Notable Mergers and Acquisitions of the Day 03/12: (CIS) (LIFE) (AMD) (CDNS)

March 12, 2013 10:19 AM EDT
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* Camelot Information Systems (NYSE: CIS) received a preliminary non-binding proposal letter dated March 12, 2013 from its Chairman and Chief Executive Officer, Mr. Simon Yiming Ma, its President, Ms. Heidi Chou, and its Executive Vice President and the Chief Executive Officer of CFITS, a subsidiary of the Company, Mr. Yuhui Wang, to acquire all of the outstanding shares of the Company not currently owned by the Buyer Group and their respective affiliates and certain other management members of the Company who may choose to join the Buyer Group in a going private transaction for US$1.85 per American Depositary Share in cash, subject to certain conditions.

According to the proposal letter, the acquisition is intended to be financed through a combination of debt and equity capital, and the Buyer Group has been in discussion with a financial institution which has expressed interest in financing the proposed acquisition.

The Company's Board of Directors has formed a special committee of independent directors (the "Independent Committee") consisting of Mr. Jian Wang, Mr. David Dahu Wang, and Ms. Joanna Wang, to consider this proposal. Mr. Jian Wang will serve as chairman of the Independent Committee. The Independent Committee will retain a financial advisor and legal counsel to assist it in its work.

* Reports earlier today have a buyout of Life Technologies Corporation (Nasdaq: LIFE) getting closer than ever.

According to late reports from the WSJ, KKR (NYSE: KKR) is considering teaming with other private-equity firms to put together a joint bid for the company. In addition, strategic buyers Danaher Corp. (NYSE: DHR) and Thermo Fisher Scientific Inc. (NYSE: TMO) are also weighing bids.

In January, Life Technologies hired Deutsche Bank Securities Inc. and Moelis & Company LLC to assist in its annual strategic review. Since that time rumors have suggested a deal was "on," then "off," then back "on."

* Advanced Micro Devices, Inc. (NYSE: AMD) announced that it has entered into an agreement to sell and lease-back its "Lone Star Campus" located at 7171 Southwest Parkway in Austin, Texas to 7171 Southwest Parkway Holdings, LP, an affiliate entity of real estate investment company Spear Street Capital. Upon closing, net of all fees, the sale is expected to generate approximately $164 million in cash. The proceeds are expected to be reflected in the company's first quarter 2013 financial statements when reported on Apr. 18, 2013. At closing, AMD will enter into a 12-year lease with an extension option to continue its operations on the campus. The transaction is expected to close on or about Mar. 26, 2013.

The sale of AMD's Austin campus is in keeping with the company's strategy to reduce investments and capital in non-core parts of the business, including real estate. In 1998, the company sold and currently leases-back its headquarters in Sunnyvale, Calif. In 2008, it sold and currently leases-back its major site in Markham, Ontario, Canada. Recently, AMD also began marketing the sale of its Building 3 property located at 5900 East Ben White Boulevard in Austin, Texas. Building 3 is a largely unoccupied property whose operations and employees will be consolidated at other AMD sites.

The company expects to record a special charge of approximately $50 million in the first quarter of 2013 primarily related to the difference between the sale proceeds and the carrying value of the property. AMD employs approximately 1,900 people in Austin.

* After markets closed Monday, Cadence Design Systems, Inc. (Nasdaq: CDNS) entered into a definitive agreement to acquire Tensilica, Inc., a leader in dataplane processing IP, for approximately $380 million in cash. Tensilica had approximately $30 million of cash as of December 31, 2012.

Further expanding Cadence's IP portfolio, Tensilica provides configurable dataplane processing units that are optimized for embedded data and signal processing targeted at mobile wireless, network infrastructure, auto infotainment and home application.

Cadence intends to finance the transaction with available cash and an existing revolving credit facility. The transaction is expected to close in the second quarter of fiscal 2013, subject to customary closing conditions including regulatory approvals. Cadence expects the transaction to be slightly dilutive to its non-GAAP earnings per share in fiscal 2013 due to the impact of merger-related accounting and accretive to its non-GAAP earnings per share in fiscal 2014. The impact on GAAP earnings per share will be available after valuation and the completion of purchase accounting.

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