April 16, 2025 | Industrials | Asia | Active
Topcon / KKR & JICC : Deal Insight
On 28-Mar-25, Japanese medical equipment manufacturer Topcon announced a management buyout backed by KKR and Japan’s JIC Capital (“JICC”), the private equity arm of the government-backed Japan Investment Corp’s (JIC), which focuses on investments in digital transformation. The offer price of JPY 3,300 per share implies a 3.5% one-day takeover premium and an 87.9% premium over Topcon’s undisturbed share price on 9-Dec-24, when media reports first surfaced that the company had entered a sale process with the private equity firms. While Topcon’s board has recommended the offer, the decision was not unanimous; Director Takayuki Yamazaki opposed the deal due to having insufficient time to assess its impact on corporate value. Once launched, the tender offer is expected to be subject to a 50.1% minimum acceptance condition, a threshold designed to enable a two-thirds majority at an EGM, thus facilitating a two-step acquisition. The target’s largest shareholder, ValueAct (14.62%), has expressed support for the offer, but the sometimes-activist fund has not revealed any specific arrangements with the bidders to tender or co-invest. For completeness, Topcon’s President and CEO, Takashi Eto (0.07%), will tender his full stake and reinvest part of the proceeds into the acquiring entity, while continuing to lead the company. If KKR acquires at least 90% of Topcon shares through the offer, it expects to initiate a squeeze-out. If it falls short of that but meets the minimum acceptance level, it will pursue a share consolidation, requiring two-thirds approval at an EGM expected around end-October 2025 (assuming a July launch of the tender offer). The offer is also conditional on antitrust approvals from Japan, the US, the EU, Vietnam, Morocco, Taiwan, Turkey, Albania, Egypt, Germany, Ukraine, the UAE, Brazil, Australia, and Austria, as well as foreign investment clearances from Japan, the US, Australia, Austria, Belgium, France, Germany, Italy, Spain, Canada, and the UK. Due to Topcon’s involvement in aerospace and defence – sectors designated under Japan’s Foreign Exchange and Foreign Trade Act – prior notification and clearance are required under this Act. Other closing conditions include the absence of legal impediments, compliance with the target’s representations and warranties, and no MAC. Regulatory and recommendation conditions may ...
April 11, 2025 | Technology | Europe | Active
Fortnox / EQT & First Kraft : Deal Insight
On 31-Mar-25, Swedish accounting software provider Fortnox announced that it had received a recommended all-cash public offer from a consortium comprising of Stockholm-based private equity firm EQT (EQT SS) and the company’s largest shareholder, First Kraft (private). The offer, made through a jointly controlled bidding vehicle, Omega II, will see Fortnox shareholders receive SEK 90 per share in cash, representing a 38.2% premium to Fortnox’s closing share price on 28-Mar-25. The offer has been made on a cum-dividend basis and will downwardly adjust for any dividends declared prior to completion. Per the M&A announcement, “for the avoidance of doubt, such price adjustment will apply to the proposed dividend payment of SEK 0.25 per share to be resolved by the annual general meeting of the Company convened to be held on 10 April 2025.” Now that this dividend has been approved at the AGM, and traded ex-dividend today, for all intents and purposes, the offer consideration is now SEK 89.75 per share. Olof Hallrup, chairman and the sole owner of First Kraft, initiated discussions with EQT. He believes the next phase of expansion requires long-term investments, both in product development and potential acquisitions, and that this would be better pursued in a private setting. Due to his ties to the company, Hallrup recused himself from all board deliberations related to the offer. Under the agreement, First Kraft will roll its 18.9% stake into Omega II, becoming a co-owner alongside EQT, and First Kraft will not contribute to the equity funding. Conversely, EQT will fund the transaction using equity from its managed entities, plus debt facilities arranged by SEB. Omega II has confirmed that it has secured the necessary resources to meet the consideration in full, and the offer is not conditional on financing. Fortnox’s board unanimously recommends that shareholders accept the offer, a position supported by a fairness opinion. The consortium has confirmed that the offer price will not be increased, in accordance with Swedish takeover rules, and conditions include a 90% minimum acceptance threshold, antitrust clearances and an ownership assessment by the Swedish Financial Supervisory Authority (Finansinspektionen). According to the consortium, work on the required filings has ...
