Driverless truck start-up Plus goes public in $3bn SPAC deal

BY Fraser Tennant

In a $3.3bn deal that will make it a publicly traded company, self-driving truck technology start-up Plus is to merge with special purpose acquisition company (SPAC) Hennessy Capital Investment Corp. V (HCIC V).

Under the terms of the definitive agreement, Plus’s existing shareholders will convert 100 percent of their ownership stakes into the combined company and are expected to own approximately 80 percent of the post-combination company at close.

Furthermore, the merger is expected to deliver up to approximately $500m in gross proceeds at closing, including approximately $345m of cash held in HCIC V’s trust account from its initial public offering (IPO) in January 2021.

“This transaction enables us to continue growing our business globally, so that fleets and drivers can benefit from our revolutionary technology and usher in a new generation of innovation,” said David Liu, chief executive and co-founder of Plus. “At the same time, the transaction introduces a partner that shares our focus on sustainable technology and infrastructure, is aligned on our growth and value creation objectives, and recognises the challenges trucking companies face today.”

To meet these challenges, Plus plans to roll out its Supervised Level 4 PlusDrive solution in 2021 and accelerate the development of its Level 4 fully autonomous system by the end of 2024.

“We are excited to partner with Plus on their mission to make long-haul trucking safer, cheaper and better for the environment,” said Daniel J. Hennessy, chairman and chief executive of HCIC V. “We look forward to collaborating with experts in automotive safety, self-driving technology, artificial intelligence, robotics, cyber security and product development, as Plus transforms the global freight market with a safe self-driving trucking system.”

The merger has been unanimously approved by the boards of directors of both Plus and HCIC V and is expected to close in the third quarter of 2021, subject to the satisfaction of the necessary regulatory approvals and customary closing conditions, including approval by HCIC V’s shareholders.

Mr Liu concluded: ”We look forward to working closely with the HCIC V team as we move to commercial deployment and deliver value for drivers, customers and shareholders.”

News: Self-driving truck startup Plus to go public through $3.3 bln SPAC deal

Verizon Media sold for $5bn

BY Richard Summerfield

Verizon Communications has sold its Verizon Media assets, including AOL and Yahoo, to private equity giant Apollo Global Management in a deal worth $5bn.

Under the terms of the deal, Verizon will receive $4.25bn in cash from Apollo, along with preferred interests of $750m and a 10 percent stake in the unit. Verizon originally paid nearly $9bn for the pair. The divested unit, which was previously named Oath and renamed Verizon Media in 2018 when Verizon wrote off around half of the unit’s value, will now be called Yahoo when the deal closes, which is expected to be in the second half of 2021.

Verizon has been making moves to refocus its attention on its wireless networks and other internet provider businesses of late and has been selling off its media properties. Last year, the company sold HuffPost to BuzzFeed. It also recently sold off or shut down other media properties like Tumblr and Yahoo Answers.

“We are excited to be joining forces with Apollo,” said Guru Gowrappan, chief executive of Verizon Media. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long- term success of the company.”

“We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms,” said David Sambur, senior partner and co-head of private equity at Apollo. “Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive.”

“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” said Hans Vestberg, chief executive of Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”

Apollo has engaged in a number of transactions in recent months, announcing deals to acquire Michaels, a chain of crafting stores in the US, and the Venetian Resort in Las Vegas.

News: Verizon to offload Yahoo, AOL for $5 billion

COVID-19 drove down deals

BY Richard Summerfield

The uncertainty and chaos caused by the COVID-19 pandemic saw M&A deal volumes and values fall sharply in the first half of 2020, according to a new report from WilmerHale, though there was a stark improvement in the second half of the year.

The report – ‘M&A Report 2021’ – notes that the number of M&A transactions worldwide declined by 6 percent, from 48,613 deals in 2019 to 45,507 in 2020. Furthermore, global M&A deal value decreased by 15 percent, from $3.35 trillion to $2.83 trillion. The average deal size in 2020 was $62.3m, down 10 percent from $68.9m in 2019.

Of course, there were variations in deal volume and value across different regions. Both volume and value were up in the Asia-Pacific region, but fell most prominently in the US and Europe. In the US, deal volume fell by 14 percent, from 20,603 transactions in 2019 to 17,748 in 2020. US deal value also fell 26 percent, from $2.14 trillion to $1.58 trillion. The average deal size in the US fell by 14 percent, from $104.m to $89.1m. The number of billion-dollar transactions involving US companies decreased by 11 percent, from 296 in 2019 to 234 in 2020, while their total value fell by 27 percent, from $1.57 trillion to $1.15 trillion.

