Renesas and Dialog agree $6bn deal

BY Richard Summerfield

Renesas Electronics Corp has agreed to buy Dialog Semiconductor in a deal worth $5.9bn. Dialog accepted the all-cash offer of around €67.50 per share, the companies said in a statement announcing the deal. The price represented a 20 percent premium to Dialog’s Friday close of €56.12.

“The transaction we announced today represents our next important step in catapulting Renesas’ growth plan to achieve substantial strategic and financial benefits, following our previous acquisitions,” said Hidetoshi Shibata, president and chief executive of Renesas. “Dialog has a strong culture of innovation along with excellent customer relationships and serves fast growing areas including IoT, industrial and automotive. By bringing Dialog’s talented team and expertise into Renesas, together, we will accelerate innovation for customers and create sustainable value for our shareholders.”

“For several years, we have successfully executed on a diversification strategy that positions Dialog for high-growth,” said Dr Jalal Bagherli, chief executive of Dialog. “We have built a strong foundation of high-performance analog and power efficient mixed-signal expertise, extended our product portfolio and applied our technologies into markets including 5G, wearables, automotive, smart home, connected medical and industrial IoT.”

He continued: “This compelling platform – combined with Renesas’ leading embedded compute, analog and power portfolio – creates even greater growth opportunities in today’s increasingly connected world. The Dialog team is excited to join forces with Renesas. The combined company will be in an even stronger position to provide innovative products for these markets, building on Renesas’ extensive sales, distribution and customer support capabilities.”

The deal is the last transaction in the increasingly active semiconductor industry. According to Bloomberg, the volume of deals involving semiconductor companies more than doubled in 2020 to $144bn. A marked shortage of available semiconductors has impacted the manufacturing of various consumer electrical goods, with Sony and Apple among those companies worst affected.

Renesas and Dialog both supply Apple. In Dialog’s case, Apple accounted for two-thirds of the company’s $1.4bn in total sales in 2019. Dialog’s other clients also include Samsung, Xiaomi and Panasonic. The company expects revenue generated from Apple to fall to about 25 percent by the end of 2023.

Dialog confirmed on Sunday that it had received an offer from Renesas after media reports of interest from the Japanese company and Franco-Italian chipmaker STMicroelectronics.

News: Renesas boosts power and connectivity prowess with $6 billion Dialog deal

Jazz Pharma to acquire rival for $7.2bn

BY Richard Summerfield

Jazz Pharmaceuticals Plc has agreed to acquire GW Pharmaceuticals Plc in a $7.2bn cash and stock deal.

Jazz will acquire GW for $220 per American depositary share – $200 in cash and $20 in Jazz shares. The offer price represents a 50 percent premium to GW’s closing price on Tuesday, the day before the deal was announced. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2021.

GW’s product line has a number of notable medications for cancer and other conditions and diseases. It is perhaps best known for a cannabis-based epilepsy treatment called Epidiolex, which was approved by the US Food and Drug Administration in June 2018. The drug’s active compound, cannabidiol, produces an anticonvulsant effect through its interaction with prominent components of the nervous system.

“Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business,” said Bruce Cozadd, chairman and chief executive of Jazz Pharmaceuticals. “We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities.”

He continued: “We are joining two teams that share a passion for, and track record of, developing differentiated therapies that advance science and transform the lives of patients. This will help facilitate a successful integration and bring added capabilities to Jazz. Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies’ shareholders and patients. We look forward to welcoming the GW team to Jazz to build an even stronger company.”

“Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline,” said Justin Gover, chief executive of GW Pharmaceuticals. “We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs.

“We have a shared vision of developing and commercialising innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first,” he added. “Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.”

Jazz Pharma expects to fund the cash portion of the deal with a combination of cash on hand and debt.

News: Jazz Pharma in $7.2 billion deal for GW Pharma to add cannabis-based epilepsy drug

EVgo goes public in $2.6bn SPAC deal

BY Richard Summerfield

EVgo Services LLC, the wholly owned subsidiary of LS Power that owns and operates public fast chargers for electric vehicles, is to become a publicly traded company through a $2.6bn merger with special purpose acquisition company (SPAC) Climate Change Crisis Real Impact I Acquisition Corporation.

The deal is expected to provide EVgo with around $575m in net cash proceeds, including $400m from investors such as Pacific Investment Management Co LLC (PIMCO), BlackRock Inc and Wellington Management, among others.

“Just a few years ago, electric vehicles were considered niche,” said Cathy Zoi, chief executive of EVgo. “Today, improved technology, lower costs, greater selection, and a better appreciation for the performance of EVs is increasingly making them the vehicle technology of choice. With that, the need for fast charging is on the rise.

