Only two of last week’s top 10 deals involved purely U.S.-based transactions, with Canadian companies at the center of most mergers and acquisitions, and Alberta’s Calgary alone involved in three of them.
In a slow week, with 40 North American transactions producing a total volume of $7.44 billion, the top agreement was Agrium Inc.’s $2.61-billion purchase of Colorado-based UAP Holding Corp., a distributor of agricultural and non-crop products. Agrium’s home? Calgary, of course.
The biggest all-U.S. deal was Macrovision Corp.’s $2.18-billion purchase of Gemstar-TV Guide International Inc., according to data provided to CFO.com by mergermarket. The only other billion-dollar transactions were the $1.52-billion combination of two Calgary energy trust companies — Enerplus Resources Fund to buy Focus Energy Trust — and Seoul’s SK Telecom Co.’s purchase of nearly 40 percent of fellow South Korean telecommunications provider Hanaro from a group of owners that included American International Group.
In all, the week’s dealmaking brought year-to-date transaction values in North America to $1.49 trillion, compared with $1.40 trillion through Dec. 9, 2006. If the year’s M&A ends with a December whimper, as many predict, the 2008 total would barely top the $1.50 trillion mark that seemed such a sure thing amid the feverish activity of the first half.
Agrium Inc. to buy UAP Holding Corp. for $2.61 billion
Greeley, Colo.-based UAP signed a definitive agreement to be acquired by Agrium Inc., of Calgary, Alberta, and both boards approved a deal in which Agrium would pay $39 a share, a premium of 30.4 percent. UAP is an independent distributor of agricultural inputs and non-crop products. Agrium is a retail supplier of agricultural products and services in North and South America, and also produces and markets agricultural nutrients and industrial products. The acquisition will enable Agrium to expand its geographic base and capitalize on the strong outlook for agriculture markets, and is expected to be slightly accretive to Agrium earnings per share in the first year, and significantly accretive thereafter. Annual synergies are expected to be approx. $115 million by 2010, with most captured in 2009. Although there are no financing conditions, Agrium has bridge and term loan commitments in place to fund the deal, and plans to arrange financing of $1.25 billion in equity, with the balance in public and bank term debt to replace the bridge loan. The transaction is expected to close in early 2008.
Seller financial advisor: JPMorgan
Bidder financial advisor: RBC Capital Markets
Seller legal advisor: Goodmans; and Wachtell Lipton Rosen & Katz
Bidder legal advisor: Blake, Cassels & Graydon; and Paul Weiss Rifkind Wharton & Garrison
Macrovision Corp. to buy Gemstar-TV Guide International Inc. for $2.18 billion
Los Angeles-based Gemstar-TV Guide signed a definitive agreement to be acquired by Macrovision, of Santa Clara, Calif., for $6.35 a share, or in an exchange of 0.2548 shares for each Gemstar share, subject to a proration limit of $1.55 billion cash. The premium for the media, entertainment, and technology company that develops, licences, markets, and distributes products for video consumers would be 6.19 percent. News Corp., which owns about 41 percent of Gemstar common, has agreed to vote its shares for the transaction. When completed, Macrovision holders will own about 53 percent of the combined company, and former Gemstar holders the rest. Closing is expected by early next second quarter. Gemstar announced plans to seek strategic alternatives on July 9. On July 19, 8.4-percent holder Citadel LP announced its support of the strategic alternatives and noted that it believed that certain strategic investors, as opposed to financial investors, might more fully realize the strategic value of Gemstar’s assets given the company’s competitive position in the marketplace.
Seller financial advisor: UBS
Bidder financial advisor: JPMorgan
Seller legal advisor: Wachtell Lipton Rosen & Katz; and Latham & Watkins
Bidder legal advisor: Heller Ehrman