Notable Mergers and Acquisitions of the Day 06/04: (PL) (NYLD) (ONB)/(LSBI) (SHLM)/(FOE)
- Lannett (LCI) to Acquire Kremers Urban Pharmaceuticals in $1.23B + Contingency Payments Deal
- After-Hours Stock Movers 09/02: (GERN) (LCI) (SEAC) Higher; (FIVE) (PLNT) (VRNT) Lower (more...)
- Verizon Communications (VZ) Debuts New Logo
- Geron Corp (GERN) Announces Publication of Two Papers in NEJM Highlighting Imetelstat
- Tesla (TSLA) CEO Musk: Model 3 Will Start Production in ~2 Years
Dai-ichi Life, founded in 1902 and headquartered in Tokyo, Japan, is one of the top 20 global life insurers and operates throughout Japan, Australia, Vietnam, Indonesia, India and Thailand. Protective, whose primary subsidiary, Protective Life Insurance Company, was founded in 1907, is headquartered in Birmingham, Alabama and offers a diverse portfolio of personalized products and services to meet the unique life insurance, retirement income and asset protection needs of individuals and families throughout the United States.
This strategic transaction will create the 13th largest global insurer, with total assets of $424 billion. Protective will become Dai-ichi Life’s platform for growth in the United States, where Dai-ichi Life does not currently have a material operational presence. No significant changes to Protective’s current strategy, day-to-day operations, distribution channels or employee base are anticipated as a result of the transaction, and Protective's President and Chief Executive Officer John D. Johns and the current management team will continue to lead the business from Protective's current headquarters.
"We are pleased to be entering the U.S. life insurance market by bringing such an outstanding company as Protective into our portfolio. With a strong leadership team, vibrant and growing retail franchise and long track record of profitable growth organically and through the acquisition and integration of attractive businesses, Protective is the ideal platform for expansion,” said Koichiro Watanabe, President of Dai-ichi Life. “Our companies are an excellent strategic fit and share similar missions and values. We look forward to working with Protective's management and employees, who will play an integral part in the long-term, continued success of the combined company, to grow our business and build on Protective’s commitments to its customers, distributors and the communities in which it operates throughout the U.S."
Protective President and Chief Executive Officer, John D. Johns, stated, "This transaction will enable Protective to deliver substantial, immediate cash value to our shareholders while maintaining our mission and continuing on our growth trajectory. Dai-ichi Life and Protective are both committed to ensuring the financial success of customers, shareholders, distribution partners and employees. This transaction is a testament to the talent, dedication and excellent execution by the Protective employees and management team, and we are thrilled to be combining with such a prestigious, financially strong company as Dai-ichi Life."
John R. Sawyer, Senior Vice President, Life and Annuity Executive, stated, “As part of Dai-ichi Life we will have exciting opportunities to continue driving the growth of our retail business across all product lines, and to leverage our unique acquisition capabilities.”
The transaction, which has been approved by both companies’ boards of directors, is expected to close by the end of 2014 or early 2015, subject to Protective stockholders' approval, regulatory approvals in Japan and the U.S., and other customary closing conditions.
The transaction will include a pre-vote "market check" designed to afford an opportunity for other bidders to determine whether they are interested in proposing to acquire Protective. Accordingly, the Merger Agreement provides the Company an opportunity to solicit competing proposals. In the event the Company accepts a competing proposal the break-up fee would be $140 million.
Dai-ichi Life intends to fund the transaction through cash in hand and supplementary sources if necessary.
Goldman Sachs is acting as financial advisor to Dai-ichi Life and Baker & McKenzie and Willkie, Farr & Gallagher are acting as legal advisors. Morgan Stanley is serving as financial advisor to Protective and Debevoise & Plimpton LLP is serving as legal advisor.
* NRG Yield, Inc. (NYSE: NYLD) has entered into an agreement with Terra-Gen Power LLC to acquire the Alta Wind facility located in Tehachapi, Calif., for $870 million, plus the assumption of $1.6 billion of non-recourse project financings and subject to customary working capital adjustments. The acquisition, which totals 947 megawatts (MW) of operating wind capacity, also includes a portfolio of land leases associated with the Alta Wind facility.
