Merger and acquisition activity held up well in the face of concerns over weak credit markets and predictions of a retreat in dealmaking. The $46.34 billion in proposed M&A was slightly higher than the prior week’s level, with the largest deal being Transocean Inc.’s $17.28 billion agreement to buy GlobalSanteFe Corp.

Private equity players remained relatively restrained in the softening credit environment. Among the top 10 North American deals in the period ended July 29, four were leveraged buyouts, led by Cerberus Capital Management LP’s $5.43-billion purchase of United Rentals Inc. The total value of private deals reached $8.9 billion, according to data provided to CFO.com by mergermarket.

Year-to-date volume of proposed deals rose to $1.26 trillion, compared with $838.87 billion at the same time a year earlier. The $489.74 billion of private-equity activity compared with $183.15 billion between Jan. 1 and July 29, 2006.

It was an especially strong week in Healthcare M&A, with three of the top 10 deals being in that sector.

JPMorgan and Goldman Sachs each advised four of the deals to lead the adviser ranks.

Transocean to buy GlobalSantaFe for $17.28 billion

The definitive agreement between the two global offshore drilling contractors describes the combination as a merger of equals, with Transocean shareholders receiving $33.03 in cash and 0.6996-shares of the combined company. Each GlobalSantaFe share will garner $22.46 and 0.4757-share of the new company. The transaction represents a value of $74.77 for each share of GlobalSantaFe, based on an Transocean share price of $109.97, a premium of 0.04-percent. The aggregate total cash paid to both companies’ shareholders will be $15 billion, funded through a bridge loan due one year after closing. Transocean received a commitment letter from Goldman, Sachs & Co. and Lehman Brothers Inc. providing for the financing. Transocean expects to refinance the bridge loan with a mix of bank loans and debt securities. The combined company will be known as Transocean Inc., with Transocean shareholders retaining 66 percent ownership, and GlobalSantaFe holders the remaining 34 percent. Robert E. Rose, currently GlobalSantaFe’s Chairman, will serve as Transocean chairman, while Robert L. Long will continue as Transocean’s CEO, and Jon A. Marshall will assume the position of president and COO after the deal, which is expected to close by the end of the year.
Seller financial advisor: Lehman Brothers; Simmons and Company
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Maples & Calder; Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Baker Botts; Latham & Watkins; Walkers

Siemens AG to buy Dade Behring Holdings Inc. for $6.81 billion

Dade, a producer of clinical diagnostics equipment, and Siemens, an engineering and electronics company, signed a definitive merger agreement calling for Siemens to acquire all Dade’s outstanding shares for $77 per share in cash, a 37.8-percent premiuim. The deal is expected to close in next year’s second quarter. Siemens is one of three major companies in the medical diagnostics industry—the others are General Electric and Philips—continuing to pursue active acquisition strategies as the business consolidates. The acquisition of Dade Behring follows the recent unsuccessful $8.1 billion bid by General Electric for two units of Abbott Diagnostics.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: JPMorgan
Seller legal advisor: Kirkland & Ellis
Bidder legal advisor: Clifford Chance

Cerberus Capital to buy United Rentals for $5.43 billion

United Rentals, an equipment rental company, signed a definitive agreement that calls for a price of $34.50 per share, a premium of 6.6 percent. Holders of United Rentals preferred stock, including Apollo Management, which represent about 18 percent of the voting power, have agreed to vote their shares in favor of the merger.
Seller financial advisor: UBS
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Latham & Watkins (Advising UBS); Simpson Thacher & Bartlett
Bidder legal advisor: Lowenstein Sandler; Schulte Roth & Zabel; Stikeman Elliott

Medtronic Inc. to buy Kyphon Inc. for $3.61 billion

The definitive agreement calls for holders of Kyphon, a global company specializing in the design, manufacture, and marketing of medical devices to treat and restore spinal anatomy using minimally invasive technology, to receive $71 per share, a premium of 32 percent. Medtronic is a medical technology giant specializing in pain alleviation and other work. The transaction will be financed by a combination of cash on the balance sheet and debt, and is expected to close in next year’s first quarter.

Seller financial advisor: JPMorgan
Bidder financial advisor: Goldman Sachs; Piper Jaffray & Co
Seller legal advisor: Latham & Watkins
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton; Sullivan & Cromwell (Advising Goldman Sachs)

Teleflex Inc. to buy Arrow International Inc. for $1.97 billion

The definitive agreement calls for holders of Arrow, which develops, manufactures, and markets a broad range of advanced, disposable catheters and related products for critical and cardiac care, to receive $45.50 per share, a 38.6-percent premium over the price before an announcement was made about Arrow seeking strategic alternatives. There are no financing conditions, and Teleflex has secured the financing commitment required. The deal is expected to close by the fourth quarter. On May 9, Arrow announced that its board had formed a special committee of independent directors to explore and evaluate strategic alternatives aimed at enhancing shareholder value.
Seller financial advisor: Lazard
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Dechert; Gibson Dunn & Crutcher
Bidder legal advisor: Simpson Thacher & Bartlett

