Deals: There Will Be Oil … in Calgary, Anyway

In our M&A Roundup for the week ended March 29, Suncor's $18.39-billion purchase of Petro-Canada tops the sale of Calgary-based Oilexco's North Sea...
Roy HarrisMarch 30, 2009

The oil industry’s version of the Calgary stampede drove up the value of North American dealmaking last week.

Far and away the biggest transaction was Suncor Energy Inc.’s $18.39-billion purchase of crosstown oil-and-gas operator Petro-Canada. While the next-largest deal was one-third that size, Premier Oil Plc’s deal to by Oilexco Inc.’s North Sea business for $505-million weighed in as the only other acquisition worth more than $350 million. Suncor, Petro-Canada, and Oilexco are all based in Calgary.

The Canadian Press newspaper calculated that the Suncor-Petro-Canada merger would create a Canadian energy giant sizable enough to compete with such behemoths as ExxonMobil Corp. in North American. The newspaper said that the combined company would have a market capitalization of $43.3 billion, making it the largest energy company in Canada and fifth-largest on the continent. Suncor has about 6,500 employees globally, and Petro-Can about 6,000.

Still, some middle-market acquisitions in the entertainment area spiced up the M&A week, which was speckled also with smaller financial and IT combinations. Blank-check company Victory Acquisition Corp. agreed to acquire TouchTunes Music Corp., a private interactive entertainment company for $318 million, while Time Warner Inc. is buying 30.6-perecent of TV broadcaster Central European Media Enterprises Ltd. And Deloitte is purchasing some businesses of business-process-outsourcing company BearingPoint for $350 million. 

The total value of all 17 North American deals struck in the week was $19.29 billion, up sharply from $4.89 billion in the prior week, when 26 transactions were recorded, according to data provided to CFO.com by mergermarket.

The year-to-date dealmaking totals have now hit 500. And while in numbers that is less than half the 1,066 acquistions as of this time in 2008, the value of transactions is sharply higher — $223.41 billion, compared to $138.15 billion. That quirk is due to a spate of blockbuster deals so far in 2009, led by Merck’s $43.2-billion purchase of Schering-Plough.

Suncor Energy Inc. to buy Petro-Canada for $18.39 billion

Calgary, Canada-based oil and gas company Petro-Canada agreed to be acquired by crosstown Calgary energy company Suncor, which does business focused on development of Canada’s Athabasca oil, and production of renewable energy. Both boards approved the merger, in which 1.28 shares of the combined company will be exchanged for each Petro-Canada share, with Suncor holders receiving one share. The $32.37-a-share equivalent price offers a premium of 34.8 percent, and the implied equity value of the deal is about $15.69 billion. The combined company will operate under the Suncor name after completion, which is expected in the third quarter.
Seller financial advisor: Deutsche Bank; RBC Capital Markets
Bidder financial advisor: CIBC World Markets; Morgan Stanley
Seller legal advisor: Macleod Dixon; Torys
Bidder legal advisor: Blake, Cassels & Graydon; Shearman & Sterling

Premier Oil Plc to buy Oilexco North Sea Ltd. from Oilexco Inc. for $505 million

London-based Premier Oil, an oil and exploration company, agreed to acquire the Aberdeen, UK-based Oilexco North Sea unit of Calgary-based Oilexco for cash in deal financed through a right issue of $242.56 million of credit facilities and existing cash resources. The credit facility includes an acquisition bridge loan of $175 million for 18 months, a revolving credit facility of $225 million for three years, and letters of credit of $63 million for three years each. Completion is expected in May.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: Deutsche Bank; Oriel Securities
Seller legal advisor: Not Available
Bidder legal advisor: Blake, Cassels & Graydon; Slaughter and May

Deloitte to buy the Public Services business of BearingPoint for $350 million

The private, London-based Deloitte financial services group agreed to acquire a substantial portion of the Public Services business of McLean, Va.-based BearingPoint, the business consulting company. The acquisition is subject to bankruptcy-court approval.
Seller financial advisor: Alix Partners; Greenhill & Co
Bidder financial advisor: Houlihan Lokey
Seller legal advisor: Davis Polk & Wardwell; Weil Gotshal & Manges
Bidder legal advisor: Not Available

