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Global M&A Roundup Oct 27, 2017 – Equis Energy, Hess Norge, BroadSoft

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

Target: Equis Energy Pte. Ltd

  • Industry: Energy
  • Acquirers: CIC Capital Corporation; Global Infrastructure Partners III; PSP Investments
  • Target: Equis Energy Pte. Ltd
  • Size: $5 billion
  • Consideration: 100% Cash
  • Source of Funds: Cash
  • Sell Side Advisors: Credit Suisse, JP Morgan
  • Buy Side Advisors: Not Disclosed
  • Legal Advisors: Davis Polk & Wardwell LLP; Skadden, Arps, Slate, Meagher & Flom LLP; Clifford Chance LLP
  • Expected Close: Q1 2018

CIC Capital, Global Infrastructure Partners III, and PSP Investments entered into an agreement to acquire Equis Energy for an implied Enterprise Value of $5 billion on October 24, 2017. The deal will include $3.7 billion consideration and $1.3 billion in net assumed liabilities.

The deal positions Equis as a dominant renewable energy player in the Asia-Pacific region, with over 180 assets located in 6 countries. Equis has a total capacity of 11 GW through its wind and solar assets in operation, construction and development.

PSP Investments is one of Canada’s largest pension funds with a large interest in renewable energy investments. Equis provides an attractive investment opportunity for both funds due to its growth potential and the stability of its cash flows; Equis only invests in growing markets with favourable regulatory environments.

Target: Hess Norge AS

  • Industry: Energy
  • Acquirer: Aker BP ASA (OB:AKERBP)
  • Target: Hess Norge AS
  • Size: $2 billion
  • Consideration: 100% Cash
  • Source of Funds: 75% Debt, 25% Equity
  • Sell Side Advisors: Not Disclosed
  • Buy Side Advisors: Not Disclosed
  • Legal Advisors: Not Disclosed
  • Expected Close: Q4 2017

On October 24, 2017, Aker BP entered into an agreement to acquire Hess Norge for $2 billion. The deal will carry forward Hess Norge’s tax loss with a net nominal after–tax value of $1.5 billion.

The transaction also includes Hess Norge’s 64.05% interests in the Valhall and 62.5% interest in Hod fields.

The deal values Hess Norge at an implied EV/Revenue of 4.5x. The deal will be financed through Aker BP’s existing long-term Reserve Based Lending bank facility and $500 million in new equity issuances.

Hess Corporation, parent company of Hess Norge, sought the asset divesture as a means to reduce costs and debt levels. The parent company will refocus its strategy on the development of assets in offshore Guyana.

The deal will add 150 mmboe of reserves, 195 mmboe of contingent resources and a production base of 24,000 boe/day to Aker BP’s existing operations. Aker BP will derive additional value from increased oil recovery and flank development opportunities.

Target: BroadSoft, Inc. (NasdaqGS:BSFT)

  • Industry: Technology, Media & Telecom
  • Acquirer: Cisco Systems, Inc. (NasdaqGS:CSCO)
  • Target: BroadSoft, Inc. (NasdaqGS:BSFT)
  • Size: $1.9 billion
  • Consideration: 100% Cash
  • Source of Funds: Not Disclosed
  • Sell Side Advisors: Jefferies, Qatalyst Partners
  • Buy Side Advisor: BofA Merrill Lynch
  • Legal Advisors: Cooley LLP, Fenwick & West LLP
  • Expected Close: Not Disclosed

Cisco Systems entered into an agreement to acquire BroadSoft for an implied Enterprise Value of $1.9 billion on October 20, 2017 . The deal includes:

  • $1.8 billion consideration to shareholders
  • $392 million consideration to convertible debtholders
  • $43 million in options
  • $207 million in debt
  • $367 million in cash
  • $(207) million adjustment

The deal will privatize BroadSoft and current employees will join Cisco’s Unified Communications Technology Group.

The deal will pay a consideration of $55 per BroadSoft share for 31.6 million outstanding shares, 1.8 million RSU’s, and 0.16 million PSU’s. The deal values BroadSoft at an implied EV/EBITDA of 78.8x and an implied P/E multiple of 21.1x.

The deal will allow BroadSoft’s small and medium-sized business clients to benefit from an integrated experience across meetings, calling, and contact center by providing combined offers. Cisco will gain additional expertise, technology and channel reach to continue to innovate its products and services as it moves away from its traditional switches and routers business.

Cisco hit 200 acquisitions earlier this year and has no plans to slow down its aggressive growth strategy. The company would traditional work with telecom providers to sell its business services. Now, Cisco plans to go directly to enterprise customers to provide it with integrated solutions.

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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