Notable Mergers and Acquisitions 9/26: (CHMT) (ACN) (ACTA) (CBOE)/(BATS) (TRP)/(CPPL)
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“For the past year, our management team and Board of Directors have been actively working to identify a transformative opportunity to create value for our shareholders and to enhance the scale, strength and diversity of our business, both vertically and geographically, for the benefit of our customers and employees. The transaction we are announcing today delivers on that promise,” said Craig A. Rogerson, President, Chief Executive Officer and Chairman of the Board of Chemtura. “It provides premium value to our shareholders and benefits our customers and employees by making Chemtura part of a larger, stronger global enterprise with the resources to fully support a more diverse suite of specialty chemicals products and services.”
Matthias Zachert, Chief Executive Officer and Chairman of the Board of Management of LANXESS, said: “With this acquisition, we are forming a major global player in the field of additives and are significantly strengthening our already profitable portfolio. We are confident that this transaction will create new and exciting opportunities for the customers and employees of both companies. The Chemtura team has built four industrial businesses into a highly attractive group of assets. In addition to the additives segment, Chemtura’s urethane and organometallics businesses will further diversify our company’s product offering.”
Mr. Rogerson concluded: “We believe LANXESS’s offer is recognition of the strength of our business, product portfolio and exceptional global team. I am confident that LANXESS shares Chemtura’s commitment to quality, safety and service and is the right home to ensure a bright future ahead.”
LANXESS will fund the transaction through existing liquidity and the issuance of new debt. The transaction is expected to close around mid-2017, subject to approval by the holders of Chemtura’s common stock, customary closing conditions and regulatory approvals.
Morgan Stanley & Co. LLC acted as financial advisor and Davis Polk & Wardwell LLP acted as legal advisor to Chemtura.
*** Accenture (NYSE: ACN) has entered into an agreement to acquire DayNine, a leading global Workday consulting and deployment services provider with vast expertise in helping organizations transform their employee experience and financial management systems to better navigate change and drive growth. The acquisition will extend Accenture’s already strong position in Workday and provide new value for clients.
“Our clients are increasingly choosing Workday to drive their cloud transformations, so we are taking this important step to meet the growing demand,” said Paul Daugherty, chief technology officer, Accenture. “DayNine is a leading exclusive Workday partner and will bring an enviable track record and impressive team that will provide our clients even greater value and business results as they transform their organizations using Workday. I look forward to welcoming the leadership and talented professionals of DayNine to Accenture.”
Upon completion of the acquisition, approximately 400 DayNine professionals with 1,250 Workday certifications will join the existing Accenture Workday group working within the Accenture Cloud First Applications team. The combined group, which will be led by DayNine CEO and co-founder Tim Ramos, will become the largest certified workforce in the Workday ecosystem and will work across all phases of Workday deployment.
“The breadth of Accenture’s industry expertise brings incredible opportunities to customers looking to leverage the cloud for their financial management and HR transformations,” said Tim Ramos, chief executive officer and co-founder, DayNine. “We pride ourselves on delivering an industry leading customer experience helping our customers connect their people to their strategy and we are excited to join forces with Accenture to deliver a full range of transformational and deployment services for Workday customers. Our combined teams and capabilities will be able to deliver unparalleled value for customers around the globe.”
“We’re excited to see that Accenture is deepening its commitment as customer demand for Workday continues to grow,” said Aneel Bhusri, co-founder and chief executive officer, Workday. “DayNine has already built a very strong Workday practice, and we look forward to seeing how the combined capabilities of Accenture and DayNine will enable Workday customers to take full advantage of what the cloud can offer.”
DayNine, headquartered in Pleasanton, CA and with 14 additional offices across the United States, Europe, and Asia, was founded in 2009 with an exclusive focus on Workday. Since then, it has grown to be a leading global Workday Services Partner. DayNine serves clients across a wide range of industries including consumer goods, healthcare providers, pharmaceuticals, financial services, and communications, media and technology.
With the intent to acquire DayNine, Accenture continues to strengthen its position as a leading enterprise cloud services provider. The move is part of Accenture’s acquisition strategy that focuses on expanding its cloud services to bolster its Cloud First agenda, and includes the past acquisitions of Cloud Sherpas, New Energy Group, CRMWaypoint, Tquila UK and ClientHouse.