NRG Yield intends to fund the purchase price through a combination of newly issued debt, common equity and cash on hand. The transaction is expected to increase both the annual run-rate EBITDA by approximately $220 million and Cash Available for Distribution by approximately $70 million (before debt service associated with acquisition financing) by 2016.
Bank of America Merrill Lynch acted as exclusive financial advisor to NRG Yield in relation to this transaction and rendered a fairness opinion to the Board of Directors of NRG Yield. Jones Day served as legal counsel to NRG Yield.
NRG Yield expects to close the transaction in the third quarter of 2014. The transaction is subject to customary closing conditions, including the receipt of regulatory approval by the Federal Energy Regulatory Commission (FERC), the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act, as well as notice of the acquisition to the California Public Utilities Commission.
* Old National Bancorp (Nasdaq: ONB) and Lafayette-based LSB Financial Corp. (Nasdaq: LSBI) ("LSB"), jointly announced today the execution of a definitive agreement under which Old National will acquire LSB Financial through a stock and cash merger.
With $366 million in total assets and just over $312 million in deposits, LSB Financial is a savings and loan holding company with Lafayette Savings Bank as its wholly-owned subsidiary. The largest bank headquartered in Lafayette, Lafayette Savings Bank currently operates five full-service banking centers in Tippecanoe County, which is home to Purdue University and a successful high-tech manufacturing sector.
Founded in Evansville in 1834, with $9.5 billion in assets and 166 branches (as of March 31, 2014), Old National is the largest financial services holding company headquartered in Indiana and the fourth largest deposit holder in the Hoosier state. Currently Old National has two banking centers in Lafayette and one in West Lafayette and others throughout Indiana, as well as banking centers in Southern Illinois, Southwestern Michigan, Western Kentucky and Louisville.
"This partnership continues Old National's path of regional expansion by more than doubling our presence in the Lafayette market, and it also marks the union of two like-minded banks with outstanding legacies of client service and community engagement," said Old National President & CEO Bob Jones. "By acquiring the community bank in Tippecanoe County, Old National is reinforcing our standing as the Indiana bank and one of the leading community focused banks in all of our markets."
Randolph F. Williams, President and CEO of LSB Financial added, "Old National is an established, well-managed company that is truly Indiana's bank; they care about the people in the markets they serve. This partnership is in the best interests of our shareholders who will become part of a larger and growing institution. Our board believes that the best way to advance our long-standing commitment to the Lafayette community is to partner with a larger institution that has demonstrated commitment to our values, is respectful of our history, and has the ability to grow opportunities for our community, customers and employees. I'm looking forward to working with Bob and his team to establish this partnership."
Under the terms of the merger agreement, which was unanimously approved by the boards of both companies, shareholders of LSB Financial will receive 2.269 shares of Old National common stock and $10.63 in cash (fixed) for each share of LSB Financial common stock. Based upon the June 3, 2014, closing price of $13.68 per share of Old National common stock, the transaction is valued at approximately $41.67 per share of LSB Financial common stock, or approximately $66.7 million. The transaction value is likely to change due to fluctuations in the price of Old National common stock. As provided in the merger agreement, the exchange ratio is subject to adjustment (calculated prior to closing) in the event shareholders' equity of LSB Financial is below a specified amount.
The transaction is expected to close in mid-to-late fourth quarter of 2014. It remains subject to approval by LSB Financial's shareholders and approval by federal regulatory authorities as well as the satisfaction of other customary closing conditions provided in the merger agreement. The merger agreement also provides that Lafayette Savings Bank will be merged into Old National Bank.
Old National was advised by Keefe, Bruyette and Woods and the law firm of Krieg DeVault LLP. LSB Financial was advised by Sandler O'Neill + Partners, L.P. and the law firm of Barnes & Thornburg LLP.
