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Notable Mergers and Acquisitions of the Day 9/28: XRX/ACS, ABT, COV/ASPM, PMRY


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September 28, 2009 10:08 AM EDT
  • Xerox Corporation (NYSE: XRX) and Affiliated Computer Services, Inc. (NYSE: ACS) today announced a definitive agreement for Xerox to acquire ACS in a cash and stock transaction valued at $63.11 per share or $6.4 billion as of the closing price of Xerox stock on Sept. 25.

    This acquisition will transform Xerox into the leading global enterprise for document and business process management, and will accelerate its growth in an expanding market.

    Under the terms of the agreement, ACS shareholders will receive a total of $18.60 per share in cash plus 4.935 Xerox shares for each ACS share they own. In addition, Xerox will assume ACS's debt of $2 billion and issue $300 million of convertible preferred stock to ACS's Class B shareholder. On an adjusted earnings basis, the transaction is expected to be accretive in the first year.

    The transaction, which has been approved by the Xerox and ACS boards of directors and ACS special committee, is expected to close in the first quarter of 2010.

  • Abbott (NYSE: ABT) announced a definitive agreement to acquire Solvay's pharmaceuticals business for EUR 4.5 billion ($6.6 billion) in cash.

    The merger will provide Abbott with a large and complementary portfolio of pharmaceutical products and a significant presence in key global emerging markets. The acquisition also includes full global rights to the fenofibrate franchise. Currently Abbott has U.S. rights to fenofibrate and pays royalties to Solvay.

    Solvay Pharmaceuticals will add more than $3 billion in annual sales, the majority outside the U.S.. The acquisition will also add approximately $500 million to Abbott's annual pharmaceutical R&D investment.

    The transaction will be approximately $0.10 accretive to ongoing earnings per share in 2010, accelerating to more than $0.20 by 2012, increasing thereafter, all before one-time transaction-related items, which will be provided at a later date. These one-time transaction-related items are expected to occur between 2010 and 2012. The transaction also includes payments of up to EUR 300 million if certain sales milestones are met between 2011 and 2013.

    Abbott plans to fund the transaction with cash currently on the balance sheet.

    This transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the first quarter of 2010. As a result, the deal will have no impact on 2009 ongoing earnings per share.

  • Covidien (NYSE: COV) agreed to acquire Aspect Medical Systems, Inc. (NASDAQ: ASPM) for $12.00 in cash per Aspect share for a total of approximately $210 million, net of cash and short-term investments acquired.

    Shares of Aspect Medical closed at $7.67 on Friday.

    Assuming a December 31, 2009, closing, Covidien expects this transaction to dilute fiscal 2010 GAAP earnings per share, primarily due to a one-time charge for restructuring. On a non-GAAP basis, excluding the restructuring charge, the transaction is expected to be slightly dilutive to 2010 earnings per share; however, the underlying strength of Covidien's existing businesses is expected to offset this dilution. As a result, Covidien does not anticipate this transaction will have a material impact on its fiscal 2010 sales or operating margin outlook.

    Once the transaction has been completed, Covidien will report the Aspect business as part of its Oximetry and Monitoring product line in the Medical Devices segment.

  • Late Friday, Pomeroy IT Solutions, Inc. (Nasdaq: PMRY) entered into a definitive merger agreement to be acquired by affiliates of private equity firm Platinum Equity, LLC.

    Under the terms of the merger agreement, Platinum Equity, through its affiliates, will acquire all of the outstanding common stock of the Company for $6.50 per share.

    Pomeroy IT Solutions closed at $5.84 on Friday.
To see all the Mergers & Acquisitions for today in real-time go to http://www.streetinsider.com/Mergers+and+Acquisitions

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