Notable Mergers and Acquisitions of the Day 11/19: BX, AGU/CF, PRIM, CL
- Blackstone Group's (NYSE: BX) Pinnacle Brands Corp. is expected to acquire Birds Eye Foods for $1.3 billion the Wall Street Journal reported, citing people familiar with the matter.
Birds Eye Foods is the nation's largest frozen-vegetable company and is majority owned by the private-equity firm Vestar Capital Partners. The deal could be announced as soon as Thursday.
Bird's Eye, which currently carries $700 million in long-term debt, has a dominant market share in the frozen vegetable market, representing 25 percent of total sales in the industry. The company was acquired by Vestar in 2002, and employers approximately 1,700 workers, with warehouses throughout the Midwest.
The all-cash deal will add to Pinnacle's stable of branded grocery products sold throughout the country, including Vlasic pickles, Mrs. Butterworth syrup and Open Pit Barbeque sauce.
The deal is a sign that private-equity funds have become more willing to make transactions as the nation recovers from recession.
Birds Eye had filed for an initial public offering in October in an attempt to generate a minimum of $350 million.
Shares of Blackstone last traded at $15.55 at the close yesterday.
- Agrium Inc. (NYSE: AGU) today announced that stockholders of CF Industries Holdings, Inc. (NYSE: CF) have tendered approximately 30 million shares, or 62 percent of the total outstanding CF shares, into its offer of $45.00 in cash and one Agrium common share per CF share, as of its expiration last night at 12:00 midnight, New York City time. The offer is currently valued at $101.90 per CF share, or a total consideration of approximately $5.1 billion, based on yesterday's closing Agrium share price.
Agrium President and CEO Mike Wilson said, "We are pleased that once again, CF stockholders have strongly supported our offer. CF stockholders have sent a clear and unambiguous message to CF's board that they want this deal with Agrium. To achieve such a compelling majority of stockholder support for a second time regarding the combination of our two companies speaks for itself. We have the highest regard for CF's people and assets. The companies have complementary strengths both geographically and in terms of our product mix. We look forward to meeting with CF and its advisors shortly to conclude this mutually beneficial transaction."
Agrium has satisfied all related regulatory issues in Canada, and has signed a proposed Consent Agreement with the U.S. Federal Trade Commission. Agrium has a clear path to completion and is prepared immediately to execute a binding merger agreement with CF.
Agrium has extended the offer until 12:00 midnight, New York City time, on December 18, 2009. The offer is not subject to a financing condition. Agrium has sufficient cash resources and committed financing underwritten by Royal Bank of Canada and The Bank of Nova Scotia to fund the cash portion of the offer. The offer is subject to certain conditions described in the offer to exchange.
- Primoris Services Corporation (NASDAQ: PRIM) today announced that it has signed a definitive agreement to acquire James Construction Group, L.L.C., one of the largest privately-held construction companies in the southeastern United States, in a transaction valued at approximately $135 million. Total consideration will be comprised of $7 million in cash, a five-year $53.5 million promissory note with escalating interest of 5% to 8% and shares of Primoris preferred stock valued at $64.5 million. The preferred stock will be automatically converted into shares of Primoris common stock after approval of Primoris shareholders. The definitive agreement also contains an incentive provision that could provide an additional $10 million of Primoris common stock based on James Construction Group attaining specified financial goals for the year ending December 31, 2010.
For the year ended December 31, 2008, James Construction Group generated revenues of approximately $410 million and an operating profit of approximately $33 million. Primoris expects that the transaction will be immediately accretive to its earnings per share.
Following the completion of the acquisition, James Construction Group will become a wholly-owned subsidiary of Primoris, and its current management team, led by CEO Mike Killgore, will continue to operate the business.
The acquisition is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.
- CNBC's David Faber said his sources know of no takeover talks between Reckitt and Colgate-Palmolive Co. (NYSE: CL). Yesterday, shares of CL rose 4-5% in the final hour of trading on the speculation. Shares are down 2.2% today.
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