Notable Mergers and Acquisitions 10/17: (SVU) (STZ) (COTY) (SNA)
- Earnings lift S&P to two-week high; M&A supports
- Unusual 11 Mid-Day Movers 10/24: (UNIS) (MBVT) (ACCO) Higher; (TDW) (INO) (BCC) Lower
- AT&T (T) to Acquire Time Warner (TWX) for $107.50/Share
- Rockwell Collins (COL) to Acquire B/E Aerospace (BEAV) for $6.4B
- TD Ameritrade (AMTD) to Acquire Scottrade in $4B Cash & Stock Deal
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“Today’s announcement is the result of a thorough process to maximize the value of the Save-A-Lot business and best position SUPERVALU for future success,” said SUPERVALU Non-Executive Chairman of the Board, Jerry Storch. “SUPERVALU is successfully executing on its long term strategic vision and positioning the Company for continued growth and value creation. We are confident that this transaction will create exciting opportunities for both SUPERVALU and Save-A-Lot.”
“The sale of Save-A-Lot is another important step in SUPERVALU’s transformation. It provides us with a stronger balance sheet that will allow us to further build on our core strengths and growth opportunities,” said SUPERVALU President and CEO, Mark Gross. “It has been a pleasure to work with the Save-A-Lot team, and, once this transaction is completed, I look forward to continuing to work with them as one of our largest professional services customers.”
Under the terms of the professional services agreement, SUPERVALU will provide Save-A-Lot with certain services and support functions for its day-to-day operations, including cloud services, merchandising technology, payroll, finance, and other technology and hosting services.
SUPERVALU expects to use the net proceeds from the sale to prepay at least $750 million against its outstanding term loan balance. The Company intends to use the remaining net sale proceeds to further reduce debt and improve its capital structure, as well as to fund corporate and growth initiatives.
Barclays Capital Inc. and Greenhill & Co., LLC acted as financial advisors to SUPERVALU, and Wachtell, Lipton, Rosen & Katz is serving as its legal advisor.
*** Constellation Brands (NYSE: STZ) announced an agreement with Charles Smith Wines LLC to acquire the Charles Smith Wines collection of five super and ultra premium wines for approximately $120 million. The transaction, expected to close in October, includes Kung Fu Girl Riesling, Velvet Devil Merlot, Boom Boom! Syrah, Eve Chardonnay and Chateau Smith Cabernet Sauvignon. With this acquisition, Constellation Brands will solidify its position as the second leading supplier of Washington State wines, gaining a collection of high quality wines that have strong consumer affinity and demand, and have shown double-digit volume growth over the last three years.
Charles Smith started the core collection of Charles Smith Wines in 2006 with the goal to create high quality, varietal specific wines true to the place of origin at a price point for everyone to enjoy. These Washington State wines are full of flavor, balanced and approachable, and have consistently garnered 90+ scores by leading industry critics. The largest wine, Kung Fu Girl, is the #2 super premium Riesling growing retail sales at 45 percent over the last year. The wine has scored 90+ points for the past seven vintages and has been twice named a Wine Spectator Top 100 wine. Boom Boom! Syrah is the #1 ultra premium Syrah with IRI dollar sales growth of more than 50 percent while Velvet Devil Merlot is the #2 super premium Washington State Merlot and is outpacing sales growth of the leading brand in this category.*
Smith will assist Constellation Brands under a consulting agreement as winemaker to maintain the high quality and consistency of the wines and will work with Constellation Brands to help drive further innovation across its wine portfolio. Wine Enthusiast named Smith, a former rock band manager, Winemaker of the Year in 2014 and Food & Wine bestowed the same honor in 2009.
"Charles Smith is a visionary in the wine business and we are excited to welcome him to Constellation Brands and bring these wines to a larger audience," said Bill Newlands, president, wine and spirits division, Constellation Brands. "With the addition of this collection, we strengthen our core wine portfolio and augment our innovation capabilities to stay ahead of consumer trends. I am looking forward to working with Charles and tapping into his creative genius to fuel our wine innovation."
"I created Charles Smith Wines so that everyone could experience a great tasting, quality wine, at an affordable price," said founder Charles Smith. "The quality of grapes in Washington State is incredible, and I have been able to put the best wines I can in a bottle for people to enjoy. Constellation Brands has a proven track record of acquiring and working with brands and companies to help them reach the next level. With Constellation Brands, we now have the opportunity to share these wines with the world."
