CCP, Global Infrastructure Partners to acquire Allete for $6.2bn

BY Richard Summerfield

US utility group Allete is to be acquired by the Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP) in a deal worth $6.2bn, inclusive of debt.

Under the terms of the deal, the firms will make a cash payment of $67 per share to take Allete private, a 19.1 percent premium over the company’s closing share price on 4 December 2023, the day before media reports that the power company was exploring a sale began to appear.

Allete’s board of directors has unanimously approved the transaction, which is set for completion in mid-2025, subject to shareholder approval and regulatory consents. Following completion, Allete will withdraw from the New York Stock Exchange and revert to private ownership.

“Our ‘Sustainability-in-Action' strategy has secured ALLETE’s place as a clean-energy leader,” said Bethany Owen, chair, president and chief executive of Allete. “Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values.”

She added: “CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our ALLETE companies serve in our communities as well as our nation’s energy future. Together, we will continue to invest in the clean-energy transition and build on our 100 plus-year history of providing safe, reliable, affordable energy to our customers.”

“Together with GIP, we look forward to bringing our sector expertise and long-term capital to support ALLETE’s strong management team as they continue to deliver safe, reliable, affordable energy services to their customers,” said James Bryce, managing director and global head of infrastructure at CPP Investments. “ALLETE is at the forefront of the clean energy transition and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for ALLETE’s customers and CPP contributors and beneficiaries.”

“GIP, alongside CPP Investments, look forward to partnering to provide ALLETE with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve,” said Bayo Ogunlesi, chairman and chief executive of GIP. “Bringing together ALLETE, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy.”

Allete’s existing management team, including Ms Owen, will continue to lead the company upon completion of the deal. The company’s headquarters will remain in Duluth, and commitments have been made to retain the workforce and maintain current compensation and benefits programmes.

News: US utility Allete goes private in $6.2 billion deal

CoStar acquires Matterport in $1.6bn transaction

BY Fraser Tennant

In a move that boosts its digital real estate services, real estate data provider CoStar Group is to acquire digital twin platform Matterport in a transaction valued at $1.6bn.

Under the terms of the definitive agreement, CoStar will acquire all outstanding shares of Matterport in a cash and stock transaction valued at $5.50 per share. Matterport stockholders will receive $2.75 in cash and $2.75 in shares of CoStar Group common stock for each share of Matterport common stock.

Utilised in nearly every sector of real estate, spanning residential, commercial, hospitality, retail and industrial spaces, among others, Matterport has curated what is considered the largest and most precise collection of spatial property data worldwide, with over 12 million spaces captured in 177 countries, representing more than 38 billion square feet of digital property under management.

“We are thrilled to join forces with CoStar Group, a long-standing customer and partner with a shared vision for transforming global real estate through technology and digitalisation,” said RJ Pittman, chair and chief executive of Matterport. “This transaction is another significant milestone that acknowledges the groundbreaking work Matterport has accomplished in 3D digital twin technology and artificial intelligence (AI)-driven property intelligence.”

The transaction has been unanimously approved by the Matterport board of directors.

“There is no better way to remotely experience space than via Matterport,” said Andy Florance, founder and chief executive of CoStar Group. “We intend to support and invest in research and development opportunities to further develop Matterport’s spatial technology, including the application of AI and machine learning to extract information from the 3D spatial data library as well as using generative AI to imagine and reimagine physical spaces.”

The transaction is expected to be completed during 2024, subject to the approval of Matterport stockholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

“With CoStar’s expansive reach and scale in property research and analytics and our joint commitment to innovation, we believe that this powerful combination will transform how properties are marketed, sold and managed worldwide,” concluded Mr Pittman. “It offers Matterport's stockholders the opportunity to participate in the value creation and future growth prospects of our combined efforts.”

News: CoStar to buy Matterport in $1.6 bln deal to boost digital real estate services

DS Smith to be acquired by International Paper in $7.2bn all-stock deal

BY Richard Summerfield

UK packaging specialist DS Smith is to be acquired by US rival International Paper in an all-stock deal worth $7.2bn.

The all-stock transaction will create a global leader in packaging, according to International Paper. Upon completion of the sale, DS Smith shareholders will own about 33.7 percent of the combined entity, with International Paper shareholders owning the rest. Subject to shareholder and regulatory approval, the deal is expected to close later this year.

International Paper agreed to pay 0.1285 new shares of International Paper for each DS Smith share, or about 415 pence based on the share prices of both companies as of late March, when the US company publicly announced its interest.  

The formal agreement for DS Smith gives International Paper the backing of the company’s board, however rival suitor Mondi Plc could still return with a competing offer. In March, Mondi reached an agreement in principle to buy DS Smith in an all-stock deal of £5.14bn, with the purchase price representing a 33 percent premium at that time and DS Smith shareholders getting control of 46 percent of the new company. Whether Mondi will return with a further bid remains to be seen. The company has until 23 April to make a firm offer or walk away from any potential deal.

“Combining with DS Smith is a logical next step in IP’s strategy to drive profitable growth by strengthening our global packaging business,” said Mark S. Sutton, chairman and chief executive of International Paper. “DS Smith is a leader in packaging solutions with an extensive reach across Europe, which complements IP’s capabilities and will accelerate growth through innovation and sustainability. We are confident this combination will drive significant value for our employees, customers, and shareholders.”