“An estimated 30% of Americans do not have access to at-home charging, and EVs will be increasingly deployed by fleets to transport goods and people in an environmentally-friendly way,” she added. “Time is precious for all of us, so a public fast charging option with an expanding footprint like EVgo is essential to meet the rapidly growing needs of EV drivers of all types.”

“EVgo is a crown jewel in our portfolio, and is one of the LS Power businesses leading the charge toward decarbonization,” said David Nanus, co-head of private equity at LS Power and chairman of EVgo. “EVgo’s extensive nationwide network and deep relationships with its customers and other stakeholders create a real competitive advantage for the company, and this business combination, which will both fully fund and accelerate the company’s growth plans, positions EVgo to further strengthen its market-leading position.”

EVgo has chargers in more than 800 locations in 67 major metropolitan markets across 34 states in the US. The company has landed a number of partnerships, including with Albertsons, Kroger and Wawa to install its chargers.

The company has also agreed deals with car manufacturers such as GM and Nissan, as well as ride-hailing companies Lyft and Uber. In July, GM and EVgo announced plans to add more than 2700 new fast chargers over the next five years. Though electric vehicles are still niche, they are expected to experience significant growth in the coming years.

News: EV charging network EVgo to go public via $2.6 billion SPAC deal

Citrix to acquire Wrike for $2.25bn

BY Richard Summerfield

Citrix Systems has announced that it has entered into a definitive agreement to acquire Slack competitor Wrike for $2.25bn in cash.

The deal, which has been unanimously approved by the board of directors of both companies, is expected to close in the first half of 2021, subject to regulatory approvals and other customary closing conditions. The combined company will have 400,000 customers across 140 countries.

Citrix plans to fund the transaction with a combination of new debt and existing cash and investments. The company has obtained a commitment from JPMorgan Chase Bank for a $1.45bn senior unsecured 364-day bridge loan facility.

Citrix said it expects Wrike to generate approximately 30 percent standalone growth in 2021 to between $180m and $190m in annual recurring revenue.

“Work today is happening everywhere – at home, in the office and on the road,” said David Henshall, president and chief executive of Citrix. “We believe that in the future, success will go to those companies that can support flexible and hybrid work models and provide a consistent, secure and efficient experience that removes the complexity and noise from work so employees can focus and perform at their best, wherever they happen to be.

He continued: “Together, Citrix and Wrike will deliver the solutions needed to power a cloud-delivered digital workspace experience that enables teams to securely access the resources and tools they need to collaborate and get work done in the most efficient and effective way possible across any channel, device or location.”

“When it comes to the future of work, Citrix and Wrike share a common vision and mission: to reduce the complexity and chaos of work and empower every person, team, and organisation to achieve their very best,” said Andrew Filev, founder and chief executive of Wrike. “Together, we will unlock the workspace of the future, truly transforming the work experience and equipping people with an innovative set of solutions they can use to exceed goals and keep business moving forward.”

News: Citrix to buy Wrike for $2.25 billion

Telefonica sells Telxius to American Towers in €7.7bn deal

BY Fraser Tennant

In a move which opens a new front in the race to control Europe’s fast-growing tower industry, multinational telecommunications company Telefonica has sold its mobile phone mast infrastructure unit Telxius to real estate investment trust American Towers Corporation for €7.7bn.

Under the terms of the agreement, American Towers will acquire approximately 30,772 telecommunications tower sites, comprising Telefonica’s European (Spain and Germany) assets, as well as its interest in Latin America (Brazil, Peru, Chile and Argentina).

The deal is part of the strategy and fulfilment of Telefónica’s strategy, which includes, among other objectives, an active portfolio management policy for its businesses and assets, based on value creation.

“This is a deal that makes strategic sense within our roadmap,” said José María Álvarez-Pallete, president of Telefónica. “American Towers was our second supplier after Telxius. After this great operation we will continue to focus on our most ambitious objectives: the integration of O2 with Virgin in the UK, the purchase of Oi mobile in Brazil and the reduction of debt."

Telefonica has also stated that it plans to use the proceeds of the sale, which include a capital gain of approximately €3.5bn, to reduce its net financial debt by €4.6bn.

“This transaction is transformational for our European business and will establish American Tower as one of the largest independent communications infrastructure providers in Europe,” said Tom Bartlett, chief executive of American Towers. “It is also complementary for our Latin American portfolio and positions us to drive strong long-term organic growth across both regions while augmenting our new build programs and enhancing our relationships with key tenants.”

The transaction is expected to close in the second quarter of 2021, subject to government and regulatory approvals and customary closing conditions.

Mr Bartlett concluded: “We are excited to broaden our partnership with Telefónica by acquiring a high-quality, well-located portfolio of sites that will further diversify our global footprint and enhance our ability to help provide broadband connectivity for billions of people.”

News: Telefonica sells mobile phone masts to American Towers for $9.4 bln