Acquisitions Monthly articles from June 2007

Acquisitions Monthly archives from June 2007

Fusione fudge.(EDITORIAL)
June 1, 2007... The all-share "fusione" of Italian banks UniCredit Group and Capitalia, announced on Sunday 20 May following respective board meetings in Milan and Rome, promises to consolidate the Italian footprint of the combined bank as well as create the...

First Chrysler, next Jaguar.(EDITORIAL)
June 1, 2007... DaimlerChrysler confirmed its split on 14 May, selling 80.1% of its US car maker Chrysler to private equity firm Cerberus for a total capital contribution of 5.5bn [euro]. For Daimler, Chrysler was a misfiring merger from almost the very...

May snapshot: Unicredito Italiano's US$29.5bn acquisition of Capitalia was top announced European deal in May, followed by CVC/PAI's US$20.9bn offer for Altadis, HeidelbergCement's recommended US$18.3bn deal to buy Hanson, and Thomson's US$18.3bn merger with Reuters. Synopsis of the global deals announced last month.(MARKET INTELLIGENCE)
June 1, 2007... ITALY: UniCredito Italiano SpA (UI) agreed to merge with Rome-based bank Capitalia SpA (CS), in a stock-swap transaction valued at 21.839bn [euro] (US$29.528bn). UI offered 1.12 new ordinary shares per CS share. Based on UI's closing stock...

Sizing up private company sales; private companies are being sold on average for 14.8 times their historic after tax profits. Where private equity is the buyer, that average price rises to 17.6 times, according to the latest Q1 2007 report on the Private Company Price Index (PCPI) from accountancy firm BDO Stoy Hayward.(MARKET INTELLIGENCE)
June 1, 2007... As predicted in BDO Stoy Hayward's Q4 2006 review, the private company price index (PCPI) premium was unlikely to widen in the long-term, and in Q1 2007 the PCPI was operating at a 6% discount to public comparables. However, this masks the...

Benelux boosted by ABN AMRO: the two competing bids for Dutch bank ABN AMRO--the largest ever in the Benelux region--have already boosted the value of this year's announced deals well beyond the 2006 value total. But the rest of the market is as active as ever.(LEAD FEATURE: BENELUX REPORT)
June 1, 2007... In 2007, the two rival takeover offers for Dutch banking group ABN AMRO, between them worth almost US$190bn, have driven the total value of announced M&A deals with any Benelux involvement to over US$300bn by mid-May, the highest aggregate...

Pharma sector faces 'perfect storm'; by 2012, patents for 20% of current drug sales will expire. But consolidation remains a compelling defence strategy for pharmaceutical groups.(SECTOR REPORTS: FOCUS ON PHARMACEUTICALS)
June 1, 2007... The pharmaceuticals industry is facing its biggest challenge yet. In 2011-2012, the patents for 20% of current drug sales will expire and with a lack of adequate replacements in the pipeline, low sector growth and investor apathy,...

Telefonica and Telecom Italia tie the knot: their 6bn [euro] link-up is a major blow to AT&T and Carlos Slim. In the process, Telefonica has protected its Latin American operations, while Italy's Prime Minister Romano Prodi has kept Telecom Italia essentially Italian.(SECTOR REPORTS: FOCUS ON TMT)
June 1, 2007... Telefonica, Europe's second largest telecoms operator, is at it again, ever expanding its empire. Not just content with buying in recent years Cesky Telecom for US$3.5bn or UK mobile player 02 for US$32bn, the Spanish giant has this time round...

Europe's utilities keep on fighting: no sooner had the dust settled on the 18-month battle for Endesa, than two more potential European utility deals, RWE/EdF and Gas Natural/Repsol, have emerged.(SECTOR REPORTS: FOCUS ON UTILITIES)
June 1, 2007... The same two countries --Germany and Spain--were the focus of the latest excitement, after German utility E.ON had held pole position in the race for Endesa for most of that saga's duration (only to be pipped at the post by a combination of...

Buyers beware: in a seller's market, warranty and indemnity insurance has become an option for buyers to consider.(LEGAL & REGULATORY)
June 1, 2007... M&A insurance used to be the dealmaker's equivalent of a long, hot bath--far from exciting, but conducive to a good night's sleep. Today, a range of products tailored to M&A professionals has given insurance a strategic use beyond peace of...