March 31, 2025 | Technology | North America | Active
Juniper Networks / Hewlett Packard : Antitrust Risks and Break Price Analysis
HPE’s $14bn acquisition of Juniper is a landmark deal in enterprise networking, but it is facing significant regulatory risk in the US. The Department of Justice (DoJ) has moved to block the proposed merger, with a lawsuit filed on 30-Jan-25, arguing that it would hurt competition, drive up prices, and slow innovation, specifically in the enterprise wireless LAN (“WLAN”) market. The case will be heard in the US District Court for the Northern District of California, with an expedited trial scheduled to begin on 9-Jul-25. The merger agreement includes an $815m reverse termination fee, and the termination date is currently 9-Oct-25. In this report, we assess the DoJ’s case as slightly stronger overall, particularly on market share and HHI statistics, and its theory of Juniper as a “maverick” competitor. However, the case is far from clear-cut. Our analysis indicates that the outcome will likely depend on whether the DoJ can persuade the court to accept its narrow, US-specific market framing, which would give it the benefit of a structural presumption of harm. If it can do so, the burden will shift to HPE to prove that the deal won’t hurt competition – a high bar that merging parties rarely meet. We assess the strength of both sides’ arguments, drawing on past merger cases and views from antitrust lawyers. The case raises familiar tensions seen in past deals: whether the government can successfully define a narrow market, and whether removing an aggressive pricing rival like Juniper is enough to justify blocking the deal. Much will depend on how the judge weighs structural indicators like market concentration, alongside real-world evidence, from customer complaints to internal documents. We also consider two alternative outcomes: settlement and termination. On settlement, there’s little sign of movement so far. HPE has made clear ...
March 27, 2025 | Industrials | Asia | Active
AZEK / James Hardie : Deal Insight
On 24-Mar-25, James Hardie Industries, a global building materials group headquartered in Ireland but trading through depositary receipts in the US and Australia (JHX AU), agreed to acquire US-based decking manufacturer AZEK Company through a cash-and-stock deal valued at $8.75bn, including debt. AZEK shareholders will receive $26.45 in cash and 1.0340 James Hardie ordinary shares – worth $56.88 per share based on James Hardie’s closing share price on 21-Mar-25, the last trading day prior to the announcement. The offer implies a 37.4% one-day premium. Upon completion, James Hardie shareholders will hold 74% of the combined entity, with AZEK shareholders owning the remaining 26%. The merged company will list James Hardie’s ordinary shares on the NYSE, while maintaining its CDI listing and index inclusion on the ASX. Leadership of the combined group will remain with James Hardie CEO Aaron Erter and CFO Rachel Wilson, while AZEK’s CEO, Jesse Singh, will join the acquirer’s board. To fund the cash portion, James Hardie has secured fully committed bridge financing, arranged by Bank of America and Jefferies. The company plans to refinance this with long-term debt and seeks to preserve a strong investment-grade credit rating. The boards of both companies have unanimously approved the transaction. Conditions to closing include approval from AZEK shareholders (50%; no vote required from James Hardie shareholders) and regulatory clearances under HSR, with a filing expected by 28-Apr-25 (25 business days from signing). The merger agreement includes customary covenants and representations, with standard carve-outs to the MAC for wars and pandemics. AZEK is subject to a no-solicitation clause, though it retains a fiduciary out, and both parties are bound by best-efforts obligations to secure regulatory approvals, including a commitment to take “all actions necessary” to resolve any antitrust issues. James Hardie has agreed to offer remedies if required, including divestments, though capped at businesses generating up to $140m in FY’24 sales (the target generated $1.4bn in revenue in 2024, so 10% of total revenues). James Hardie will file a preliminary Form F-4 registration statement “as promptly as reasonably practicable,” with AZEK’s shareholder meeting scheduled for 50 days following the registration becoming ...
