Target: Energy Future Holdings Corp.
- Industry: Power & Utilities
- Acquirer: Berkshire Hathaway Energy Company
- Target: Energy Future Holdings Corp.
- Size: $9 billion
- Consideration: 100% Cash
- Source of Funds: Not Disclosed
- Sell Side Advisor: Not Disclosed
- Buy Side Advisor: Not Disclosed
- Legal Advisor: Kirkland & Ellis
- Expected Close: Q4 2017
Berkshire Hathaway Energy Company entered into a definitive agreement to acquire Energy Future Holdings Corp for $9 billion on July 7, 2017.
Energy Future Holdings filed for Chapter 11 bankruptcy protection in 2014 and continues to reorganize its operations as they finalize the bankruptcy. A few years ago, Warren Buffet expressed his doubts in investing in bonds associated with Energy Future Holdings.
Berkshire Hathaway Energy is interested in Energy Future Holdings in order to acquire an 80% stake in a Texas power transmission company, Oncor Electric Delivery. Oncor provides energy to over 10 million customers in Texas with more than 122,000 miles of transmission and distribution lines. This would significantly increase Berkshire Hathaway Energy customer base as they currently serve 11.6 million customers in the U.S., the U.K. and Canada.
Berkshire has placed various bets on U.S. infrastructure including railroads and industrial manufacturing as the company searches for stable and regulated industries to deliver growth. Buffet is interested in the steady profits offered by Oncor from its utilities and infrastructure deals.
Target: Worldpay Group plc (LSE:WPG)
- Industry: Telecom, Media and Technology
- Acquirer: Vantiv, Inc.
- Target: Worldpay Group plc
- Size: £9.24 billion
- Consideration: Cash and Equity
- Source of Funds: Equity
- Sell Side Advisor: Goldman Sachs
- Buy Side Advisor: Morgan Stanley
- Legal Advisor: Not Disclosed
- Expected Close: Q3 2017
Vantiv entered into a merger agreement to acquire Worldpay group for £8.92 billion on July 5, 2017. The deal includes a £7.55 billion consideration to shareholders and £1.37 billion of net debt.
Vantiv will pay £0.55 in cash and 0.0672 new Vantiv shares per Worldpay share. In addition, Worldpay shareholders will receive a cash dividend of 5 pence per Worldpay share. This values the company at £3.85 per Worldpay Share with an implied EV/EBITDA of 21.2x and an implied P/E multiple of 28.2x.
Following the merger, Worldpay shareholders would own approximately 41% of the share capital of the combined company. If the deal goes through, Worldpay will be delisted from London Stock Exchange while common stock of Vantiv will be held by the combined group and continue to be listed on the New York Stock Exchange.
The acquisition serves to counter the “Amazon effect”. The deal will allow Vantiv to gain greater exposure to e-commerce retailers and small businesses as most of its revenue comes from brick and mortar businesses such as Barnes & Noble, T.J. Maxx, and Macy’s.
The deal greatly expands Vantiv’s international exposure overseas for the first time. “The combined company will have strong operations in the U.S., Europe, Asia and South America,” the boards said. Furthermore, the board has identified “substantial opportunities for cost synergies”. These cost synergies may come from integrated payments channels, technology platforms and client base.
Target: Monogram Residential Trust, Inc. (NYSE:MORE)
- Industry: Real Estate
- Acquirer: Greystar Real Estate Partners
- Target: Monogram Residential Trust, Inc.
- Size: $3.86 billion
- Consideration: 100% Cash
- Source of Funds: Internal Cash, Debt
- Sell Side Advisor: Morgan Stanley
- Buy Side Advisor: JP Morgan
- Legal Advisors: Goodwin Procter LLP, Jones Day
- Expected Close: Q3 or Q4 2017
Greystar Growth & Income Fund, LP managed by Greystar Investment Group, LLC entered into a definitive merger agreement to acquire Monogram Residential Trust for $3.86 billion on July 4, 2017. This includes a $2.02 billion consideration to shareholders and $1.84 billion of net assumed debt.
The deal will pay Monogram’s shareholders $12 per share in cash, a 22% premium to the prior day’s closing price. After the transaction closes, Monogram will be taken private. The deal values Monogram at an implied EV/EBITDA of 27.8x.
Part of Monogram’s portfolio includes rental properties in Dallas, including the Alexan project overlooking Stemmons Freeway and the Arpeggio in Victory Park and other developments on Oak Lawn, Addison, and Arlington. Overall, Monogram owns investments in 49 communities and 10 states, totalling over 13,674 units.
The acquisition of Monogram other only further accentuates Greystar’s position as the 19th largest apartment owner in the US with over 44,037 units. Greystar, for the record, also manages over 415,634 units as an apartment manager.
Included in the $3.86 billion transaction price is Monogram’s two institutional co-investment joint ventures PGGM and NPS. The former will be restructured in the deal while the latter will be purchased by Greystar in a separate agreement for $500 million. JP Morgan has agreed to finance the purchase with $2 billion of debt.
Thanks for contributions from Tim Chen for Worldpay Group Plc