Bricks brinkmanship: Michelmersh's offer for Baggeridge Brick means four of the five biggest UK brickmakers are currently in takeover talks.(MOVING IN THE MID-MARKETS: (US$30M-US$500M))
June 1, 2007... The last-ditch offer from the fifth largest brickmaker, Michelmersh, for its bigger rival, Baggeridge Brick, is opportunistic in the extreme. Michelmersh revealed that it had acquired a 17.4% blocking stake in Baggeridge on April 16. Only...

Medical giants face private equity challenge; the US$11 bn takeover of Biomet by a financial consortium is forcing trade buyers to reassess their strategies.(MOVING IN THE MID-MARKETS: REPORT ON HEALTHCARE EQUIPMENT)
June 1, 2007... Producers of medical equipment make compelling investments for private equity companies, principally because of the fundamentals driving these businesses. "Private equity has bought into the healthcare opportunity. The demographics are...

Grand designs: 3i says its investment in Foster + Partners is a long-term venture aimed at opening new opportunities for the architecture firm.(MOVING IN THE MARKETS: REPORT ON HEALTHCARE EQUIPMENT)
June 1, 2007... Sometimes, it's easy to jump to conclusions. When word got out that architecture firm Foster + Partners had hired a corporate finance adviser to help with a "strategic review" ear tier this year, many in the market saw it as a euphemism for...

European mid-market company valuations are up; bidders are now willing to pay higher prices for private mid-market companies than public ones.(MOVING IN THE MID-MARKETS)
June 1, 2007... While there is regular discussion as to the relevance of using certain multiples, this study does not plan to go into the pros and cons of using the price/earnings ratio over others. Rather it will summarise the average P/E ratios of European...

Fashionable risk: desperate teens may be breaking down doors at high street clothing stores to grab the latest designs fronted by low-rent celebrities. Private equity firms, on the other hand, are breaking the bank to buy the chains themselves.(BEHIND THE BUYOUTS)
June 1, 2007... The fickle world of fashion may not be an obvious destination for risk capital investment, but private equity has long held a fascination for clothing manufacturers and retailers. On May 16, it also made its biggest bet in the luxury brand...

Fever pitch: following a number of high-profile deals in the healthcare sector, and the increasing presence of property investors in those transactions, some are now asking if prices are too high for care service providers.(BEHIND THE BUYOUTS)
June 1, 2007... Private equity has few restrictions in the current environment. Listed entities in the UK have generally refused to play ball with financial buyers over the last few years, but the Alliance Boots deal, if it completes successfully, will be the...

Boots deal could stumble on pension deficit; takeover consortium only planning to offer US$791m upfront for pension deficit, despite claims trustees demanded immediate payment and guarantees of up to US$1.97bn.(BEHIND THE BUYOUTS)
June 1, 2007... The 11bn [pounds sterling] (US$21.7bn) takeover of high street retailer Alliance Boots could face problems over the amount that the buying consortium is willing to pay into the company's pension fund. In its offer document, submitted 9...

Blackstone buys plastic films producer.(BEHIND THE BUYOUTS)(Company overview)
June 1, 2007... Private equity firm Blackstone, in a deal announced on 3 May, has agreed to buy German plastic films producer Klockner Pentaplast (kp) for 1.3bn [euro] from Cinven and its minority partner JPMorgan Partners. The acquisition price represents...

CVC and PAI likely to push Imperial out.(BEHIND THE BUYOUTS)
June 1, 2007... Imperial Tobacco looks likely to be pushed out of the race for Altadis following a long awaited 12.8bn [euro] offer from private equity firms CVC and PA/for the Spanish tobacco company. The Altadis board reportedly feels that CVC and PAI...

Apollo sets sights on focus.(BEHIND THE BUYOUTS)
June 1, 2007... After a successful revised 1.62bn [euro] offer for Countrywide, US buyout giant Apollo has turned its sights on ailing DIY business Focus. Apollo Management hit the UK M&A headlines twice in late April with its success at trumping 3i in the...

