Notable Mergers and Acquisitions of the Day 02/22: (ARKR)/(LNY) (B)/(MSM) (MMP)/(PAA)

February 22, 2013 10:14 AM EST
* Ark Restaurants Corp. (Nasdaq: ARKR) announced that its Board of Directors has concluded, after careful consideration, including a review of the proposal with its independent financial and legal advisors, that the unsolicited proposal from Landry’s, Inc. (NYSE: LNY) to acquire Ark Restaurants for $22 per share is inadequate, not compelling and not in the best interests of Ark Restaurants shareholders.

Michael Weinstein, Chairman of the Board and Chief Executive Officer of Ark Restaurants, said: “The Board believes that the proposal by Landry’s significantly undervalues the Company and its future prospects. In the Board’s judgment, Ark’s shareholders will be better served by our experienced management operating and growing our business.”

Duff & Phelps, LLC is serving as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal counsel to Ark.

* Magellan Midstream Partners, L.P. (NYSE: MMP) has agreed to acquire approximately 800 miles of refined petroleum products pipeline from Plains All American Pipeline, L.P. (NYSE: PAA) for $190 million.

"This acquisition utilizes Magellan's expertise in transporting and storing petroleum products," said Michael Mears, chief executive officer. "These pipelines are a natural extension of our existing refined products distribution system and provide new markets for Magellan to serve."

Rocky Mountain pipeline system. The acquisition includes approximately 550 miles of common carrier pipeline that distributes refined petroleum products in Colorado, South Dakota and Wyoming. The system includes 4 terminals with nearly 1.7 million barrels of storage.

New Mexico pipeline system. Magellan also will acquire about 250 miles of common carrier pipeline that transports refined petroleum products north from El Paso, Texas, delivering products to Albuquerque, New Mexico, and transports products south to the Texas-Mexico border for delivery via a third-party pipeline within Mexico.

Management expects the acquisition to be immediately accretive to the partnership's distributable cash flow per unit, with the potential for additional growth in cash flow from the assets over time.

The acquisition is expected to close in the second quarter of 2013 subject to regulatory approvals. Management expects to fund the acquisition with cash on hand and borrowings under its revolving credit facility, if necessary.

* Barnes Group, Inc. (NYSE: B) has entered into a definitive agreement to sell its Barnes Distribution North America business (“BDNA”) to MSC Industrial Direct Co., Inc. (NYSE: MSM) for $550 million, subject to certain adjustments. The transaction, which is subject to various conditions, including customary closing conditions and approvals, is expected to close in late March, or early in the second quarter of 2013.

Barnes Distribution North America is an industry leader in logistical support by providing inventory management, technical sales, and supply chain solutions for maintenance, repair, operating and production supplies. With advanced e-commerce capabilities and other technology-based solutions, BDNA offers a diverse range of service options and innovative solutions to meet customers’ individual needs and improve their overall profitability. BDNA, headquartered in Cleveland, Ohio, has approximately 1,400 employees and had 2012 revenues of approximately $300 million.

MSC Industrial Direct is one of the nation's largest distributors of Metalworking and Maintenance, Repair and Operations (“MRO”) supplies to industrial customers throughout the United States.

Barnes Group expects to report BDNA as Discontinued Operations beginning with the first quarter of 2013. After-tax proceeds from the transaction are anticipated to be approximately $400 million. Barnes Group expects to utilize a portion of the proceeds to reduce debt, buyback common shares, invest in profitable growth initiatives including acquisitions, and general corporate purposes.

The BDNA business results currently comprise the majority of the Company’s Distribution segment. The remaining business within the Distribution segment, Associated Spring Raymond, will be realigned into the Company’s Industrial Segment. Accordingly, the Company’s financial results, beginning with the first quarter of 2013, will be reported in two segments: Aerospace and Industrial.

Baird served as the exclusive financial advisor to Barnes Group Inc. on the sale of Barnes Distribution North America.

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