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Notable Mergers and Acquisitions of the Day 01/17: (KSWS) (NEWL) (SYK) (CBS)

January 17, 2013 10:10 AM EST Send to a Friend
* K-Swiss, Inc. (Nasdaq: KSWS) and E.Land World Ltd. announced today entry into a definitive agreement pursuant to which E.Land World will acquire all of the outstanding common stock of K•Swiss for $4.75 per share in cash, or a total equity value of approximately $170 million.

Under the terms of the agreement, which was unanimously approved by K•Swiss’ Board of Directors, K•Swiss stockholders will receive $4.75 in cash for each outstanding Class A and Class B share of K•Swiss common stock they own, representing a 49% premium over the closing price for a share of Class A common stock on the NASDAQ Stock Market on January 16, 2013, and a 62% premium over the three-month, volume-weighted average trading price for a share of Class A common stock on the NASDAQ Stock Market as of January 16, 2013.

The merger, which is expected to close during the second quarter of 2013, requires the approval of 80% of K•Swiss’ outstanding voting power and applicable regulatory approvals in addition to other customary closing conditions. E.Land World will use existing resources and credit facilities to fund the acquisition and will not need additional external financing for this transaction. Certain Class A and Class B stockholders, who collectively hold approximately 75% of the voting power of all outstanding common stock, have executed agreements to vote in favor of and support the transaction.

Goldman, Sachs & Co. is acting as the sole financial advisor to K•Swiss and Gibson, Dunn & Crutcher LLP is acting as legal counsel to K•Swiss. Morgan Stanley is acting as the sole financial advisor to E.Land World and Linklaters LLP is acting as legal counsel to E.Land World.

* NewLead Holdings Ltd. (Nasdaq: NEWL) announced that the Company has entered into an agreement to acquire title and excavation rights in properties containing 18.6 million tons of estimated coal reserves for $11.0 million. NewLead also entered into an agreement to acquire ownership and leasehold interests in properties containing approximately 143.1 million tons of coal for $55.0 million.

Coal and Natural Gas Reserve Acquisitions As of December 28, 2012, NewLead entered into an agreement to acquire title and mineral excavation rights to 5,000 acres of land in Kentucky. The coal reserves in these properties are estimated to be approximately 18.6 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close by January 29, 2013. There can be no assurance that the transaction will be consummated. The consideration of $11.0 million was paid in the form of notes maturing on January 29, 2013. The notes do not accrue interest, but remain subject to a guaranty by the initial purchaser and are secured by a mortgage lien and a security interest in the assets being purchased.

NewLead has also entered into an agreement to acquire ownership and leasehold interests in 18,335 acres in Tennessee containing coal and natural gas and other natural resources. The agreement contemplates that the Company will acquire rights, title, permits and leases to coal mines with total reserves estimated at 143.1 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close in February 2013. There can be no assurance that the transaction will be consummated. The agreement contemplates that consideration of $55.0 million shall be payable in cash in two installments; $30.0 million at closing and the remaining $25.0 million on the first anniversary of the closing.

The estimated reserves stated above are as determined by independent appraisals. The methodology used by the independent appraisers was not compliant with the methodology required by the Securities and Exchange Commission ("SEC") in reserve reports and, accordingly, should not be relied upon. Such reserve information is only provided to give the best currently available information. NewLead is undertaking to obtain reserve reports that comply with SEC methodology. Such reports may differ materially from the information provided herein.

The properties in Tennessee and Kentucky also include natural gas wells and projects relating to extraction of timber, sand, gravel, fly ash and dimension stone. Third parties are currently extracting these commodities on the properties and paying royalties.

* Stryker Corporation (SYK) and Trauson Holdings Company Limited announced that Stryker will make a voluntary general offer to acquire all the shares of Trauson for HK$7.50 per ordinary share for a total consideration of $764 million in an all cash transaction, representing an enterprise value of approximately $685 million. Trauson`s controlling shareholder, Luna Group, has undertaken to accept the offer from Stryker by tendering 61.7% of the Trauson shares towards the offer. Founded in China in 1986 by Chairman Fuqing Qian, Trauson had sales in 2011 approximating $60 million and is the leading trauma manufacturer in China and a major competitor in the spine segment. Stryker and Trauson have maintained a relationship under an OEM agreement for instrumentation sets since 2007. With this acquisition, Stryker will expand its presence in a key emerging market with a product portfolio and pipeline that is targeted at the large and fast growing value segment of the Chinese orthopaedic market.

The closing of the transaction is subject to customary conditions. Upon closing, the transaction is expected to be neutral to Stryker`s 2013 diluted net earnings per share excluding acquisition and integration-related charges and accretive thereafter. The transaction is expected to close by the end of the second quarter of 2013.

Barclays Capital served as Stryker`s exclusive financial advisor and Sullivan & Cromwell served as outside legal counsel for Stryker in connection with this transaction.

* After markets closed Wednesday, CBS Corporation (NYSE: CBS) announced a pair of strategic initiatives regarding its CBS Outdoor operating segment, which is comprised of two businesses -- one in the Americas and the other in Europe and Asia.

For the Outdoor Americas division, the Company has begun the process of converting the business into a real estate investment trust (REIT). For its Outdoor operations in Europe and Asia, the Company will pursue a divestiture of the business, which will be presented as a discontinued operation as of December 31, 2012.

As part of CBS's plan to convert its Outdoor Americas division into a REIT, the Company will submit a request for a private letter ruling from the Internal Revenue Service during the first quarter of 2013. If the ruling is granted, the Company could complete the REIT conversion in the taxable year beginning in 2014. All of these actions are subject to customary approvals.

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