Merck sells generics business.(BEHIND THE BUYOUTS)
June 1, 2007... Merck KGaA, a German family-controlled healthcare group, announced on 13 May that it has sold its Generics business to its smaller US-based rival Mylan Laboratories. Merck and Mylan have signed a share purchase agreement whereby Mylan will...

Advent buys Llloyds TSB registrars.(BEHIND THE BUYOUTS)
June 1, 2007... Lloyds TSB have sold Lloyds TSB Registrars, a subsidiary of the UK bank, to London-based private equity house Advent international for 550m [pounds sterling] (US$1.0Bbn). Lehman Brothers advised Lloyds TSB in the sale of the Worthing,...

The maverick capitalist: former Pizza Express chairman Luke Johnson is now better known for chairing Channel 4 than for private equity deals.(INSTITUTIONS)
June 1, 2007... Big Brother is about to start its latest series on Channel 4 but the broadcaster's chairman, Luke Johnson, is currently promoting The Maverick, a book that avoids any mention of the reality TV programme. In January, a row, with supposedly...

Livingstone launches new boutique; M&A adviser unveils Succession Corporate Finance to target lower mid-market deals.(INSTITUTIONS)
June 1, 2007... M&A adviser Livingstone Partners has launched Succession Corporate Finance, a firm targeting the UK's lower mid-market, as it takes its own offering forwards with new offices in Spain and the US. Since Livingstone opened its doors in 1976,...

Baird announces Indian partnership; private equity firm offers support to portfolio companies with new alliance.(INSTITUTIONS)
June 1, 2007... Baird Private Equity has announced a partnership with Indian advisory firm Tholons to support its portfolio companies' work in the country. A senior adviser at Tholons will work with Baird's companies to develop strategies in India such as...

M&A cycle still climbing: viewpoints: "are we at the top of an M&A boom? Can you name the next likely targets--by sector, by company, by region?" Angela Ward asks the market.(ACQUISITION FINANCE)
June 1, 2007... "No, based on trends in corporate profitability, global liquidity and increasing emerging market demand for overseas investments. Private equity leverage has become an increasing component of global M&A activity, rising from 7% to 25% over the...

M&A deal data.
June 1, 2007... This country analysis includes acquisitions and buyouts announced between 17 April 2007 and 16 May 2007. Benelux Target Bidder ABN-AMRO Holding NV (NE)--Bank RFS Holdings BV (UK)--Special...

Pressure mounts to do deals before Putin goes; this year is expected to be a bigger one for both Russian M&A and IPOs as confidence in the market grows.(RUSSIAN OVERVIEW)
June 1, 2007... When Russia's first democratically elected president, Boris Yeltsin, was buried at the Novodevichy cemetery in Moscow, he probably took a piece of Russian democracy with him as a keepsake. His onetime protege Boris Berezovsky--the...

Absolut biggest Russian financial deal: KBC does about-face and enters the Russian market.(RUSSIAN FINANCIALS)
June 1, 2007... After a few years of deciding not to, Belgium's third largest financial institution. KBC Group, has finally made moves into Russia, apparently deciding the risk to its investment is minimal. It wasn't quiet about its decision either. Press...

Norilsk Nickel steps onto global stage; Russia's--and the world's--largest palladium and nickel producer bids for Canada's LionOre.(RUSSIAN MINING)
June 1, 2007... In what would be the largest ever cross-border acquisition by a Russian company, Norilsk Nickel announced on 3 May an unsolicited, C$21.50 per share, C$5.3bn (US$4.5bn) cash offer for Canadian miner LionOre. The deal, if it comes off, will...

KPMG in Russia and the CIS--M&A Team.(SPONSORED PROFILE: KPMG)
June 1, 2007... KPMG in Moscow is part of KPMG's global network of over 7,000 financial advisory professionals in 60 countries, and provides a range of advisory services that help the firm's clients develop and achieve their financial strategies in Russia and...

Look before you leap; Mikhail Krapivin, manager, Forensic, KPMG in Russia and CIS says it is important to find out everything you can about a target before embarking on an acquisition and explains the importance of performing integrity due diligence to do this efficiently.(SPONSORED ARTICLE: KPMG RUSSIA AND CIS)
June 1, 2007... While emerging markets of the Former Soviet Union countries offer lucrative investment opportunities, they hold considerable risks for an unwary investor. On one hand, the foreign investors have a genuine need to understand the issues which may...

