Notable Mergers and Acquisitions of the Day 06/20: (CSCO) (SSYS) (APO) (CG) (CEDU)
* Cisco Systems, Inc. (Nasdaq: CSCO) announced its intent to acquire privately held Composite Software, Inc., a market leader in data virtualization software and services. Headquartered in San Mateo, Calif., Composite provides software technology that connects many types of data from across the network and makes it appear as if it's in one place. Composite's software integrates traditional and new data sources including cloud and big data, into a simplified consolidated view. This simplified and optimized logical view of data enables organizations to make better, more informed decisions in real time.
Composite will expand Cisco's portfolio of Smart Services and extend our next-generation services platform by connecting data and infrastructure. Through this connection, companies will be able to better leverage network knowledge (APIs) and programmability, which maximizes the benefits of data virtualization. As with the transition from physical servers to server virtualization and from physical networks to network virtualization, together Cisco and Composite will accelerate the shift from physical data integration to data virtualization for customers and partners.
Under the terms of the agreement, Cisco will pay approximately $180 million in cash and retention-based incentives in exchange for all shares of Composite. The acquisition of Composite is expected to close in the first quarter of fiscal year 2014, subject to customary closing conditions.
* Stratasys Ltd. (Nasdaq: SSYS) signed a definitive merger agreement whereby privately held MakerBot has agreed to merge with a subsidiary of Stratasys in a stock-for-stock transaction.
MakerBot, founded in 2009, helped develop the desktop 3D printing market and has built the largest installed base of 3D printers in the category by making 3D printers highly accessible. The company has sold more than 22,000 3D printers since 2009. In the last nine months, the MakerBot Replicator 2 Desktop 3D Printer accounted for 11,000 of those sales.
The combination of these two industry leaders is expected to drive faster adoption of 3D printing for multiple applications and industries, as desktop 3D printers are becoming a mainstream tool across many market segments. Upon completion of the transaction, MakerBot will operate as a separate subsidiary of Stratasys, maintaining its own identity, products and go-to-market strategy. The merger enhances Stratasysâ leadership position in the rapidly growing 3D printer market, by enabling Stratasys to offer affordable desktop 3D printers together with a seamless user experience. The merger is expected to be completed during the third quarter of 2013; and it is subject to regulatory approvals and other conditions customary for such transactions.
Under the terms of the merger agreement, Stratasys will initially issue approximately 4.76 million shares in exchange for 100% of the outstanding capital stock of MakerBot. The proposed merger has an initial value of $403 million based on Stratasysâ closing stock price of $84.60 as of June 19, 2013. MakerBot stakeholders also qualify for performance-based earn-outs that provide for the issue of up to an additional 2.38 million shares through the end of 2014. The proposed earn-out payments have an initial value of up to $201 million based on the Stratasys closing stock price as of June 19, 2013. Those payments, if earned, will be made in Stratasys shares or cash (in an amount reflecting the value of the Stratasys shares that would have otherwise been issued at the relevant earn out determination date), or a combination thereof, at Stratasysâ discretion. The merger is expected to accelerate Stratasysâ growth rate and be slightly dilutive to Non-GAAP earnings per share in 2013, and accretive to Stratasys' Non-GAAP earnings per share by the end of 2014.
Stratasys intends for MakerBot to operate as a separate subsidiary, preserving its existing brand, management, as well as the spirit of collaboration it has built with its users and partners. Together with Stratasys, MakerBot will continue to innovate, expand its product offering, provide attentive service to its users and make more 3D printing content available through Thingiverse.com.
Upon completion of the merger, Stratasys and MakerBot will jointly develop and implement strategies for building on their complementary strengths, intellectual property and technical know-how, and other unique assets and capabilities. The opportunities could include accelerating MakerBotâs reach by leveraging Stratasysâ global infrastructure; cross-promotion of products into the installed base of the combined companies; and leveraging Stratasysâ extensive know-how in Fused Deposition Modeling (FDM) to benefit MakerBotâs product line.
* Apollo Global Management, LLC'S (NYSE: APO) McGraw-Hill Education signed an agreement to acquire ALEKS Corporation, the privately held developer of the ALEKSÂ® adaptive learning technology for the K-12 and higher education markets.
The move strengthens McGraw-Hill Education's position as the leader in delivering personalized learning experiences through adaptive technology.
The acquisition is McGraw-Hill Education's first since it was acquired by funds affiliated with Apollo Global Management, LLC (NYSE: APO) in March 2013.
Terms of the agreement were not disclosed. The closing of the transaction is expected to occur early in the third quarter of 2013.
* The Carlyle Group (Nasdaq: CG) announced that a company wholly owned by funds it manages has signed an agreement to acquire Marelli Motori from Melrose Industries PLC. The transaction will be effected by the sale of Marelli Overseas Limited, the holding company of Marelli Motori, and is expected to close in August 2013.
The deal was made for â¬212 million.
Capital for this investment will come from Carlyle Europe Partners III L.P., a 5.3 billion Euro fund that makes mid- and large-cap investments.
Founded in 1891, Marelli Motori is one of the worldâs largest manufacturers of industrial generators and electric motors, serving worldwide markets for power generation, marine, oil & gas and industrial manufacturing.
In recent years the Company has seen significant growth in revenues, which grew to â¬149.1 million in 2012, an increase of 12.5% over the previous year and generating in 2012 a headline EBITDA of â¬22.2 million.
Headquartered in Arzignano (Vicenza), Italy and with production plants in Italy and Malaysia, Marelli Motori has a global presence with sales, service and distribution offices in Germany, UK, Spain, United States and South Africa.
Unicredit and Intesa acted as M&A advisors for Carlyle, with financing arranged and underwritten by MLAs Unicredit and Societe Generale. Melrose Industries PLC and Marelli Motori were advised by Nomura International PLC.
* ChinaEdu Corporation (Nasdaq: CEDU) announced that its board of directors has received a preliminary, non-binding proposal letter dated June 20, 2013 from Julia Huang, executive chairman of the board of directors and Shawn Ding, CEO of the Company (collectively, the "Buyer Parties"), to acquire all of the outstanding ordinary shares of the Company not currently owned by the Buyer Parties and certain other shareholders of the Company who may join the Buyer Parties, including ordinary shares represented by the Company's American depositary shares, or "ADSs" (each representing three ordinary shares of the Company), at a proposed price of $2.33 in cash per ordinary share, or $7.00 in cash per ADS, subject to certain conditions.
According to the proposal letter, the acquisition is intended to be financed by debt and/or equity capital and the Buyer Parties have been in discussions with one or more financial institutions which have expressed interest in financing the proposed acquisition. Furthermore, the proposal letter specifies that the Buyer Parties' proposal constitutes only a preliminary indication of its interest, and is subject to negotiation and execution of definitive agreements relating to the proposed transaction. A copy of the proposal letter is attached hereto as Exhibit A.
The Company's board of directors intends to form a special committee of disinterested directors to consider the proposal and cautions the Company's shareholders and others considering trading in its securities that the board of directors has just received the proposal and has not made any decisions with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made by the Buyer Parties or any other person, that any definitive agreement will be executed relating to the proposed transaction, or that this or any other transaction will be approved or consummated.
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