Terms of the acquisition were not disclosed. Completion of the acquisition is subject to the satisfaction of customary closing conditions.
*** Actua Corporation (Nasdaq: ACTA) announced that it has entered into a definitive agreement with an investor group led by Vista Equity Partners under which it will sell GovDelivery, the leading provider of cloud-based government communications software solutions, for $153 million in cash, subject to certain adjustments, including working capital, cash, debt and other items. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2016.
“This transaction demonstrates the significant value Actua delivers in growing SaaS businesses,” said Walter Buckley, Actua’s Chief Executive Officer. “Under the strong leadership of CEO Scott Burns, we have transformed GovDelivery into a valuable, high growth company, and are confident that the company will continue its impressive growth trajectory. Since our acquisition of the business in 2009 for $20 million, GovDelivery has assembled a first-class management team and built out an industry-leading platform for digital government communications with a strong competitive moat. Through the execution of a highly effective growth strategy, GovDelivery has increased revenues by nearly 600 percent.”
Upon completion of the transaction, Actua expects to realize net cash proceeds of approximately $132 million. A portion of the proceeds will be held in escrow and will be subject to potential indemnification claims. Actua does not expect to owe any non-reimbursable income taxes in connection with the transaction. Actua intends to use its proceeds from the transaction to enhance shareholder value, remaining focused on building our leading vertical cloud businesses and repurchasing shares.
*** CBOE Holdings, Inc. (Nasdaq: CBOE) and Bats Global Markets, Inc. (BATS: BATS) today announced that they have entered into a definitive agreement, which has been approved by the Board of Directors of each company by unanimous votes of the members of the boards present, under which CBOE Holdings has agreed to acquire Bats in a cash and stock transaction valued at approximately $32.50 per Bats share, or a total of approximately $3.2 billion, consisting of 31% cash and 69% CBOE Holdings stock, based on CBOE Holdings' closing stock price of $70.30 per share on September 23, 2016.
The transaction will significantly expand CBOE Holdings' product line across asset classes, broaden its geographic reach with Bats' strong pan-European equities and global FX positions, and diversify its business mix with significant non-transactional revenue streams. CBOE Holdings expects to utilize Bats' leading proprietary trading technology by migrating trading in all of the combined company's markets onto a single, proven platform.
"The acquisition of Bats is expected to strengthen our position as a global leader in innovative tradable products and services, and is a transformative next step in our growth strategy," said Edward T. Tilly, CBOE Holdings' Chief Executive Officer. "We believe that bringing together CBOE Holdings' product innovation, indexing expertise, and options and volatility market position, with Bats' proven proprietary technology infrastructure, global ETP listing and trading venues, global foreign exchange marketplace and market data services, represents a compelling combination that should deliver significant benefits for our customers and enhanced long-term value for our stockholders. In particular, we believe the complementary nature of our respective offerings uniquely positions the combined company to provide the product set, transparency and tradability demanded by the rapidly-developing index-based investing market. Further, Bats' market data expertise will allow CBOE Holdings to develop new products using the company's index calculation capabilities."
Mr. Tilly continued, "CBOE Holdings and Bats share a culture based on the goal of efficiently utilizing innovation to better serve customers and the broader marketplace while enhancing stockholder value. We expect the acquisition to enhance the trading experience by streamlining access for customers and to allow CBOE Holdings to provide greater scale, while significantly increasing operational and cost efficiencies."
"This transaction offers our stockholders immediate cash value and allows us the opportunity to continue our great growth trajectory by combining with another market innovator in CBOE," said Chris Concannon, Bats' Chief Executive Officer. "Today's announcement is a testament to the hard work and achievements of our talented employees around the globe and in every asset class in which we operate. We look forward to working with the CBOE team to facilitate a smooth integration."
Following the closing of the transaction, CBOE Holdings expects to incorporate the functionality offered by both technology platforms and migrate onto a leading proprietary Bats' system. By utilizing Bats' technology and the combined customer reach of CBOE Holdings and Bats, CBOE Holdings plans to broaden distribution of its expanded product line to provide greater breadth and depth of products and services.
