Oaktree Capital-Led Funds to Acquire HETCO from Hess Corp. (HES) Oct 27, 2014 09:29AM

Hess Energy Trading Company LLC (“HETCO”), a leading global marketer and trader of energy commodities, announced that an affiliate of funds managed by Oaktree Capital Management L.P. (“Oaktree”), a leading global alternative investment management firm, is acquiring the interest in the firm held by Hess Corporation (NYSE: HES). HETCO, which will be renamed in due course, is led by Stephen Hendel and Stephen Semlitz, founding partners, and Guy Merison, partner, all of whom will remain in their current positions. Following the close of the transaction, Oaktree will be the only outside investor in HETCO.

Under the terms of the transaction, Oaktree will provide initial working capital to HETCO. In addition, Oaktree has committed up to $500 million of additional capital for HETCO to make potential new investments in the commodity space. Other financial terms of the transaction were not disclosed. The transaction is expected to close in the first quarter of 2015.

Stephen Hendel said, “We are pleased to forge a relationship with Oaktree, providing us with a world class partner with exceptional financial strength and an extremely strong platform for further expansion of our business. We have enjoyed a long and fruitful relationship with Hess Corporation and we are now delighted to be moving into a new phase of our business in the partnership with Oaktree.”

Stephen Semlitz said, “Oaktree’s investment in HETCO will allow us to build on our existing successful activities in the energy space and expand our business across various commodities markets. In particular, access to additional investment capital will provide us an incremental capability to strategically expand our reach and portfolio.”

Bruce Karsh, Co-Chairman and Chief Investment Officer of Oaktree said, “We are pleased to partner with HETCO’s seasoned and talented management team which has a 17 year track record of excellence. There is tremendous opportunity in the energy trading business today as a result of changing market dynamics related to traditional participants exiting the industry. HETCO is well-positioned to benefit from changes to the industry, and to anticipate and capitalize on micro and macro commodity market developments. The company’s focus on risk management and its opportunistic investment strategy based on fundamental research are consistent with Oaktree’s own investment philosophy, making this investment consistent with our fund mandates and our culture. We look forward to working with HETCO and to helping their talented team continue to grow their business.”

Perella Weinberg Partners acted as Financial Advisor to HETCO and Hess in the transaction. Weil, Gotshal & Manges LLP provided legal advice to HETCO and Sullivan & Cromwell LLP provided legal advice to Hess. Paul, Weiss, Rifkind, Wharton & Garrison LLP provided legal advice to Oaktree in connection with the transaction.

Hewlett-Packard (HPQ) Looks to Private Equity for Possible H3C Sale - DJ Oct 24, 2014 04:06PM

Hewlett-Packard (NYSE: HPQ) is 'sounding out' private equity for a possible H3C sale, according to DJ, citing sources. The unit could be valued at $5 billion, the report said.

Bain, APAX Consider Offers for Portugal Telecom (PT) - FT Oct 24, 2014 09:25AM

Bain, APAX Consider Offers for Portugal Telecom (NYSE: PT) - FT

Investor Group to Acquire Digital River (DRIV) in $840M Deal Oct 24, 2014 06:11AM

Digital River (NASDAQ: DRIV) announced that it has entered into a definitive merger agreement to be acquired by an investor group led by Siris Capital Group, LLC (collectively “Siris”) in a transaction valued at approximately $840 million.

Under the terms of the agreement, Siris will acquire all of the outstanding common shares of Digital River for $26.00 per share in cash, representing a premium of approximately 50 percent over the closing price on October 23, 2014, and 67 percent over Digital River’s volume weighted average share price during the 90 days ended October 23, 2014. The agreement was approved by Digital River’s Board of Directors, which recommended that Digital River’s stockholders adopt the agreement with Siris.

Under the terms of the agreement, Digital River may solicit alternative acquisition proposals from third parties during a 45-day “go-shop” period, following the date of execution of the merger agreement. There is no guarantee that this process will result in a superior proposal. A special meeting of Digital River’s stockholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission and subsequent mailing to stockholders.

“We are pleased to have reached this agreement with Siris, which provides significant value to our shareholders and represents a clear endorsement of our transformation strategy, our industry leading ecommerce and payments solutions, our 1,300 global experts and our deep commitment to clients,” said David Dobson, Digital River’s CEO. “We believe that this transaction will provide Digital River with the flexibility to innovate and execute our vision of setting the standard for global ecommerce technology and services. Siris has extensive industry expertise, and working with Siris, Digital River will continue to create even more compelling ways to deliver ecommerce excellence and customer growth.”

“With 20 years of global ecommerce expertise, Digital River has a leading market position and significant global growth potential in the Commerce-as-a-Service market,” said Dan Moloney, Siris Capital Executive Partner. “We are excited to work with the talented employees to build on the Company’s success as a global leader in ecommerce, payments and marketing services. We look forward to supporting Digital River as it continues to serve its world-class client base while exploring new opportunities to drive innovation and global growth.”

Siris has secured committed financing consisting of a combination of equity and debt. The equity financing will be provided by an investor group led by Siris and the debt financing will be provided by Macquarie Capital and Sankaty Advisors.

The transaction is subject to customary closing conditions, including the receipt of shareholder approval and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, but is not subject to any financing condition. Upon completion of the acquisition, Digital River will become wholly owned by an affiliate of Siris. The transaction is currently expected to close in the first quarter of 2015.

Morgan Stanley & Co. LLC is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Digital River in connection with the transaction. Macquarie Capital (USA) Inc., Union Square Advisors LLC, and Evercore Partners Inc. are acting as financial advisors and Simpson Thacher & Bartlett LLP is acting as legal advisor to Siris in connection with the transaction.

For further information regarding the terms and conditions contained in the definitive merger agreement, please see Digital River’s Current Report on Form 8-K, which will be filed in connection with this transaction.

KKR Eyeing PetSmart (PETM) - NY Post Oct 23, 2014 07:34AM

PetSmart (NASDAQ: PETM) has attracted interest from buyout firms including KKR (NYSE: KKR), according the NY Post. KKR is interested in examining the company's books. First-round bids are due by Halloween.

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