Notable Mergers and Acquisitions of the Day 06/27:(PCP) (NYT) (HIG)/(BRK-A) (HOGS)
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* Precision Castparts Corp. (NYSE: PCP) has agreed to acquire Permaswage SAS (Permaswage), a world-leading designer and manufacturer of aerospace fluid fittings, for $600 million.
Permaswage's primary focus is the design and manufacture of permanent fittings used in fluid conveyance systems for airframe applications, as well as related installation tooling. The company has particular expertise in swaged fittings, which establish a permanent connection between two tubes, and a growing presence in separable (threaded) fittings. Permaswage permanent fittings have been designed into virtually every major commercial and military aircraft program. The company operates manufacturing locations in Gardena, California; Paris, France; and Suzhou, China, and employs approximately 680 people.
The cash acquisition will be immediately accretive to earnings. Subject to regulatory approvals, the transaction is expected to be completed during the second quarter of fiscal 2014, after which its results will be reported as part of the Airframe Products segment.
* New York Times (NYSE: NYT) shares are flat in early trading amid reports that it its planning to unload Boston Globe assets at a steep discount.
According to Bloomberg, bidding will start at $100 million. Bidders include former Globe president Rick Daniels and a group led by former Times CEO Jack Griffin.
Having hired Evercore to advise on a sale of the Globe assets, Times is taking a large hit on the deal unless bidding heats up. It bought the Globe assets for $1.1 billion in 1993, which was mostly a stock deal.
The purchase and erosion of the newspaper segment has caused Times' market cap to see a steep decline. Its current market cap of $1.6 billion is down 19 percent since it first acquired the Globe and well-off a peak cap of $8 billion reached in 1999.
Negotiations have stumbled over what to include in the total cost, particularly with respect to pension liability. Two bidders could be including pension liability, meaning the cash portion of the offer would be lower.
* The Hartford (NYSE: HIG) has signed a definitive agreement to sell its subsidiary, Hartford Life International Limited (HLIL), in a cash transaction to Columbia Insurance Company, a Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) company, for approximately $285 million. At closing, HLIL’s sole asset will be its subsidiary, Hartford Life Limited (HLL), a Dublin-based company that sold variable annuities in the U.K. from 2005 to 2009.
The purchase price is roughly equal to HLL’s statutory surplus (calculated under Irish accounting standards) as of March 31, 2013, and is expected to reduce U.S. statutory surplus by approximately $150 million in the second quarter of 2013. In addition, the transaction is expected to result in a net loss of approximately $110 million, after-tax (calculated under U.S. GAAP), in the second quarter of 2013.
The agreement, which is subject to customary closing conditions and regulatory approvals, is expected to close by the end of the year. The Hartford's financial advisor for this transaction is Deutsche Bank, and the company's legal advisor is Sidley Austin LLP.
* Zhongpin Inc. (Nasdaq: HOGS) announced the completion of the merger (the "Merger") contemplated by the previously announced Amended and Restated Agreement and Plan of Merger, dated as of February 8, 2013 (the "Merger Agreement"), by and among Golden Bridge Holdings Limited ("Parent"), Golden Bridge Merger Sub Limited (the "Merger Sub"), Mr. Xianfu Zhu and the Company. As a result, the Company became a wholly-owned subsidiary of Parent.
Under the terms of the Merger Agreement, which was approved by the Company's stockholders at a special meeting held on June 27, 2013, each share of Company common stock has been cancelled and converted into the right to receive $13.50 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration"), except for (a) shares of common stock owned by the Company as treasury stock and shares owned by Parent or Merger Sub and their affiliates, including shares contributed to Parent by Mr. Xianfu Zhu, Mr. Baoke Ben, Mr. Chaoyang Liu, Mr. Qinghe Wang, Mr. Shuichi Si and Ms. Juanjuan Wang (the "Rollover Investors"), all of which shares of common stock have been cancelled without the right to receive any consideration thereon, and (b) shares of common stock owned by stockholders who have exercised, perfected and not withdrawn a demand for or lost the right to, appraisal rights under the Delaware General Corporation Law ("DGCL"), which shares of common stock have been cancelled and have entitled the former holders thereof to receive the appraised value thereon in accordance with such holder's appraisal rights under the DGCL.
Stockholders of record as of the effective time of the Merger who are entitled to the Merger Consideration will receive a letter of transmittal and instructions on how to surrender their share certificates in exchange for the merger consideration. Stockholders should wait to receive the letter of transmittal before surrendering their share certificates.
Cowen and Company (Asia) Limited and Duff & Phelps Securities, LLC are serving as independent financial advisors to the Special Committee of the Company's Board of Directors. Akin Gump Strauss Hauer & Feld LLP is serving as United States legal advisor to the Special Committee of the Company's Board of Directors, and O'Melveny & Myers LLP is serving as United States legal advisor to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is serving as United States legal advisor to the buyer group. Credit Suisse is serving as financial advisor to the buyer group. Paul Hastings Janofsky and Walker LLP is serving as legal advisor to Cowen and Company (Asia) Limited, and Winston Strawn LLP is serving as legal advisor to Duff & Phelps Securities, LLC.