The transaction is expected to provide meaningful scale and financial benefits to CBOE Holdings, and should enable the company to further grow and capitalize on significant synergies expected to be achieved through the acquisition. Within three years of the completion of the transaction, CBOE Holdings expects to realize $50 million in annualized expense synergies, increasing to approximately $65 million of anticipated expense synergies within five years following closing. CBOE Holdings expects to achieve these synergies by migrating to a single proprietary trading platform and optimizing the expense structure of the combined company.
The transaction is expected to be accretive to CBOE Holdings adjusted EPS in the first year following the completion of the transaction and deliver attractive returns on invested capital.
Transaction Terms, Approvals and Timing
CBOE Holdings will acquire Bats for approximately $3.2 billion (based on CBOE's closing stock price on September 23, 2016), and will fund the purchase price through a mix of stock and debt. Under the terms of the agreement, Bats stockholders will receive $10.00 per share in cash and 0.3201 of a share of CBOE Holdings common stock, representing a total consideration of approximately $32.50 per share, based on the closing price of CBOE Holdings common stock on September 23, 2016. The merger agreement also contains an election procedure allowing each Bats stockholder to seek all cash or all stock, subject to proration and adjustment. The company intends to fund the cash portion of the consideration and the refinancing of Bats' debt through available cash and new borrowings of $1.65 billion, for which commitment letters have been obtained.
The per-share consideration represents a premium of 22.5% to Bats' closing stock price on September 22, 2016, the last full trading day prior to media publications regarding the potential transaction.
The transaction is subject to customary closing conditions, including the approval of the stockholders of both companies, and receipt of required regulatory clearances and approvals. Bats' and CBOE Holdings' directors and officers have signed supportive voting agreements. The transaction is expected to close in the first half of 2017.
Organization and Leadership
Following the close of the transaction, Edward T. Tilly, CBOE Holdings CEO, will remain CEO of the combined company. Chris Concannon, Bats CEO, will become President and COO, succeeding Edward L. Provost, CBOE Holdings President and COO, who plans to retire at that time. Chris Isaacson, Bats CIO, will succeed Gerald T. O'Connell as CIO, who also plans to retire at that time. CBOE Holdings CFO Alan J. Dean will remain as CFO of the combined company.
Following the close of the transaction, the Board of Directors of the combined company will consist of 14 directors, 11 of the 14 members currently serving on the CBOE Holdings board, plus three members from the Bats Board of Directors. These changes will be effective immediately upon closing.
The combined company's corporate headquarters will be located in Chicago, with business offices in Kansas City, New York and London, as well as presences in San Francisco, Singapore and Quito, Ecuador.
BofA Merrill Lynch and Broadhaven Capital Partners, LLC are acting as co-lead financial advisors to CBOE Holdings. CBOE Holdings intends to fund the transaction through a mix of stock and debt and has received fully committed financing provided by BofA Merrill Lynch. Sidley Austin LLP is serving as CBOE Holdings' legal counsel. Barclays Capital Inc. is lead financial advisor, with UBS Investment Bank acting as co-financial advisor to Bats, and Davis Polk & Wardwell LLP is serving as its legal counsel.
*** TransCanada Corporation (NYSE: TRP) announced that its wholly-owned subsidiary, Columbia Pipeline Group, Inc. (Columbia) has offered to acquire, for cash, all of the 53,843,466 outstanding common units of the master limited partnership, Columbia Pipeline Partners, LP (NYSE: CPPL) (CPPL) at a price of US$15.75 per common unit. The offer price represents an 11.3 per cent premium to the 30 day average closing price on September 23, 2016.
The offer has been made to the board of directors of the general partner of CPPL (the CPPL Board). As the general partner of CPPL is an indirect wholly-owned subsidiary of Columbia, a committee composed of the independent directors of the CPPL Board will be formed to consider the offer. The transaction is also subject to the execution of an agreement and plan of merger which would provide the definitive terms of the transaction, including the offer price. If an agreement is reached and such terms are ultimately approved by each of the TransCanada, Columbia and CPPL boards of directors, the transaction will also require approval by a majority of the CPPL common unitholders. Closing of a potential transaction will also be conditioned upon regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act, as amended.
This decision to make the offer follows TransCanada's July 1, 2016 announcement, upon closing its acquisition of Columbia, that the Company is reviewing its strategic alternatives for its master limited partnership holdings.
TransCanada has retained Morgan Stanley to act as its financial advisor and Vinson & Elkins to act as its legal advisor.
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