Notable Mergers and Acquisitions of the Day 08/30: (CG)/(DD) (VR)/(FSR) (UMPQ)

• The Carlyle Group (Nasdaq: CG) and DuPont (NYSE: DD) signed a definitive agreement whereby Carlyle will purchase DuPont Performance Coatings (DPC) for $4.9 billion in cash. The transaction is expected to close in the first quarter 2013, subject to customary closing conditions and regulatory approvals.
  
  DPC is a global supplier of vehicle and industrial coating systems with 2012 expected sales of more than $4 billion and more than 11,000 employees. The investment will be funded with equity from Carlyle Partners V and Carlyle Europe Partners III.
  
  
  Beginning with the third quarter 2012, DuPont will classify and report results of DPC as discontinued operations on a retroactive basis. DuPont expects 2012 full-year earnings from discontinued operations to be in the range of $.41 to $.47 per share. Full-year 2012 guidance was last updated on and as of July 24, 2012, and is not being updated today. The company will begin providing full-year 2012 guidance from continuing operations when it issues its third quarter earnings announcement on Oct. 23.
  
  DuPont plans to eliminate general corporate overhead costs that were previously allocated to DPC but are not part of the transaction. Additional details will be provided during DuPont’s third quarter earnings announcement. As part of the transaction, Carlyle will assume $250 million of DuPont’s unfunded pension liabilities. DuPont will use the net after-tax proceeds of this sale in a manner consistent with its cash deployment principles and goal to maximize shareholder value creation.
  
  Carlyle’s industrial and automotive investments include Allison Transmission, Hertz and PQ Corporation, as well as recent commitments to invest in Hamilton Sundstrand Industrial, Sunoco’s Philadelphia refinery and regional rail freight operator Genesee & Wyoming.
  
  
• Validus Holdings, Ltd. (NYSE: VR) and Flagstone Reinsurance Holdings, S.A. (“Flagstone”) (NYSE: FSR) today announced that the boards of directors of both Validus and Flagstone have approved a definitive merger agreement pursuant to which Validus will acquire all of the issued and outstanding shares of Flagstone. Under the terms of the agreement, Flagstone shareholders will receive 0.1935 Validus voting common shares and $2.00 in cash for each Flagstone share. The transaction provides Flagstone shareholders with a 19.4% premium and $8.43 of value per share based on the closing share price for each of Validus and Flagstone as of Wednesday, August 29, 2012 and represents an aggregate equity value of $623.2 million. For United States tax purposes, the proposed transaction is intended to be tax-free to Flagstone shareholders with respect to the Validus voting common shares they receive.
  
  Completion of the transaction, which is expected to occur in the fourth quarter of 2012, is subject to customary closing conditions, including obtaining regulatory approvals and the approval of Flagstone’s shareholders. The combined company will maintain Validus’ name, headquarters and executive management. Validus has obtained agreements from investment funds associated with Lightyear Capital and Trilantic Capital Partners, which collectively own approximately 22.5% of the outstanding Flagstone shares, to vote in favor of the transaction.
  
  Deutsche Bank Securities Inc. acted as financial advisor to Validus and Skadden, Arps, Slate, Meagher & Flom LLP provided legal advice to Validus. Evercore Partners acted as financial advisor to Flagstone and Cravath, Swaine & Moore LLP provided legal advice to Flagstone.
  
  
• Umpqua Holdings Corporation (Nasdaq: UMPQ) entered a definitive agreement to purchase California-based Circle Bancorp, parent company of Circle Bank. The agreement provides for cash consideration to the common shareholders of $20.4 million, or $17.75 per share. Including the planned cash redemption of $3.5 million in preferred stock and the value of outstanding options and warrants, the total aggregate deal value is approximately $24.9 million.
  
  Upon completion of the acquisition, all Circle Bank branches will operate under the Umpqua Bank name. The acquisition will add Circle Bank’s Bay Area network of six branches in Corte Madera, Novato, Petaluma, San Francisco, San Rafael and Santa Rosa* to Umpqua Bank’s network of 193 locations in California, Oregon, Washington and Northern Nevada.

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