November 22, 2022 | Health Care | North America | Active
Abiomed / Johnson & Johnson : Deal Insight
On 1-Nov-22, pharma and medical devices giant Johnson & Johnson (“J&J”) announced a definitive agreement to acquire heart pump maker, Abiomed, for an enterprise value of $16.6bn, or $380 cash per share. The offer implies a 50.7% one-day premium and is just shy of Abiomed’s 52-week high, near the level shares traded four years ago. This deal will be J&J’s largest takeover since its $30bn acquisition of Actelion in 2017 and its largest device deal since its $20bn acquisition of Synthes in 2012. An interesting aspect of the offer consideration is an additional non-tradable contingent value right (CVR) that will be given to Abiomed shareholders, worth up to $35 per share. Payments of the CVR are split into three tranches based on specific milestones: (i) $17.50 if Abiomed’s product sales exceed $3.7bn during 2Q’27-1Q’28 (if achieved at a later date during any rolling four quarters through J&J’s 1Q’29, the CVR will be reduced to $8.75), (ii) $7.50 if Abiomed’s Impella receives FDA approval for use in ST-Segment Elevation Myocardial Infarction (STEMI) patients without cardiogenic shock, by ...
November 22, 2022 | Energy | Australia | Active
Origin Energy / Brookfield : Deal Insight
Origin Energy, one of Australia's largest power and gas suppliers, has received an indicative, conditional, and non-binding proposal from a consortium led by Canadian asset firm Brookfield. The target’s board confirmed on 10-Nov-22 that it would grant due diligence to the consortium, which also includes energy infrastructure investment firm EIG Partners, through its LNG company MidOcean Energy, and that it intends to recommend shareholders approve the AUD 9 per share proposal. Origin communicated that the proposal follows an earlier indicative bid from the consortium at AUD 7.95 per share on 8-Aug-22 (AUD 7.79 ex-dividend) and a subsequent proposal at AUD 8.70 to AUD 8.90 per share, before Origin agreed to grant due diligence at AUD 9. The latest bid on the table values the target at an AUD 18.4bn enterprise value and implies a 54.9% takeover premium to Origin’s unaffected closing share price on 9-Nov-22. The offer is cum dividend and includes a ticking fee, whereby if the scheme is not effective by ...
November 17, 2022 | Technology | North America | Active
IAA / Ritchie Bros : Deal Insight
Canada’s Ritchie Bros. Auctioneers (“Ritchie”) has agreed to buy US-based damaged vehicle marketplace provider IAA in a stock and cash transaction that values the company at $7.3bn, or $46.88 per share, based on Ritchie’s undisturbed 10-day VWAP. Under the deal terms, $10 in cash plus 0.5804 RBA shares for each IAA share, Ritchie is offering an 18% one-day premium to IAA’s undisturbed price on 4-Nov-22. Upon closing, IAA shareholders will own 41% of the combined company while Ritchie shareholders will own the remaining 59%. Ritchie plans to fund the deal through a combination of its existing cash and new debt, and it has secured bridge financing commitments for a $750m revolver and a $2.8bn in bridge loan from a consortium of lenders that include Goldman Sachs, Bank of America, and Royal Bank of Canada. Ritchie’s shares are dually listed, and we assume that most funds will use ...
November 15, 2022 | Telecom | Europe | Active
Vantage Towers / Vodafone, GIP, KKR : Deal Insight
Vodafone announced on 9-Nov-22 a strategic co-control partnership with a consortium of “long-term investors with significant expertise in digital infrastructure”, as the British telecom group seeks to cut debt and boost growth at its majority-held tower infrastructure unit, Vantage Towers. Under the deal structure, Vodafone will move its 81.7% stake in Vantage into a joint venture (JV) with Global Infrastructure Partners (“GIP”) and KKR (KKR US). The JV, called Oak BidCo, will then launch a voluntary public takeover offer for the outstanding stake at €32.00 per share. Vodafone confirmed it holds an irrevocable from the second-largest minority shareholder, RRJ Capital (2.4%), to accept the offer and that it will purchase Digital Bridge’s (4.1%) stake, meaning the JV will hold at least 88.3% of Vantage when the offer ...
October 28, 2022 | Industrials | North America | Active
Altra Industrial / Regal Rexnord : Deal Insight
Regal Rexnord will acquire rival machine parts manufacturer Altra Industrial Motion in a $5.0bn takeover, the companies announced on 27-Oct-22. Regal is offering $62 per share, representing a 54% one-day premium, which equates to 13.6x LTM adjusted EBITDA, or 9.5x if run-rate cost synergies are factored-in. The deal is subject to antitrust and foreign direct investment approvals and an Altra shareholder vote (50%); an acquirer vote is not required. The parties will file the preliminary proxy within 20 business days (by 23-Nov-22) and notify under HSR within 10 business days (by 8-Nov-22). The merger agreement is standard, with a MAC clause that carves out war and pandemics. It also contains a burdensome condition that does not specify a monetary restriction but prevents the companies from offering remedies that “would reasonably be expected to have a material adverse effect” on Regal and Altra, taken as together. Altra is bound by ‘no shop’ restrictions and Regal has debt financing in place from JPMorgan, which has committed $7.5bn to fund the acquisition and refinance Altra’s existing debt. The companies expect the deal to close in ...