The wines are sourced from prime vineyards across Columbia Valley and are produced in several custom crush facilities in Washington. Sustainable practices are utilized in both the vineyards and in the winemaking process for all of these wines. The following wines are not included in this deal and will continue to be nurtured and developed by Charles Smith's company: K Vintners, Wines of Substance, ViNO, Casa Smith, SIXTO, B. Leighton and Charles & Charles.
* IRI, Total US Multi-Outlet and Convenience, 52 weeks ending 9/4/16
*** Coty Inc. (NYSE: COTY) announced that it has reached a definitive agreement to acquire ghd (www.ghdhair.com), a premium brand in high-end hairstyling appliances from Lion Capital LLP for approximately ₤420 million (ca.USD$510 million) in cash. The transaction will be funded with a combination of cash on hand and available debt facilities. Upon closing, the acquisition is expected to be immediately accretive to Coty’s earnings.
The addition of ghd’s market-leading and high-performance lines of hair straighteners, hairdryers, curlers and other hairstyling appliances is expected to further strengthen Coty’s worldwide leading position in the professional hair category. ghd products represent the top of the range in its category, attracting strong loyalty with both professionals and consumers. ghd’s products are known for unsurpassed quality, beautiful design and excellent performance, and will enable Coty to offer salon partners and their clients an enhanced and more premium range of hair solutions. Coty also aims to accelerate ghd’s strong track record of growth through its channel and category capabilities combined with ghd’s strong innovation pipeline, superior technology and robust technical expertise.
ghd, which stands for “Good Hair Day,” generated ₤178 million in revenues in fiscal year 2016. ghd is headquartered in London and has commercial operations in the United Kingdom, Australia, the United States, Germany, France, Spain, Italy and several other markets. The company has been expanding from its core salon channel into premium retail and e-commerce. ghd will become part of the Coty Professional Beauty division, where it will be managed as a standalone business led by its current CEO Anthony Davey and management team. Anthony Davey will report to Sylvie Moreau, President of Coty Professional Beauty.
Commenting on the news, Camillo Pane, Coty Chief Executive Officer, said: “We are pleased to bring ghd’s highly skilled management team and its employees into Coty as we continue to strengthen our core business through the addition of innovative market-leading brands and products. ghd has beautifully designed and superior performing products, and is the preferred choice for discerning professionals and consumers alike. Not only do we expect ghd to strengthen our professional hair portfolio and enable Coty to provide even better hair solutions, but we also believe there is strong growth potential for ghd across several markets.”
Lyndon Lea, Partner of Lion Capital, said: “Over the three years of our ownership, ghd grew worldwide sales by 30% through a strong pipeline of innovative new products, which deepened the brand’s leadership in its core markets and supported its successful entry into new hairstyling categories. Anthony Davey and his management team have also done an excellent job of expanding the brand internationally whilst meaningfully strengthening ghd’s multichannel distribution capabilities. We are pleased to be selling ghd to Coty, a global leader in the beauty category, where it can take its rightful place among Coty’s unique family of beauty brands.”
The transaction is subject to regulatory clearances and other customary closing conditions, and is expected to close by the end of calendar year 2016.
Lion Capital and ghd were advised by Rothschild & Co. and Proskauer Rose LLP. Skadden Arps Slate Meagher & Flom LLP acted as legal counsel for Coty Inc.
*** Snap-on Incorporated (NYSE: SNA) announced that it has entered into a definitive agreement to acquire Car-O-Liner Holding AB for approximately $155 million in cash. Based in Gothenburg, Sweden, Car-O-Liner, with trailing 12 month sales of approximately $95 million, is a leading global provider of collision repair equipment and information and truck alignment systems. Subject to certain closing conditions, the transaction is expected to close within 30 days.
“Car-O-Liner’s product offering and special expertise are important additions to our Repair Systems & Information Group, bringing greater capabilities in collision repair and strengthening Snap-on’s position in the heavy duty segment,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “Given trends in the collision space, including the need for greater precision, the requirement to accommodate new materials and the higher emphasis on shop efficiency, we believe this acquisition will further Snap-on’s progress along its strategic and coherent growth runway of expanding with repair shop owners and managers. We look forward to welcoming Car-O-Liner associates to the Snap-on family.”
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