Deals: Microsoft, Cisco Pony Up Again

In our M&A roundup for the period ended Aug. 31, the two giants are back in the game with mid-market bids, although other dealmaking continues fairly slack.

North America endured another slack week of dealmaking, with only two transactions topping $1 billion. But in what could be a positive M&A sign, two eyebrow-raising middle-market purchases came from once-acquisitive stalwarts Microsoft and Cisco Systems.

Ranking first in size was Tokyo-based Ricoh Co. Ltd.’s $2.38-billion agreement to buy Ikon Office Solutions Inc., the Malvern, Pa.-based document managing concern. But there was more interest in the number-seven and number-ten deals as registered in data provided to by mergermarket. Microsoft Corp.’s bid of $396-million bid for interactive media company Greenfield Online Inc. topped the offer by Quadrangle Group. The purchase include’s Greenfield’s Ciao GmbH, a leading European provider of consumer and price comparison Websites.

Cisco agreed to pay $215 million for PostPath Inc., which provides E-mail and calendaring software, and Cisco reminded investors that such deals exemplify the buyer’s commitment to “build, buy, and partner” as a way of entering into new markets and capturing “key market transitions.”

In all, the week brought 41 deals worth a total of $8.21 billion, up from the prior week’s 21 deals worth 5.76 billion. Last week’s mergers and acquisitions brought year-to-date transactions up to $640.5 billion, still around half the $1.26 trillion of the same period of 2007, a land-office time for deals.

Ricoh Company Ltd. to buy Ikon Office Solutions Inc. for $2.38 billion

Malvern, Pa.-based document management concern Ikon definitively agreed to be acquired by Tokyo-based Ricoh in a deal both boards approved. Ricoh, the maker of such office equipment as facsimile machines, printers, personal computers, servers, and network-related software, and also cameras, will pay $17.25 a share, a premium of 10.9 percent. The transaction is expected to close in the 4th quarter of 2008.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Baker & Hostetler; Cravath Swaine & Moore; Lang Michener; White & Case
Bidder legal advisor: Morrison & Foerster

Precision Drilling Trust to buy Grey Wolf Inc. for $1.58 billion

Houston-based oil-and-gas drilling services operator Grey Wolf definitively agreed to be acquired by Calgary-based Precision Drilling Trust, which provides energy services to the North American oil and gas industry. Both boards approved the merger at a price of $5 and 0.1883 of a Precision Drilling unit for each share. The $9.02 total value per share provides a premium of 5 percent. The special meeting of Grey Wolf shareholders is expected to be held before year-end.
Seller financial advisor: UBS
Bidder financial advisor: Deutsche Bank; RBC Capital Markets
Seller legal advisor: Blake, Cassels & Graydon; Covington & Burling (Advising UBS); Gardere Wynne Sewell; Porter & Hedges
Bidder legal advisor: Bennett Jones; Felesky Flynn; Fried Frank Harris Shriver & Jacobson (Advising Deutsche Bank); Mayer Brown

Pacific Convenience & Fuel LLC to buy 600 U.S. service stations and convenience stores from ConocoPhillips Co. for $800 million

Pacific, a Seattle-based petroleum and convenience-stores operator, also is a wholly-owned subsidiary of PetroSun Fuel. ConocoPhillips, of Houston, is an integrated energy company.
Seller financial advisor: Internal
Bidder financial advisor: Rodman & Renshaw Capital Group
Seller legal advisor: Cleary Gottlieb Steen & Hamilton
Bidder legal advisor: Goodwin Procter


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