March 26, 2025 | Industrials | North America | Ended
On 20-Mar-25, Beacon Roofing Supply (“Beacon”) agreed to a buyout offer from billionaire Brad Jacobs’ enterprise applications consulting and reselling firm, QXO. Structured as a tender offer, Beacon shareholders will receive $124.35 per share, valuing the company at nearly $11bn, including debt. The offer price represents a 25.9% premium to Beacon’s undisturbed trading price on 15-Nov-24. Both boards of directors have approved the deal and QXO has $5bn in cash and secured financing commitments to cover the acquisition. The offer is not subject to any financing conditions. The definitive agreement came nearly two months after QXO bypassed Beacon’s board and launched an unsolicited tender offer directly to shareholders, at a slightly lower, $124.25 per share, on 27-Jan-25. The 20-business day offer was originally set to expire on 24-Feb-25, and on 6-Feb-25, the board rejected the offer and responded with a “poison pill”, which QXO criticised as blocking shareholder choice. On 10-Feb-25, QXO wrote to Beacon shareholders, laying out the deal rationale, and two days later, it proposed a full slate of independent directors. The offer was extended several times, and by 10-Mar-25, both sides were in active deal talks. QXO revealed it had had been in talks with Beacon’s CEO since July 2024, but the bidder faced “delays, cancellations, and unreasonable preconditions”, including a proposed long-term standstill. It subsequently made a $124.25 proposal privately, on 11-Nov-24, but Beacon refused to engage and instead put itself up for sale. Beacon neither countered the proposal nor received other bids. Nonetheless, with a definitive merger now agreed, QXO will amend its existing tender offer documents to reflect the new terms. It has also withdrawn its nomination of 10 independent directors for election at Beacon’s 2025 shareholder meeting, ending a potential proxy fight. The amended offer documents are expected to be filed with the SEC by 31-Mar-25. Under the merger agreement, Beacon is bound by a non-solicitation clause with a fiduciary-out. The deal requires a majority of shares to be tendered, and Beacon’s board now unanimously recommends its shareholders ...
March 13, 2025 | Consumer Discretionary | North America | Active
Walgreens Boots Alliance / Sycamore Partners : Deal Insight
On 6-Mar-25, US pharmacy giant, Walgreens Boots Alliance (“Walgreens”), announced that it has agreed to be bought by private equity firm Sycamore Partners, as the struggling retailer looks to go private to reverse years of financial decline. Under the transaction terms, Walgreens shareholders will receive $11.45 per share in cash and a non-transferable Divested Asset Proceed Right (“DAP Right”) worth up to $3 per share, tied to the future monetisation of Walgreens’ debt and equity interests in its VillageMD subsidiary. The cash component represents a 29.4% premium, while the total consideration, including the DAP Right, implies a 63.3% premium over Walgreen’s undisturbed price on 9-Dec-24. Walgreens is currently reviewing its options for VillageMD and overseeing the monetisation process is a committee comprising of representatives from its board, including Chairman Stefano Pessina, and Sycamore. Akin to a contingent value right (“CVR”), target shareholders will receive one DAP Right per share upon deal completion. The board has approved the transaction, with two directors recusing themselves. Pessina, who will re-invest his 17% stake into the acquiring entity, and John Lederer, CEO of Staples, a Sycamore portfolio company, did not participate in discussions or voting. Sycamore has obtained a $2.5bn equity commitment letter and has secured an asset-based revolving credit facility for $5bn, a senior secured first-in-last-out term loan of $2.5bn, a receivables purchase facility for $1.0bn, and other commitment letters from a consortium of lenders, including Wells Fargo, Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan Chase, UBS, Mizuho Bank, and PNC Bank. The sponsor has also entered into voting and reinvestment agreements with Pessina and his holding company. The merger agreement contains customary clauses on representations, warranties, covenants, and MAC with specific exclusions for war and pandemics. There is also a 35-day ‘go-shop’ period, ending on 10-Apr-25. Closing is contingent on shareholder approval, from the holders of a majority of outstanding shares, as well as from holders of a majority of outstanding shares excluding those affiliated with Pessina and Sycamore. A preliminary proxy will be filed within three business days after the go-shop period ends (i.e., by 15-Apr-25). The deal is also subject to regulatory clearances, including HSR, foreign antitrust and investment clearances, EU foreign subsidies regulation (FSR) approval, and under certain healthcare notification laws. HSR notification will be ...
