Notable Mergers and Acquisitions of the Day 10/04: (ACMR) (LKQX) (RHT) (TCO)

• A.C. Moore Arts & Crafts, Inc. (Nasdaq: ACMR) reports it has signed a definitive agreement to be acquired by an affiliate of Sbar’s, Inc., for $1.60 per common share in cash.
  
  Under the terms of the agreement, an affiliate of Sbar’s will commence a cash tender offer for all issued and outstanding shares of A.C. Moore common stock at $1.60 per share, without interest.
  
  
  The merger agreement requires that the tender offer commence within 10 business days of October 3, 2011. The tender offer is conditioned upon, among other things, satisfaction of the minimum tender condition of approximately 70.7 percent of A.C. Moore’s common stock, the receipt of funding under the financing commitment and customary closing conditions. Following completion of the tender offer, assuming the minimum tender condition is met, a Sbar’s affiliate will acquire the remaining outstanding shares of A.C. Moore common stock for $1.60 per share in cash, without interest, through a second-step merger. If the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of A.C. Moore shareholder approval. The one-step merger is conditioned upon, among other things, receipt of funding under the financing commitment and customary closing conditions. The acquisition is expected to close during Q411.
  
  Janney Montgomery Scott LLC is acting as exclusive financial advisor to A.C. Moore in connection with its review of strategic alternatives and the transaction and has rendered a fairness opinion to A.C. Moore’s Board of Directors in connection with the transaction. Blank Rome LLP is acting as legal advisor to A.C. Moore.
  
  Bryan Cave LLP and Brown & Connery, LLP are acting as legal advisors to Sbar’s in connection with the transaction.
  
  
• LKQ Corporation (Nasdaq: LKQX) reports it has acquired Euro Car Parts.
  
  The initial purchase price was £225 million ($347 million). In addition, the purchase agreement provides that the purchase price could increase by up to £55 million ($85 million) if Euro Car Parts meets certain growth targets in 2012 and 2013. The payments related to the growth targets would be payable in 2013 and 2014.
  
  The Company indicated that the acquisition is expected to generate Q4 2011 revenue of approximately $120 - $125 million and to be accretive to diluted earnings per share by $0.15 - $0.18 in 2012.
  
  
• Red Hat, Inc. (NYSE: RHT), has signed a definitive agreement to acquire Gluster, Inc.
  
  Red Hat has agreed to acquire Gluster, a privately-held company, for approximately $136 million in cash. As part of the transaction, Red Hat will also assume unvested Gluster equity outstanding on the closing date and issue certain equity retention incentives. The transaction is expected to close in October, subject to customary closing conditions.
  
  The acquisition is expected to have no material impact to Red Hat’s revenue this fiscal year but should begin to grow next year based on a subscription revenue model. Red Hat is reaffirming its Q3 and fiscal 2012 guidance, provided on its September 21, 2011 earnings call, for revenue, non-GAAP operating margin, non-GAAP earnings per share and operating cash flow, assuming the exchange rates of September 20, 2011 identified on the call. Non-GAAP operating margin and EPS estimates exclude the impact of stock-based compensation and amortization of acquisition-related intangibles. Stock-based compensation and amortization expenses are estimated to increase by $1 million and $2 million, respectively, per quarter.
  
  
• Taubman Centers, Inc. (NYSE: TCO) announced an agreement to purchase The Mall at Green Hills (Nashville, Tenn.) and The Gardens on El Paseo/El Paseo Village (Palm Desert, Calif.) from Davis Street Properties of Evanston, Ill.
  
  The purchase price for the properties is $560 million, excluding transaction costs. The consideration consists of the assumption of approximately $206 million of debt, up to $80 million of partnership units in The Taubman Realty Group Limited Partnership (TRG) and the balance of approximately $274 million in installment notes. The number of partnership units will be determined based on a value of $55 per unit.

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