Notable Mergers and Acquisitions 9/30: (CQH)/(LNG) (ACPW) (TSCO)

September 30, 2016 10:01 AM EDT

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*** Cheniere Energy Partners LP Holdings, LLC (NYSE: CQH) announced today that its board of directors has received a proposal from Cheniere Energy, Inc. (NYSE: LNG) pursuant to which Cheniere would acquire the publicly held shares of Cheniere Partners Holdings not already owned by Cheniere in a stock for stock exchange. Subject to negotiation and execution of a definitive agreement, Cheniere is proposing consideration of 0.5049 Cheniere shares for each issued and outstanding publicly-held share of Cheniere Partners Holdings as part of a transaction that would be structured as a merger of Cheniere Partners Holdings with a wholly-owned subsidiary of Cheniere. The proposed consideration represents a value of $21.90 per common share of Cheniere Partners Holdings, or a premium of approximately 3.0% over the closing price of Cheniere Partners Holdings' shares, based on the closing prices of Cheniere Partners Holdings' shares and of Cheniere's shares as of September 29, 2016, or a premium of approximately 7.0% over the 30-trading day average CQH / LNG exchange ratio as of September 29, 2016.

Cheniere owns 80.1% of the issued and outstanding shares of Cheniere Partners Holdings.

The proposed transaction is subject to the negotiation and execution of a definitive agreement and approval of such definitive agreement and transactions contemplated thereunder by the board of directors of Cheniere, the board of directors of Cheniere Partners Holdings and a conflicts committee established by the board of directors of Cheniere Partners Holdings, and the consummation of the proposed transaction would be subject to customary closing conditions. There can be no assurance that any such approvals will be forthcoming, that a definitive agreement will be executed or that any transaction will be consummated.

*** Active Power (Nasdaq: ACPW) announced that it has signed an Asset Purchase Agreement (APA) with Langley Holdings PLC ("Langley"). Under the terms of the APA, Langley will acquire substantially all assets and operations of Active Power, including the Active Power name, through their Piller USA Inc. subsidiary for a nominal purchase price, plus the assumption of all debt, liabilities, customer, employee and purchase commitments going forward. Closing is subject to customary conditions and to the approval of the stockholders of Active Power. Closing is expected to occur in the fourth quarter of 2016.

Langley is a diverse, privately owned engineering and industrial group based in the United Kingdom with principal operating divisions located in Germany and France and more than 80 subsidiaries worldwide. The group was founded by the current Chairman, Tony Langley, in 1975 and had revenues of $1.1 billion in 2015. In 2004, Langley acquired Piller Group GmbH, a world leader in power protection technology and rotary UPS systems. Langley's mid-year 2016 financial statements can be viewed here.

"The acquisition of the assets of Active Power is consistent with Langley's strategy and business model," said Board member, Bernard J. Langley. "The addition of Active Power's differentiated flywheel UPS technology to Piller's power protection portfolio will further strengthen its position in the market, creating more compelling alternatives to traditional UPS offerings for mission critical applications. We plan to maintain Active Power's manufacturing operations in Austin, further expanding our operating footprint in the United States with this acquisition."

"We are delighted to enter into this agreement with Langley as we believe it equitably addresses the present circumstances facing Active Power with an optimized outcome," said Mark A. Ascolese, the Company's President and CEO. "The current capital market environment is very challenging, making it difficult to raise capital through traditional equity financing to support our current operations. Langley is a proven, long-term investor and this deal enables us to avoid a costly liquidation process or further funding operations given our diminished cash balance. We believe it is the best alternative available for the benefit of our stockholders, customers, employees and vendors."

After the Closing, under the APA the Company will transition its business model to monetize non-core intellectual property assets not purchased by Langley, and to acquire profitable businesses. The Company is in active negotiations with several parties to raise additional capital to support this business strategy.

"The Agreement with Langley is an important step towards positioning the Company for the future," Ascolese continued. "Our business plan is to leverage the assets not sold to Langley and to acquire and operate businesses that will generate profit and positive cash flows, thereby creating enterprise value and utilizing our net operating loss carry forward and other tax benefits(1). We believe this strategy is in the best interest of all our stakeholders and will result in higher long term stockholder value than the other alternatives available to us."

*** Tractor Supply Company (Nasdaq: TSCO), the largest rural lifestyle retail store chain in the United States, today announced that it has acquired 100% of Petsense, LLC, a leading specialty retailer of pet supplies and services with 136 stores in 25 states. The transaction price was approximately $116 million, net of acquired estimated future tax benefits of $29 million. The acquisition was a cash transaction financed with cash-on-hand and revolver debt. The transaction, including transaction and integration costs, is not expected to be material to Tractor Supply's net earnings per diluted share for fiscal 2016.

Petsense will operate as a subsidiary of Tractor Supply Company from Petsense's current headquarters in Scottsdale, Arizona and will continue to be led by members of Petsense's senior management team. Tractor Supply plans to continue to grow the Petsense store base at a target rate of 15% to 20% annually and will convert its two existing HomeTown Pet stores to Petsense stores.

Greg Sandfort, Tractor Supply Company's Chief Executive Officer, stated, "We are excited about the addition of Petsense to the Tractor Supply family as we develop our pet specialty retail business. The pet industry represents a $60 billion market driven by favorable pet ownership trends and the continued humanization of pets by their owners. We believe the pet specialty industry is an attractive expansion opportunity and, with 136 stores across 25 states, we think Petsense is an excellent complement to our Tractor Supply retail operations."

Mr. Sandfort continued, "With Tractor Supply's success in the pet category and the knowledge gained from our HomeTown Pet stores, we determined that the acquisition of an established, successful concept with a proven track record of growth would be the best way to capitalize on the opportunities in the pet market. We believe the Petsense team's expertise in growing smaller format pet specialty stores combined with our proven expertise in the category as well as site selection and store growth, will enable us to accelerate the growth of our pet specialty retail business and enhance long-term shareholder value."

Bob Angstead, President and Chief Executive Officer of Petsense stated, "As we looked at the future for Petsense, we recognized Tractor Supply Company as a natural fit to continue our growth. The Tractor Supply team has a strong culture, and we share many of the same values, as well as an appreciation of the opportunities presented by smaller towns and communities. Additionally, the Tractor Supply team has the experience and resources to help expand Petsense to the many untapped markets across the country."

Peter J. Solomon Company acted as exclusive financial advisor and Bass, Berry & Sims PLC acted as legal advisor to Tractor Supply Company. William Blair & Company acted as exclusive financial advisor and Jenner & Block acted as legal advisor to Petsense.

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