“Bringing together the capabilities and expertise of both companies will create a winning position in renewable packaging across Europe, while also enhancing IP’s North American business,” said Andrew K. Silvernail, chief executive-elect of International Paper. “I firmly believe this strategic combination offers a unique and highly compelling opportunity to create tremendous shareholder value. I am also committed to working with the teams to deliver the expected synergies, along with the ongoing profit improvement initiatives across the IP portfolio.”

“The combination with IP is an attractive opportunity to create a truly international sustainable packaging solutions leader that is well positioned in attractive and growing markets across Europe and North America,” said Miles Roberts, chief executive of DS Smith. “It combines two focused and complementary businesses. DS Smith has grown significantly through a dedication to customers, focus on innovation, quality of packaging and high levels of service. In a dynamic sustainable packaging landscape, the combination will enhance our global proposition to customers, create opportunities for colleagues and drive value for shareholders who can remain fully invested in such an exciting business.”

News: DS Smith agrees $7.2 bln all-share deal with International Paper

AIR Communities goes private in $10bn deal

BY Fraser Tennant

In a move that takes the real estate investment trust private, US alternative investment management company Blackstone is to acquire Apartment Income REIT – known as AIR Communities – in an all-cash transaction valued at approximately $10bn.

Under the terms of the definitive agreement, Blackstone will acquire all outstanding common shares of AIR Communities for $39.12 per share. Subject to and upon completion of the transaction, AIR Communities’ common stock will no longer be listed on the New York Stock Exchange.

The transaction has been unanimously approved by the AIR Communities board of directors.

“The transaction will strengthen the AIR mission to provide homes for others, be a great place to work, act as responsible stewards of AIR communities, and be a trusted partner to AIR investors,” said Terry Considine, president and chief executive of AIR Communities. “The business the AIR team has built will be improved and expanded by collaboration with Blackstone and a shared focus on serving residents and investing wisely.”

AIR Communities’ portfolio consists of 76 high-quality rental housing communities concentrated primarily in coastal markets including Miami, Los Angeles, Boston and Washington DC. Blackstone plans to invest more than $400m to maintain and improve the existing communities in the portfolio and may invest additional capital to fund further growth.

“AIR Communities represents the highest quality, large scale apartment portfolio we have ever acquired, and is located in markets where multifamily fundamentals are strong,” said Nadeem Meghji, global co-head of Blackstone Real Estate. “We are very impressed by the terrific operating team at AIR Communities and look forward to working closely with them, while continuing to deliver a fantastic resident experience.”

A global leader in real estate investing, Blackstone is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, residential, office, hospitality and retail.

The acquisition is expected to close in the third quarter of 2024, subject to approval by AIR Communities’ stockholders and other customary closing conditions.

Mr Considine concluded: “The AIR team is grateful to Blackstone for the opportunity and for its faith in what can be accomplished working together.”

News: Blackstone to take Apartment Income REIT private in $10bn deal

Johnson & Johnson agrees $13.1bn Shockwave deal

BY Richard Summerfield           

Johnson & Johnson has agreed to acquire Shockwave Medical in a deal valued at $13.1bn including debt.

Under the terms of the deal, Johnson & Johnson will pay $335 per share to acquire the company, a 17 percent premium to the stock’s closing price in late March, when rumours of a potential deal first began to emerge.

The acquisition is expected to close by mid-year 2024, subject to Shockwave’s shareholder approval, as well as the receipt of applicable regulatory approvals and other customary closing conditions.

“With our focus on Innovative Medicine and MedTech, Johnson & Johnson has a long history of tackling cardiovascular disease – the leading cause of death globally,” said Joaquin Duato, chairman and chief executive of Johnson & Johnson. “The acquisition of Shockwave and its leading IVL technology provides a unique opportunity to accelerate our impact in cardiovascular intervention and drive greater value for patients, shareholders and health systems.”

“Shockwave offers a truly differentiated opportunity to further enhance our leadership position in medtech, expand into additional high-growth segments, and ultimately transform the future of cardiovascular treatment,” said Tim Schmid, executive vice president and worldwide chairman of Johnson & Johnson MedTech. “Shockwave’s IVL technology for treating CAD and PAD, and its strong pipeline, are in a class of their own.”

“Shockwave has transformed the treatment of complex calcified arterial disease through the pioneering development of intravascular lithotripsy, and it is our mission to make this remarkable technology available to patients worldwide,” said Doug Godshall, president and chief executive of Shockwave. “As part of a larger, more diverse organization, with broad expertise and a core focus on improving patient outcomes, we are confident we will be able to further solidify IVL as the global standard of care for patients.”

Johnson & Johnson has been placing greater emphasis on its cardiac health business in recent years, spending $16.6bn to acquire heart pump maker Abiomed in 2022 and $400m to buy heart-centric device maker Laminar. In early 2023, the company announced its plans to focus on deals that would add value to its portfolio of cardiovascular products, and that many of its future transactions were likely to be smaller ‘tuck-in’ acquisitions.

In 2023, Shockwave’s revenue grew 49 percent to $730m, according to its most recent quarterly earnings report. The company projects that its revenue in 2024 will rise another 25 percent to between $910m and $930m.

News: J&J boosts heart device business in $13.1 bln Shockwave deal