Notable Mergers and Acquisitions of the Day 05/25: (CPKI) (WPI) (RAE)

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CPKI Hot Sheet

Overall Analyst Rating:
NEUTRAL (= Flat)

California Pizza Kitchen, Inc. (Nasdaq: CPKI) entered into a definitive agreement to be acquired by Golden Gate Capital for $18.50 per share in cash, or total consideration of about $470 million.

Closing is expected in Q311.

An affiliate of Golden Gate Capital will commence a tender offer for all of the outstanding shares of the Company no later than June 8, 2011. Closing of the transaction is conditioned upon, among other things, satisfaction of a minimum tender condition, clearance under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, receipt of funding under the financing agreements and other customary closing conditions.

Moelis & Company is serving as exclusive financial advisor to California Pizza Kitchen and has delivered a fairness opinion to the special committee. Latham & Watkins LLP is serving as outside counsel to the Company and Richards, Layton & Finger P.A. is serving as outside counsel to the special committee. Kirkland & Ellis LLP is serving as legal advisor to Golden Gate Capital. Golden Gate Capital has received debt commitments from GE Capital and Jefferies Finance LLC to provide the debt financing necessary to close the transaction.
Watson Pharmaceuticals, Inc. (NYSE: WPI) to acquire Specifar Pharmaceuticals S.A. for €400 million, or about $562 million.

As a result of the acquisition, Watson gains a leading generic product development company that develops and out-licenses products throughout the world. In addition, this acquisition enhances Watson's commercial presence in key European markets by providing a portfolio of approved products. The transaction also gives Watson a strong branded-generic commercial presence in the EUR 6 billion Greek pharmaceutical market.

Watson anticipates that the transaction will be immediately accretive to 2011 non-GAAP earnings.

Jefferies & Company, Inc. advised Watson in this transaction. Rothschild and Eurobank EFG advised Specifar.
RAE Systems Inc. (AMEX: RAE) reports that it has entered into a further amendment to its merger agreement with an affiliate of Vector Capital under which the acquirer has increased the price per share to be paid to our unaffiliated stockholders to $2.25 per share.

The termination fee payable in the event that the Vector merger agreement is terminated in connection with a superior offer has also been increased, to $5.75 million.