In Europe, the number of transactions fell for the fifth consecutive year, dropping 11 percent from 18,844 in 2019 to 16,738 in 2020. Total deal value fell by 3 percent, from $1.18 trillion to $1.15 trillion. On the other hand, the Asia-Pacific region saw deal volume increase by 11 percent, from 10,092 transactions in 2019 to 11,241 in 2020, while total deal value grew by 26 percent, from $721.1bn to $911.6bn.

Despite the lingering pandemic, the report paints a brighter picture for 2021. With falling valuations, an abundance of private equity dry powder and the re-emergence of SPAC deals, among other factors such as the rollout of COVID-19 vaccines, there are reasons to be optimistic about deal drivers in the second half of the year.

Report: M&A Report 2021

Supply sustainability: Panasonic acquires Blue Yonder in $7.1bn deal

BY Fraser Tennant

In a move designed to deliver new cloud capabilities, innovate global supply chains and create a more sustainable world,  Japanese multinational electronics company Panasonic Corporation is to acquire US software and consultancy company Blue Yonder in a transaction valued at $1.7bn.

The acquisition sees Panasonic purchase the remaining 80 percent of shares of Blue Yonder, adding to the 20 percent it acquired in July 2020. It builds on a strategic relationship, established in January 2019 with a partnership, followed by the creation of a joint venture company in Japan in November 2019.

Moreover, the purchase of Blue Yonder enhances Panasonic’s digital transformation and customer-centric focus. To this end, on 1 April 2022, the company plans to shift to a holding company system concentrating management resources on strategic businesses in key areas such as providing supply chain innovation and automation.

“I am happy to welcome Blue Yonder and its associates to the Panasonic Group,” said  Yuki Kusumi, chief executive of Panasonic. “By merging the two companies, we would like to realise a world where waste is autonomously eliminated from all supply chain operations and the cycle of sustainable improvement continues.”

Over the past year, the need for more intelligent, autonomous and edge-aware supply chains has been dramatically heightened by the coronavirus (COVID-19) pandemic, the rise of e-commerce and the proliferation of data.

“There are still many such losses and stagnation in supply chain operations,” added Mr Kusumi. “So, through the drastic reduction of wasted labour and resources, we would like to provide better ways of working, and contribute to customers’ management reform and also to the realisation of a sustainable society by carefully using limited global resources.”

Together, Panasonic and Blue Yonder intend to deliver a unique competitive advantage for customers to drive more automation and actionable, real-time business insights that reduce waste and improve operations, while creating a more sustainable world.

“I am thrilled that Blue Yonder is joining Panasonic,” said Girish Rishi, chief executive of Blue Yonder. “We have developed mutual trust and have a shared vision for an autonomous supply chain that delivers a better life and a better world.”

Approved by the boards of directors of both Panasonic and Blue Yonder, the acquisition is expected to close by the second half of 2021, subject to receipt of customary regulatory approvals.

News: Panasonic to buy U.S. supply-chain software firm Blue Yonder for $7.1 bln

Madison highlights air quality with $3.6bn acquisition of Nortek

BY Fraser Tennant

In a $3.6bn deal it claims highlights “the importance of indoor air quality”, Madison Industries, one of the world’s largest privately held companies, is to acquire heating, ventilation and air conditioning manufacturer Nortek Air Solutions from engineering group Melrose Industries.

The acquisition of Nortek brands, including Broan, NuTone, Reznor, StatePoint, Zephyr and Huntair, positions Chicago-based Madison to better serve its customers by providing a full suite of air hygiene solutions to improve indoor air quality for the health and longevity of building occupants.

The Ergotron and Nortek Control businesses, which also form part of the Nortek group, remain under Melrose’s ownership.

“The global pandemic has put a spotlight on the importance of indoor air quality,” said Larry Gies, founder of Madison. “Nortek perfectly complements our portfolio of companies that provide solutions to improve the quality of indoor air. Our mission is to make the world safer, healthier and more productive and the addition of Nortek Air with its 6000 passionate employees allows us to deliver even more of that mission.”

Acquired in 2016 for $2.8bn, Nortek is Melrose’s third largest division by revenue. The British firm initially explored the potential sale of its temperature control business in March 2020, a process delayed by coronavirus (COVID-19) lockdown restrictions. 

“Our strategy of ‘buy, improve, sell’ remains the same but circumstances evolve,” said Simon Peckham, chief executive of Melrose. “Our businesses are all responding to the demands of climate change, driven by customers and consumers. Our air management executive team has created a business from scratch with exemplary environmental credentials which will make a real difference to energy and water consumption in its market. We can now hand that technology to a high quality buyer with specialist aspirations and skills.”

The acquisition is expected to be completed in the second or third quarter of 2021 and is conditional upon, among other things, shareholder approval.

Mr Gies concluded: “The Madison team is committed to improving indoor air quality and delivering solutions that provide healthy air for its customers.”

News: UK's Melrose to sell Nortek Air Management unit for about $3.63 bln