Qualcomm and SSW Partners agree $4.5bn Veoneer deal

BY Richard Summerfield

Chip manufacturer Qualcomm and newly formed private equity firm SSW Partners have agreed to acquire Swedish automotive technology group Veoneer for $37 a share in a deal worth $4.5bn.

The deal for Veoneer ends the ongoing battle for the company which had been a target for both Qualcomm and Magna International Inc, a Canadian mobility technology company. In July, Magna made an offer worth around $3.8bn for Veoneer which was accepted by Veoneer’s board. As a result of the agreed Qualcomm/SWW deal, Veoneer has terminated its prior acquisition agreement with Magna, which means Veoneer will pay a termination fee of $110m to Magna.

The boards of Veoneer and Qualcomm have both approved the transaction and expect it to close next year. Under the terms of the deal, at closing, SSW Partners will acquire all of the outstanding capital stock of Veoneer, shortly after which it will sell Veoneer’s autonomous-driving software operation, known as Arriver, to Qualcomm and retain Veoneer’s Tier 1 supplier businesses. SSW will also seek owners for the rest of Veoneer’s businesses. The Arriver business emerged from a collaboration between Qualcomm and Veoneer first announced in August 2020. The transaction is the first deal for SSW Partners.

“Qualcomm is the natural owner of Arriver,” said Cristiano Amon, president and chief executive of Qualcomm. “By integrating these assets, Qualcomm accelerates its ability to deliver a leading and horizontal ADAS solution as part of its digital chassis platform. We believe that this transaction and structure benefits both Qualcomm’s and Veoneer’s shareholders, positions all of Veoneer’s businesses for success and provides a compelling opportunity to customers and employees.”

“This transaction creates superior value for our shareholders,” said Jan Carlson, chairman, president and chief executive of Veoneer. “It also provides attractive opportunities to our Arriver team at Qualcomm and allows our other businesses to find long-term industrial partners where they can continue to develop.”

“We are excited to partner with Qualcomm to acquire Veoneer,” said Antonio Weiss and Josh Steiner of SSW Partners. “While Qualcomm focuses on the Arriver business, we will focus on finding strong, long-term strategic homes for the rest of Veoneer’s businesses – we are committed to ensuring that Veoneer’s employees prosper, the businesses continue to innovate and grow and customers continue to have uninterrupted access to the outstanding service and quality for which Veoneer is known. We have high regard for Veoneer’s management team and look forward to partnering with them to ensure a successful outcome for all stakeholders.”

News: Qualcomm, SSW Partners to buy Veoneer in $4.5 billion deal

Sun Life US to acquire DentaQuest in $2.48bn deal

BY Fraser Tennant

In a deal which bolsters its business south of the border, Canadian financial services firm Sun Life Financial Inc., via the US arm of its operations, is to acquire oral healthcare company DentaQuest for $2.48bn.

Under the terms of the definitive agreement, the transaction will be financed using a combination of cash and debt and is expected to close in the first half of 2022, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

Headquartered in Boston and founded in 2001, DentaQuest is the largest provider of Medicaid dental benefits in the US, with growing Medicare Advantage, commercial and US Affordable Care Act (ACA) exchange businesses. Currently DentaQuest has more than 33 million members in 36 states and approximately 2400 employees.

Furthermore, its acquisition by Sun Life will position DentaQuest as a leader in providing government dental benefits, alongside another leading business at Sun Life US, its medical stop-loss business.

“We are excited about the acquisition of DentaQuest and expanding our leadership into the US dental benefits space,” said Kevin Strain, president and chief executive of Sun Life. “DentaQuest is a values-driven industry leader dedicated to improving oral health, with a focus on underserved populations and access to dental care. The addition of DentaQuest is consistent with our strategy to focus on health and group benefits in the US.”

Upon close of the transaction, DentaQuest will become part of the Sun Life US business. Sun Life US currently offers dental benefits through employers for their employee benefits plans and has an extensive national commercial dental network.

“DentaQuest’s combination with Sun Life marks an important next step in our long-term transformation,” said Steve Pollock, president and chief executive of DentaQuest. “A variety of longstanding barriers have created significant unmet oral health needs, which are disproportionately felt by historically marginalised groups. With support from Sun Life, we will be even better positioned to fulfil this critical need.”

Mr Strain concluded: “The addition of DentaQuest supports both our Purpose to help clients achieve lifetime financial security and live healthier lives and our sustainability focus on improving health and wellness outcomes for all.”

News: Sun Life to buy oral healthcare firm DentaQuest for $2.5 billion

Endeavour acquires SG’s sports betting business for $1.2bn

BY Fraser Tennant

In a $1.2bn deal it says will strengthen its position in the sports betting industry, global entertainment, sports and content company Endeavor Group Holdings, Inc. is to acquire OpenBet, the sports betting unit of gaming entertainment company Scientific Games Corporation.

Under the terms of the definitive agreement, Scientific Games will receive $1bn in cash and $200m in Endeavor Class A common stock, subject to customary purchase price adjustments.

“This transaction represents the culmination of a thorough process to divest OpenBet in order to maximise value for our shareholders and rapidly advance our vision to become the leading cross-platform global game company,” said Barry Cottle, president and chief executive of Scientific Games. “The transaction is a significant milestone towards optimizing our portfolio and de-levering the balance sheet to enhance our financial flexibility.”

One of the world’s leading global online sports betting technology companies, OpenBet is the number one business-to-business sports betting partner in the US, UK, Australia and Canada, with a leading position in Europe and Asia Pacific. The company has over 75 global customers, including 24 sports books across 12 states and a 100 percent uptime record across major sporting events.

