Tag Archives: Economy

American, US Air will fight gov’t on merger

The Justice Department and a number of state attorneys general on Tuesday challenged a proposed $11 billion merger between US Airways Group and American Airlines’ parent company, AMR Corp.

US Airways shares fell more than 10 percent at one point in active trading. The two airlines strongly defended their combination.

An American Airlines plane (left) and a USAirways jetliner at Dallas-Fort Worth.

“We will mount a vigorous defense and pursue all legal options in order to achieve this merger and deliver the benefits of the new American to our customers and communities as soon as possible,” they said in a statement.

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K.K.R. Sells Last of Alliance Boots Stake

The private equity firm Kohlberg Kravis Roberts & Company said on Wednesday that it had sold off its remaining stake in the British drugstore chain Alliance Boots.

The sale follows Monday’s vote by Walgreen & Company shareholders, who approved the acquisition of the 55 percent of Alliance Boots that Walgreen did not already own. The private equity’s firms shares were sold to the holding company that has now been formed, Walgreens Boots Alliance.

In 2007, Kohlberg Kravis, along with Stefano Pessina, who was Alliance Boots deputy chairman and its largest shareholder at the time, took the British company private in a $22 billion deal — Europe’s largest ever leveraged buyout.  The private equity firm invested $1.8 billion in Alliance Boots.

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Beam bonds soar on M&A news

NEW YORK, Jan 13,2014 (IFR) – Beam’s bonds ratcheted in by as much as 15 basis points on Monday after Japan’s Suntory Holdings made a USD16bn bid for the US spirits maker.

Beam’s 3.25% June 2023s were trading around 60p bid/55bp offered this morning, from around 70/65bp on Friday. Its 1.75% 2018s tightened to Treasuries plus 30bp mid-morning from around Treasuries plus 45bp at open.

 

The tightening is based on hopes that a successful bid from Suntory will trigger a change of control (CoC) covenant aimed at protecting investors against credit event risk.

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8-K Filing Shows PCM Enters Agreement With Sarcom Properties To Buy Property For $6.569M

On December 23, 2014, PCM, Inc. (the “Buyer”) entered into an agreement with Sarcom Properties, Inc. (the “Seller”), an unaffiliated third party, to buy certain real property from the Seller for a total cash sales price of $6,569,500 (the “Agreement”). The real property is located at 8337 Green Meadows Drive N., Lewis Center, Ohio and includes approximately 12.4 acres of land together with a building for office and warehouse space of approximately 144,000 square feet (the “Building”). One of our other subsidiaries is currently the tenant of the Building and it is currently being used as our second headquarters, sales office and distribution center. We expect to finance around 70% of the purchase price with a long-term note.

The Buyer is entitled to terminate the Agreement for any reason while it conducts due diligence related to the property during a 30 day period from December 23, 2014 (the “Due Diligence Period”). In addition, the Buyer may extend the Due Diligence Period for further environmental due diligence for an additional 30 days if it determines in its sole discretion that further environmental due diligence is required. However, the Buyer and Seller have agreed to use best efforts to close the transaction no later than January 31, 2015. The Agreement also contains other customary closing conditions to the purchase and sale of the real property.

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Worldwide M&A activity reaches seven-year high

During the first few months of 2014, it quickly became apparent that major companies and corporations across the U.S. were interested in expanding their operations through aggressive mergers and acquisitions. We have reported extensively on many of the most noteworthy complex transactions to be undertaken within the nation, however, it seems that just as many landmark deals have been reached outside of the country, as well.

Global transactions total more than $1 trillion in Q2
In the latest bit of M&A news, the deal volume recorded during the second three-month period of this year has amounted to more than $1 trillion, according to Reuters. This figure marks the largest deal volume observed since the same time in 2007, and represents a significant improvement from the $680 million that changed hands during the first quarter of 2014.

“Companies have strategic imperatives to do deals, they have the cash to do deals, and they can borrow additional cash at record-low rates,” Frank Aquila, a mergers and acquisitions lawyer at Sullivan & Cromwell LLP, told the news source. “It really is a bit of a perfect storm when it comes to dealmaking.”

Multiple mega deals were completed during the second quarter, including agreements between Oracle and Micros Systems, Tyson Foods and Hillshire Brands as well as Sprint and T-Mobile.

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Good year for cross-border M&A in the Middle East

“The Middle East has seen a very robust year in terms of both inbound and outbound M&A activity,” said Tom Thraya, UAE Head of Corporate/M&A for Baker&McKenzie Habib Al Mulla.”The increasing trend looks set to continue in 2015, with stable markets such as the UAE and Saudi Arabia remaining attractive to international investors. Factors such as the UAE’s increasing importance as a business hub for the Middle East and Africa, and the opening up of Saudi Arabia’s stock exchange for foreign investors in 2015, are fueling optimism for a further acceleration of M&A activity in the region.”

Data from Thomson Reuters reveals that as of 14 December 2014, the total value of Middle Eastinbound M&A activity has already surpassed 2013, increasing by 53 percent to reach USD9.5 billion. In terms of deal value, inbound acquisitions were driven by the US (49.8 percent), followed by China (10.3 percent) and Switzerland (7.1 percent). The US had the most number of transactions with 43 deals, followed by India and China, both with 8 deals.

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PFSweb, Speed Commerce are urged to merge

As the valuations of e-commerce groups PFSweb Inc. (PFSW) and Speed Commerce Inc. (SPDC) have converged, activist firm Engine Capital LP is pushing the companies to combine.

“As a result of the stock appreciation of PFSW and the stock decline of SPDC over the past 12 months, the Ebitda multiples of both companies have now converged to a point where a combination of both companies is doable,” Engine managing partner Arnaud Ajdler wrote in a letter to the boards of both companies made public on Monday. “The historical reason for not merging the companies is no longer an obstacle.”

PFSWeb-LG.jpg

PFSweb stock has climbed from about $9 at the start of 2014 to $12.19 Tuesday morning, putting its market cap at about $190 million. Speed shares have declined from about $4.60 each at the beginning of the year to $2.99, with its total equity worth about $215 million. Both companies’ valuations have settled at about 10 times Ebitda.

After restructuring by Speed, the companies have nearly identical businesses providing e-commerce services to retailers and manufacturers.

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