M&A

Deals: Nowhere to Go but Up

In our M&A Roundup for the week ended Jan. 4, a mere 16 North American transactions are arranged, with only Chesapeake Corp.'s billion-dollar bankr...
Roy HarrisJanuary 5, 2009

Dealmaking nearly disappeared in the transition week between 2008 and 2009, although a single $1.02-billion private-equity buyout involving Chesapeake Corp. — a bankruptcy-related transaction — did salvage some respectability for merger-and-acquisition totals.

The buyers were New York-based Irving Place Capital and Los Angeles-based Oaktree Capital Management LP, who assumed $536 million of debt in the process. But no other deal in the week exceeded the $150 million that West Hollywood, Calif.-based film producer Relativity Media LLC paid for Rogue Pictures, a unit of General Electric subsidiary NBC Universal. The tenth-largest of the top ten North American deals was only worth $11 million, according to data provided to CFO.com by mergermarket.

In all for the week ended Jan. 4, 16 deals were struck, for a total of $1.52 billion. In the week immediately preceding that, 21 deals were stuck totaling $1.1 billion.

Irving Place Capital and Oaktree Capital Management LP to buy Chesapeake Corp. for $1.022 billion

Richmond, Va.-based specialty paperboard packaging products supplier Chesapeake agreed to be acquired by the two private equity firms. Los Angeles-based Oaktree specializes in real estate and private equity investments, as well as alternative investments such as high-yield and distressed debt and convertible securities. The other is an affiliate of New York City-based Irving Place, which focuses on investing middle-market companies. Chesapeake supplies Europe, with interests in North America and Asia. Terms call for Chesapeake to sell all its U.S. operating subsidiaries and the outstanding capital stock or other equity securities of foreign subsidiaries for $485 million. It has debt of $536 million, and is a voluntary Chapter 11 petitioner in the Eastern District of Virginia. Oaktree and Irving Place Capital will operate Chesapeake as a growing concern company. Chesapeake and all operating subsidiaries outside U.S. that were excluded from bankruptcy filling are included in the transaction. The transaction is expected to be completed in the first quarter.
Seller financial advisor: Alvarez & Marsal; Goldman Sachs
Bidder financial advisor: Not Available
Seller legal advisor: Hunton & Williams
Bidder legal advisor: Kirkland & Ellis; McCann FitzGerald

Relativity Media to buy Rogue Pictures from Universal Pictures for $150 million

Universal, the film producer and distributor that is a subsidiary of NBC Universal and General Electric Co., sold its Universal City, Calif.-based Rogue Pictures subsidiary, a low-budget films producer, to Relativity Media LLC of West Hollywood, Calif., a film producer and distributor.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

American Greetings Corp. to buy Recycled Paper Greetings Inc. from Monitor Clipper Partners LLC for $73 million

American Greetings, the Cleveland-based producer of “social expression products,” agreed to acquire Chicago-based Recycled Paper Greetings, a designer, manufacturer, and distributor of seasonal greeting cards and other products. The seller, Cambridge, Mass.-based Monitor Clipper, is a private equity firm. Terms include $54.7 million of new 7.375 percent notes due in 2016, and $18.4 million in cash.
Seller financial advisor: Rothschild
Bidder financial advisor: Imperial Capital
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Jones Day

Cavendish Asset Management, Francisco Partners, and Sequoia Capital Israel to buy Dmatek Ltd. for $64 million

Tel Aviv-based Dmatek, a provider of remote people-monitoring technologies, definitively agreement to be acquired by an investor group led by San Francisco-based private equity firm Francisco Partners and Herzelia, Israel-based Sequoia Capital Israel, a venture capital firm. Terms call for a price of $309 a share, with the implied equity value of the transaction being about $76.1 million, a premium of 50.8 percent. The transaction is expected to close by the end of March.
Seller financial advisor: BDO Stoy Hayward; Market Bridges
Bidder financial advisor: Jefferies & Company Inc
Seller legal advisor: Fladgate; Shenhav & Co
Bidder legal advisor: Meitar Liquornik Geva & Leshem Brandwein; Slaughter and May

Liberty Healthcare Corp. to buy the diabetes-treatment supply business of Owens & Minor Inc. for $63 million

Liberty Healthcare, a private, Bala Cynwyd, Pa.-based contract medical management organization, agreed to acquire the direct-to-consumer diabetes business from Mechanicsville, Va.-based Owens & Minor, a healthcare supply chain management company and a distributor of medical and surgical supplies to the acute-care market. The transaction is expected to close in early January.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Eclipsys Corp. to buy Premise Corp. for $39 million

Boca Raton, Fla.-based medical business-management software provider Eclipsys agreed to acquire Premise, a private, Farmington, Conn.-based provider of integrated and clinically focused software solutions and related services. Both boards of directors have approved the transaction, which is expected to close within 15 days.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Mecalux SA to buy UFC Interlake Holding for $30 million

Barcelona-based services concern Mecalux SA agreed to acquire Naperville, Ill.-based UFC Interlake, a privately group for the storage systems manufacturers United Fixtures Co. and Interlake Material Handling. Completion is expected in the first quarter of 2009.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Baker & McKenzie

Moog Inc. to buy AITECS Medical UAB from Hanseatic Capital for $22 million

East Aurora, N.Y.-based Moog, which designs, manufactures, and integrates precision control components and systems, acquired AITECS, a private, Vilnius, Lithuania-based manufacturer of syringe style infusion therapy pumps. The seller, Hanseatic Capital, is a Tallinn, Estonia-based provider of mezzanine capital to growth-oriented businesses and private equity firm.
Seller financial advisor: M&A International
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Adventure Exploration Partners LLC to buy the Southwestern Region assets of Rex Energy I LLC for $18 million

Private, Midland, Texas-based energy concern Adventure Exploration Partners agreed to acquire the Southwestern energy assets of private, Delaware-based Rex Energy I, a liability company having interest in the energy sector. The transaction is expected to close by Feb. 27.
Seller financial advisor: KeyBanc Capital Markets
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Premier Financial Bancorp Inc. to buy Abigail Adams National Bancorp Inc. for $11 million

Washington, D.C.-based bank holding company Abigail Adams National agreed to be acquired by Huntington, W.Va.-based bank holding company Premier Financial in an exchange of 0.4461-share of Premier common for each share of Abigail Adams National. The price of $3.06 a share represents a premium of 24.94. The transaction is expected to close during the first half of 2009.
Seller financial advisor: RP Financial
Bidder financial advisor: Baxter Fentriss & Co
Seller legal advisor: Luse Gorman Pomerenk & Schick
Bidder legal advisor: Huddleston Bolen

source: mergermarket