Notable Mergers and Acquisitions of the Day 11/30: SYK, PPDI, CAT, VNR, CBE/FSS
- Stryker Corporation (NYSE: SYK) announced a definitive agreement to acquire privately held Ascent Healthcare Solutions, Inc. a market leader in the reprocessing and remanufacturing of medical devices in the U.S.
Under the terms of the agreement, Stryker will acquire Ascent Healthcare Solutions for $525 million in an all cash transaction. The closing is conditioned on the expiration or termination of all applicable waiting periods pursuant to the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The board of directors of Stryker and the board of directors and shareholders of Ascent Healthcare Solutions have approved the transaction.
Ascent Healthcare Solutions was formed through the 2005 merger of Vanguard Medical Concepts and Alliance Medical Corporation, two leading players in the reprocessing and remanufacturing of medical devices. With over 900 team members, Ascent achieved sales in 2008 in excess of $100 million.
- PPD, Inc. (NASDAQ: PPDI) today announced it has completed its acquisition of BioDuro LLC, a drug discovery outsourcing company focused on integrated drug discovery programs and services.
With this acquisition, PPD now employs more than 1,400 in Asia Pacific and nearly 1,000 people in China, making it the largest contract research organization to offer clinical development and discovery services in the country.
"Our acquisition of BioDuro positions us to capitalize on the tremendous growth in Asia Pacific and to become the CRO of choice in China," said David Grange, chief executive officer of PPD. "BioDuro has a premier reputation for delivering quality service and has built an exceptional team of researchers and scientists. We are very pleased to welcome BioDuro's 660 employees into PPD."
Founded in 2005, BioDuro operates a state-of-the-art, 110,000-square-foot laboratory in Beijing. With the vast majority of its employees based in China, the company focuses on providing fully integrated programs to synthesize and optimize novel compounds to generate drug development candidates.
PPD paid approximately $77 million in cash to acquire BioDuro.
- Caterpillar Inc. (NYSE: CAT) announced today it has entered into an agreement to acquire JCS Co., Ltd., a subsidiary of Jinsung T.E.C. Co., Ltd., a South Korea-based manufacturer that specializes in producing undercarriage components for earthmoving and other off-road machinery. The acquisition builds on a strong, existing relationship between Caterpillar and Jinsung T.E.C. Currently Jinsung supplies Caterpillar with rollers, idlers and metal-faced seals used on a wide range of Caterpillar machines. The acquisition of JCS will provide Caterpillar proprietary technology to competitively produce highly engineered seals that will improve machine undercarriage reliability and durability.
The JCS seal manufacturing facility will be the first factory for Caterpillar in South Korea. It will complement Caterpillar's existing footprint in Asia Pacific, which includes manufacturing facilities in China, India, Indonesia and Australia.
The acquisition, which is subject to, among other things, regulatory approval, is expect to be finalized in early 2010.
- Vanguard Natural Resources, LLC (NYSE: VNR) today announced it has entered into a definitive agreement to acquire producing oil and gas assets in the Permian Basin for $55 million from a private seller. The properties to be acquired have estimated total proved reserves of 3.2 million barrels of oil equivalent, of which approximately 83% are oil reserves and 65% are proved developed. Current net production attributable to the assets being acquired is approximately 780 Boe/d. At closing, Vanguard will operate the majority of the producing wells located on the acquired properties. The effective date of the acquisition is October 1, 2009 and the Company anticipates closing this acquisition during December 2009.
Scott W. Smith, President and Chief Executive Officer, commented that "The assets being acquired in this transaction are an excellent addition to our existing Permian Basin operating platform. As the operator of the assets, we have plans for a development drilling program over the next several years that should maintain our production rates at or above current levels for these properties. These assets are primarily oil production and with the hedges we contemplate putting in place upon closing the acquisition, this acquisition should be a major contributor to our cash flow next year and for several years thereafter."
After closing this transaction, management intends to recommend to the Company's Board of Directors an increase in the quarterly distribution rate for the fourth quarter 2009 distribution payable on February 14, 2010. The Company is currently distributing $0.50 per quarter ($2.00 annualized).
The Company intends to fund this acquisition with borrowings under its existing reserve-based credit facility. Vanguard has requested that the banks perform an interim borrowing base redetermination to include the properties from this acquisition. We anticipate an increase to the current borrowing base of $170 million to take into account the additional value of the assets being acquired.
- Cooper Industries plc (NYSE: CBE) announced the acquisition of Texas-based Pauluhn Electric from Federal Signal Corporation (NYSE: FSS). Pauluhn Electric is a leading provider of specialized marine, offshore and industrial lighting and connecting product solutions for harsh and hazardous locations and corrosive environments.
Terms of the transaction were not disclosed.
Pauluhn Electric was founded in 1924 and designs and manufactures a wide range of specialized area lighting and connecting solutions used in offshore and onshore drilling, shipbuilding, mining, petrochemical and other industrial applications involving harsh and corrosive environments.
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