Notable Mergers and Acquisitions of the Day 07/17: (STT)/(GS) (WILN)/(SI) (TIVO) (ADSK) (STE)
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- American Airlines Group (AAL)/Orbitz Worldwide (OWW) Reach Agreement; American Airlines Back on Orbitz Sites
- FTC Requests Additional Info from Reynolds American (RAI), Lorillard (LO) on Pending Deal
- State Street Corporation (NYSE: STT) agreed to acquire Goldman Sachs Administration Services (GSAS), a leading hedge fund administrator, from The Goldman Sachs Group, Inc. (NYSE: GS) in a cash transaction with a total purchase price of $550 million, subject to certain adjustments. Pending regulatory approvals and other customary closing conditions, the transaction is expected to be finalized early in the fourth quarter of 2012. State Street expects the transaction to be accretive in the first full year of operation on a cash basis. Through dedicated teams globally, State Street provides a comprehensive suite of middle office, fund administration, risk analytics and credit services to hedge funds, private equity funds, real estate funds and institutional investors. State Street’s Alternative Investment Solutions (AIS) team has more than 3,000 employees in multiple offices around the world.
- TiVo Inc. (Nasdaq: TIVO), said it agreed to acquire TRA, Inc., maker of the first and leading platform with the world's largest database that directly links information from the same households as to what viewers watch with what they buy. TRA matches television exposures from 1.5 million TV homes with specific purchase transactions. The acquisition is expected to create a powerful combination of insights that will offer the TV advertising industry Internet-level measurement and accountability accelerating TiVo's position in the billion dollar television analytics business. The unit will be known as TiVo Research and Analytics (TRA). The consummation of the acquisition of TRA is subject to customary closing conditions.
TiVo will pay approximately $20 million for TRA. TiVo expects the transaction to close this month. TRA's revenue is on track to increase significantly in 2012. TiVo expects the transaction will be accretive to Adjusted EBITDA* in its next fiscal year if planned synergies are realized.
- Autodesk Inc., (Nasdaq: ADSK) signed a definitive agreement to acquire Socialcam for a purchase price of approximately $60 Million. Socialcam is a popular mobile social video capture, editing and sharing app and service that was launched in 2011. This transaction is expected to close in Autodesk's third quarter of fiscal 2013 (which ends on October 31, 2012) and is subject to customary closing conditions.
For full year fiscal 2013, this transaction is expected to decrease targeted GAAP earnings per diluted share by approximately $0.06 (primarily in the third quarter). Excluding $0.05 of stock-based compensation and $0.01 of amortization of acquisition related intangibles, both net of tax, this transaction is expected to have no impact on targeted non-GAAP earnings per diluted share for the full year fiscal 2013.
- STERIS Corporation (NYSE: STE) announced the signing of a definitive agreement to acquire all the outstanding shares of privately-owned US Endoscopy for $270 million in cash.
With the acquisition of US Endoscopy, STERIS will significantly expand its presence in the GI market and gain direct access to the procedural spaces in the GI market with a franchise of proprietary, single-use consumable medical devices.
In calendar 2011, US Endoscopy generated revenue of approximately $70 million and operating income of approximately $14 million. After adjusting for depreciation and amortization, shareholder expenses and other non-recurring items, adjusted operating income would have been approximately $20 million in 2011. STERIS anticipates that the acquisition will qualify for a joint election tax benefit under Section 338(h)(10) of the Internal Revenue Code, which allows goodwill and intangibles to be fully deductible for tax purposes. Giving effect to the present value of the anticipated tax benefit, the purchase price is reduced to approximately $220 million.
- Wi-LAN Inc. (Nasdaq: WILN) acquired a global portfolio of more than 40 patents and applications from Siemens AG (NYSE: SI) related to telecommunication network management and mobile multimedia. Although the terms of the agreement are confidential, WiLAN can confirm that it does not consider the purchase amount to be material relative to its current cash position.
The acquisition expands WiLAN's portfolio of patents that relate to fundamental telecommunication technologies. The portfolio specifically relates to features covered in the 3rd Generation Partnership Project ("3GPP") global mobile broadband standards and those of the European Telecommunications Standards Institute ("ETSI"). It is the first such transaction between WiLAN and Siemens, one of the world's leading electronics and electrical engineering companies.
A premier global service provider to hedge funds, GSAS administers approximately $200 billion in single manager hedge fund assets on behalf of approximately 150 investment manager clients from locations across the globe. GSAS employees, including client-facing staff and the management team, are expected to join State Street following the close of the transaction. The transaction does not include Goldman Sachs’ Prime Brokerage business, which remains an important offering of Goldman Sachs.
George Sullivan, executive vice president and global head of State Street’s AIS team said, “GSAS is a premier provider of hedge fund administrative services and represents a strong franchise supported by longstanding relationships with highly regarded clients and an industry-leading service philosophy similar to our own. Servicing alternative assets remains a strategic focus for State Street. We expect that GSAS clients will benefit from State Street’s robust and flexible global servicing platform that is scalable for funds of all types and sizes. Our continued investment in our global operating platform and technology solutions makes us well-positioned to meet clients’ increasing needs for regulatory compliance, reporting, transparency and risk management requirements. We look forward to extending these comprehensive solutions to GSAS’ clients.”
John Willian, global head of Global Securities Services at Goldman Sachs said, “We look forward to continuing to serve the hedge fund community, including many GSAS clients, through Prime Brokerage and elsewhere across our businesses globally and will work closely with State Street and our GSAS clients to ensure a seamless transition.”
Cory Thackeray, managing director and global head of GSAS, who will continue to lead the teams servicing the GSAS clients post-close, said, “We are pleased to join the State Street AIS team, a group that has the same high-touch approach to client service as GSAS. With this transaction, we will be well-positioned to offer our clients an enhanced product offering that covers the entire investment lifecycle and provides relevant regulatory compliance, risk and transparency solutions that our clients often request to help them navigate today’s complex environment.”
The acquisition will strengthen State Street’s global leadership in hedge fund administration and will establish the company as the No. 1 hedge fund administrator globally based on industry survey data.1 State Street today is the No.1 servicer of alternative assets in the world with $877 billion under administration at June 30, 2012.
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