Notable Mergers and Acquisitions of the Day 01/24: (STWD) (AMZN) (NRP)/(APC)

January 24, 2013 10:06 AM EST Send to a Friend
* Starwood Property Trust, Inc. (NYSE: STWD) and Starwood Capital Group, a leading global private investment firm, on behalf of Starwood Distressed Opportunity Fund IX, today announced that they have entered into a definitive agreement to acquire LNR Property LLC ("LNR") for a total purchase price of $1.05 billion in cash.

LNR, founded in 1969, is a leading diversified real estate investment, finance, management and development firm with over 550 employees located in 12 offices throughout the US and Europe.

Under the terms of the agreement, Starwood Property Trust will acquire the following LNR business segments for a total purchase price of $856 million:

* US Special Servicer – the largest US special servicer with over $131 billion in loans under management and real estate owned;

* US Investment Securities Portfolio – a portfolio of legacy whole loans, CMBS and CDO investments;

* Archetype Mortgage Capital – a commercial real estate conduit loan origination platform designed to provide unique financing solutions throughout the US;

* Archetype Financial Institution Services – an acquirer, manager, and servicer of portfolios of small balance commercial loans and real estate assets;

* LNR Europe – which consists of Hatfield Philips, the largest independent primary and special servicer in Europe, and LNR European Investment Fund, a European CRE debt fund; and

* Auction.com – 50 percent of LNR's interest in the nation's leading real estate exchange selling residential and commercial real estate via auction.

In addition, Starwood Capital Group will acquire for $197 million both LNR's US Commercial Property Group and the other 50 percent of LNR's ownership interest in Auction.com.

* Amazon.com (Nasdaq: AMZN) today announced that it has acquired leading text-to-speech technology company IVONA Software. IVONA delivers world-class technologies that power the "Text-to-Speech," "Voice Guide" and "Explore by Touch" features on Kindle Fire tablets. Additionally, IVONA delivers text-to-speech products and services for thousands of developers, businesses and customers around the world.

IVONA offers voice and language portfolios with 44 voices in 17 languages and more in development.

* Natural Resource Partners L.P. (NYSE: NRP) has acquired (1) a 48.51% general partner interest in OCI Wyoming L.P. and (2) 20% of the common shares and all of the preferred shares of OCI Wyoming Co. from subsidiaries of Anadarko Petroleum Corporation (NYSE: APC). NRP paid a net $292.5 million for the interests, after normal closing adjustments to the purchase price of $310 million. The agreement also contains an earn-out provision, which would require NRP to pay Anadarko up to $50 million, on a net present value basis, over a three-year period if OCI Wyoming L.P. achieves specified revenue targets during that period. The acquisition was funded through a $200 million term loan, the issuance of $76.5 million in equity, including a general partner contribution of $1.5 million, and $16 million in cash.

The Acquisition

OCI Wyoming is the world's fifth-largest producer of soda ash. It operates a trona ore mining operation and a soda ash refinery in Green River, Wyoming. Trona ore is a naturally occurring form of soda ash, which is used worldwide in manufacturing a variety of consumer products, primarily including glass, chemicals, soap and paper. World demand for soda ash has been growing for the past three decades, driven particularly by Asia.

In addition to distributions on its 48.51% partnership interest in OCI Wyoming L.P., NRP expects to receive an annual preferential distribution of $4.7 million on its preferred shares in OCI Wyoming Co. NRP expects the transaction to be accretive to cash flow in 2013 in a range of $0.18 to $0.22 per unit.

The day-to-day operations in Green River are managed by employees of OCI Chemical Corporation, a subsidiary of OCI Company, Ltd, a Korean-based global chemical company. NRP will appoint three people to a 7-member committee responsible for governing the partnership.

Term Loan

The three year $200 million senior unsecured term loan was issued by ten banks, seven of which participate in NRP's credit facility. Citigroup Global Markets, Inc., Wells Fargo Securities, LLC and BBVA Compass served as joint lead arrangers and joint bookrunners on the transaction. The loan requires modest repayments of $10 million in January 2014 and $20 million in January 2015, with the remainder due upon maturity in January 2016.

Equity

NRP issued $75 million in equity to several affiliates of NRP's general partner, including Corbin J. Robertson, Jr, Chairman and CEO of Natural Resource Partners, and members of his family; Chris Cline; S. Reed Morian; and W.W. Scott, Jr. The 3,784,572 common units issued at $19.8173 reflect a 4.5% discount to the volume-weighted average closing price of NRP's units over the prior 15 trading days. NRP (GP) L.P., the general partner of Natural Resource Partners L.P., also contributed $1.5 million to maintain its 2% interest in the partnership.

Following the acquisition and associated financing, NRP has approximately $285 million in liquidity, consisting of $133 million in cash (at December 31, 2012 pro-forma for the transaction) and $152 million available under its credit facility.

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