Notable Mergers and Acquisitions of the Day 01/28: HON, SLE, VZ/TMRK

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Dividend Yield: 2.6%
EPS Growth %: +18.2%

Honeywell (NYSE: HON) announced that it has agreed to sell its Consumer Product Group to Rank Group for approximately $950 million in cash. The transaction is baked into the company's FY11 EPS guidance.
Sara Lee Corp. (NYSE: SLE) announced that its Board has agreed in principle to divide the company into two separate, publicly traded companies. The separation is expected to be completed in early calendar year 2012.

Under the plan approved, Sara Lee’s North American Retail and North American Foodservice units (excluding the North American beverage business) will be spun off, tax-free, into a new public company that will retain the “Sara Lee” name. Its brands will include Sara Lee, Jimmy Dean, Ball Park, Hillshire Farm, Chef Pierre and State Fair.

The yet to be named other company will consist of Sara Lee’s current International Beverage and Bakery businesses, as well as the North American beverage business. Its leading brands will include Douwe Egberts, Senseo, Pickwick, Maison du Café, L’OR, Café Pilão, Marcilla and Bimbo.

In conjunction with today's news, Sara Lee's Board has said it intends to declare a $3/share special dividend on common stock, the majority of which will be funded with proceeds from the sale of the company’s North American Fresh Bakery business. The special dividend is expected to be declared and paid in fiscal 2012 and before completion of the spin-off of Sara Lee’s North American Retail and North American Foodservice businesses.

Sees FY11 EPS from continuing operations of 82-86c, with sales of $11.9-$12.1 billion and cash flow from operations of about $400-$500 million.
After the market yesterday, Verizon Communications Inc. (NYSE: VZ) and Terremark Worldwide Inc. (Nasdaq: TMRK) announced that they have entered into a definitive agreement whereby Verizon will acquire all outstanding shares of Terremark for $19 per share in cash, or a total consideration of $1.4 billion.

Pursuant to the agreement, Verizon anticipates that it will commence a tender offer between Feb. 10, 2011, and Feb. 17, 2011, for all shares of common stock of Terremark.

Closing is expected in Q111.

Verizon was represented by Goldman Sachs and Weil, Gotshal & Manges.

Terremark was represented by Credit Suisse Securities (USA) LLC and Greenberg Traurig.