| From: The Ox | 2/20/2015 10:58:24 AM | | | | | | Citigroup: M&A set for big jump this year
- "Animal spirits are on the up," says Citigroup. "Cash piles, cheap borrowing rates, an improving global economy and increasing CEO confidence should all boost activity again in 2015.”
- With the global equity rally boosting the value of stocks to a record $67.1T, says the team, companies would need to spend $4T on M&A to close the gap between stock prices and deal-making - that would be up 43% from 2014.
- More than $350M in deals have been announced so far this year.
- Europe has the most potential for boosted M&A, as last year's activity was 52% below the 2007 for the region (not including the U.K.). Citi sees deals worth $800B this year vs. $470B in 2014.
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| From: Glenn Petersen | 2/26/2015 3:51:45 AM | | | | | | HP in Talks to Buy Aruba Networks for Wi-Fi Infrastructure
by Alex Sherman Ed Hammond
2:02 PM CST
February 25, 2015
(Bloomberg) -- Hewlett-Packard Co. is in talks to acquire Aruba Networks Inc., a maker of wireless-network infrastructure used by hotels, universities and shopping malls, people with knowledge of the matter said.
The purchase may be announced as soon as next week, said one of the people, asking not to be identified discussing private information. The deal hasn’t been completed and the talks could still fall through.
Aruba rose 21 percent to $22.24 in New York trading Wednesday, giving the company a market value of about $2.4 billion.
This would be the largest acquisition in several years for Hewlett-Packard, where Chief Executive Officer Meg Whitman has been focused on cutting costs and returning the business to growth. Hewlett-Packard is planning to split itself in two later this year, with Whitman remaining in charge of the business focused on corporate customers.
Hewlett-Packard is “now in a position where we can actually make acquisitions, which we couldn’t when we started,” Whitman said in an interview on Tuesday, after the company released its quarterly earnings.
Howard Clabo, a Hewlett-Packard spokesman, declined to comment, as did Pavel Radda, a spokesman for Aruba.
Aruba makes hardware and software used to build Wi-Fi networks for customers including China’s Dalian Wanda Group Co., which uses the technology in shopping malls. Other customers include California State University at Los Angeles and the Edzan Hotels & Suites in Qatar.
The company’s annual sales are projected to grow to more than $1 billion by fiscal 2017, the average of eight analysts’ estimates compiled by Bloomberg show, from $729 million in the year through July.
Small Addition
Hewlett-Packard’s entire networking group contributed $562 million in sales for the company’s first quarter, down 11 percent from the year-earlier period. The division has faced challenges in the U.S. due to changes in the types of networking technology being bought, and in China due to management changes at its H3C networking unit. HP is in the process of selling its majority stake in H3C, people familiar with the situation have said.
Aruba would be a small addition to Hewlett-Packard’s overall business. The Palo Alto, California-based company reported sales for the first quarter of $26.8 billion. After its forecast for full-year profits fell short of analysts’ estimates, Hewlett-Packard’s shares fell 9.9 percent Wednesday, to $34.67. At that price it has a market value of about $63 billion.
Hewlett-Packard has a checkered past when it comes to deals. In the decade before Whitman took over, the company struck almost $66 billion of acquisitions, including of the U.K.’s Autonomy Corp. for $10.3 billion in 2011. Just one year after that deal closed, Hewlett-Packard said it would write down about 85 percent of the purchase price after discovering accounting improprieties that inflated Autonomy’s finances.
To contact the reporters on this story: Alex Sherman in New York at asherman6@bloomberg.net; Ed Hammond in New York at ehammond12@bloomberg.net
To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Elizabeth Wollman
bloomberg.com |
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| From: Glenn Petersen | 3/2/2015 2:57:17 AM | | | | | | Chip Makers Will Merge in Deal Worth $11.8 Billion
By MICHAEL J. de la MERCED
New York Times
MARCH 1, 2015
NXP Semiconductors said on Sunday that it would buy a smaller peer, Freescale Semiconductor, in an $11.8 billion deal that would create a big maker of chips for industries as varied as automobiles and mobile payments.
The merger will also offer some relief to the private equity firms that bought Freescale at the height of the leveraged buyout boom, only to see the financial crisis bring the company low.