* A. Schulman, Inc. (Nasdaq: SHLM) announced that it has entered into an agreement to purchase a selected majority of the assets of the Specialty Plastics business segment from Ferro Corporation (NYSE: FOE) for $91 million in cash. The purchase agreement includes four facilities located in the United States as well as operations in Spain. Subject to the satisfaction of customary closing conditions and regulatory approvals, the transaction is anticipated to close during the fourth quarter of A. Schulman's current fiscal year ending August 31, 2014. Excluded from the transaction are Ferro's plastics business and operations in Edison, New Jersey, and Carabobo, Venezuela.
The acquisition is expected to be accretive to adjusted earnings per share and the Company anticipates achieving approximately $5.5 million in synergies within 12 to 18 months following the close of the transaction, driven primarily by sourcing activities and plant efficiency actions. The Specialty Plastics assets included in the pending transaction achieved sales of $154 million in 2013, with approximately two-thirds of these revenues generated in the United States. As a result, this acquisition is expected to deliver important geographic diversification benefits to A. Schulman.
The Specialty Plastics segment is a global supplier of custom engineered plastic compounds, colorants, and liquid coatings, primarily focused on thermoset plastic technology. The business offers a broad portfolio of proprietary products and recognized brand names serving a wide range of end markets including packaging, transportation, construction, appliances and agriculture.
"Specialty Plastics is a performance-driven, technically demanding business, and this business segment is what initially attracted us to seek to acquire Ferro back in 2013. Strategically combining the two businesses provides the existing customers of the Specialty Plastics segment with an expanded product portfolio, technical solutions and global resources with the full support of the A. Schulman team. We are delighted to have reached an agreement to purchase these assets, and we plan to leverage their capabilities, competitive advantages and footprint to become an integral part of our growth engine," said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman. "When finalized, this will be the ninth acquisition we have successfully completed over the past four years, in addition to three joint ventures, as we continue to execute our aggressive growth strategy driven by organic growth and acquisitions. As we stated at our recent investor day, our goal is to gain $100 million in sales annually through acquisitions. While this large bolt-on acquisition exceeds that target, it more importantly is an excellent strategic fit with A. Schulman and provides us with an expanded geographic reach not only in the United States but also in Spain. Through our successful execution of our dual approach strategy, we are improving our position in target markets, diversifying our product mix and increasing our prospects for sustainable and profitable growth."
Bernard Rzepka, Executive Vice President and Chief Operating Officer of A. Schulman, said, "We continue to strengthen our U.S. operations and expand our global capabilities in engineered plastics, masterbatch solutions and custom performance colors, which represent outstanding profitable growth opportunities and are integral to our value creation strategy. We are impressed with the highly talented Specialty Plastics team, and we expect its demonstrated focus on customer satisfaction, innovation and technological expertise to complement our performance-oriented growth culture. The team has an impressive track record of developing high-quality specialty compounds, colors and coatings that exceed the needs of its diverse customer base."
The Specialty Plastics segment's products include color additives and concentrates with a focus on high-margin color, combination and additive masterbatches; filled and reinforced plastics with a strong position in glass-filled polypropylene and custom formulating capabilities; advanced polymer compounds and alloys including melt-processable rubber, molding and extrusion materials, and custom compounds. Its facilities are strategically located to competitively and efficiently serve its target markets and customers, with available capacity for growth in all segments.
To keep up on all the Mergers & Acquisitions data in real-time, go to our M&A Insider page.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Lannett (LCI) to Acquire Kremers Urban Pharmaceuticals in $1.23B + Contingency Payments Deal
- Integra LifeSciences (IART) to Acquire U.S. Rights to Certain Tornier (TRNX) Assets
- Deutsche Bank Resumes AMAG Pharmaceuticals (AMAG) at Hold
Create E-mail Alert Related CategoriesSpecial Reports
Related EntitiesMorgan Stanley, Merrill Lynch, Bank of America, Sandler O'Neill, Notable Mergers and Acquisitions, Earnings, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!