Canadian M&A Roundup Oct 20, 2017 – Meituan Dianping, Cenovus Energy, Recurrent Energy Energy Mergers & Acquisitions Power & Utilities Technology by William - October 24, 2017October 24, 20170 Our previous Canadian Mergers & Acquisitions roundups can be found here. Our previous global M&A roundups can be found here. Target: Meituan-Dianping (China Internet Plus Group) Industry: Technology Investors: Syndicate (led by Tencent Holdings Ltd) Target: Meituan Dianping Size: $4 billion Consideration: Not Disclosed Sourceof Funds: Not Disclosed Sell Side Advisors:Not Disclosed Buy Side Advisors: Not Disclosed Legal Advisors: Not Disclosed Expected Close: Oct 19, 2017 On October 19, 2017, a syndicate led by Tencent concluded a Series C funding round for Meituan-Dianping with a stake of $4 billion. This gives the company a valuation of approximately $30 billion. Meituan-Dianping is a lifestyle e-commerce platform that delivers services through smartphone applications. The platform can be compared to a combination of Groupon, Yelp, and Uber Eats for a spectrum of services ranging from meals, groceries, haircuts, or massages delivered straight to consumers’ doors. They have 280 million users who are served by approximately 5 million local merchants. Post funding round, Meituan-Dingping is now ranked as the world’s 9th most valuable start-up with an aggressive market share of China’s demand economy. With rising pressure at home from competitors such as Alibaba and Baidu, Tencent and others are boosting their stake in Meituan-Dingping to bankroll faster growth. The company plans to use the money to develop AI and other analytics-driven technology. The syndicate is led by Tencent and includes names such as The Priceline Group and Canada Pension Plan Investment Board. Target: Cenovus Energy Inc. (TSX:CVE), Palliser Block Asset Industry: Energy Acquirer: Schlumberger Limited (NYSE:SLB); Torxen Energy Target: Palliser Block located in Alberta Size: CAD $1.3 Billion Consideration: 100% Cash Source of Funds: Not Disclosed Sell Side Advisors: Credit Suisse, Scotiabank Buy Side Advisors: Not Disclosed Legal Advisors: Not Disclosed Expected Close: Q4 2017 On October 19th, 2017, Schlumberger Limited (NYSE:SLB) and Torxen Energy entered into an agreement to acquire the Palliser Block asset from Cenovus Energy Inc. (TSX:CVE) for CAD $1.3 billion in cash. Schlumberger will own the asset while Torxen will be the operators. The Palliser Block is a segment with ready built infrastructure and 800,000 acres of oil and gas rights. Current production is at 54,000 BOE/d and the property sits adjacent to an existing joint venture project by Schlumberger and Torxen. This deal is in line with Cenovus’ long-term strategy of selling off non-core assets and using the proceeds to retire debt. Earlier last month, Cenovus sold off their Suffield and Alderson Assets to International Petroleum Corporation for $512 million. The proceeds of that deal also went towards retiring debt. Target: Recurrent Energy, LLC, 1 MW of Solar Power Plants Industry: Power & Utilities Acquirer: Shenzhen Energy Group Co. Target: 1 MW of Solar Power Plants in California Size: $232 million Consideration: 50% Cash, 50% Debt Source of Funds: Not Disclosed SellSide Advisers: Not Disclosed Buy Side Adviser: Not Disclosed Legal Advisers: Jones Day Expected Close: Not Disclosed On October 12, 2017, Shenzhen Energy group agreed to buy 3 solar power plants in California from Recurrent Energy. Shenzhen Energy will pay with $116 million from its own balance sheet and $124 million from overseas loans. Recurrent Energy is the solar plant construction arm of Canadian Solar Inc. (NasdaqGS:CSIQ), an integrated company based in Guelph, Canada. Recurrent develops solar plants and then sells them to long-term buyers upon completion. They operate within North America with headquarters based in San Francisco, USA. China has been a strong proponent of the push for clean energy. They heavily subsidize solar panel products which has led to a supply glut coupled with a decline in solar product quality. Shenzhen Energy sees the acquisition of these solar plants overseas as a way to diversify into quality controlled power plants. The 3 plants combined have the capacity to produce approximately 1MW of energy annually and have long-term contracts to supply power locally. 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 Share on Facebook Share Share on TwitterTweet Share on LinkedIn Share Print Print