A combination would help the two chip manufacturers in their dealings with customers like car companies and phone makers that are looking to consolidate their lists of suppliers.
In fall 2013, Applied Materials, an American manufacturer of chip-making equipment, acquired Japanese rival Tokyo Electron for more than $9 billion. Other semiconductor companies, like Qualcomm and Infineon Technologies, have also struck deals, in part to gain greater negotiating leverage.
Both NXP and Freescale have also benefited from a recent boom, as companies of all stripes look to add networking capabilities to their products. NXP in particular has had a surge in demand for so-called near-field communications technology that lets phones — notably the iPhone 6 — interact wirelessly with equipment like payment terminals.
Together, NXP, which has its headquarters in the Netherlands, and Freescale, which is based in Austin, Tex., reported $10.6 billion in sales last year.
“The combination of NXP and Freescale creates an industry powerhouse focused on the high-growth opportunities in the smarter world,” Richard L. Clemmer, NXP’s chief executive, said in a statement. “We fully expect to continue to significantly outgrow the overall market, drive world-class profitability and generate even more cash, which taken together will maximize value for both Freescale and NXP shareholders.”
Under the deal’s terms, NXP will pay $6.25 a share in cash and 0.3521 of one of its shares for each Freescale share held. That values Freescale at roughly its existing market capitalization, although shares of Freescale rose last month after The New York Post reported that the company was exploring a sale.
The discussions between the two companies that eventually led to the current deal began a little over six months ago, according to people briefed on the matter, though potential strategic acquirers of Freescale had made inquiries about a deal several times over the past four years.
Both NXP and Freescale were previously parts of bigger corporations that eventually became targets of private equity firms. NXP was formerly a division of the Dutch electronics giant Philips until it was acquired in 2006 by a group led by Kohlberg Kravis Roberts and Bain Capital for about $10 billion.
Freescale had been a part of Motorola until being purchased in 2006 by the Blackstone Group, the Carlyle Group, TPG Capital and Permira for $17.6 billion, including the assumption of debt.
Both companies soon began to struggle under new ownership, burdened by new and huge debt obligations and falling demand during the financial crisis. Freescale in particular suffered from an economic downturn and the loss of its biggest customer, its former parent.
During its darkest days, Freescale’s earnings before interest, taxes, depreciation and amortization, or Ebitda, plummeted around 80 percent. And its ratio of debt to Ebitda swelled to 13 times.
Faced with potentially needing to put the chip maker into bankruptcy, the company’s private equity owners slashed costs, shook up management and revamped its product portfolio, according to people with direct knowledge of the matter.
The fortunes of the two companies have improved since going public. Since an initial public offering in the summer of 2010, NXP’s shares have leaped 506 percent, closing on Friday at $84.90. Freescale’s stock has doubled since returning to the public markets in June 2011, closing at $36.11.
But with $1 billion in new debt to finance the deal, the combined company will be maintaining a heavy debt load of some $9.5 billion.
At the initial deal price, Freescale’s private equity backers will roughly recoup their initial investment. But the private equity firms are betting that cost savings of about $500 million from merging the two manufacturers will propel the stock price of the combined company.
nytimes.com |
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| From: richardred | 3/16/2015 11:20:37 AM | | | | | | Big pharma deals continue this year. Pharmacyclics & Hospira went earlier for multi billions.
Valeant ups Salix bid to $11.11B and Endo ends quest Valeant up Salix bid to $11.11 billion and Endo folds its cardshttp://finance.yahoo.com/news/valeant-ups-salix-bid-11-145018342.html
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| To: richardred who wrote (3805) | 3/16/2015 11:34:51 AM | | From: richardred | | | | Gloria Jean's $164m takeover cleared
The $164 million takeover of coffee chain Gloria Jean's by the company behind Donut King and Michel's Patisserie has been approved by shareholders.
Retail Food Group announced its purchase of the global business in October and has since finalised the agreement, and shareholders on Monday approved the financial arrangements involved in the deal.
They also approved the arrangements of its $30 million-plus takeover of coffee roaster Di Bella, which will further grow Retail Food Group's expansion into the coffee industry.
The group's other businesses include Brumby's Bakery and pizza chains Crust and Pizza Capers.
theaustralian.com.au |
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