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Global M&A Roundup Sep 29, 2017 – Uniper, Nets, GE Industrial Solutions

Our previous Canadian Mergers & Acquisitions roundups can be found here. Our previous global M&A roundups can be found here.

Target: Uniper SE (XTRA:UN01)

  • Industry: Power & Utilities
  • Acquirer: Karemi Charge and Drive SE
  • Target: Uniper SE
  • Size: €10.2 billion
  • Consideration: 100% Cash
  • Source of Funds: Cash, Debt
  • Sell Side Advisor: Goldman Sachs
  • Buy Side Advisors: Not Disclosed
  • Legal Advisors: Not Disclosed
  • Expected Close: mid-2018

Karemi Charge and Drive SE made a voluntary public takeover offer to acquire Uniper SE for a total implied Enterprise value of €10.2 billion on September 26, 2017. The transaction includes a €7.8 billion consideration, €1.8 billion of assumed net debt and €627 million in minority interest.

Karemi will pay a consideration of €21.31 per Uniper share and a dividend of €0.69 per Uniper share, paid in FY2017. The deal values Uniper at an implied EV/EBITDA of 6.2x.

The deal will be financed using existing cash and committed credit facilities, underwritten by Barclays, with ongoing liquidity requirements. Fortum, parent company of Karemi, is committed to maintain a stable dividend for its shareholders.

Fortum intends to be a long-term investor in Uniper. The deal is expected to boost Uniper’s energy production and storage abilities in countries aligned with Fortum’s existing markets.

Fortum also supports “accelerating the development and implementation of sustainable energy technologies,” specifically through wind and solar investments. The combined company still faces many transition challenges, including flexibility, storage and transmission of supply, as it gradually phases out coal.

Target: Nets A/S (CPSE:NETS)

  • Industry: Technology
  • Acquirers: Advent International Corp; Bain Capital Private Equity; Fisher Lynch Capital; GIC Special Investments; Hellman & Friedman LLC; Sampo Oyj; StepStone Group LP
  • Target: Nets A/S
  • Size: kr 40.4 billion (USD $6.4 billion)
  • Consideration: 100% Cash
  • Source of Funds: Not Disclosed
  • Sell Side Advisor: Latham & Watkins LLP
  • Buy Side Advisors: JP Morgan, Nordea Bank Danmark
  • Legal Advisors: Freshfields Bruckhaus Deringer LLP, Kromann Reumert, Gorrissen Federspiel I/S
  • Expected Close: Q1 2018

A consortium led by Hellman & Friedman made an offer to acquire Nets A/S for kr 40.4 billion on September 25, 2017. The offer includes a kr 33.1 billion consideration, kr 7.1 billion of assumed net debt, and kr 179 million in minority interest.

The consortium offered a consideration of kr 165 per Nets share. The deal values Nets at an implied EV/EBITDA of 19.0x and an implied PE multiple of 27.3x.

Nets handles 7.7 billion transactions from over 35 million cards throughout the Nordic region. The company’s kr 475 billion of transaction volume makes it the #1 payment processor in the region. Nets has sought private equity in order to navigate the consolidating European payment industry and accelerate the company’s long term growth.

The deal requires 90% of the share capital and voting rights of Nets to approve the transactions. Currently, about 46% of Nets’ share capital are in favour of the offer. Nets began to approach potential buyers in June of 2017.

Target: GE Industrial Solutions, Inc.

  • Industry: Industrials
  • Acquirer: ABB Ltd (SWX:ABBN)
  • Target: GE Industrial Solutions, Inc.
  • Size: $2.6 billion
  • Consideration: 100% Cash
  • Source of Funds: Not Disclosed
  • Sell Side Advisors: Not Disclosed
  • Buy Side Advisors: Credit Suisse, Dyalco
  • Legal Advisor: Davis Polk & Wardwell LLP
  • Expected Close: H1 2018

ABB Ltd has agreed to acquire GE Industrial Solutions from General Electric Company for $2.6 billion on September 25, 2017. The deal values GE Industrial Solutions at an implied EV/Revenue of 1.0x.

The target will be integrated into ABB’s Electrification Products (EP) division with the existing GE Industrial Solutions management team overseeing the product. ABB will also be able to take advantage of the GE brand.

The deal will strengthen ABB’s #2 position in the global electrification business with pro forma revenues totaling $12.3 billion. ABB will now offer its North American clients a full portfolio of solutions including LV Protection and Control, Building Products, and Critical Power (UPS) products.

Initially, the transaction will reduce ABB’s EP division operating EBITDA margin. However, ABB will maintain its target operating EBITDA margin of 15-19% in 3 years to stay competitive with its peers.

ABB also expects to realize $200 million of annual cost synergies by year 5. The sources of synergies include portfolio harmonization, footprint optimization, supply chain savings and SG&A reductions. The synergies will require a cumulative one-time cost of $400 million.

To better understand our M&A write-ups, please refer to the following:

Mergers & Acquisitions
Cash or Stock Consideration for M&A
Accretion/Dilution Part I: EPS, Earnings Yield & All-Stock Transactions

Accretion/Dilution Part II: Math and Breakeven Premiums

Accretion/Dilution Part III: Using Debt for Acquisitions
Accretion/Dilution Part IV: Synergies & Sources of Funds

Sara Troka is a first year HBA student at Ivey Business School. Sara will be joining a bank in NYC next summer. She was involved in the York Finance Club as VP Marketing and the York University Student Investment Fund as a Junior Analyst. Outside of finance, Sara enjoys photography and fashion. She is an avid traveler who enjoys exploring historic cities and beaches across Europe.

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