Deals: How’s the Weather? Ask GE, and PE

In our M&A Roundup for the week ended July 6, NBC Universal's acquisition of the Weather Channel — along with Blackstone and Bain — tops a tepid seven days, even as hostile bids swirl.

While $40-million-plus hostile grabs for Anheuser-Busch and Yahoo dominate this week’s news — with Belgium’s InBev and Microsoft, respectively, as potential buyers — the rest of North America’s dealmaking has been relatively lackluster. The two billion-dollar-plus deals struck over the last seven days involved private equity, led by a sale of TV’s Weather Channel to General Electric Co.’s NBC Universal, in league with Blackstone Group Holdings and Bain Capital.

Three of the top 10 North American deals were in the energy sector: topped by Dominion Resources Inc.’s $910-million sale of Peoples Natural Gas and Hope Gas, to Babcock & Brown Infrastructure Fund, according to data provided to CFO.com by mergermarket.

With 53 transactions signed, the week featured one more deal than in the prior seven days. But the volume of those deals plunged from $20.44 billion to $8.87 billion. For the year-to-date, 2,020 deals now have been struck, with a total value of $452.11 billion. Last year at this time — well before the precipitous third-quarter fall-off in dealmaking occurred — the volume of the 2,748 transactions had just crossed $1 trillion.

Blackstone Group Holdings LLC, Bain Capital LLC, and NBC Universal Inc. to buy Weather Channel Properties from Landmark Communications Inc for $3.50 billion

General Electric Co.’s NBC Universal, the New York City-based media and entertainment company — along with New York-based Blackstone Group and Boston-based Bain Capital, both private equity firms — agreed to acquire the Weather Channel Cos. from Norfolk, Va.-based media service company Landmark Communications. The price of the leverage buyout was not disclosed, but was widely estimated to be about $3.5 billion. Some reports said the three buyers would hold about one-third each, although the parties were not disclosing many details. The sale, which concludes a long auction process, is expected to be completed later this year.
Seller financial advisor: JPMorgan
Bidder financial advisor: Allen & Company; Credit Suisse; Deutsche Bank
Seller legal advisor: Kilpatrick Stockton; Skadden Arps Slate Meagher & Flom; Venable; Wilcox & Savage
Bidder legal advisor: Ropes & Gray; Weil Gotshal & Manges

Lone Star Funds to buy the Home Lending Business of CIT from CIT Group Inc. for $1.50 billion

Dallas-based private equity firm Lone Star Funds agreed to acquire the Home Lending Business of New York City-based CIT, a commercial finance company under terms that include $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other liabilities relating to the business. The sale is scheduled to be completed in July.
Seller financial advisor: JPMorgan; Morgan Stanley; Evercore Partners
Bidder financial advisor: Piper Jaffray
Seller legal advisor: Wachtell, Lipton, Rosen & Katz; McKee Nelson
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

Babcock & Brown Infrastructure Fund North America to buy natural gas distribution utilities Peoples Natural Gas Co. and Hope Gas Inc. from Dominion Resources Inc. for $910 million

San Francisco-based Babcock & Brown Infrastructure Fund, which owns and manages utilities and other infrastructure assets, agreed to acquire Pittsburgh-based Peoples Natural Gas and Clarksburg, W. Va.-based Hope Gas from Dominion, a Richmond, Va.-based company that transmits and distributes electricity and natural gas.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Internal
Seller legal advisor: McGuireWoods
Bidder legal advisor: Dewey & LeBoeuf

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