Merger & Acquisition Round Up - December 22 to 26, 2014

ALTEN Group, the €1.2 Billion European leader in Technology Consulting and Engineering, announced the acquisition of cPrime Inc., a San Francisco-based industry leader in Agile consulting, training, and Enterprise Agile Transformation services.

Dec 26, 2014 11:12 IST India Infoline News Service

Top News 
 
Sumitomo Mitsui to acquire 2.77% stake in Reliance Capital
Reliance Capital Ltd has sold a 2.8 per cent stake to Japan's Sumitomo Mitsui Trust Bank for Rs 371 crore. The Board of Directors of the company has approved a proposal to issue and allot 70,00,000 Equity Shares of face value of Rs.10 each at a premium of Rs.530 per share, aggregating to Rs.371 crore to Sumitomo Mitsui Trust Bank, Limited (SMTB) (Preferential Allotment), subject to necessary permissions, sanctions, approvals and applicable SEBI Regulations and other provisions of law and which is subject to approval of the Members of the Company.
 
The Board has also proposed to conduct an Extraordinary General Meeting of the Members of the Company on January 23, 2014 to consider the Preferential Allotment of Equity Shares under Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”) and Section 62 and Section 42 of the Companies Act, 2013 and Rules made there under and other applicable provisions of the law.
 
The “Relevant Date” for the Preferential Allotment of Equity Shares in terms of Regulation 71 of the SEBI ICDR Regulations is December 23,, 2014 and accordingly, the floor price in respect of the said Preferential Allotment, based on the pricing formula as prescribed under Regulation 76 of the SEBI ICDR Regulations, has been rounded off at Rs.530 per Equity Share. The share sale will help Reliance Capital to prove it's financially sound enough to run a bank, says report.
 
UltraTech Cement to acquire two cement plants from JP Associates
The Board of Directors of UltraTech Cement Limited, an Aditya Birla Group company, has approved of acquiring the following cement business of Jaiprakash Associates Limited (JAL) in Madhya Pradesh (MP):
 
Integrated cement plant with clinker capacity of 2.1 mtpa and cement grinding capacity of 2.6 mtpa at Bela, Madhya Pradesh (MP);
 
Integrated cement plant with clinker capacity of 3.1 MTPA and cement grinding capacity of 2.3 MTPA at Sidhi, MP;180 MW TPP of which 25 MW is situated at Bela and 155 MW at Sidhi
 
This acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8- 2.5 MTPA in addition to the 4.9 MTPA mentioned above. This acquisition will enable the Company to increase its presence in Satna cluster of MP.
 
The Board has approved the Memorandum of Understanding  setting out the broad terms and conditions of the proposed acquisition. The Enterprise Value of this acquisition has been agreed at Rs. 5,400 crores.
 
The transaction is subject to customary due diligence, definitive agreements, and regulatory approvals as may be required.
 
Domestic News
 
GIC arm to acquire 34.2 % stake in Nirlon
Reco Berry Private Limited, an affiliate of GIC, Singapore’s sovereign wealth fund, has on 23 December 2014, signed definitive agreements to purchase up to 30,825,114 shares from Geraldton Finance Limited, Real India Invest Aktiengesellschaft and promoters Maneesha Rahul Bhat, Mallika Vir Advani, Bilby Pte Limited and Guildford Pte Limited for a per share price of not more than Rs. 222/- each, in aggregate representing 34.2% shareholding in Nirlon.
 
Under the applicable regulations prescribed by the Securities and Exchange Board of India, the Acquirer will make an open offer to the public shareholders of Nirlon. The open offer being made is for up to an additional 28.4% shareholding of Nirlon at the same price, i.e. a cash price of Rs 222/- per share. On completion of the Open Offer (assuming full take-up), the Acquirer will hold 62.6% of Nirlon.
 
The Acquirer has also signed definitive agreements, subject to conditions (including the response to the offer), to purchase up to 4,505,902 shares from Alfano Pte Limited, Deltron Pte Limited, Kunal V Sagar and Rahul V Sagar, the existing promoters of Nirlon, for a per share price of Rs. 222/- each, in aggregate representing 5.0% shareholding in Nirlon. The Acquirer has also entered into a shareholders agreement with Alfano Pte Limited, Deltron Pte Limited, Kunal V Sagar and Rahul V Sagar with respect to their shareholding if they continue to be shareholders. The Acquirer is also in discussions with certain other shareholders to acquire up to 1,802,361 equity shares constituting 2.0% (approx.) shareholding in Nirlon.
 
