M&A

Deals: A Week of Health and Energy

In our M&A Roundup for the week ended Feb. 15, power-related companies and firms with medical connections account for most transactions. But none t...
Roy HarrisFebruary 17, 2009

Three of last week’s top 10 North American acquisitions involved companies related to health care, while another four involved energy or natural-resource companies. But no deal was worth more than $1 billion.

And over the entire six-day period, in fact, only 38 deal were struck, worth a total of $2.56 billion, according to data provided to CFO.com by mergermarket.

The largest transaction was the $900-million purchase of biopharmaceuticals company Ovation Pharmaceuticals Inc. by Lundbeck Research USA Inc., the New Jersey-based drug research unit of Danish pharma H. Lundbeck A/S. Next came Live Nation Inc.’s purchase of Ticketmaster for $637 million, and after that two more health-care deals. The private University of Southern California paid Tenet Healthcare Corp. $275 million for two USC hospital units.

Among the energy deals, the largest was special purpose acquisition company Japan Uranium Management Inc.’s $221-million offer for 19.95-percent stake of Uranium One Inc., a company established by Tokyo-based Japan Bank for International Cooperation, along with Tokyo Electric Power Co. and electronics manufacturer Toshiba Corp.

Through Feb. 15, 229 North American transactions were struck, worth $124.2 billion, largely on the strength of a Pfizer’s $67.5 billion acquisition of Wyeth, and Roche Holdings’s hostile $43.2 billion bid for the 44 percent of Genentech during one January week.

Lundbeck Research USA Inc. to buy Ovation Pharmaceuticals Inc. for $900 million

Lundbeck Research, the Paramus, N.J.-based drug research company, which is wholly owned by Copenhagen-based pharmaceutical company H. Lundbeck A/S, agreed to acquire private, Deerfield, Ill.-based biopharmaceutical company Ovation in a deal with an initial payment of $600 million. The transaction includes an earnout of up to $300 million, paid within one year, subject to certain product regulatory results relating to the approvals of Sabril by the Food and Drug Administration. The acquisition is expected to close in March.
Seller financial advisor: Goldman Sachs; Morgan Stanley
Bidder financial advisor: Deutsche Bank
Seller legal advisor: Katten Muchin Rosenman; Kirkland & Ellis
Bidder legal advisor: Morgan Lewis & Bockius

Live Nation Inc. to buy Ticketmaster for $637 million

West Hollywood, Calif.-based ticketing and marketing company Ticketmaster definitively agreed to be acquired by Beverly Hills-based Live Nation, a music company that principally promotes live music events in its owned or operated venues, and in rented third-party venues, as well as produces music festivals. Both boards approved the merger through an exchange of 1.384 shares of Live Nation for each Ticketmaster share. The value of $7.32 per share offers a premium of 11.4 percent, and an implied equity value of about $418.8 million. The transaction is expected to close in the second quarter.
Seller financial advisor: Allen & Company; JPMorgan
Bidder financial advisor: Deutsche Bank; Goldman Sachs
Seller legal advisor: Gibson Dunn & Crutcher; Wachtell Lipton Rosen & Katz
Bidder legal advisor: Latham & Watkins; Willkie Farr & Gallagher (Advising Deutsche Bank)

University of Southern California to buy USC Kenneth Norris Jr. Cancer Hospital and USC University Hospital from Tenet Healthcare Corp. for $275 million

Los Angeles-based USC, a private university, agreed to acquire the medical operations from two subsidiaries of Dallas-based Tenet, which owns and operates acute care hospitals and medical center. About $30 million of that amount will be deferred and placed in an escrow account for up to four years. The transaction is expected to close by March 31.
Seller financial advisor: Not Available
Bidder financial advisor: Moelis & Company
Seller legal advisor: Not Available
Bidder legal advisor: Bingham McCutchen

Thoratec Corp. to buy HeartWare International Inc. from Apple Tree Partners I LP for $237 million

