Notable Mergers and Acquisitions of the Day 12/02: (PAA)/(BP) (SNPS)/(LAVA) (PEIX) (JVA)

• Plains All American Pipeline, L.P. (NYSE: PAA), announced today that its wholly owned subsidiary, Plains Midstream Canada ULC, entered into a definitive agreement with BP plc (NYSE: BP) to acquire its Canadian natural gas liquids (NGL) and liquefied petroleum gas (LPG) business for total consideration of approximately $1.67 billion. The acquisition is subject to regulatory approval and customary closing conditions and is anticipated to close late in the first quarter or early in the second quarter of 2012.
  
  “BP’s Canadian NGL business is an asset-rich platform that significantly expands our LPG asset footprint, providing a supply-based complement to our existing demand-focused business and making PAA one of the largest LPG service providers in North America,” said Greg L. Armstrong, Chairman and CEO of PAA. “We expect to be able to generate meaningful operating and commercial synergies by more fully connecting, integrating and utilizing these assets together with our existing North American LPG assets and our Canadian crude oil assets and activities.”
  
  Armstrong continued, “Based on the accretive nature of this transaction and the four other acquisitions announced today, we are increasing our 2012 distribution growth target to 8% - 9% over our current annualized distribution of $3.98 per common unit.” Armstrong noted that as a result of PAA’s existing credit lines, and receipt of bank commitments for a new $1.0 - $1.2 billion, 364-day liquidity facility, the Partnership is well positioned to complete the transactions while maintaining a strong balance sheet and liquidity position. The Partnership completed a $385 million equity offering in early November and is forecasting to retain approximately $300 million of cash flow in excess of distributions during 2011.
  
  In connection with the transaction, the Partnership’s general partner owners have agreed to reduce their incentive distribution rights by $15 million per year for each of the first two years following the acquisition and $10 million per year thereafter. Armstrong noted that this is the fourth time PAA’s general partner owners have agreed to unilaterally modify their incentive distribution rights, and the first time such action has included a permanent IDR reduction.
  
  The assets to be acquired include ownership interests of varying levels in and contractual rights relating to approximately 2,600 miles of pipelines, approximately 20 million barrels of LPG storage capacity, seven fractionation plants with approximately 232,000 barrels per day of capacity, multiple straddle plants and two field gas processing plants with an aggregate capacity of approximately 8 billion cubic feet per day, as well as approximately 10 million barrels of long-term and seasonal NGL inventory as of October 1, 2011. The business also includes various supply contracts at other field gas processing plants, shipping arrangements on third-party NGL pipelines and long-term leases on 720 rail cars used to move product among various locations. Collectively, the BP assets and activities provide access to approximately 140,000 to 150,000 barrels per day of NGL supply that are transported through a fully integrated network to fractionation facilities and markets in Western and Eastern Canada and the Great Lakes region of the United States.
  
  Barclays Capital served as financial advisor and Bennett Jones LLP served as legal counsel to PAA in connection with the transaction.
  
  
• Late Wednesday, Synopsys, Inc. (Nasdaq: SNPS) signed a definitive agreement to acquire Magma Design Automation Inc. (Nasdaq: LAVA), a provider of chip design software headquartered in San Jose, California. Bringing together complementary technology, development and support capabilities will enable the combined company to more rapidly meet customer requirements linked to chip designs at both leading-edge and mature process nodes.
  
  Under the terms of the merger agreement, Synopsys will acquire Magma for $7.35 per Magma share in cash, resulting in a transaction value of approximately $507 million net of cash and debt acquired. The boards of directors of both companies have unanimously approved the transaction.
  
  The closing of the merger is subject to customary conditions, including approval by the stockholders of Magma as well as U.S. regulators. In the event the merger closes as expected in the second calendar quarter of 2012, Synopsys anticipates it to be modestly accretive to non-GAAP earnings per share in its fiscal 2012. Synopsys plans to fund the acquisition with a combination of cash and debt, with the specifics to be determined at the time of close.
  
  
• Pacific Ethanol, Inc. (Nasdaq: PEIX), has purchased an additional 7% ownership interest in New PE Holdco LLC, the owner of the four Pacific Ethanol production facilities with a combined annual production capacity of 200 million gallons. The company paid $4.5 million in cash for the additional interest. This purchase brings the company's total ownership interest to 27%. On October 6, 2010, the company paid $23.3 million in cash for its initial 20% ownership interest.
  
  
• Coffee Holding Co., Inc. (Nasdaq: JVA) announced an investment in Global Mark LLC, a new venture focusing on supply of instant coffee and related products.
  
  Under the terms of the agreement with Global Mark, the Company is investing $2.0 million for a 40% interest in Global Mark. In addition, Global Mark will be providing the Company with preferred pricing on instant coffee for all of the Company's instant coffee needs.

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