After taking note of Madrid-based Santander Central Hispano’s purchase of Sovereign Bancorp, there wasn’t much to cheer about in last week’s dealmaking. But private equity players were in the game, with three of the five largest transactions.
In building its ownership of Philadelphia-based Sovereign to 100 percent, Banco Santander’s deal at market price was the week’s lone billion-dollar North American acquisition. The 41 deals in the week, totaling a mere $3.60 billion in value, represented less than a quarter of the prior week’s $12.72 billion — although nearly as few deals (43) were struck in that earlier period.
Still, private equity firms became more active as mid-market buyers in the seven days just past, with Elliott Associates buying Epicor Software; First Reserve taking an undisclosed economic interest in Reliant Energy; and Advent International and a French outfit called Doc@Post purchasing the French transaction processing activities of Experian Plc, according to data provided to CFO.com by mergermarket.
For the year to date, the 3,122 deals struck so far were worth $801.85 billion, far lower than the record pace of this time in 2007, when 4,113 transactions had been struck at this time, with a total value of $1.36 trillion.
Santander Central Hispano SA to buy a 75.6-percent stake in Sovereign Bancorp Inc. for $1.91 billion
Philadelphia-based Sovereign definitively agreed to be acquired by Madrid-based Banco Santander in a stock-for-stock transaction of 0.2924 American Depository Shares of Santaner for each Sovereign common share. With a valued of $3.81, there was no premium offered in the transaction, which is expected to close in the first quarter of 2009. The deal will give 100-percent control of Sovereign to Santander, which now owns 24.3 percent.
Seller financial advisor: Barclays Bank
Bidder financial advisor: Goldman Sachs; JPMorgan; Lazard; Merrill Lynch
Seller legal advisor: Cuatrecasas – Goncalves Pereira, Castelo Branco; Milbank Tweed Hadley & McCloy; Sullivan & Cromwell
Bidder legal advisor: Davis Polk & Wardwell; Skadden Arps Slate Meagher & Flom (Advising JPMorgan; Merrill Lynch)
Elliott Associates LP to buy Epicor Software Corp. for $764 million
Elliott, a New York City based hedge fund with over $14 billion of capital under management, made an offer for Irvine, Calif.-based Epicor, a provider of integrated enterprise resource planning, customer relationship management, supply chain management, and professional services automation software, after Epicor rejected an Elliott proposal. Elliott already owns 10.2 percent and $28.7 million of Epicor common shares and convertible notes, respectively. The latest offer is $9.50 a share, providing a premium of 39.7 percent. Before including debt, the implied equity value of the transaction is about $566 million.
Seller financial advisor: UBS
Bidder financial advisor: Internal
Seller legal advisor: Wilson Sonsini Goodrich & Rosati
Bidder legal advisor: Paul Weiss Rifkind Wharton & Garrison
First Reserve Corp. to buy an undisclosed economic interest in Reliant Energy Inc. for $350 million
Greenwich, Conn.-based private equity firm First Reserve agreed to acquire 350,000 shares of preferred convertible stock of Reliant, a Houston-based power producer. Terms call for a purchase price of $1,000 per share. Newly issued shares will have equal voting rights as the common stock and pay quarterly cash dividends at an annual rate of 14 percent. Freferred shares will be convertible into common stock, with a conversion price set between $8 and $11 per common share, subject to various adjustments.
Seller financial advisor: Goldman Sachs; Morgan Stanley
Bidder financial advisor: Not available
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Simpson Thacher & Bartlett