Deals: From Feast Back to Famine?

In our M&A roundup for the period ended July 26, blockbusters finally run out after two big weeks dominated by InBev and Dow Chemical.

Merger and acquisition activity returned to earth after a stratospheric ride launched by such blockbuster deals as InBev’s purchase of Anheuser-Busch and Dow Chemical’s acquisition of Rolm & Haas earlier in the month.

Last week’s top 10 North American deals were led by Tokio Marine Holdings Inc.’s agreement to buy insurer Philadelphia Consolidated Holding Corp. for $4.40 billion.

The prior week’s 42 deals, capped by the Belgian brewer’s $58.9-billion deal for the maker of Budweiser, came close to being the first $100-billion period since July 2007, near the end of that year’s land-office M&A. In the latest week, though, the 41 transactions were worth $12.16 billion, according to data provided to CFO.com by mergermarket. The top 10 deals are listed below.

For the year to date there have been 2,202 deals worth a total of $581.61 billion, with the volume about half the $1.18 trillion of the prior year, when 3,035 agreements had been struck at this time.

Tokio Marine Holdings Inc. to buy Philadelphia Consolidated Holding Corp. for $4.40 billion

Bala Cynwyd, Pa.-based insurance holding company Philadelphia Consolidated definitively agreed to be acquired by the Tokyo-based Tokio Marine for $61.50 a share, a premium of 73 percent. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Fox-Pitt Kelton Cochran Caronia Waller
Seller legal advisor: Wolf, Block, Schorr and Solis-Cohen; Shearman & Sterling
Bidder legal advisor: Sullivan & Cromwell

Brocade Communications Systems Inc. to buy Foundry Networks Inc. for $1.972 billion

Santa Clara, Calif.-based Foundry Networks, which designs, develops, manufactures, and markets products for network infrastructures, definitively agreed to be acquired by San Jose-based Brocade for $18.50 in cash and 0.0907-share of Brocade per Foundry share. The premium represented by the overall value of $19.25 includes a premium of 44 percent. Brocade supplies storage area network equipment and provides data center networking products. The transaction is expected to close in the fourth quarter.
Seller financial advisor: Merrill Lynch
Bidder financial advisor: Bank of America, Morgan Stanley
Seller legal advisor: Heller Ehrman White & McAuliffe
Bidder legal advisor: Cooley Godward Kronish

Kinross Gold Corp. to buy Aurelian Resources Inc. for $1.01 billion

Toronto-based gold, silver, and base-metals exploration company Aurelian definitively agreed to be acquired by Kinross for 0.317-share of Kinross and 0.1429-warrant, each of which entitles the holder to one Kinross share. Aurelian’s business is focused on the Cordillera del Condor region of southeastern Ecuador. Toronto-based Kinross is a gold mining company with mines in the U.S., Brazil, Russia, and Chile. The Kinross warrants have an exercise price of $31.85, and will expire five years after the date on which Kinross first pays for Aurelian common shares tendered to the offer. Each fractional warrant has a value of about $91. The entire offer provides a premium of 69.2 percent.
Seller financial advisor: BMO Capital, Dundee Securities Corporation
Bidder financial advisor: Rothschild, Canadian Imperial Bank of Commerce, Scotia Capital
Seller legal advisor: Cassels Brock & Blackwell
Bidder legal advisor: Osler, Hoskin & Harcourt , Perez, Bustamante &
Ponce

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