February 27, 2025 | Financials | Europe | Active
BP Sondrio / BPER : Deal Insight
On 6-Feb-25, Italy’s fourth-largest bank, BPER Banca, announced a voluntary public exchange offer for its smaller rival, Banca Popolare di Sondrio (“BP Sondrio”), adding to a series of recent public bank M&A in the country. The merger ratio is 1.450 BPER shares for each BP Sondrio share, implying an offer price of €9.527 per share based on the previous day’s closing prices – a 6.6% one-day takeover premium. Prior to completion, the companies can pay dividends corresponding to their FY’24 profits, where Bloomberg estimates that BP Sondrio and BPER will distribute €0.80 and €0.60 per share, respectively, both around May 2025. Any further dividends will lead to an adjustment to the ratio. BPER aims to acquire at least 50% of BP Sondrio shares to gain de jure control over the bank, but it can waive this if it secures at least 35% of the share capital. If it acquires more than 90% of BP Sondrio, it will not restore a free float sufficient for regular trading, and at 95% ownership, BPER will pursue a squeeze-out. The exchange offer’s effectiveness is conditional on: (i) antitrust approvals, (ii) a 50% + 1 BP Sondrio share minimum acceptance, (iii) no material change in BP Sondrio’s business, (iv) no transactions by BP Sondrio that could jeopardise the deal, (v) receipt of prior authorisations without conditions, (vi) no unfolding of material fact that could prevent the deal, and (vii) a customary MAC. BPER may waive any of the above in whole or in part, and, as stated above, BPER reserves the right to partially waive the minimum acceptance condition, provided it secures 35% + 1 BP Sondrio share, a threshold condition that can’t be waived. Additionally, the transaction requires BPER shareholder approval for a related capital increase and, as such, an EGM will be held on 18-Apr-25. BPER filed the offer document with Consob on 26-Feb-25 and has submitted all necessary applications to the ECB, the Bank of Italy, IVASS, and other relevant authorities. These approvals cover not only the direct acquisition of BP Sondrio but also the indirect acquisition of Banca della Nuova Terra, as well as the acquisitions of subsidiaries Factorit, Alba Leasing, Unione Fiduaciaria, and Polis SGR, alongside certain by-law amendments. Consob will approve the offer document only after receiving all required authorisations. Separately, BPER has submitted applications concerning (i) concentration control, (ii) “golden power” approval from the Italian government, (iii) FINMA’s approval for BP Sondrio’s Swiss subsidiary, and (iv) any other necessary regulatory clearances. The bank confirmed that it has also provided all required communications, requests, and pre-notifications to the competent authorities. The offer document will only be published when Consob approves it, potentially in ...
February 26, 2025 | Consumer Discretionary | Europe | Active
Just Eat Takeaway / Prosus : Deal Insight
On 24-Feb-25, Prosus, the Dutch technology investor and subsidiary of South Africa’s Naspers (NPN SJ), announced an agreement to acquire Just Eat Takeaway.com (“JET”) in an all-cash deal valued at €4.1bn. Structured as a public tender offer, Prosus is offering €20.30 in cash per JET share, cum-dividend, which implies a 63.3% one-day takeover premium. JET’s board unanimously recommends the offer and JET’s CEO and board members, collectively holding 8.1% of the target, have agreed to tender their shares into the offer. Prosus said it plans to finance the acquisition using its existing cash resources. The offer is subject to a 95% minimum acceptance threshold that will be lowered to 80% if JET shareholders approve the resolutions necessary for an asset sale and liquidation. Prosus retains the right to unilaterally reduce the threshold to 67%, thus providing it with flexibility to close the deal. If Prosus secures at least 95% of JET, it will initiate a statutory squeeze-out procedure, and if it obtains at least 80% but less than 95%, the companies have agreed to execute a post-closing asset sale transaction. This entails transferring all JET’s assets and liabilities to Prosus at the same price per share as the offer. Subsequently, JET would be liquidated, with a distribution to shareholders equal to the offer price, net of applicable taxes and without interest. The asset sale and liquidation requires approval by JET shareholders. Prosus has committed to several non-financial covenants, including maintaining JET’s headquarters in Amsterdam, retaining key brands, and supporting the company’s previously communicated strategy. The buyer has also pledged not to pursue a break-up of JET and to fund its growth initiatives, with no material workforce reductions, and plans to offer retention and incentive arrangements to JET’s employees and management. These covenants will remain in effect for two years post-closing, and two independent JET supervisory board members will oversee compliance. Otherwise, the offer is subject to customary conditions, including the absence of a material breach of the merger agreement and no MAC. JET will pay a €41m termination fee if it terminates the agreement to accept a superior offer; Prosus will pay €410m if the deal fails due to regulatory reasons. Prosus has identified certain regulatory jurisdictions requiring approvals, including the EU and the UK, and intends to engage with regulators promptly. JET needs to complete the works council consultation process before proceeding with the offer, which it intends to initiate “as soon as feasible.” The tender offer will only launch in ...
