M&A

Deals: They Resurface in a Global Flurry

In our M&A Roundup for the week ended March 1, values surge from the prior week, and every North American transaction but one is cross-border.
Roy HarrisMarch 2, 2009

A flurry of middle-market acquisitions in the health-care, energy, and commodities businesses led North American dealmakers into a week back in the chips — for now, at least.

All but one of the 10-largest deals — Woodward Governor Co.’s purchase of HR Textron Inc. from Textron Inc. for $365 million — involved cross-border arrangements.

The largest transaction was Abu Dhabi-based, United Arab Emirates-controlled International Petroleum Investment Co.’s $2.03-billion agreement to purchase NOVA Chemicals Corp., a Calgary, Canada-based plastics and chemical company that makes products for food and electronics packaging, industrial materials, appliances, and consumer goods. Also valued at over $1 billion was another non-North American company’s purchase of an a North American stalwart: Tokyo-based Astellas Pharma Inc. buying Palo Alto, Calif.-based pharmaceutical company CV Therapeutics Inc.

For the week ended Saturday, there were 35 transactions worth a total of $5.90 billion, according to data provided to CFO.com by mergermarket. That contrasts with the prior week’s 25 deals — most of them considerably smaller — creating a total of a mere $386 million.

In fact, while the prior week’s mergers and acquisitions included only two deals worth more than $100 million, last week all the top 10 transactions were in nine figures, with the 10th-largest being valued at $133 million.

For this year to date, North American companies have been involved in 311 transactions, worth $131.15 billion by virtue of several blockbuster deals. This time last year, 776 deals had been struck, worth $97.24 billion.

International Petroleum Investment Co. to buy NOVA Chemicals Corp. for $2.03 billion

Calgary, Canada-based plastics and chemical company NOVA definitively agreed to be purchased by IPIC, the Abu Dhabi-based company owned by UAE government, for $6 a share, offering a premium of 348 percent. The implied equity value is $499.2 million.
Seller financial advisor: RBC Capital Markets; UBS Investment Bank
Bidder financial advisor: HSBC Bank
Seller legal advisor: Osler, Hoskin & Harcourt; Wachtell, Lipton, Rosen & Katz
Bidder legal advisor: Clifford Chance; Torys

Astellas Pharma Inc. to buy CV Therapeutics Inc. for $1.06 billion

Tokyo-based pharmaceuticals developer and manufacturer Astellas began a tender offer for outstanding shares of CV, a Palo Alto-based biopharmaceutical company focused on applying molecular cardiology to the discovery, development, and commercialization of drugs to treat cardiovascular diseases. The offer was $16 a share, providing a premium of 41 percent.
Seller financial advisor: Not Available
Bidder financial advisor: Lazard
Seller legal advisor: Not Available
Bidder legal advisor: Morrison & Foerster

Mechel OAO to buy Bluestone Coal Corp. from James Justice Family for $800 million

Moscow-based Mechel, a mining and metals company, agreed to acquire private Beckley, W.Va.-based Bluestone from the James Justice Family. While the price was undisclosed, estimates were that $665 million would be paid in cash and preferred shares in a total deal that valued Bluestone at about $800 million. The price included an initial payment of $425 million in cash and $240 million in Mechel preferred share, which will represent about 15 percent of Mechel’s increased share capital. Mechel also is expected to assume Bluestone’s debt of about $135 million. The transaction is expected to close in March or April.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Beckman Coulter Inc. to buy Mishima Olympus Co. Ltd., the Diagnostic Systems division of Olympus Corp., and Olympus Medical Engineering Co. Ltd. from Olympus Corp. for $790 million

Fullerton, Calif.-based medical diagnostic systems maker Beckman agreed to acquire the Diagnostics Systems division of Tokyo-based imaging products maker Olympus for a price in cash and stock. Newly issued Beckman shares will make up 37.5 percent of the price, or $296.2 million, with the remaining $493.7 million in cash, to be funded through debt financing. The transaction is expected to close on July 1.
Seller financial advisor: Credit Suisse Group
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Not Available
Bidder legal advisor: Latham & Watkins

Medtronic Inc. to buy CoreValve Inc. for $700 million

Minneapolis-based medical technology company Medtronic agreed to acquire Irvine, Calif.-based CoreValve, a provider of delivery systems for heart valve replacements, from a consortium led by private, Paris-based Sofinnova Partners. The consortium includes private, London-based Apax Partners, Stockholm-based HealthCap, and Dallas-based Maverick Capital Ltd. Terms call for additional contingency payments reflecting performance milestones.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Piper Jaffray & Co
Seller legal advisor: Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Fredrikson & Byron

J&T Finance Group AS and Severoceske Doly to buy Mitteldeutsche Braunkohlengesellschaft mbH from NRG Energy Inc. for $514 million

J&T, a private finance group based in Bratislava, Slovakia, and Severoceske Doly, the Chomutov, Czech-based brown coal mining company agreed to acquire Theissen, Germany-based Mitteldeutsche, an integrated coal mining and power generating business, from NRG Energy and URS Corp. NRG is a Princeton, N.J.-based power generating company, and URS is a San Francisco-based engineering and environmental consultancy group. Terms call for J&T and Severoceske each to purchase 50 percent for $257 million in a deal expected to close in the second quarter.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

CNPC International Ltd. to buy Verenex Energy Inc. for $407 million

Beijing-based CNPC, engaged in the exploring for, developing, and producing oil and gas and natural gas, agreed to acquire Calgary-based Verenex, an oil and gas exploration and production company for $8.01 per Verenex common share, offering a premium of 28.2 percent. The implied equity value of the transaction is about $354.44 million.
Seller financial advisor: FirstEnergy Capital; Standard Chartered
Bidder financial advisor: Scotia Capital
Seller legal advisor: Macleod Dixon
Bidder legal advisor: Dewey & LeBoeuf; Stikeman Elliott

Woodward Governor Co. to buy HR Textron Inc. from Textron Inc. for $365 million

Fort Collins, Colo.-based Woodward Governor is a designer and manufacturer of energy control solutions for aircraft and industrial engines, turbines, and power equipment. It agreed to acquire Santa Clarita, Calif.-based HR Textron, engaged in the development and production of motion control systems for defense vehicles and aircraft. The seller is Providence-based Textron, which operates in the segments of aircraft, fastening systems, industrial, and financial services. Terms call for Woodward to acquire all outstanding capital stock of HR Textron and UK assets used in HR Textron’s business. This deal is expected to close by April.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

Medtronic to buy Ventor Technologies Ltd. for $325 million

Medtronic also agreed to acquire Netanya, Israel-based Ventor, a developer of transcatheter heart valve technologies for the treatment of aortic valve disease.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: GKH Partners
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton

Sumitomo Heavy Industries Ltd. to buy SEN Corp. from Axcelis Technologies Inc. for $133 million

Tokyo-based Sumitomo, an industrial machinery manufacturing group, agreed to acquire the 50 percent stake it does not already own in Tokyo-based SEN, maker of an ion implantation system, from Beverly, Mass.-based Axcelis, which makes machinery for semiconductors production. The transaction is expected to close by March 31.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Jones Day
Bidder legal advisor: Not Available

source: mergermarket