AstraZeneca strikes $1.8bn CinCor deal

BY Richard Summerfield

Multinational pharmaceutical and biotechnology company AstraZeneca has agreed to acquire US-based drug developer CinCor Pharma Inc in a deal worth up to $1.8bn.

Central to the transaction is CinCor’s experimental therapy baxdrostat, which is in development to treat conditions including high blood pressure and chronic kidney disease. Under the terms of the merger agreement, AstraZeneca will pay $26 per share in cash at closing plus a non-tradable contingent value right of $10 per share in cash payable upon a specified regulatory submission of a baxdrostat product.

The upfront cash portion of the consideration represents a transaction value of approximately $1.3bn and a premium of 121 percent over CinCor’s closing market price on 6 January 2023. Total consideration including the contingent value right, if the milestone is achieved, would be approximately $1.8bn and a 206 percent premium over CinCor’s closing market price on 6 January 2023. CinCor’s board of directors has unanimously approved the transaction.

The deal will also see AstraZeneca, which is keen to expand its pipeline of treatments for heart and kidney disorders, gain approximately $522m in cash and marketable securities on CinCor’s balance sheet.

AstraZeneca believes that baxdrostat will complement its strategy to provide more treatments for cardiorenal diseases, an area that has a “high unmet medical need”. The company added that baxdrostat could be combined with its chronic kidney disease drug Farxiga.

“We are excited about the proposed acquisition of CinCor Pharma by AstraZeneca as we believe it offers the prospect of accelerating the development timeline and expanding the breadth of benefits patients with cardiorenal diseases might obtain from baxdrostat, if approved,” said Marc de Garidel, chief executive at CinCor. “CinCor is committed to ensuring a smooth transition of the development responsibilities to AstraZeneca once the acquisition is consummated. Thank you to all who have played, and will continue to play, essential roles in developing and evaluating baxdrostat as a potential novel treatment for cardiorenal diseases.”

“AstraZeneca’s shared commitment to addressing the unmet medical need for patients with hypertension and cardiorenal disease will accelerate CinCor’s mission to develop and deliver life-changing therapies that improve patient care,” said James Healy, chairman of CinCor’s board of directors and managing partner at Sofinnova Investments. “The CinCor management team has laid very important scientific and clinical groundwork for the baxdrostat program, including the successful Phase 2 BrigHtn trial that was recently published in the New England Journal of Medicine. On behalf of CinCor’s Board of Directors, I would like to recognize and thank the CinCor team, scientific advisors and patients for their dedication and contributions to the advancement of the development of baxdrostat.” 

News: AstraZeneca boosts heart, kidney business with $1.8 bln CinCor deal

Space company Maxar acquired by Advent for $6.4bn

BY Fraser Tennant

In a transaction that takes the space technology company private, Maxar Technologies is to be acquired by global private equity (PE) firm Advent International for approximately $6.4bn.

Under the terms of the definitive agreement, which has been unanimously approved by Maxar’s board of directors, Maxar stockholders will receive $53 in cash for each share of common stock they own.

As a private company, Maxar will be able to accelerate investments in next-generation satellite technologies and data insights that are vital to the company’s government and commercial customers, as well as pursue select, strategic M&A to further enhance its portfolio of solutions.

“Advent has a proven record of strengthening its portfolio companies and a desire to support Maxar in advancing our long-term strategic objectives,” said Daniel Jablonsky, president and chief executive of Maxar. “As a private company, we will have enhanced flexibility and additional resources to build on our strong foundations, further scale operations and capture significant opportunities in a rapidly expanding market.”

Headquartered in the US, Advent has a demonstrable track record as a responsible owner of defence and security businesses. Following the close of the transaction, Maxar will remain a US-controlled and operated company.

“We have tremendous respect and admiration for Maxar, its industry-leading technology and the vital role it serves in supporting the national security of the US and its allies around the world,” said David Mussafer, chairman and managing partner of Advent. “We will prioritise Maxar’s commitment as a core provider to the US defence and intelligence communities, and allies, while providing Maxar with the financial and operational support necessary to apply its technology and team members even more fully to the missions and programmes of its government and commercial customers.”

The transaction is expected to close mid-2023, subject to customary closing conditions, including approval by Maxar stockholders and receipt of regulatory approvals.

Mr Jablonsky concluded: “This transaction is an exceptional outcome for stockholders and is a testament to the hard work and dedication of our team, the value Maxar has created and the reputation we have built in our industry.”

News: Advent to buy satellite operator Maxar Technologies for about $4 billion

L3Harris to acquire Aerojet Rocketdyne for $4.7bn

BY Richard Summerfield

L3Harris Technologies Inc. has agreed to acquire rocket engine manufacturer Aerojet Rocketdyne Holdings Inc. in a deal valued at around $4.7bn.

Under the terms of the deal, which is expected to close in 2023, subject to required regulatory approvals and clearances and other customary closing conditions, L3Harris will pay $58 per share, in an all-cash transaction valued at $4.7bn, inclusive of net debt. L3Harris will use existing cash and issue new debt to fund the deal

The deal marks L3Harris’ second acquisition announcement of 2022 after previously agreeing to acquire Viasat’s tactical data links unit, which provides data and voice communications systems for military vehicles, aeroplanes and ships, for $1.96bn.

Lockheed Martin, the world’s largest defence contractor by revenue, tried to buy the Rocketdyne for $4.4bn before abandoning the bid after federal regulators sued in January to block it. The Federal Trade Commission (FTC) noted that Lockheed would use its ownership of Aerojet to damage other defence companies and would ultimately control multiple defence programmes critical to national security.

