Notable Mergers and Acquisitions of the Day 11/23: GMCR/DDRX, PBCT/FIF, CIEN, BDX, IDTI

November 23, 2009 10:35 AM EST

• Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) today confirmed that it has submitted a proposal to acquire Diedrich Coffee, Inc. (NASDAQ: DDRX) for $30.00 per share in cash pursuant to a cash tender offer, in a transaction with a total enterprise value of approximately $247 million. Separately, today Diedrich announced that the Board of Directors of Diedrich had determined that the GMCR offer constituted a superior proposal, as defined in the existing merger agreement between Diedrich and Peet's Coffee & Tea, Inc. (NASDAQ: PEET), to the November 2, 2009 Peet's proposal. Diedrich also announced today that is has received a revised offer from Peet's.
  
  Under the terms of GMCR's proposal, GMCR will acquire all of the outstanding shares of Diedrich common stock for $30.00 per share in cash, with no financing and no due diligence contingencies. GMCR intends to fully finance this transaction through cash on hand and GMCR's existing bank lines of credit. This offer represents a 47% premium to the closing market price of Diedrich common stock on November 2, 2009, the last trading day prior to the public announcement of a proposed merger agreement between Diedrich and Peet's, and a 15% premium over the original cash and stock proposal from Peet's. GMCR anticipates that this transaction will be neutral to slightly accretive within the first twelve months following the close, excluding one-time transaction expenses, and accretive thereafter.
  
  Lawrence J. Blanford, President and Chief Executive Officer of GMCR, said, "We are pleased that Diedrich's Board of Directors determined that our all-cash offer constituted a superior proposal to Peet's November 2, 2009 proposal. We believe our offer provides Diedrich shareholders with a substantial all-cash premium as well as greater value and greater certainty than the cash and stock proposal from Peet's. We remain committed to this strategic combination."
  
  Blanford continued, "We believe the combination with Diedrich provides significant growth opportunities and further advances GMCR's objective of becoming a leader in the highly fragmented and competitive coffee and coffee maker businesses. This transaction will build upon the success of GMCR's family of brands across North America by enhancing our brand differentiation with an expanded portfolio of fast-growing consumer offerings, and by taking advantage of manufacturing, distribution and duplication of public company cost synergies.
  
  "Diedrich's has three coffee brand platforms which will be complementary to GMCR's brands: Diedrich, Gloria Jean's, and Coffee People. The Diedrich brand offers strong Southern Californian coffeehouse heritage and will work well alongside GMCR's successful Tully's brand in the Pacific Northwest. Gloria Jean's is a premium coffee brand, widely known for its expertise in flavored coffees and indulgent beverages, and is highly visible in malls where Keurig brewers are sold. This is expected to broaden our flavored coffee and dairy-based beverage offerings. The Coffee People brand includes both straight-forward offerings like the successful Donut Shop as well as more creative and innovative product offerings like Jet Fuel, Wake-Up Call and Cowboy Coffee. These Coffee People varieties expand the appeal of the Keurig system to a broader range of coffee drinkers," Blanford added.
  
  "This combination will be a natural extension of the successful Keurig licensed roaster partnership between our two companies. We believe that an offering of meaningful brands is a key part to driving the growth of the Keurig system and we are continually evaluating ways to expand the brands we provide to consumers. To that end, we have recently added the Mr. Coffee and Cuisinart brands through brewer licenses; these join the Breville brand also under license. Additionally, we maintain numerous and differing license arrangements, which allow consumers to enjoy other specialty coffee brands including Van Houtte, Newman's Own Organics, Caribou, and Emeril's as well as specialty tea brands Celestial Seasonings and Twinings all in K-Cup portion packs," Blanford continued.
  
  "Diedrich also owns and operates manufacturing and distribution facilities in Southern California which, upon completion of this transaction, will enable us to more effectively reach consumers in this region. These facilities will also complement the investments we have made across our network and enable us to achieve our objective of having high-quality manufacturing and distribution assets strategically located across North America. The combined company will have manufacturing and distribution assets in Waterbury and Essex, Vermont, Knoxville, Tennessee, Seattle, Washington, Castroville, California and Toronto, Canada," Blanford concluded.
  
