Notable Mergers and Acquisitions 9/28: (DB) (SHLX) (AKAM)

September 28, 2016 9:55 AM EDT
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*** Deutsche Bank (NYSE: DB) announced that it has reached an agreement with Phoenix Life Holdings Limited, a subsidiary of Phoenix Group Holdings Limited, to sell its Abbey Life business (Abbey Life Assurance Company Limited, Abbey Life Trustee Services Limited and Abbey Life Trust Securities Limited) which is held within Deutsche Asset Management.

Under the terms of the transaction, Phoenix Life Holdings Limited will acquire 100% of the Abbey Life business for 935 million pounds (1.085 billion euros, about US$1.21 billion, based on current exchange rates).

The transaction is subject to regulatory approvals including that of the Prudential Regulatory Authority. The sale will have a net positive capital impact upon closing of the transaction and, on a pro-forma basis, would have improved Deutsche Bank’s Common Equity Tier 1 capital ratio (CRR/CRD 4 fully loaded) as of 30 June 2016 by approximately 10 basis points.

The transaction will result in an expected pre-tax loss of approximately 800 million euros, primarily resulting from impairment of goodwill and intangible assets. The transaction is not expected to have a material impact on Deutsche Bank’s Available Distributable Items.

John Cryan, Chief Executive Officer of Deutsche Bank, said: “We are pleased to have reached this agreement with Phoenix Group, a specialist life fund provider which is well qualified to serve Abbey Life policyholders. Deutsche Asset Management will continue to focus on its core businesses of Active, Passive and Alternatives, while this transaction will also strengthen Deutsche Bank’s capital position. We continue to build a simpler and better Deutsche Bank.”

*** Shell Midstream Partners, L.P. (NYSE: SHLX) announced it has agreed to acquire from Shell an additional 20 percent equity interest in Mars Oil Pipeline Company (Mars) and a 49 percent equity interest in Odyssey Pipeline L.L.C. (Odyssey) for $350 million.

“This acquisition further diversifies the Shell Midstream Partners portfolio with the inclusion of a well-positioned eastern Gulf of Mexico asset. In addition, the partnership acquired an additional interest in an existing asset with a strong track record of delivery,” said John Hollowell, CEO of Shell Midstream Partners. “Both Mars and Odyssey build on our key corridor pipeline strategy in the Gulf of Mexico and are advantageously positioned to continue to capture growth of offshore volumes along our footprint of assets.”

The acquisition price reflects an approximate 8.4 times multiple of the forecasted 2017 Adjusted EBITDA of the acquired interests. The acquisition is expected to be immediately accretive to unitholders and funded with a combination of cash on hand and borrowings under Shell Midstream Partners’ credit facilities. The acquisition is expected to close on October 3, 2016.

Mars and Odyssey Highlights:

  • Mars delivers crude from the prolific Mars Basin and the Amberjack system, offering 600 kbpd of capacity into LOOP’s Clovelly facility
  • Odyssey has 220 kbpd of capacity from the eastern Gulf of Mexico to the Delta Pipeline system, enabling deliveries to refineries in Louisiana and Mississippi

The terms of the acquisition were approved by the Conflicts Committee of the Board of Directors of the General Partner of Shell Midstream Partners, which is composed entirely of independent directors. This committee was advised by Evercore Group, L.L.C. as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters.

*** Akamai Technologies, Inc. (Nasdaq: AKAM) acquired Concord Systems, Inc., a provider of technology for the high performance processing of data at scale, in an all cash transaction. The acquisition is expected to complement Akamai's existing platform data processing capabilities and augment the Company's product roadmap for supporting customers leveraging Internet of Things (IoT) technologies.

Data collection and processing from many sources back to an origin requires scale and reliability across the Internet. Concord software provides a unique framework for data aggregation, filtering, and analysis of highly-distributed big data use cases.

"Concord brings a fresh, innovative and modern approach to some of the challenges and hard problems related to processing big data," said Ash Kulkarni, senior vice president of Akamai's Web Experience Division. "Their team has developed critical software that enables the dynamic deployment of customer logic at scale. Together, their expertise will be a strong complement to Akamai, and we believe their technology is applicable across a number of different use cases."

Concord Systems, headquartered in New York City and established in 2014, is a privately-funded company. The acquisition is not material to Akamai's financials.

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