Deals: Nowhere to Go but Up

In our M&A Roundup for the week ended Jan. 4, a mere 16 North American transactions are arranged, with only Chesapeake Corp.'s billion-dollar bankruptcy buyout topping $150 million.

Dealmaking nearly disappeared in the transition week between 2008 and 2009, although a single $1.02-billion private-equity buyout involving Chesapeake Corp. — a bankruptcy-related transaction — did salvage some respectability for merger-and-acquisition totals.

The buyers were New York-based Irving Place Capital and Los Angeles-based Oaktree Capital Management LP, who assumed $536 million of debt in the process. But no other deal in the week exceeded the $150 million that West Hollywood, Calif.-based film producer Relativity Media LLC paid for Rogue Pictures, a unit of General Electric subsidiary NBC Universal. The tenth-largest of the top ten North American deals was only worth $11 million, according to data provided to by mergermarket.

In all for the week ended Jan. 4, 16 deals were struck, for a total of $1.52 billion. In the week immediately preceding that, 21 deals were stuck totaling $1.1 billion.

Irving Place Capital and Oaktree Capital Management LP to buy Chesapeake Corp. for $1.022 billion

Richmond, Va.-based specialty paperboard packaging products supplier Chesapeake agreed to be acquired by the two private equity firms. Los Angeles-based Oaktree specializes in real estate and private equity investments, as well as alternative investments such as high-yield and distressed debt and convertible securities. The other is an affiliate of New York City-based Irving Place, which focuses on investing middle-market companies. Chesapeake supplies Europe, with interests in North America and Asia. Terms call for Chesapeake to sell all its U.S. operating subsidiaries and the outstanding capital stock or other equity securities of foreign subsidiaries for $485 million. It has debt of $536 million, and is a voluntary Chapter 11 petitioner in the Eastern District of Virginia. Oaktree and Irving Place Capital will operate Chesapeake as a growing concern company. Chesapeake and all operating subsidiaries outside U.S. that were excluded from bankruptcy filling are included in the transaction. The transaction is expected to be completed in the first quarter.
Seller financial advisor: Alvarez & Marsal; Goldman Sachs
Bidder financial advisor: Not Available
Seller legal advisor: Hunton & Williams
Bidder legal advisor: Kirkland & Ellis; McCann FitzGerald

Relativity Media to buy Rogue Pictures from Universal Pictures for $150 million

Universal, the film producer and distributor that is a subsidiary of NBC Universal and General Electric Co., sold its Universal City, Calif.-based Rogue Pictures subsidiary, a low-budget films producer, to Relativity Media LLC of West Hollywood, Calif., a film producer and distributor.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Not Available
Bidder legal advisor: Not Available

American Greetings Corp. to buy Recycled Paper Greetings Inc. from Monitor Clipper Partners LLC for $73 million

American Greetings, the Cleveland-based producer of “social expression products,” agreed to acquire Chicago-based Recycled Paper Greetings, a designer, manufacturer, and distributor of seasonal greeting cards and other products. The seller, Cambridge, Mass.-based Monitor Clipper, is a private equity firm. Terms include $54.7 million of new 7.375 percent notes due in 2016, and $18.4 million in cash.
Seller financial advisor: Rothschild
Bidder financial advisor: Imperial Capital
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Jones Day


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