Android app on Google Play

Notable Mergers and Acquisitions of the Day 03/28: (GNW) (ABC) (LBTYA)

March 28, 2013 10:13 AM EDT Send to a Friend
* After markets closed Wednesday, Genworth Financial, Inc. (NYSE: GNW) announces that it reached an agreement to sell its Wealth Management business, including Genworth Financial Wealth Management and alternative solutions provider, the Altegris companies, to a partnership of Aquiline Capital Partners and Genstar Capital. The sale price is expected to be approximately $412.5 million and the company will record an after-tax loss of approximately $40 million related to the sale with approximately $35 million recorded in the first quarter of 2013 and the remainder upon closing. The sale is expected to close in the second half of 2013, subject to customary closing conditions, including requisite regulatory approvals. Proceeds from the transaction, net of transaction related expenses, will be held at the holding company and be used to address the 2014 debt at maturity or before.

"This transaction is another step forward in executing our strategy, by generating capital from a non-core business and increasing financial flexibility for Genworth," said Martin P. Klein, executive vice president and chief financial officer. "The sale of Wealth Management also provides the opportunity for our employees there and the purchaser to have a strong business to grow going forward."

As of the first quarter of 2013, the Wealth Management business will be classified as an asset held for sale in the balance sheet and discontinued operations in the statement of net income, and will be excluded from operating income. The company will provide further updates associated with this transaction on its first quarter 2013 earnings call.

Goldman, Sachs & Co. and Sullivan & Cromwell LLP advised Genworth on this transaction.

* AmerisourceBergen Corporation (NYSE: ABC) signed a definitive agreement to sell its Canadian pharmaceutical distribution business, AmerisourceBergen Canada Corporation (ABCC), to Kohl & Frisch Limited, a Canadian-owned national full-line distributor. The transaction is expected to close in the third quarter of fiscal 2013, and is subject to customary closing conditions, including certain regulatory approvals. AmerisourceBergen will retain its Canadian specialty business.

The estimated sale price is expected to be between $80 million and $100 million, of which approximately half will be financed by AmerisourceBergen. As a result of the agreement, the Company expects to record an estimated loss on sale and other impairment charges of between $160 million and $180 million when it reports its quarterly results for the March quarter of fiscal 2013. This estimated loss on sale, in addition to ABCC’s operating losses, will be reported within discontinued operations. ABCC represented approximately 2 percent of AmerisourceBergen’s total revenues.

Due to the impact of the sale, AmerisourceBergen has revised its financial performance expectations for fiscal year 2013. The Company now expects revenue growth in the range of 8 to 10 percent and it has increased its estimated earnings per share from continuing operations for fiscal 2013 from a range of $2.96 to $3.06 to a range of $3.04 to $3.14. The revised earnings per share range does not include the impact of significant one-time expenses anticipated as a result of the previously disclosed new strategic long-term relationship with Walgreen Co. and Alliance Boots, GmbH, including a LIFO expense due to an anticipated inventory build and recurring non-cash expenses relating to the equity warrants issued in connection with the new relationship. The Company continues to expect free cash flow in the range of $100 million to $200 million, and to repurchase approximately $400 million of common stock in fiscal 2013.

* Liberty Global, Inc. (Nasdaq: LBTYA) has acquired 25.3 million shares in Ziggo N.V. from Barclays Capital Securities Limited at €25.00 per share, for a total investment of approximately €632.5 million. As a result of this investment, Liberty Global owns 12.65 percent of Ziggo, based on the shares outstanding as of December 31, 2012.

Liberty Global considers the acquisition of this minority stake in Ziggo as an attractive opportunity to make a strategic investment in a market where it already enjoys a sizeable presence through its UPC Netherlands subsidiary. The Purchase Price is also financially attractive given the stock’s approximate 7.4 percent dividend yield, which is implied by Ziggo’s expectation that it will pay €370 million of dividends during 2013.

Liberty Global will fund the acquisition of Ziggo shares with a non-recourse margin loan and existing liquidity. As the transaction does not result in Liberty Global obtaining a controlling interest in Ziggo, no regulatory approvals are required.

To keep up on all the Mergers & Acquisitions data in real-time, go to our new M&A Insider page.




You May Also Be Interested In


Related Categories

Special Reports

Related Entities

Barclays, Dividend, Notable Mergers and Acquisitions, Earnings

Add Your Comment