To keep up on all the Mergers & Acquisitions data in real-time, go to our M&A Insider page.
Permaswage's primary focus is the design and manufacture of permanent fittings used in fluid conveyance systems for airframe applications, as well as related installation tooling. The company has particular expertise in swaged fittings, which establish a permanent connection between two tubes, and a growing presence in separable (threaded) fittings. Permaswage permanent fittings have been designed into virtually every major commercial and military aircraft program. The company operates manufacturing locations in Gardena, California; Paris, France; and Suzhou, China, and employs approximately 680 people.
The cash acquisition will be immediately accretive to earnings. Subject to regulatory approvals, the transaction is expected to be completed during the second quarter of fiscal 2014, after which its results will be reported as part of the Airframe Products segment.
* New York Times (NYSE: NYT) shares are flat in early trading amid reports that it its planning to unload Boston Globe assets at a steep discount.
According to Bloomberg, bidding will start at $100 million. Bidders include former Globe president Rick Daniels and a group led by former Times CEO Jack Griffin.
Having hired Evercore to advise on a sale of the Globe assets, Times is taking a large hit on the deal unless bidding heats up. It bought the Globe assets for $1.1 billion in 1993, which was mostly a stock deal.
The purchase and erosion of the newspaper segment has caused Times' market cap to see a steep decline. Its current market cap of $1.6 billion is down 19 percent since it first acquired the Globe and well-off a peak cap of $8 billion reached in 1999.
Negotiations have stumbled over what to include in the total cost, particularly with respect to pension liability. Two bidders could be including pension liability, meaning the cash portion of the offer would be lower.
* The Hartford (NYSE: HIG) has signed a definitive agreement to sell its subsidiary, Hartford Life International Limited (HLIL), in a cash transaction to Columbia Insurance Company, a Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) company, for approximately $285 million. At closing, HLIL’s sole asset will be its subsidiary, Hartford Life Limited (HLL), a Dublin-based company that sold variable annuities in the U.K. from 2005 to 2009.
The purchase price is roughly equal to HLL’s statutory surplus (calculated under Irish accounting standards) as of March 31, 2013, and is expected to reduce U.S. statutory surplus by approximately $150 million in the second quarter of 2013. In addition, the transaction is expected to result in a net loss of approximately $110 million, after-tax (calculated under U.S. GAAP), in the second quarter of 2013.
The agreement, which is subject to customary closing conditions and regulatory approvals, is expected to close by the end of the year. The Hartford's financial advisor for this transaction is Deutsche Bank, and the company's legal advisor is Sidley Austin LLP.
* Zhongpin Inc. (Nasdaq: HOGS) announced the completion of the merger (the "Merger") contemplated by the previously announced Amended and Restated Agreement and Plan of Merger, dated as of February 8, 2013 (the "Merger Agreement"), by and among Golden Bridge Holdings Limited ("Parent"), Golden Bridge Merger Sub Limited (the "Merger Sub"), Mr. Xianfu Zhu and the Company. As a result, the Company became a wholly-owned subsidiary of Parent.
Under the terms of the Merger Agreement, which was approved by the Company's stockholders at a special meeting held on June 27, 2013, each share of Company common stock has been cancelled and converted into the right to receive $13.50 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration"), except for (a) shares of common stock owned by the Company as treasury stock and shares owned by Parent or Merger Sub and their affiliates, including shares contributed to Parent by Mr. Xianfu Zhu, Mr. Baoke Ben, Mr. Chaoyang Liu, Mr. Qinghe Wang, Mr. Shuichi Si and Ms. Juanjuan Wang (the "Rollover Investors"), all of which shares of common stock have been cancelled without the right to receive any consideration thereon, and (b) shares of common stock owned by stockholders who have exercised, perfected and not withdrawn a demand for or lost the right to, appraisal rights under the Delaware General Corporation Law ("DGCL"), which shares of common stock have been cancelled and have entitled the former holders thereof to receive the appraised value thereon in accordance with such holder's appraisal rights under the DGCL.
Stockholders of record as of the effective time of the Merger who are entitled to the Merger Consideration will receive a letter of transmittal and instructions on how to surrender their share certificates in exchange for the merger consideration. Stockholders should wait to receive the letter of transmittal before surrendering their share certificates.
Cowen and Company (Asia) Limited and Duff & Phelps Securities, LLC are serving as independent financial advisors to the Special Committee of the Company's Board of Directors. Akin Gump Strauss Hauer & Feld LLP is serving as United States legal advisor to the Special Committee of the Company's Board of Directors, and O'Melveny & Myers LLP is serving as United States legal advisor to the Company. Skadden, Arps, Slate, Meagher & Flom LLP is serving as United States legal advisor to the buyer group. Credit Suisse is serving as financial advisor to the buyer group. Paul Hastings Janofsky and Walker LLP is serving as legal advisor to Cowen and Company (Asia) Limited, and Winston Strawn LLP is serving as legal advisor to Duff & Phelps Securities, LLC.
To keep up on all the Mergers & Acquisitions data in real-time, go to our M&A Insider page.
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