January 31, 2025 | Technology | North America | Ended
Aspen Technology / Emerson Electric : Deal Insight
On 27-Jan-25, Emerson Electric (“Emerson”) agreed to acquire the remaining outstanding shares of Aspen Technology (“AspenTech”) that it does not already own through an all-cash tender offer at $265.00 per share. Emerson currently holds 57.4% of AspenTech, following its initial 55% stake acquisition in 2022. In that transaction, Emerson contributed its industrial software businesses – OSI and Geological Simulation Software – along with $6.0bn cash in exchange for a majority holding in AspenTech. The current tender offer seeks to acquire the remaining 42.6% float. Emerson plans to finance the deal with cash on hand and debt, and the tender offer is subject to the satisfaction of customary closing conditions. Both boards approve the transaction, and the offer has been unanimously recommended by an AspenTech special committee. Emerson initially proposed acquiring the minority stake for $240 per share on 5-Nov-24, and two weeks later, AspenTech’s board formed a special committee to evaluate the non-binding proposal. The bid represents an 11.5% premium to AspenTech’s undisturbed price prior to its initial bid in November 2024. The offer includes a non-waivable condition that requires at least 50% of AspenTech shares held by minorities (“unaffiliated shares”) to be tendered and not withdrawn. Per the merger agreement, AspenTech is bound by a non-solicitation clause, subject to a fiduciary-out exemption. There is also a burdensome condition that restricts divestitures of any business expected to “materially and adversely affect” Emerson and its subsidiaries; to this end, AspenTech and its subsidiaries will not be considered subsidiaries of Emerson. The tender offer will be open for a minimum 20 business days and is expected to commence within 15 business days from the merger agreement date (i.e., by 14-Feb-25). Closing the offer may be ...
January 31, 2025 | Financials | Europe | Active
Mediobanca / Banca Monte dei Paschi di Siena : Deal Insight
On 24-Jan-25, Banca Monte dei Paschi di Siena (“MPS”), the partially state-owned Italian bank, announced a surprise unsolicited voluntary exchange offer for Mediobanca, one of Italy’s most prestigious financial institutions. However, on 30-Jan-25, Mediobanca firmly rejected the bid, stating in a press release that the proposal lacks industrial and financial rationale and threatens the bank’s identity. The board further emphasised that the offer does not align with Mediobanca’s strategic interests or values and called it ‘hostile’. The all-share bid offers 2.3 newly issued MPS shares for each Mediobanca share, worth €15.992 per Mediobanca share and representing a 4.9% premium to the prior day’s close. The proposed exchange ratio will be adjusted to account for any distributions from either party. To finance the acquisition, MPS plans to issue new shares, contingent on shareholder approval at a meeting scheduled for 17-Apr-25. Among conditions to closing are the absence of legal impediments and antitrust clearances. Regulatory submissions to the European Central Bank (ECB), the Bank of Italy, and other relevant authorities, are expected by mid-February, and following regulatory clearances, the offer period is expected to start in June / July 2025. The Mediobanca minimum acceptance will be 66.67% and the acceptance period is anticipated to be open for 15 to 40 days. MPS aims to close the transaction in 3Q’25. Conditions to Closing Prior to launching the offer, MPS requires “prior authorisations” – essentially regulatory pre-conditions – for the acquisitions of Mediobanca’s businesses, primarily from the ECB, the Bank of Italy, and IVASS, Italy’s insurance regulator. These approvals extend to all relevant industry-specific regulators, including ...