Notable Mergers and Acquisitions 10/4: (CRM) (CRTO) (LKQ) (ARLZ)
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On October 3, 2016, the Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) to acquire Krux. Krux is a leading data management platform that unifies, segments and activates audiences to increase engagement with users, prospects and customers. Following the acquisition, Krux will be a wholly owned subsidiary of the Company.
Under the terms of the Merger Agreement, upon consummation of the acquisition and subject to customary purchase price adjustments, in exchange for all of the outstanding shares of Krux capital stock, the Company expects to pay approximately $340 million in cash and to issue shares of Company common stock. The aggregate number of shares of Company common stock to be issued will be determined based on the volume-weighted average closing price of Company common stock during the ten trading days ending on (and including) the second trading day before closing of the acquisition (the “Company Trading Price”); provided that, for purposes of determining the number of shares to be issued, the Company Trading Price will not be less than $57.25 nor more than $100.18. As a result, if the acquisition is consummated, the Company expects to issue at closing between approximately 3.4 million and approximately six million shares of Company common stock. A portion of the shares will be subject to vesting conditions based upon continued employment of certain recipients following closing of the acquisition. In addition, the Company has agreed to assume stock options and other equity awards of Krux. The amounts set forth above with respect to the Krux acquisition are estimates and are subject to change.
The Merger Agreement contains customary representations, warranties and covenants by the Company and Krux. A portion of the aggregate consideration will be held in escrow to secure the indemnification obligations of the Krux security holders. Closing of the acquisition is subject to customary closing conditions, including regulatory approvals. The acquisition is anticipated to close in the Company’s fourth fiscal quarter ending January 31, 2017.
Salesforce and Krux had already formed a partnership in the past.
*** Criteo (Nasdaq: CRTO) announced it has signed a definitive agreement to acquire HookLogic. The acquisition of HookLogic and its leading advertising exchange for brands will strengthen Criteo's performance marketing platform.
"With HookLogic's acquisition, Criteo is adding a complementary performance marketing solution to its portfolio, focusing on delivering more value to brand manufacturers and retailers alike," said Eric Eichmann, CEO Criteo. "We are excited to help develop the HookLogic platform with our own sophisticated technology and to bring their solution to marketers across the globe. Jon and his team at HookLogic are some of the best minds in performance advertising and we are thrilled to welcome them to the Criteo family."
HookLogic's performance marketing exchange connects many of the world's largest retail e-commerce sites with consumer brand manufacturers who vie for virtual shelf-space via sponsored product ads. Retailers earn revenue by monetizing their site traffic via these Cost-per-Click (CPC) based native ads. Unlike traditional advertising tactics, HookLogic's ads link manufacturer marketing spend directly to retail sales.
"We are thrilled to join the Criteo team, who share our passion for transparent, accountable, and relevant marketing," states Jonathan Opdyke, CEO HookLogic. "Criteo's global scale, extensive client base, unmatched technology and team provide a tremendous opportunity to rapidly accelerate HookLogic's business and expand performance marketing solutions for our clients."
Criteo will integrate its sophisticated technology for predictive bidding and product recommendations into HookLogic's products, bringing increased campaign performance to brand manufacturers and enabling retailers to further monetize their site traffic via the HookLogic Exchange.
HookLogic was founded in 2004 and is headquartered in New York, USA. HookLogic's solutions will be maintained upon close of the deal ensuring continuity of its offering. The transaction remains subject to customary conditions and is expected to close in the 4th quarter of Criteo's fiscal year, as described in Criteo's filings with the U.S. Securities and Exchange Commission.
*** LKQ Corporation (Nasdaq: LKQ) announced that its United Kingdom subsidiary, Euro Car Parts, has acquired substantially all the business assets of Andrew Page Limited, a distributor of automotive parts in the United Kingdom. As part of the transaction, Euro Car Parts acquired 102 Andrew Page branch locations, its national distribution center and corporate office.
“We are pleased to acquire the Andrew Page business, a company with a long and proud history in the UK,” said Robert L. Wagman, President and CEO of LKQ Corporation. “Andrew Page will continue to operate under its own brand, offering UK automotive repairers and consumers high-quality automotive parts that are alternative choices to new OEM parts. With our support, we believe that customers will benefit from an extended range of products while continuing to enjoy the great level of service that Andrew Page and its employees have historically provided.”
Terms of the transaction were not disclosed.
*** Aralez Pharmaceuticals Inc. (Nasdaq: ARLZ) announced it will acquire the U.S. rights to Toprol-XL (metoprolol succinate) and its Authorized Generic (AG) pursuant to an agreement entered into between AstraZeneca and Aralez Pharmaceuticals Trading DAC, a subsidiary of Aralez. Toprol-XL is a cardioselective beta-blocker indicated for the treatment of hypertension, alone or in combination with other antihypertensives; the long term treatment of angina pectoris and treatment of stable, symptomatic (NYHA class II or III) heart failure of specific origins. It was first approved in the U.S. in 1992. AstraZeneca recorded U.S. net revenues from Toprol-XL and its AG of $89 million and $53 million in 2015 and year-to-date June 2016, respectively. The transaction is expected to be immediately EBITDA accretive and to move profitability forward to 2017, in each case on an adjusted EBITDA basis. The transaction is expected to be completed in the fourth quarter of 2016, subject to customary closing conditions.
The agreement includes an initial upfront payment of $175 million, which will be financed through a previously committed senior secured debt facility with Deerfield Management. At closing, Aralez will also borrow funds under this credit facility to replenish $25 million that was paid from cash on hand in connection with the recently announced ZONTIVITY® acquisition. In addition, Deerfield has agreed to provide Aralez access to up to an additional $250 million in capital to fund future mutually agreeable acquisitions. The transaction with AstraZeneca also includes mid-teen percentage royalties and up to $48 million of potential contingent milestone payments. In connection with the Asset Purchase Agreement, at closing the parties will enter into a Supply Agreement pursuant to which AstraZeneca will continue to manufacture and supply Toprol-XL and the AG to Aralez for at least ten years, a License Agreement with respect to certain trademarks and copyrights and a Transition Services Agreement. Under the terms of the Transition Services Agreement, AstraZeneca will continue to distribute the product on behalf of Aralez for up to nine months until the product is transferred to Aralez Pharmaceuticals Trading DAC.
"We are delighted to enter into an agreement with AstraZeneca for the U.S. rights to Toprol-XL and its AG, a beta blocker that further broadens our cardiovascular portfolio and, importantly, strengthens our financial profile by generating meaningful cash, which should accelerate our profitability to 2017 on an adjusted basis in addition to offsetting launch costs for YOSPRALA™ and ZONTIVITY," said Adrian Adams, Chief Executive Officer of Aralez. "This transaction further reflects our ability to deliver against the expectations that we set upon the formation of Aralez that included promoting FIBRICOR®, approval and commercialization of YOSPRALA, and seizing opportunities to expand through aggressive business development and licensing as evidenced by our recent acquisition of ZONTIVITY and now Toprol-XL."
Toprol-XL is an extended-release tablet that belongs to a family of high blood pressure medications known as beta-blockers. Extended-release tablets need to be taken only once a day. After swallowing Toprol-XL, the coating of the tablet dissolves, releasing a multitude of controlled release pellets filled with metoprolol succinate. Each pellet acts as a separate drug delivery unit and is designed to deliver metoprolol continuously over the dosage interval of 24 hours.
Greenhill & Co. served as Financing Advisor and Willkie Farr & Gallagher LLP served as Legal Advisor in connection with the transaction.
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