  
• People's United Financial, Inc. (NASDAQ: PBCT), the holding company for People's United Bank, announced today a definitive agreement to acquire Financial Federal Corporation (NYSE: FIF) in a stock and cash transaction valued at approximately $738 million. Completion of the transaction is subject to customary closing conditions, including the approval of the shareholders of Financial Federal.
  
  People's United expects the transaction to be significantly accretive to operating earnings in 2010 and to have an IRR greater than 20%. Given Financial Federal's significant excess capital, the transaction is expected to have a slight positive impact on People's United's industry leading capital levels on a pro forma basis. The transaction is expected to close in the first quarter of 2010.
  
  Under the terms of the definitive agreement, which has been approved by both companies' boards of directors, at closing Financial Federal Corporation shareholders will receive $11.27 in cash and one share of People's United common stock. Based on the closing price of People's United on November 20, 2009, the transaction is valued at $27.74 per Financial Federal Corporation share. The actual value per Financial Federal share on consummation of the acquisition will depend on the share price of People's United at that time. The receipt of People's United stock by shareholders of Financial Federal is expected to be tax-free.
  
  Morgan Stanley acted as exclusive financial advisor to People's United and Simpson Thacher & Bartlett LLP acted as legal counsel. Keefe Bruyette & Woods acted as exclusive financial advisor to Financial Federal Corporation and Covington & Burling LLP served as legal counsel.
  
  
• Dow Jones reported that Ciena Corp. (NASDAQ: CIEN) on Monday said it has won the auction to buy the Ethernet assets of bankrupt Canadian firm Nortel Networks for $769 million.
  
  The winning offer consists of $530 million in cash and $239 million in senior convertible notes.
  Ciena said it expects the deal to be "significantly accretive" to its operations in fiscal 2011 and that it will offer jobs to at least 2,000 Nortel employees.
  
  The transaction is expected to close in the first calendar quarter of 2010.
  
  
• BD (NYSE: BDX) today announced the completion of its acquisition of HandyLab, Inc., an Ann Arbor, Michigan-based company that develops and manufactures molecular diagnostic assays and automation platforms.
  
  In May 2009, BD and HandyLab announced an exclusive agreement for BD to develop and commercialize molecular assays on the HandyLab Jaguar platform, the first fully integrated molecular diagnostic system to provide hands-off operation, incorporating clinical sample preparation, nucleic acid extraction, and microfluidic real-time polymerase chain reaction (PCR) amplification and detection in a simple bench-top system. The self-contained workstation is designed to accommodate both batch workflows and on-demand testing for maximum lab efficiency and flexibility.
  
  With this acquisition, BD will migrate its BD GeneOhm molecular assays for Methicillin-resistant Staphylococcus aureus (MRSA), Clostridium difficile and Vancomycin-resistant Enterococcus (VRE) onto the new platform and will market them as the new BD MAX system, an evolution of the current Jaguar system.
  
  
• Concho Resources Inc. (NYSE: CXO) today announced that it has entered into a definitive agreement with multiple private sellers to acquire interests in certain producing and non-producing assets in the Wolfberry trend in the Permian Basin for $225 million in cash, subject to usual and customary closing adjustments.
  
  The acquisition of these interests is subject to certain participation rights of third parties; therefore, the Company's final ownership level in these acquired assets will be between approximately 20% and 100%. This transaction is scheduled to close in December 2009 and the Company will update 2010 guidance when its final ownership is determined.
  
  
• IDT, Inc.(NASDAQ: IDTI) today announced it has signed an agreement to divest its Micro Networks business to Spectrum Control, Inc. for approximately $13 million. The transaction, which has already received approval by the IDT Board of Directors, is expected to close by the end of November.
  
  "Our Micro Networks business has been a stable business for IDT for many years. However, we continue to sharpen our focus on analog-intensive, mixed-signal solutions for the communications, computing and consumer markets. This divestiture is a great outcome for Micro Networks employees and provides funds for use in faster growing businesses that are better aligned with our strategy," said Dr. Ted Tewksbury, IDT president and CEO.
  
  Signal Hill acted as advisors for IDT on the transaction.

To see all the Mergers & Acquisitions for today in real-time go to http://www.streetinsider.com/Mergers+and+Acquisitions

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