“OpenBet has built an incredible sports betting suite anchored in its best-in-class betting engine and now including expanded content, services and products for sports books and fans,” said Ariel Emanuel, chief executive of Endeavor. “This capability set is the ideal complement to our IMG ARENA sports betting business, which works directly with sports rights holders. We look forward to growing these businesses together to capitalise on the strong secular tailwinds in the sports betting ecosystem.”

The transaction is expected to close in the second quarter of 2022, subject to applicable regulatory approvals and customary closing conditions.

“This transaction will position us to invest both organically and inorganically in key growth areas, particularly in content and digital markets,” concluded Mr Cottle. “We are delivering on our promises and executing on our strategy to transform our company and unlock significant value for employees, customers and shareholders.”

News: Endeavor to buy sports betting unit from Scientific Games for $1.2 bln

GE Healthcare agrees BK Medical deal

BY Richard Summerfield

GE Healthcare has agreed to acquire BK Medical from Altaris Capital Partners in an all-cash purchase worth $1.45bn.

The transaction, which is expected to close in 2022, subject to review by the relevant regulatory authorities, will strengthen GE’s $3bn ultrasound business and help the company expand beyond pre-and post-operative diagnostic ultrasound.

GE expects BK Medical to deliver rapid revenue growth by expanding its margins and quickly growing free cash flow. It forecasts high-single-digit returns on its invested capital within five years.

BK Medical, which has operated for 40 years in the imaging space, has a global installed base of more than 14,000 ultrasound platforms.

“Ultrasound today forms an integral part of many care pathways, and BK Medical is a strategic and highly complementary addition to our growing and profitable Ultrasound business,” said Kieran Murphy, president and chief executive of GE Healthcare. “This transaction helps GE Healthcare continue to expand beyond diagnostics into surgical and therapeutic interventions, simplifying decision-making for clinicians and equipping them with greater insights to deliver faster, more personalized care for their patients—representing another step toward delivering precision health.”

“We are immensely proud of the organization and of the life-changing technology that we have built at BK Medical, and look forward to our future as part of the GE Healthcare family,” said Brooks West, president and chief executive of BK Medical. “Combining our expertise in intraoperative imaging and surgical navigation with GE Healthcare’s many strengths and global presence will accelerate our mission to change the standard of care in surgical interventions. Our mission to help surgeons make critical decisions using active imaging aligns well with GE Healthcare’s mission to help physicians make more informed decisions and improve patient outcomes, and we are eager to begin this new chapter.”

“Adding the fast-growing and relatively new field of real-time surgical visualization to GE’s pre- and post-operative Ultrasound capabilities will create an end-to-end offering through the full continuum of care—from diagnosis through therapy and beyond,” said Roland Rott, president and chief executive of GE Healthcare Ultrasound. “GE Healthcare and BK Medical share a passion for clinical innovation, and I’m excited to welcome BK Medical to our team.”

News: GE Healthcare to Acquire BK Medical, Expanding Ultrasound Portfolio into Surgical Visualization

U.S. Bancorp to acquire MUFG Union Bank in $8bn deal

BY Richard Summerfield

U.S. Bancorp, parent of US Bank, has agreed to acquire MUFG Union Bank in a deal worth around $8bn.

Under the terms of the deal, U.S. Bancorp will pay $5.5bn in cash and issue 44 million shares of its common stock, giving the Japanese parent of MUFG Union Bank a 2.9 percent stake in the company. The transaction excludes the purchase of MUFG Union Bank’s Global Corporate & Investment Bank, certain middle- and back-office functions, and other assets.

The transaction has been unanimously approved by the boards of directors of U.S. Bancorp and MUFG, though it is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals. The deal is expected to close in the first half of 2022.

“The acquisition of MUFG Union Bank underscores our commitment to strengthen and grow our business on the West Coast, make investments to serve customers and local communities and enhance competition in the financial services industry,” said Andy Cecere, chairman, president and chief executive of U.S. Bancorp. “With MUFG Union Bank, we will increase access to state-of-the-art financial products while maintaining U.S. Bank’s strong track record of putting its customers and communities first.

“We are also committed to maintaining both organizations’ excellent records of serving low-income communities and supporting minority-led institutions,” he continued. “We have a great deal of respect for the MUFG Union Bank team and share customer-centric and relationship-based strategies and cultures based on integrity. We look forward to welcoming MUFG Union Bank to the U.S. Bancorp family.”

“We are very pleased to have reached this agreement which will allow MUFG to focus and increase our resources on accelerating growth in our Americas wholesale businesses – specifically our corporate and investment banking, global markets, Japanese corporate banking and transaction banking businesses,” said Kevin Cronin, MUFG regional executive for the Americas and chief executive of MUFG Americas Holdings Corporation and MUFG Union Bank, N.A.

For U.S. Bancorp, the deal creates a group with combined assets of $665bn and gives it access to MUFG Union Bank’s 300 branches in the US. The bank said it expects to achieve about $900m in pre-tax cost synergies.

There has been a spate of consolidation deals in the US banking sector over the last two years. Driven by the coronavirus (COVID-19) pandemic, dealmaking has gathered pace. In February, M&T Bank agreed to acquire smaller rival People’s United Financial for $7.6bn, while Pittsburgh-based PNC struck a $11.6bn deal last year to buy the US business of Spain’s BBVA. 

News: Japan's MUFG to exit U.S. retail banking in $8 bln deal with U.S. Bancorp