“We’ve heard the DoD leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said Christopher E. Kubasik, chief executive and chair of L3Harris. “With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset.”

“This agreement will accelerate innovation for national security propulsion solutions while providing a premium cash value for our shareholders and tremendous benefits for our employees, customers, partners and the communities in which we operate,” said Eileen P. Drake, chief executive and president of Aerojet Rocketdyne. “Joining L3Harris is a testament to the world-class organization and team we’ve built and represents a natural next phase of our evolution. As part of L3Harris, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration. This is an exciting new chapter for Aerojet Rocketdyne and our over 5,200 dedicated team members, providing them with additional opportunities, and we look forward to working closely with L3Harris to complete this transaction.”

Aerojet Rocketdyne currently generates around $2.3bn in annual revenue. The company’s employees operate out of advanced manufacturing facilities across the US. L3Harris has more than $17bn in annual revenue and customers in more than 100 countries.

News: Defense firm L3Harris to buy Aerojet for $4.7 bln with eye on missile demand

Weber taken private in $3.7bn deal

BY Richard Summerfield

Grill manufacturer Weber Inc. has agreed to be taken private by BDT Capital Partners in a $3.7bn deal.

BDT, Weber’s controlling shareholder with a 48.2 percent stake in the company, has agreed to buy all of the outstanding shares in Weber that it does not already own for $8.05 per share. The purchase price represents a 60 percent premium to Weber’s closing price on 24 October, the last trading day before BDT submitted its takeover offer.

Upon completion of the transaction, Weber will become a privately held company majority owned by investment funds managed by BDT. The deal is expected to close in the first half of 2023, subject to customary closing conditions. The transaction has been approved by the written consent of the holders of the requisite number of shares of common stock of Weber, such that no additional stockholder approval is required.

In connection with the transaction, BDT managed investment funds will provide Weber with an additional unsecured loan facility in the aggregate principal amount of $350m. Weber intends to use the loan to repay existing debt and fund working capital for the 2023 outdoor cooking season. The previous $60m loan agreement that Weber entered into with BDT managed investment funds on 8 November 2022, will remain outstanding, the companies confirmed in a statement.

“We appreciate the Special Committee’s comprehensive evaluation of BDT’s offer and are confident that this transaction provides immediate and fair value to Weber minority shareholders,” said Alan Matula, interim chief executive of Weber. “For over a decade, BDT has been a longstanding strategic partner for Weber. With their continued support, our global team will move forward in executing our long-term strategy with consumers and customers as our top priorities. And we’ll continue to sharpen our focus on doing what we do best: delivering the outdoor cooking industry's most innovative, best-performing, highest-quality products and engaging millions worldwide who love to gather together and cook outside.”

“Weber is the #1 brand and global category leader in outdoor cooking, and it has demonstrated a relentless commitment to quality and innovation over its 70-year history,” said Kelly Rainko, a partner at BDT and non-executive chair of the board of Weber. “We look forward to continuing our partnership with the company and the founding Stephen family in its next chapter.”

News: Grill maker Weber to go private with BDT Capital in $3.7 bln deal

NRG Energy agrees $2.8bn Vivint deal

BY Richard Summerfield

NRG Energy Inc has agreed to acquire Vivint Smart Home Inc in a $2.8bn all-cash deal. Under the terms of the agreement, NRG will pay $12 per share for the company, a premium of 33.5 percent to Vivint’s closing stock price on Monday, the last day of trading before the deal was announced. NRG will also take on $2.4bn of debt as part of the deal.

According to a statement announcing the agreement, the deal will have an implied multiple of 6.3 times run-rate enterprise value to adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).

The deal is expected to close in the first quarter of 2023, subject to customary closing conditions. Upon completion of the transaction, NRG intends to maintain a significant presence in the state of Utah, where Vivint is headquartered. The agreement has been unanimously approved by the boards of directors of both companies.

The deal will not impact NRG’s 2023 capital allocation plans, according to the company’s chief financial officer Alberto Fornaro, NRG also plans to fully execute its $1bn stock buyback authorisation. The company plans to fund the deal with about $600m in cash, $900m from its revolving credit facility and $1.39bn in new debt and preferred equity.

“Last year at our Investor Day, we presented our strategic roadmap to becoming the leading provider of essential services for homes and businesses, informed by consumer trends and underpinned by disciplined execution,” said Mauricio Gutierrez, president and chief executive of NRG. “The acquisition of Vivint is a transformational step in achieving our vision. Customers want simple, connected, and customized experiences that provide peace of mind. Vivint’s smart home technology strengthens our retail platform, improves our customer experience, and increases customer lifetime value. I am excited to welcome Vivint to the NRG family.”

“We are pleased to announce a transaction that delivers immediate and compelling cash value to Vivint’s stockholders while also presenting significant opportunities to drive our company’s continued success in the years to come,” said David Bywater, chief executive of Vivint Smart Home. “Our agreement with NRG is the culmination of our Board’s ongoing pursuit of maximizing value for Vivint stockholders and is a testament to the strength of the Vivint brand, capabilities, and proven industry leadership. We look forward to working with NRG to create exciting opportunities for Vivint as part of a larger platform. On behalf of our Board and management team, I thank the hard-working Vivint employees for the significant role they have played in this important milestone.”

The deal will increase NRG’s customer base to about 7.4 million across North America. The company is one of the largest US independent power producers and operates a fleet of natural gas, coal and other generating plants totalling 18 gigawatts. It is also one of the biggest retail electricity providers in Texas.

News: NRG Energy to buy Vivint Smart Home for $2.8 bln