Platinum Equity LLC to buy Ryerson Inc. for $1.92 billion

The definitive agreement for Ryerson Inc., a distributor and processor of metals in North America, calls for a price of $34.50 per share, a premium of 45.14 percent over Ryerson’s closing share price on Dec. 13, 2006. Then, hedge fund Harbinger Capital Partners had filed a 13D disclosing a 9.7 percent stake in Ryerson and suggesting changes to maximize shareholder value. On Jan. 3, 2007, the hedge fund said it sought election of seven directors to replace the majority of the existing board at Ryerson’s 2007 annual meeting. On Feb. 26, Owl Creek I LP, a 5.3 percent shareholder, filed a 13D supporting Harbinger’s slate. Later, Ryerson’s board selected James R. Kackley (not one of Harbinger’s nominees) as a director. Ryerson retained UBS Investment Bank to assist in exploring a range of strategic alternatives, including a sale of the company. Over 50 potential acquirers were identified and contacted. Following a thorough review and analysis of internal options and external proposals, the board determined that accepting the Platinum proposal was in the best interests of stockholders. The transaction is not subject to any financing condition. It is expected to close in the fourth quarter.
Seller financial advisor: UBS
Bidder financial advisor: Banc of America Securities
Seller legal advisor: Skadden Arps Slate Meagher & Flom; Covington & Burling (Advising UBS)
Bidder legal advisor: Bingham McCutchen ; Cahill Gordon & Reindel (Advising Banc of America Securities)

Bain Capital LLC to buy the Bath and Kitchen businesses of American Standard Cos. for $1.75 billion

The private equity firm’s agreement was for two of American Standard’s businesses, which now comprise air conditioning systems and services, vehicle control systems, as well as bath and kitchen products. The two businesses have 26,000 employees and 54 production facilities in 23 countries worldwide. American Standard intends to use proceeds of the sale primarily to repurchase common stock and reduce debt to keep the company at investment-grade standards. The sale is in line with the company’s strategy of separating American Standard into three focused companies. On Feb. 1 American Standard announced plans to separate its three businesses, selling Bath and Kitchen, and spinning off Vehicle Control Systems, while retaining its largest business, Air Conditioning Systems and Services. In March, the company sold Venesta Washroom Systems, which was part of Bath and Kitchen. Combined with Venesta, proceeds for the sale of Bath and Kitchen will now be a total of $1.92 billion. After the spin-off and the sale, American Standard will change its name to Trane, which will retain the American Standard brand name for its heating, ventilating and air conditioning and related products. The newly formed Bath and Kitchen business will retain the name for its markets. Completion of the transaction is expected early in the fourth quarter. Bain Capital has secured firm financing commitments from Bank of America, N.A. and Credit Suisse.
Seller financial advisor: Lazard
Bidder financial advisor: Banc of America Securities; Credit Suisse; Lehman Brothers
Seller legal advisor: Baker & McKenzie; Littler Mendelson; Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Kirkland & Ellis

Hewlett-Packard Co. to buy Opsware Inc. for $1.43 billion

The definitive agreement calls for a tender offer for Opsware, a provider of data center automation software products for enterprises, government agencies, and service providers, of $14.25 per share, a premium of 38.6 percent. H-P provides products, technologies, solutions, and services to consumers, small and medium-sized businesses, and large enterprises. Combining Opsware’s solutions with HP’s enterprise information-technology management software will deliver a comprehensive and fully integrated solution for IT automation. Opsware will become part of the H-P Software business when the deal closes, expected before the end of H-P’s 2007 fiscal fourth quarter.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: JPMorgan
Seller legal advisor: Fenwick & West
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton

Merrill Lynch Global Private Equity to buy Cumulus Media Inc. for $1.32 billion

A group led by Lewis Dickey, CEO and chairman of the radio broadcaster, agreed to acquire the company in a management buy-out through Cloud Acquisition Corp. The acquisition vehicle is backed by Merrill Lynch, and calls for an offer price of $11.75 per share, a premium of 24.7 percent. Debt financing will be provided by Merrill Lynch Capital Corp. The deal is expected to close in the first quarter next year.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Merrill Lynch; Credit Suisse (Advising the special committee)
Seller legal advisor: Sutherland Asbill & Brennan; Richards, Layton & Finger (Advising the special committee)
Bidder legal advisor: Debevoise & Plimpton; Jones Day

Liberty Property Trust to buy Republic Property Trust for $842 million

Liberty Property, a listed real estate trust, agreed to acquire REIT Republic Property Trust for $14.7 per fully-diluted share and a Liberty Property unit, a 28 percent premium. Based on Republic’s 26.1 million outstanding common shares, and units of 3.5 million, the cash consideration is approximately $435 million. When the deal is completed, Liberty Property will own 2.6 million square feet of office properties in the Greater Washington, D.C., area. The deal is expected to close in the fourth quarter of 2007.
Seller financial advisor: JPMorgan
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Latham & Watkins; Venable; Davis Polk & Wardwell (advising JPMorgan)
Bidder legal advisor: Wolf, Block, Schorr and Solis-Cohen

source: mergermarket