Notable Mergers and Acquisitions of the Day 10/24: (CI)/(HS) (ORCL)/(RNOW) (GOOG)/(YHOO) (TUC)

• Cigna Corporation (NYSE: CI) and HealthSpring, Inc. (NYSE: HS) signed a definitive agreement under which Cigna will acquire all the outstanding shares of HealthSpring for $55 per share in cash, representing a total transaction value of approximately $3.8 billion.
  
  The business combination is expected to be accretive to Cigna earnings per share in the first full year of operations. The agreement has been approved by the boards of directors of both companies and is subject to required regulatory approvals and customary closing conditions. The transaction is expected to close during the first half of 2012 and is not subject to a financing condition.
  
  
  Cigna’s financial adviser is Morgan Stanley and its legal adviser is Davis Polk. Goldman, Sachs & Co. is acting as financial adviser to HealthSpring, and its legal advisers are Skadden, Arps, Slate, Meagher & Flom, LLP and Bass, Berry & Sims PLC.
  
  
• Oracle (Nasdaq: ORCL) entered into an agreement to acquire RightNow Technologies, Inc. (Nasdaq: RNOW) for $43.00 per share or approximately $1.5 billion net of RightNow's cash and debt.
  
  The Board of Directors of RightNow Technologies has unanimously approved the transaction. The transaction is expected to close by late 2011 or early 2012.
  
  
• Plains All American Pipeline, L.P. (NYSE: PAA) disclosed today that, on October 6, 2011, it submitted a proposal to SemGroup Corporation (NYSE: SEMG) to acquire all of the outstanding shares of SemGroup for $24 per share in cash.
  
  PAA’s proposal is subject to customary documentation and regulatory approvals, but is not subject to a financing contingency.
  
  
• Mac-Gray Corporation (NYSE: TUC), reported its Board of Directors unanimously rejected an unsolicited written proposal from KP Capital, LLC to acquire Mac-Gray for $17.50 in cash per share.
  
  According to the release: "The Mac-Gray Board of Directors has completed the comprehensive evaluation it undertook in response to the KP Capital proposal. The Board's evaluation process included a meeting among two Board members and KP Capital, multiple Board meetings, the assistance of two independent financial advisors, and a thorough, special review of the current and updated business plan from Mac-Gray management. Based on its evaluation, the Board has unanimously determined that pursuing the transaction proposed by KP Capital, or a sale process, would not be in the best interests of the Company's shareholders at this time. The Board believes that the Company can best maximize long-term shareholder value by continuing to aggressively implement the strategic, operational and financial initiatives currently under way as well as those specific initiatives contemplated in the updated business plan."
  
  
• Reports over the weekend have Google (Nasdaq: GOOG) may be in talks with private equity firms about helping finance a deal to acquire Yahoo's core search business.
  
  The parties are in early-stage talks and have not put together a formal proposal. Google could still decided not to mount a bid at all.
  
  
• Mattel, Inc. (Nasdaq: MAT) entered into an agreement to acquire HIT Entertainment for $680 million in cash from a consortium led by Apax Partners funds. HIT Entertainment owns a global portfolio of popular preschool brands, including Thomas & Friends®, Barney, Bob the Builder, Fireman Sam and Angelina Ballerina®. With more than $180 million of revenues, HIT Entertainment represents one of the largest independent owners of preschool intellectual property. The purchase price equates to a multiple of about 9 ½ times trailing earnings before interest, tax, depreciation and amortization.
  
  Closing is expected in Q112.
  
  HiT is a leading independent children's entertainment producers and rights-owners with an enviable portfolio of brands, including Thomas & Friends, Bob the Builder, Barney, Fireman Sam, Angelina Ballerina, Pingu, Rainbow Magic and Mike the Knight.
  
  The transaction is not expected to have a material impact on Mattel’s 2012 earnings, but is expected to be increasingly accretive as the benefits of owning these brands are reflected in Mattel’s results, including the addition of Thomas & Friends wood business in 2013 and retention of Thomas & Friends plastic and die-cast business from 2015 onwards.
  
  The transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. RBC Capital Markets, LLC acted as financial advisor and Latham & Watkins LLP served as legal advisor to Mattel in connection with the transaction. BofA Merrill Lynch acted as financial advisor and Weil, Gotshal & Manges LLP served as legal advisor to HIT Entertainment in connection with the transaction.

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