Notable Mergers and Acquisitions of the Day 07/09: (WLP)/(AGP) (TRI) (CPB) (CRM)
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- WellPoint, Inc. (NYSE: WLP) and Amerigroup Corp. (NYSE: AGP) entered into a definitive agreement through which WellPoint will acquire Amerigroup, one of the nation’s leading managed care companies that is focused on meeting the health care needs of financially vulnerable Americans. This combination brings together two premier organizations with a common goal of creating better health care quality at more affordable prices for their customers. The acquisition also advances the companies’ capabilities to more effectively and efficiently serve the growing Medicaid population, including the expanding dual eligible, seniors and persons with disabilities (SPD), and long-term services and support markets (LTSS).
Under the terms of the agreement, WellPoint will pay $92.00 per share in cash to acquire all of the outstanding shares of Amerigroup for a transaction value of approximately $4.9 billion.
Upon completion, WellPoint, with its affiliated Medicaid plans, will serve more than four-and-a-half million beneficiaries of state sponsored health care programs. The combined company’s Medicaid footprint will include 19 states. The company will also have a presence in 13 states with significant near-term dual eligible managed care opportunities, including a presence in the four largest states that have a combined $105 billion in annual dual eligible spending.
The acquisition is expected to close in the first quarter of 2013 and is subject to certain state regulatory approvals and standard closing conditions and customary approvals required under the Hart-Scott-Rodino Antitrust Improvements Act and the approval of Amerigroup’s stockholders. The transaction will be financed with cash on hand, commercial paper and new debt issuance.
The transaction is expected to be accretive to WellPoint’s earnings per share in 2013, including one-time transaction and integration costs. Accretion is expected to increase in 2014 and exceed $1.00 per share by 2015, inclusive of the build out costs associated with the expanding dual eligible and reform-driven Medicaid opportunities. WellPoint is not changing its 2012 EPS guidance for this transaction.
WellPoint’s financial advisor is Credit Suisse and its legal advisor is Linklaters LLP. Goldman Sachs & Co. and Barclays are acting as financial advisors to Amerigroup, and its legal advisor is Skadden, Arps, Slate, Meagher & Flom LLP.
- Thomson Reuters (NYSE: TRI) entered into a definitive agreement to acquire 100% of the shares of FX Alliance (NYSE: FX) for $22 per share in cash.
Thomson Reuters expects the acquisition to close in the third quarter.
- Campbell Soup Company (NYSE: CPB) entered into an agreement to acquire Bolthouse Farms from a fund managed by Madison Dearborn Partners, LLC, a private equity firm, for $1.55 billion in cash. Founded in 1915, Bolthouse is a vertically integrated food and beverage company focused on developing, manufacturing and marketing proprietary, high value-added natural, healthy products. The company has leading market positions in fresh carrots and super-premium beverages in the U.S., along with a growing presence in refrigerated salad dressings.
The acquisition of Bolthouse will provide Campbell with significant presence and a new platform for expansion in the rapidly growing, $12-billion market for packaged fresh foods. The addition of Bolthouse’s market-leading super-premium refrigerated beverages will complement Campbell’s successful “V8” beverage business and will create one of the industry’s largest healthy beverage platforms, with annual sales of approximately $1.2 billion. Bolthouse’s strong market position in fresh carrots in the U.S. and Canada will also provide an attractive opportunity for growth with value-added products in healthy snacking.
Campbell plans to operate Bolthouse Farms as a separate business unit. Members of Bolthouse’s senior management team, including President and CEO Jeff Dunn, will remain with the company. Dunn has built a strong team with deep expertise in beverage and consumer packaged goods, and he will report directly to Morrison.
Campbell will fund the acquisition of Bolthouse through a combination of short- and long-term borrowings. The closing of the transaction is subject to regulatory approvals and customary closing conditions and is expected to occur in late summer 2012. Including the impact of purchase accounting and suspension of the strategic share repurchase plan, Campbell expects that this acquisition will add approximately $0.05 to $0.07 cents per share to its adjusted net earnings in fiscal year 2013, before transaction costs. This estimate is subject to the finalization of the closing date and final closing balance sheet valuation.
The acquisition of Bolthouse Farms was not contemplated in Campbell’s previous guidance concerning its projected financial results for fiscal 2012. The company said today that, excluding acquisition costs, it remains on track to deliver results consistent with that guidance, with fiscal 2012 sales growth expected to be near the low end of the previously forecast range of 0 to 2 percent; adjusted EBIT expected to decline at a level near the low end of the previously forecast range of 7 to 9 percent; and adjusted EPS expected to decline at a level near the upper end of the previously forecast range of 5 to 7 percent.
- Salesforce.com (NYSE: CRM) plans to buy GoInstant for more than $70 million, the WSJ said. No comment was made by either party.
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Related EntitiesCredit Suisse, Barclays, Madison Dearborn Partners, Stock Buyback, Notable Mergers and Acquisitions, Earnings
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