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Tag >> Deals
The $1.3 billion acquisition of Bresnan Communications by Cablevision Monday is the latest instance of a private equity firm unloading a portfolio company, illustrating the rebound in PE activity over last year, especially with PE firms on the sellside of transactions.
It follows the $4 billion acquisition last week of Talecris Biotherapeutics, a portfolio company of Cerberus Capital Management, by Barcelona-based Grifols.
A number of Latin American companies have been eyeing the US for acquisitions--with some big deals already completed and numerous companies looking to make use of their big balance sheets to buy US assets.
With restructuring and consolidation still the name of the game for many US firms, this could be positive news for US companies looking for buyers of their non-core assets.
Thanks to strong balance sheets and high cash reserves, demand is clearly outstripping supply in the US investment grade markets. Creditworthy corporates are taking advantage of stellar conditions in the bond markets to issue debt at prices not seen since the 1990s – yields are hovering just above 4 percent.
The companies are using the proceeds either to refinance existing debt at lower rates or simply to strike while the iron is hot and build their liquidity cushion. Companies are also pushing out maturities for the first time since the crisis began, with a number of 10-year issues and even a few 30-year tranches being launched. Much the same can’t be said for the overall corporate bond market, at least this week.
When Allscripts and Eclipsys announced their $1.3 billion merger on Wednesday, they made it very clear they were motivated by President Obama's health care legislation and his plan to ratchet up spending on electronic health records.
Allscripts is a provider of clinical software and information for physicians while Eclipsys provides services for hospitals and clinicians. "By combining the leading physician-office and post-acute care solutions from Allscripts with Eclipsys's leading enterprise solutions for hospitals and health systems, the combined company will offer a single platform of clinical, financial, connectivity and information solutions," the companies stated in their press release.
The combined company's client base will include over 180,000 US physicians, 1,500 hospitals and nearly 10,000 nursing homes, hospices, home care and other post-acute organizations. As a result, the two companies believe they are in a great position to connect physicians, other care providers and patients in hospitals, physician practices, extended care facilities, or even in a patient's home.
M&A activity is booming in the corporate IT industry, as a raft of deals have been announced by hardware, software and service suppliers of corporate technology solutions. This could be a boon for companies down the road, as big vendors buy up technology to build out their infrastructure and move closer to IT solution convergence.
IBM CEO Sam Palmisano said in late May that the company plans to spend $20 billion on acquisitions over the next four years, and started things off by announcing the $1.4 billion acquisition of Sterling Commerce from AT&T. The hardware giant had already picked up data integration specialist Cast Iron Systems earlier in the month. And HP recently announced plans to take over networking hardware vendor 3Com and IT services firm EDS.
China has increased its appetite for foreign companies.
Outbound acquisitions by Chinese companies have swelled five times to $28.4 billion so far this year (as of May 24) compared with $5.8 billion during the same period last year, according to Thomson Reuters.
Boutique investment firm Lazard is making headway in the mergers and acquisitions league tables so far this year. With its recent contract to advise the Treasury Department on the initial public offering of the government's stake in General Motors, it is also boosting its equity business.
The IPO of the 61 percent stake in GM could take place before the end of the year and could top $50 billion, according to a recent Barron's report. Lazard was hired to value the government's GM holdings and advise on the timing of the IPO. Lazard will be paid at least $7.5 billion for the assignment.
As a follow-up to yesterday's blog on Molson Coors' experience with outsourcing, the CFO of the Latin American division of Dutch comglomerate Philips provided a different perspective Thursday morning at the Hackett Group's best practices conference in Atlanta.
While Molson Coors' CFO Stewart Glendinning expressed disappointment over high turnover rates at the outsourcing company the beer company signed up with, Philips' Latin American CFO Ronald Eikelenboom said he planned on high turnover when he inked a deal with Indian outsourcer Infosys in late 2008 to expand the two companies' relationship to Brazil, where Philips' Latin American operations are based.
I'm down at the Hackett Group's best practices conference in Atlanta and just finished a video interview with Stewart Glendinning, CFO of Molson Coors, on the topic of outsourcing.
While the video won't be up for awhile, I can report that Glendinning wowed the crowd of 250 or so finance executives in attendance this morning with a frank keynote address on the subject.
The Federal Deposit Insurance Corp.'s proposed treatment of assets transferred to bank-sponsored securitization vehicles in case of receivership or conservatorship is the latest move by regulators that raises questions about the viability of the securitization market.
The FDIC's so-called safe harbor rule legally isolates bank-sponsored securitization from the sponsoring bank's failure, and allows the securitization vehicles to be rated on the basis of the quality of the underlying assets and the securitization structure rather than the stronger rating of the sponsoring bank. As a result, investors will bear the brunt of losses.