Victory Acquisition Corp. to buy TouchTunes Music Corp. for $318 million

Blank-check company Victory Acquisition, based in Jackson, Wyo., agreed to acquire TouchTunes Music, a private, New York City-based company described as an “out-of-home interactive entertainment network.” The $9.91-a-share price, giving the transaction an implied equity value of $280.67 million, also provides for Victory to also assume about $36.83 million in TouchTunes debt. Earnouts could allow holders to received up to an additional 8,010,590 Victory shares if the combined company’s EBITDA exceeds an aggregate of $50 million for any two consecutive quarters after the fifth anniversary of the deal. The transaction is expected to close on April 24..
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Covington & Burling
Bidder legal advisor: Graubard Miller

Itau Unibanco Banco Multiplo SA to buy 3.6 percent of Redecard SA from Citigroup Inc. for $266 million

Sao Paulo-based commercial bank IItau Unibanco agreed to acquire a 3.6-percent stake in Redecard, a Sao Paulo-based provider of credit and debit cards and transaction-related services from New York City-based Citigroup. The deal was arranged though a secondary offer on the Brazilian Stock Exchange, with Itau Unibanco acquiring excerising an option to acquire 24.08 million Redecard shares at a price to be set later, after the conclusion of the bookbuilding period for the offering.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Internal
Bidder legal advisor: Internal

Time Warner Inc. to buy 30.6 percent of Central European Media Enterprises Ltd. for $242 million
New York City-based media and entertainment company Time Warner agreed to acquire the stake in Central European Media Enterprises, a TV broadcasting company based in Hamilton, Bermuda, for cash. The target operates networks in six central and eastern European countries. The price is $12 per Class A common share and $15 per Class B common share in cash, offering a 20-percent premium, and the deal will give Time Warner 14.5-million newly issued Class A shares and 4.5 million new Class B shares.
Seller financial advisor: JPMorgan
Bidder financial advisor: Citigroup
Seller legal advisor: Dewey & LeBoeuf; Latham & Watkins; Simpson Thacher & Bartlett (associated to JP Morgan); Conyers Dill & Pearman
Bidder legal advisor: Willkie Farr & Gallagher; Herbert Smith; WilmerHale

Warburg Pincus LLC to buy Scotsman Group from Manitowoc Co. for $160 million

Braveheart Acquisition Inc., a private, Delaware-based investment vehicle created by New York City-based Warburg Pincus, agreed to acquire the ice businesses of London-based Enodis Ltd., which is engaged in the design, manufacture, and supply of food and beverage equipment. The seller is a Manitowoc, Wis.-based manufacturer of cranes and food service equipment. Terms call for Braveheart to acquire Scotsman, based in Vernon Hills, Ill.; CastelMAC S.p.A., the privately held, Castelfranco, Italy-based manufacturer of foodservice equipment for bakery, pastry, and ice-cream production; and Frimont S.p.A., the Pogliano Milanese, Italy-based manufacturing plant of ice machines, along with certain real property of other related subsidiaries. The transaction is expected to be completed by July 31.
Seller financial advisor: Deutsche Bank; JPMorgan
Bidder financial advisor: Not Available
Seller legal advisor: Foley & Lardner
Bidder legal advisor: Willkie Farr & Gallagher

NAL Oil & Gas Trust to buy Alberta Clipper Energy Inc. for $92 million

Calgary-based Alberta Clipper, a natural gas and crude oil exploration company, definitively agreed to be acquired by NAL Oil, also Calgary-based, an energy compamy that develops, produces, and sells crude oil, natural gas and natural gas liquids. The price of 40 cents a share provides a discount of 2 percent. The transaction is expected to close on or about June 1.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Affiliated Computer Services Inc. to buy e-Services Group International Inc. for $85 million

Dallas-based business-process-outsourcing provider Affiliated, which also has information technology products, acquired e-Services, a private BPO company based in St. James, Jamaica. The acquisition is being funded through ACS’s existing cash.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Internal
Bidder legal advisor: Internal

Stifel, Nicolaus & Company Inc. to buy 55 branches from UBS Wealth Management USA for $46 million

St. Louis-based regional brokerage firm and investment bank Stifel, Nicolaus, and & Co., part of holding company Stifel Financial Corp., agreed to acquire the branches of the private New York City-based wealth management division of UBS Financial Services Inc., the New York-based brokerage unit of Zurich-headquartered UBS AG. The cash payment upfront will be $27 million, with the remaining $19 million to be based on net fixed assets and employee forgivable loans. Also, an earnout would allow additional payments within two years of closing. Completion is expected in the third quarter.
Seller financial advisor: UBS Investment Bank
Bidder financial advisor: Internal
Seller legal advisor: Reitler Brown
Bidder legal advisor: Bryan Cave

source: mergermarket