Russians to rescue Alitalia; Aeroflot shows it's serious about buying Italy's flagging national airline.(RUSSIAN AIRLINES)
June 1, 2007... Once upon a time, Aeroflot was known as "Aeroflop." Now, Russia's national airline--51% owned by the Russian State--has recovered from a bit of turbulence over the last few years and is stalking Alitalia. Aeroflot is much more confident...

Oligarchs talk telco control; Russian telecom companies are experiencing rapid growth but their Western competitors are treading warily.(RUSSIAN TELECOMS)
June 1, 2007... With revenue growth flattening in their domestic markets, major Western telecom companies are looking to less developed markets for future income growth. Russia seems an ideal candidate. State-controlled telecommunications group Swazinvest...

United Company RUSAL's CEO explains why Russian companies are going global; Alexander Bulygin is the chief executive officer of the newly-merged United Company RUSAL, the world's largest aluminium business.(VIEWPOINTS)
June 1, 2007... The dynamic new breed of Russian multinationals now playing leading roles in several global industries is clear evidence that Russia is fast transforming from a young emerging market into a fully-fledged world market leader. While the...

Prosperity Capital believes Russia is a hotbed of enormous M&A potential; Mattias Westman is a founding partner at Prosperity Capital. Established in 1996, it is today managing over US$4.3bn in Russian equity funds.(VIEWPOINTS)
June 1, 2007... The Russian mergers and acquisition market is very active, with many transactions taking place each year. Last year, there were over 300 reported transactions with more than US$42bn changing hands. The boom is fuelled by the current...

Behind the recent Yukos auctions: the liquidation of Khodorkovsky's former country strengthens the grip of state-controlled giants Rosneft and Gazprom on Russia's oil sector.(RUSSIAN OIL)
June 1, 2007... From the time the Moscow Arbitration Court declared Yukos bankrupt in July 2006, most observers considered it was inevitable that Rosneft and Gazprom would acquire most of the company's Russian assets through the subsequent disposal process,...

Russia plans power spin-off; twenty companies are being spun out of the country's state-controlled electricity monopoly, United Energy Systems (UES), to create separate generation, transmission and distribution subsidiaries.(RUSSIAN ELECTRICITY)
June 1, 2007... Russia is undertaking a systematic restructuring of its electricity industry with the creation of six wholesale generation businesses and 14 regional power producers that will see the state retain control of just the federal grid. Several...

Russian mid-market makes its mark; the average deal size is US$163m, with financial services being one of the most active sectors. Nick P Davies reports from Moscow.(RUSSIAN MID-MARKETS)
June 1, 2007... The Russian M&A market is home to an increasingly diverse range of transactions, from retail to energy. Russia's national champions--Gazprom, Rosneft, Rusal, Evraz, etc--may take the limelight when it comes to the larger, well-known deals. But...

Top 50 any Russian involvement deals last 12 months.(RUSSIAN TABLES)
June 1, 2007... TOP 50 ANY RUSSIAN INVOLVEMENT DEALS LAST 12 MONTHS Rank Rank value value (m of deal Rank [euro]) (US$m) date Target name Acquirer name 9,942.09 12,863.20 12/05/06 ZAO Polyus (RS)...

Top 50 Russian target deals last 12 months.(RUSSIAN TABLES)
June 1, 2007... TOP 50 RUSSIAN DEALS LAST 12 MONTHS Rank Rank value value (m of deal Rank [euro]) (US$m) date Target name Acquirer name 9,942.09 12,863.20 12/05/06 ZAO Polyus (RS) ...

Top 50 Russian involvement mid-market deals last 12 months.(RUSSIAN TABLES)
June 1, 2007... TOP 50 RUSSIAN INVOLVEMENT MID-MARKET DEALS LAST 12 MONTHS Rank Rank value value (m of deal Rank [euro]) (US$m) date Target name Acquirer name 434.99 550.00 09/06/06 Viz-Stal (RS) ...