Notable Mergers and Acquisitions of the Day 03/20: (OMPI)/(VRX) (ARCP) (EAC)

March 20, 2013 10:08 AM EDT
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* Obagi Medical Products, Inc (Nasdaq: OMPI) entered into a definitive merger agreement with Valeant Pharmaceuticals International, Inc. (NYSE: VRX) under which Valeant will acquire all of the outstanding common stock of Obagi for $19.75 per share in cash. The transaction, which values Obagi common stock at approximately $360 million, was unanimously approved by the Obagi Board of Directors. The $19.75 per share price represents a 42% premium to Obagi’s closing share price on Thursday, March 14, 2013, the last trading day prior to the disclosure of its fourth quarter and full year 2012 earnings, and a 40% premium to the thirty day prior stock price.

Under the terms of the merger agreement, Valeant will commence a tender offer for all of the outstanding shares of common stock of Obagi. The Obagi Board of Directors recommends that Obagi stockholders tender their shares in accordance with the terms of the merger agreement.

Both parties expect the transaction to be completed in the second quarter 2013, subject to customary terms and conditions, including the tender of a majority of Obagi’s outstanding shares of common stock and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The merger agreement provides for the parties to effect a merger following the completion of the tender offer, which will result in all shares of common stock not tendered in the tender offer being converted into the right to receive $19.75 per share in cash.

Morgan Stanley is acting as exclusive financial adviser for Obagi. Jenner & Block LLP is providing legal counsel to Obagi.

* American Realty Capital Properties, Inc. (Nasdaq: ARCP) announced today that on March 19, 2013, it sent to the Board of Directors of Cole Credit Property Trust III, Inc. ("CCPT III") an offer to acquire 100% of the outstanding common stock of CCPT III for at least $12 per share, or $5.7 billion, in cash and stock. The transaction, valued at more than $9 billion including assumption of debt, would create the largest and highest quality publicly traded REIT in the net lease sector.

For more color on the deal, click here.

* After markets closed Tuesday, Erickson Air-Crane Incorporated (Nasdaq: EAC) said it executed a stock purchase agreement for the purchase of Evergreen Helicopters, Inc. from Evergreen International Aviation, Inc., which doubles the size of the company.

EHI, based in McMinnville, Oregon, is a diversified global provider of air transport services for cargo and personnel to government and commercial customers. EHI was founded by aviation pioneer Mr. Delford Smith. At closing, this transaction would provide Erickson Air-Crane with an incremental fleet of 64 aircraft, consisting of both helicopters and fixed-wing airplanes. This diverse fleet serves a wide range of customers, including significant passenger transport and airlift services for the US military. EHI’s operations span the globe, including a presence in North America, the Middle East, Africa, and Asia Pacific.

In calendar year 2012 EHI’s unaudited revenue was $196.0 million and Adjusted EBITDA was $56.2 million, representing an Adjusted EBITDA margin of over 25%.

Under the terms of the purchase agreement, EHI is being acquired from EIA for $250.0 million, consisting of $185.0 million in cash, $17.5 million in unsecured promissory notes issued by Erickson Air-Crane, and approximately four million mandatorily convertible preferred shares of Erickson Air-Crane valued at $47.5 million (based on an agreed value of $11.85 per share). The preferred shares are convertible, at the option of the Company, into an equal number of common shares, subject to shareholder approval under NASDAQ marketplace rules, which the Company intends to seek following the closing of the EHI acquisition. In addition, up to $26.3 million in contingent consideration may be payable by Erickson Air-Crane (in cash or promissory notes) to EIA based on certain revenue targets for the calendar years 2013, 2014 and 2015. Successful completion of the acquisition is contingent upon the Company obtaining financing, and subject to other customary closing conditions.

The transaction is expected to close during the second quarter of 2013.

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