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Notable Mergers and Acquisitions of the Day 04/30: (BKS)/(MSFT) (SUN)/(ETP) (HOLX)/(GPRO)

April 30, 2012 10:44 AM EDT
  • Barnes & Noble Inc. (NYSE: BKS) and Microsoft (Nasdaq: MSFT) announced the formation of a strategic partnership in a new Barnes & Noble subsidiary, which will build upon the history of strong innovation in digital reading technologies from both companies. The partnership will accelerate the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content.

    The new subsidiary, referred to in this release as Newco, will bring together the digital and College businesses of Barnes & Noble. Microsoft will make a $300 million investment in Newco at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake. Barnes & Noble will own approximately 82.4% of the new subsidiary, which will have an ongoing relationship with the company’s retail stores. Barnes & Noble has not yet decided on the name of Newco.

    One of the first benefits for customers will be a NOOK application for Windows 8, which will extend the reach of Barnes & Noble’s digital bookstore by providing one of the world’s largest digital catalogues of e-Books, magazines and newspapers to hundreds of millions of Windows customers in the U.S. and internationally.

    Barnes & Noble and Microsoft have settled their patent litigation, and moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products. This paves the way for both companies to collaborate and reach a broader set of customers.

  • Energy Transfer Partners, L.P. (NYSE: ETP) announced an agreement to acquire Sunoco, Inc. (NYSE: SUN) in a unit and cash transaction valued at $50.13 per share, or a total consideration of approximately $5.3 billion.

    The merger consideration, which consists of $25 in cash and 0.5245 of an ETP common unit, or approximately 50 percent cash and 50 percent ETP common units, represents a 29 percent premium to the 20-day average closing price of Sunoco shares as of April 27, 2012.

    The transaction has been approved by each company’s board of directors and is expected to close in the third or fourth quarter of 2012, subject to approval of Sunoco shareholders and customary regulatory approvals. Following the closing, Sunoco and Sunoco Logistics Partners will operate under the Energy Transfer Equity, L.P. umbrella of companies. By acquiring Sunoco, ETP will own Sunoco’s general partner interest, limited partner interest and the incentive distribution rights in Sunoco Logistics Partners.

  • Hologic, Inc. (Nasdaq: HOLX) entered an agreement to acquire Gen-Probe Incorporated (Nasdaq: GPRO) for $82.75 per share in cash, or a total enterprise value of approximately $3.7 billion.

    The transaction is expected to be completed in the second half of calendar 2012.

    The transaction delivers a strong growth profile with attractive economics and is expected to be $0.20 accretive to Hologic's adjusted earnings per share in the first fiscal year after close and significantly more accretive thereafter. Hologic also expects the transaction to accelerate top and bottom line growth rates. The combined company expects to realize approximately $75 million in cost synergies within three years following the close of the transaction. In addition, the combined company expects to have strong free cash flows, which will be used primarily to reduce debt with the expectation to return to pre-transaction leverage levels within three years.

  • Haemonetics Corporation (NYSE: HAE) entered into a definitive agreement to acquire the business assets of the blood collection, filtration and processing product lines of Pall Corporation (NYSE: PLL). Blood processing systems and equipment to be acquired are for use in transfusion medicine and include Pall's manufacturing facilities in Covina, California; Tijuana, Mexico; Ascoli, Italy and a portion of Pall's assets in Fajardo, Puerto Rico. Approximately 1,300 employees will be transferred to Haemonetics.

    Under terms of the agreement, $536 million of the purchase price will be paid upon closing. Haemonetics intends to finance this with $475 million of new borrowings under term loans plus $61 million existing cash on hand. J.P. Morgan Securities LLC and Citibank, N.A. are joint lead arrangers and joint bookrunners for the new term loans. The remaining $15 million will be payable upon Pall Corporation's replication and delivery of certain manufacturing assets of the filter media business to Haemonetics by 2016. Until that time, Pall will manage these media assets under a supply agreement.

    The purchase price equates to approximately 8 times EBITDA for the most recent fiscal year ended July 31, 2011. Product line revenues excluding sales to Haemonetics were approximately $210 million in the same period. Excluding the expected one-time costs associated with this acquisition and the acquisition of Hemerus, the subject of a separate press release issued today, Haemonetics anticipates the impact of both acquisitions on adjusted earnings per share to be at least neutral in fiscal 2013 and accretive in fiscal 2014 and beyond. This transaction is subject to certain closing conditions, regulatory approvals and labor related notifications. It is expected to close during the second quarter of fiscal 2013. Centerview Partners LLC rendered a fairness opinion to the Haemonetics Board of Directors.

  • Clyde B. Anderson announced on April 28, 2012, that the Anderson family has made a non-binding proposal to acquire all of the outstanding publicly-held shares of the common stock of Books-A-Million, Inc. (Nasdaq: BAMM) (the “Company”). Mr. Anderson is the Executive Chairman of the Company and Mr. Anderson and other members of the Anderson family currently directly or indirectly control shares of stock representing, in the aggregate, approximately 53 percent of the common stock of the Company.

    According to the proposal, public shareholders would receive $3.05 per share in cash, representing a premium of approximately 20 percent over the closing price on April 27, 2012, and 13 percent over the average closing price of the Company’s common stock for the past 90 trading days. The proposal values the total equity of the Company at approximately $48.8 million.

    In the proposal letter, Mr. Anderson stated he anticipates the acquisition would be in the form of a merger of the Company with a newly formed acquisition vehicle that the Anderson family would control. Mr. Anderson also stated in the letter that the transaction would be financed through borrowings available under the Company’s existing credit line, and that the proposal is conditioned on availability of sufficient funds under that credit line. The Anderson family expects the Company’s management to remain in place following the merger along with the rest of the Company’s valued employees.

    In the letter, Mr. Anderson said: “We believe that this Proposal presents a unique and highly attractive opportunity for the public shareholders of the Company.”

    Mr. Anderson also noted in his letter that he expects that the Board of Directors of the Company will establish a special committee of independent directors with its own legal and financial advisors to review the proposal on behalf of the Company’s public shareholders. Mr. Anderson indicated in his letter that he and the other interests of the Anderson family do not intend to move forward with the proposed transaction unless the special committee makes a favorable recommendation to the Board.

    In the letter, Mr. Anderson also stated that the definitive transaction documents will provide that the transactions will be conditioned upon the approval of a majority of the shares of stock of the Company that are not directly or indirectly controlled by members of the Anderson family. Mr. Anderson also made clear that he and the other members of the Anderson family are interested only in acquiring the outstanding shares of the Company that they do not already own, and are not currently interested in considering a sale of their shares to a third party or any merger or other strategic transaction involving any third party and do not intend to vote in their capacity as shareholders in favor of any such transaction.

    Mr. Anderson has engaged Ropes & Gray LLP as his legal advisor and BDT & Company, LLC as his financial advisor for the proposed transaction.
  • Warner Chilcott (Nasdaq: WCRX) confirms it is reviewing strategic alternatives, says it is in preliminary talks with potential acquirers.
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