October 19, 2022 | Consumer Discretionary | North America | Active
Albertsons / Kroger : Deal Insights
Kroger plans to buy Albertsons for $24.6bn, including $4.7bn of net debt, through a merger that would combine the two largest grocery-store chains in the US, the companies said on 14-Oct-22. Kroger is offering $34.10 per Albertsons share, but this consideration is expected to be reduced two times through: (i) a $4bn, $6.85 per share special cash dividend, which will be paid to Albertsons shareholders on 7-Nov-22 (record date: 24-Oct-22, ex-date: 21-Oct-22); and, (ii) the distribution of a new Albertsons’ spin-off entity immediately prior to deal completion, based on the value of any store divestitures. Importantly, the special cash dividend will be subject to a 30% withholding tax which will affect most offshore funds to the tune of approximately ...
October 14, 2022 | Technology | North America | Active
KnowBe4 / Vista Equity Partners : Deal Insight
Cybersecurity training platform KnowBe4 has agreed to be taken private by Vista Equity Partners for $4.6bn, or $24.90 per share, the company announced on 12-Oct-22. The offer price represents a one-day premium of 15.3% and a 43.9% premium over the target’s undisturbed price on 19-Sep-22, before Vista had initially proposed a $24 per share buyout. KnowBe4 said its board and special committee unanimously approved the offer. Conditions include antitrust clearance and shareholder approval through four separate votes. HSR is the sole regulatory condition mentioned in the merger agreement and will be filed within 10 business days from the merger agreement, i.e., 24-Oct-22. The preliminary proxy is expected to be filed within 20 business days from the agreement, i.e., by 7-Nov-22. KnowBe4 is subjected to ‘no-shop’ restrictions, the termination fee is $138m, and the RTF is $276m. The deal is expected to close in 1H’23, facing a long-stop date of 11-Aug-23 ...
September 28, 2022 | Real Estate | North America | Active
STORE Capital / GIC, Oak Street : Deal Insights
On 15-Sep-22, GIC, a Singaporean sovereign wealth fund, and Oak Street, a division of asset manager Blue Owl (OWL US), together announced a definitive agreement to acquire real estate investment trust (REIT) STORE Capital. The definitive offer values STORE at $14bn, or $32.25 per share, implying a one-day premium of 20.4%. STORE is allowed to declare and pay its 3Q’22 dividend and suspend dividends thereafter; on 19-Sep-22, the company announced a quarterly dividend of $0.41 per share (ex- 29-Sep-22 and payable on 17-Oct-22). Conditions to closing include approvals from STORE shareholders and from CFIUS. The preliminary proxy ...
September 22, 2022 | Technology | Europe | Active
Aveva / Schneider : Deal Insights
On 21-Sep-22, French energy management and automation conglomerate Schneider Electric agreed to buy the rest of Aveva in a deal that values the UK industrial software developer at £9.5bn (or £10.2bn including debt). Under the definitive terms, Schneider will pay Aveva shareholders 3,100p per share in cash for the remaining 40.86% it does not already own, representing a 41% premium to Aveva’s closing price on 23-Aug-22, the day before Schneider disclosed that it was considering making an offer. Under UK takeover rules, Schneider had faced a “Put Up or Shut Up” (“PUSU”) deadline of 21-Sep-22. The offer implies 13.2x enterprise value to annualised recurring revenue (“ARR”), 8.2x to trailing revenue, and 27.8x to trailing adjusted EBIT. Schneider confirmed that shareholders can keep any interim dividend
September 07, 2022 | Health Care | North America | Active
Signify Health / CVS Health : Deal Insights
CVS has agreed to buy in-home healthcare company Signify Health for $8.0bn, the companies announced on 5-Sep-22. Under the definitive deal terms, CVS will pay $30.50 per share, implying a 6% premium over Signify’s previous day’s closing and a 53% premium over its 5-Aug-22 close, the last undisturbed trading day before the Wall Street Journal reported that the company was up for sale, with bids due by 6-Sep-22. According to Bloomberg, CVS clinched the deal after beating out other potential buyers, including Amazon.com (AMZN US), UnitedHealth Group (UNH US), and Option Care Health (OPCH US). CVS winning the auction came as a slight surprise since sources had previously told the news outlet that UNH submitted the highest bid, in excess of $30 per share, while Amazon’s offer was close behind...