3i Infotech to sell Western Europe units to Objectway
3i Infotech Ltd has announced that 3i Infotech (Western Europe) Group Limited, a step down subsidiary of the Company, has signed an agreement to sell 3i Infotech (Western Europe) Limited and 3i Infotech (Flagship-UK) Limited (hereinafter together referred to as "3i Infotech Western Europe") to Objectway Financial Software, which is a leading provider of wealth management and digital software solutions in EMEA.
 
This sale is in line with the group’s strategy to sell its non-core assets / investments and use the additional cash generated from such sale to deleverage its balance sheet and for business purpose. 3i Infotech Western Europe provides investment management software solutions to midmarket UK firms.
 
Fulford India divests its consumer care products business to Bayer Pharma
Fulford India Ltd has announced that Bayer AG has globally acquired the consumer care business from Merck & Co. (Global Transaction”). As part of the Global Transaction the consumer care products viz. Alaspan, Polaramine, Tinaderm (“Consumer Care Products”) (including the trademarks) which were marketed by Fulford (India) Limited have been transferred to Bayer Pharmaceuticals Private Limited (“Bayer”). Bayer will completely take over the marketing and distribution of the Consumer Care Products with effect from January 01, 2015.
 
Tata Chemicals clarifies reports on buyouts
The Exchange has sought clarification from Tata Chemicals Ltd with respect to the media report in DNA on December 20, 2014 stating "Tata Chem eyes Rs. 500 cr buyouts". Tata Chemicals Ltd replied stating "The Company hereby clarifies that in response to a question posed by a Reporter on the Company's future growth plans, it was stated that the Company has plans to grow in wellness and nutritional food segments, and branded agri farm inputs business. The growth will be through organic as well as inorganic route if opportunities are available.
 
It was clarified that there is nothing on the table as yet and acquisitions, if they happen, would be of smaller in size of around Rs. 500 crore in aggregate over a period of 2 to 3 years."
 
International News
 
ALTEN Group announces strategic acquisition of cPrime Inc.
ALTEN Group, the €1.2 Billion European leader in Technology Consulting and Engineering, announced the acquisition of cPrime Inc., a San Francisco-based industry leader in Agile consulting, training, and Enterprise Agile Transformation services.  The new merger also aligns cPrime with Calsoft Labs, an ALTEN Group company, to build more comprehensive and innovative products and Enterprise IT solutions for clients with greater speed and quality.
 
“We are excited to welcome an innovative company with strong Agile expertise to the ALTEN family”, said Gerald Attia, Deputy CEO of ALTEN Group. “The combination of our strengths in latest technologies and agile processes will help us deliver far greater value to our clients, something that the ALTEN Group has been known for, for over 25 years.”
 
“This merger gives us the ability to deliver full enterprise development solutions with a company whose values and culture align perfectly with cPrime” said Zubin Irani, CEO of cPrime. According to Irani, the merger comes at an opportune time as the Agile market continues to grow and change, creating more opportunities. “What it does for us is that it immediately gives us access to a wider population of clients that can benefit from our services.”
 
Fitch affirms Australia's Telstra at 'A' on Pacnet acquisition
Fitch Ratings has affirmed Telstra Corporation Limited's (Telstra) Long-Term Issuer Default Rating (IDR) and senior unsecured rating at 'A'. The Outlook on the IDR is Stable. The Short-Term IDR and the commercial paper rating have been affirmed at 'F1'.
 
This follows the announcement on 23 December 2014 that Telstra has agreed to acquire Pacnet Limited (B/Rating Watch Positive), with the deal expected to close in the quarter ending June 2015, subject to certain regulatory approvals.
 
Pacnet is a provider of connectivity, managed services and data centre services to telcos, corporations and governments in Asia-Pacific. The acquisition will provide Telstra ownership of an expanded data centre and submarine cable network as well as increased customer base for these services across the Asia-Pacific. Telstra plans to integrate all aspects of Pacnet, except a China joint venture holding, into its own business and is targeting to achieve a run rate of synergies of AUD65m.
 
Fitch expects NBN-related payments to gain momentum following the conclusion of these re-negotiations. Further, Telstra is well-positioned to gain from increased scope of works in the design, construction and maintenance of the NBN under the revised agreements.

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