stock after five years from closing the transaction at a premium of 4 percent. With 30 days notice the company can redeem the preferred if the common stock closes at or above $28.50, based on at least 20 trading days. Also, Whole Foods can convert the preferred shares into subordinated convertible notes under similar terms with the preferred stock. It is expected to close early in December 2008.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Not Available
Seller legal advisor: Dechert
Bidder legal advisor: Latham & Watkins

Corporacion Interamericana de Entretenimiento S.A. de C.V to buy Grupo Cinemex SA de CV from AMC Entertainment Inc. for $393 million

Corporacion Interamericana, an entertainment company based in Mexico, agreed to acquire Grupo Cinemex SA de CV, of Lomas de Chapultepec, Mexico, an operator of cinemas and theatres, from Kansas City, Mo.-based multiplex cinema operator AMC Entertainment for $315 million and assumed debt of $77.5 million. The transaction is expected to close within 60 days.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Monsanto Co. to buy Aly Participacoes Ltda. from Grupo Votorantim for $290 million

St. Louis-based Monsanto, the technology and agricultural products company, agreed to acquire Sao Paulo-based Aly Participacoes Ltda., an operator of the sugarcane breeding and technology companies, CanaVialis S.A. and Alellyx S.A. from conglomerate Grupo Votorantim. The transaction is in line with Monsanto building investment within the Brazilian agriculture market.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Shearman & Sterling
Bidder legal advisor: Not Available

AT&T to buy Wayport for $275 million

AT&T agreed, through a subsidiary, to acquire Wayport Inc., the Irving, Tex.-based provider of managed Wi-Fi services, in a cash deal.
Seller financial advisor: Jefferies & Co.
Bidder financial advisor: Internal
Seller legal advisor: Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: Haynes and Boone

Boscov Family to buy Boscov’s Department Stores Inc. for $225 million

The family led by Albert Boscov and Edwin Lakin, former chairman and president of Boscov’s, respectively, agreed to acquire the private Reading, Pa.-based outlet mall for that estimated price, subject to bankruptcy court approval and to financing being secured. The deal is expected to close by the end of November.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Jones Day
Bidder legal advisor: Not Available

Symphony Capital Partners to buy a 19-percent stake in DLF Assets Ltd. from Lehman Brothers Holdings Inc. for $200 million

Singapore-based private equity firm Symphony Capital Partners acquired the stake in DLF, a real estate investment company based in India, from New York-based investment bank Lehman. DLF is planning to raise $986 million, which is mixed by debt and equity, by March 2009.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

West Corp. to buy Positron Public Safety Systems, the Command Systems segment IPC Systems Inc., for $167 million

Omaha-based West, an outsourced communication product provider, agreed to acquire the unit of the Houston-based provider of public security products, from the Jersey City, N.J.-based communications company that is its parent. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Internal
Bidder legal advisor: Husch Blackwell Sanders

Amdocs to buy ChangingWorlds Ltd. for $60 million

Chesterfield, Mo.-based Amdocs Ltd., a computer software provider, agreed to acquire private, Dublin-based ChangingWorlds, a personalized information services provider, for cash.
Seller financial advisor: Not Available
Bidder financial advisor: Jefferies & Co.
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Canadian National Railway Co. to buy Compagnie de gestion de Matane Inc. and the railway operations of Quebec Railway Corp. for $41 million

Montreal-based Canadian National Railway agreed to acquire the privately held Matane, Canada-based company engaged in shuttle boat-rail freight service, along with the rail operations of the Quebec-based company.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Internal
Bidder legal advisor: Internal

source: mergermarket