As yet another pharmaceutical blockbuster was waiting in the wings — with Merck Co. getting ready for a $41-billion cash-and-stock combination with Schering-Plough Corp. — the rest of the North American dealmaking drama was developing as a copy of the prior seven days. Cross-border, middle-market transactions ruled the day, with natural resources, energy, and pharma being the industries of choice.
The long-discussed Merck-Schering deal likely will establish itself as the cornerstone of next week’s merger report. A Thomson Reuters summary listed it as the sixth-largest pharma acquisition ever, and second-largest this year, behind Pfizer’s deal for Wyeth. But for the week ended March 8, the $1.70-billion purchase by India’s Sterlite Industries Ltd. of the operating assets of Tucson-based Asarco LLC had to stand as the leading transaction — and the only one exceeding $1 billion, according to data provided to CFO.com by mergermarket.
The 32 deals struck last week before Merck-Schering totaled $4.38 billion, down a bit from the prior week’s 35 transactions worth $5.90 billion. For the year-to-date, 363 transactions now have been worth $139.9 billion, less than half the number than at the same time last year — but with a 38-percent greater value, thanks to Pfizer-Wyeth and other pharma transactions.
Sterlite Industries (India) Ltd. to buy operating assets from Asarco LLC for $1.70 billion
Tuticorin, India-based Sterlite, a copper smelting, mining, and refining business — which is a subsidiary of London-based metal-mining company Vedanta Resources Plc — agreed to acquire substantially all the operating assets of Tucson-based copper-miner Asarco for $1.1 billion in cash and $600 million through a promissory note to be paid back over nine years. The note will be non-interest bearing, and involves payment of $20 million from the end of second year for seven years. The balance of $460 million will be paid at the end of nine years. If the annual average of daily copper prices increases beyond $6,000 per ton, payment for that year will increase proportionately, subject to a maximum of $66.67 million, and the terminal payment will be reduced, keeping the total payment constant at $600 million. Assets acquired include three copper mines; associated mills; a copper smelter in Arizona; a precious metals plant in Texas; and a copper refinery, rod, and cake plants. The transaction is expected to close on April 15.
Seller financial advisor: Barclays Bank
Bidder financial advisor: Royal Bank of Scotland Group
Seller legal advisor: Baker Botts
Bidder legal advisor: Shearman & Sterling
Crescent Point Resources LP and TOG Partnership to buy non-core Saskatchewan assets of Talisman Energy Canada from Talisman Energy Inc. for $562 million
The buyers are Crescent Point, an investment holding company that is a subsidiary of Calgary, Canada-based oil and gas income trust Crescent Point Energy Trust, the Calgary, Canada, based oil and gas income trust, and Calgary-based investment holding company TOG Partnership, an oil-and-gas explorer that is a subsidiary of Calgary-based TriStar Oil & Gas Ltd. The seller is Calgary-based Talisman, an oil and natural gas exploration company. Terms call for Crescent Point and TriStar to acquire 50 percent each in the acquired asset for $280 million. The transaction is expected to close by June 1.
Seller financial advisor: FirstEnergy Capital
Bidder financial advisor: BMO Capital Markets; Macquarie Group; RBC Capital Markets
Seller legal advisor: Osler, Hoskin & Harcourt
Bidder legal advisor: Macleod Dixon
Vertex Pharmaceuticals Inc. to buy ViroChem Pharma Inc. from Business Development Bank of Canada, Caisse de Depot et Placement du Quebec, Le Fonds de Solidarite FTQ, Power Technology Investment Corp., Shire Canada Inc., and Vitus Investments III Private Ltd. for $370 million
Cambridge, Mass.-based biotechnology company Vertex agreed to acquire ViroChem private, Quebec-based Pharma, a drug developer from the group of investors. Terms call for $100 million in cash and $269.58 million to be paid in equity through the issue of 9.9 million shares valued at $27.23 each.
Seller financial advisor: Not Available
Bidder financial advisor: Goldman Sachs
Seller legal advisor: Not Available
Bidder legal advisor: Skadden Arps Slate Meagher & Flom (Advising Goldman Sachs)
General Electric Co. to buy a 51-percent stake in Airfoil Technologies International from Teleflex Incorporated for $300 million
the Fairfield, Conn.-based conglomerate agreed to acquire the stake in Mayfield Heights, Ohio-based Airfoil, a provider of repair technologies and services for cold airfoils. The seller is Mayfield Heights-based Teleflex, a designer, manufacturer, and distributor of medical, aerospace products. Teleflex and GE have also entered into an agreement that will allow Teleflex to transfer its ownership holding in the remaining ATI business to GE by the end of 2009. The acquisition is expected to close by the end of the first quarter.