Sydney-based implantable-heart manufacturer HeartWare agreed to be acquired by Thoratec, a Pleasanton, Calif.-based medical devices manufacturer in a cash-and-equity transaction that will give holders of each of 310,356,839 HeartWare CHESS Depository Interest (CDI) $0.4086 in cash, totalling $126.81 million, along with 0.017 of a common share of Thoratec. The price, aggregating $0.8647 per share, represents a 99.33 percent premium.The transaction is expected to close by July 31.
Seller financial advisor: JPMorgan
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Shearman & Sterling
Bidder legal advisor: Latham & Watkins

Japan Uranium Management Inc. to buy a 19.95-percent stake in Uranium One Inc. for $221 million

Japan Uranium, a special purpose entity established by Tokyo-based Japan Bank for International Cooperation, along with Tokyo Electric Power Co. and electronics manufacturer Toshiba Corp., also of Tokyo, agreed to buy the stake in Uranium One, a Toronto-based company interested in exploration and development of uranium and gold resource properties. The price of $1.88 a share in cash for each of the 117,000,000 Uranium One shares offers a premium of 15 percent. Completion is expected on March 31 or later.
Seller financial advisor: BMO Capital Markets
Bidder financial advisor: Credit Suisse
Seller legal advisor: Davis; Fasken Martineau
Bidder legal advisor: Not Available

Polar Star Canadian Oil and Gas Inc. to buy Tusk Energy Corp. for $214 million

Calgary, Alberta-based Tusk, an oil and gas exploration company, definitively agreed to be acquired by North Carolina-based Polar Star, an oil and gas venture indirectly owned by the Teachers Insurance and Annuity Association of America, the privately held New York City based retirement system. The transaction calls for a $1.76-a-share price for Tusk, with an implied equity value of $160m, a premium of 150 percent. The transaction is expected to close by late March.
Seller financial advisor: Macquarie Capital Markets; Scotia Capital
Bidder financial advisor: Peters & Co
Seller legal advisor: Blake, Cassels & Graydon; Osler Hoskin & Harcourt
Bidder legal advisor: Macleod Dixon

Western Union Financial Services Inc. to buy FEXCO Money Transfer Ltd. from FEXCO Ltd. for $160 million

Englewood, Colo.-based Western Union, a specialist in money transfers and electronic payments, acquired London-based FEXCO from FEXCO Limited, the Killorglin, Ireland- based provider of global payment services and processing. The transaction is expected to close in the first half.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Egdon Resources (UK) Ltd. to buy YCI Resources Ltd. from Heyco Energy Group for $79 million

Hampshire, UK based oil exploration and production firm Egdon Resources agreed to acquire YCI, a UK-based operator and license holder of oil reserves, from private, Roswell, N.M.-based oil developer and producer Heyco. Terms call for Egdon to issue 6,861,434 new Heyco shares. In addition, the company will grant Heyco a net profit interest on current and future production from the licenses, in the range of 5 percent and 10 percent of Egdon revenues from the licenses, after allowable costs.
Seller financial advisor: Not Available
Bidder financial advisor: Seymour Pierce
Seller legal advisor: Not Available
Bidder legal advisor: Norton Rose

Quadra Mining Ltd. to buy Centenario Copper Corp. for $73 million

Vancouver, Canada-based copper miner Quadra launched an offer to acquire Toronto-based Centenario Copper, an acquisition, exploration, and development company of copper properties in Chile, primarily involved in the Franke project. Terms call for 0.28-share of Quadra being exchanged for each Centenario share, valued at $0.89 cents each Centenario Copper share, a premium of 12.9 percent.
Seller financial advisor: Canaccord Capital
Bidder financial advisor: Macquarie Group
Seller legal advisor: Blake, Cassels & Graydon
Bidder legal advisor: McCarthy Tetrault

Informatica Corp. to buy Applimation Inc. for $40 million

Redwood City, Calif.-based Informatica, a provider of enterprise data integration and business intelligence software, agreed to acquire privately held, Chicago-based Applimation, a provider of application data management solutions services, for cash in a deal expected to close in matter of days.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

source: mergermarket