Seller financial advisor: Internal
Bidder financial advisor: Internal
Seller legal advisor: Simpson Thacher & Bartlett
Bidder legal advisor: Weil Gotshal & Manges
NRG Energy Inc. to buy the retail energy business of Reliant Energy Reliant Energy Inc. for $288 million
Princeton, N.J.-based electricity producer and supplier NRG, through its NRG Retail LLC unit, agreed to acquire the Austin, Texas-based retail energy business of Houston-based Reliant, an electricity producer and supplier for cash. Terms of the agreement call for an additional fee of $45 million payable to Reliant if NRG terminates the transaction, which is expected to close in the second quarter.
Seller financial advisor: Goldman Sachs; Morgan Stanley
Bidder financial advisor: Credit Suisse Group; Deutsche Bank
Seller legal advisor: Skadden, Arps, Slate, Meagher & Flom
Bidder legal advisor: Dewey & LeBoeuf (Advising Credit Suisse Group)
New Gold Inc. to buy Western Goldfields Inc. for $283 million
Toronto-based gold miner Western definitively agreed to be acquired by Vancouver, Canada-based New Gold, a natural resource exploration and development company. Western holders will receive one New Gold share and cash for every share held, and the implied equity value is about $241.91 million, a premium of 18.76 percent. The acquisition is expected to closed by May 31.
Seller financial advisor: BMO Capital Markets
Bidder financial advisor: Macquarie Group
Seller legal advisor: Cassels Brock & Blackwell
Bidder legal advisor: Lawson Lundell Lawson & McIntosh
Emerson Electric Co. to buy Roxar ASA for $242 million
St. Louis-based Emerson is a manufacturer of electrical, electromechanical, and electronic products that include compressors, measurement devices, and automation software. It has made a tender offer to acquire Stavanger, Norway-based Roxar ASA, which provides products for improving production from oil and gas reservoirs. The 73-cent-a-share cash offer is made through Emerson’s wholly owned and newly created subsidiary, Aegir Norge Holding AS. It represents implied equity value of $178.72 million based on 243.5 million shares outstanding, a 45.9-percent premium.
Seller financial advisor: Arctic Securities; Astrup and Partners
Bidder financial advisor: JPMorgan
Seller legal advisor: Schjodt
Bidder legal advisor: Bryan Cave; Wiersholm
Transaction Network Services Inc. to buy the Communication Services Group of VeriSign Inc. for $230 million
Reston, Va.-based data-communications services provider TNS acquired the Communication Services Group of Mountain View, Calif.-based VeriSign, a provider of digital infrastructure services in a transaction to be financed through a combination of new financing of up to $250 million and cash on hand. The transaction is expected to close within the next 60 days.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: SunTrust Robinson Humphrey Capital Markets
Seller legal advisor: Cleary Gottlieb Steen & Hamilton
Bidder legal advisor: Kirkland & Ellis
TowerBrook Capital Partners LP and Investcorp SA to buy Autodistribution from Investcorp SA for $139 million
New York City-based private equity firm TowerBrook has acquired the privately held Morangis, France- based automotive components retailer and services provider Autodistribution. Terms call for TowerBrook tol acquire 84 percent and Investcorp to reinvest in Autodistribution to acquire its 16 percent stake.
Seller financial advisor: NM Rothschild & Sons
Bidder financial advisor: Aforge Finance
Seller legal advisor: Dewey & Leboeuf; Shearman & Sterling
Bidder legal advisor: Bredin Prat; Kirkland & Ellis
Trinet Group Inc. to buy Gevity HR Inc. for $119 million
Bradenton, Fla.-based human-resources products provider Gevity definitively agreed to be acquired by TriNet, a private San Leandro, Calif.-based provider of HR products and services that is backed by General Atlantic, a Greenwich, Conn.-based private equity firm. The price of $4 a share offers an implied equity value of about $98.76 million and a premium of 97 percent. The transaction is expected to close during the second quarter.
Seller financial advisor: Credit Suisse Group
Bidder financial advisor: Jefferies & Company
Seller legal advisor: King & Spalding
Bidder legal advisor: Paul Weiss Rifkind Wharton & Garrison