Cencora acquires RCA in $4.6bn transaction

BY Fraser Tennant

In a deal that expands its speciality services, drug distributor Cencora is to acquire Retina Consultants of America (RCA) from private equity firm Webster Equity Partners for $4.6bn.

The acquisition of RCA – a management services organisation (MSO) that operates a network of retina specialists – will add to Cencora’s specialty capabilities and expand its business, broadening physician and manufacturer relationships as well as Cencora’s value proposition to all its stakeholders.

Cencora plans to fund the transaction through a combination of existing cash on hand and new debt financing. RCA’s affiliated practices, physicians and management will retain a minority interest in RCA, with Cencora holding approximately 85 percent ownership in RCA upon closing.

“The acquisition of RCA will allow Cencora to broaden our relationships with community providers in a high growth segment and build on our leadership in specialty,” said Bob Mauch, president and chief executive of Cencora. “With a compelling value proposition for physicians, an impressive leadership team and strong clinical research capabilities, RCA is well-positioned at the forefront of retinal care.

The leading MSO in the retina space and a trusted healthcare provider, RCA’s nearly 300 retina specialists across 23 states provide high-quality care to patients with physicians conducting over 2 million visits annually.

Cencora expects to use its suite of manufacturer services to enhance RCA’s research programme and outcomes, maintaining its position as a partner of choice to pharmaceutical innovators in the retina space.

“We are pleased to enter our next phase of growth with the support of a leading global pharmaceutical solutions organisation,” said Robby Grabow, chief executive of RCA. “With additional resources to support the continued execution of our growth strategy, we will be better positioned to continue expanding our physician network and enhancing the quality of care we provide.”

The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals.

Mr Mauch concluded: “The addition of RCA will allow us to expand our MSO solutions and drive differentiated value across the healthcare system for manufacturers, providers and patients.”

News: Cencora bolsters specialty business with $4.6 bln deal for Retina Consultants of America

Stonepeak takes ATSG private in $3.1bn deal

BY Fraser Tennant

In a deal that takes the aviation holding company private, Air Transport Services Group (ATSG) is to be acquired by US investment firm Stonepeak in an all-cash transaction valued at approximately $3.1bn.

Under the terms of the definitive agreement, which has been unanimously approved by ATSG’s board of directors, holders of ATSG’s common shares will receive $22.50 per share in cash.  

The agreement includes a go-shop period whereby ATSG may solicit proposals from third parties for a period of 35 days continuing through 8 December 2024, and in certain cases for a period of 50 days continuing through 23 December 2024.

The transaction has fully committed equity financing from funds affiliated with Stonepeak and fully committed debt financing. The transaction is not subject to a financing condition. Upon completion, ATSG’s shares will no longer trade on NASDAQ, and ATSG will become a private company.

“This transaction reflects the tremendous value of our fleet of in-demand midsize freighter and passenger aircraft, and the strength of our talented teams across ATSG’s businesses,” said Mike Berger, chief executive of ATSG. “With Stonepeak’s investment and extensive expertise in transportation and logistics and asset leasing, ATSG will be well positioned to further expand its global presence in the air cargo leasing market and enhance its service offerings to customers.”

A premier provider of aircraft leasing and cargo and passenger air transportation solutions for both domestic and international air carriers, as well as companies seeking outsourced airlift services, ATSG is the global leader in freighter aircraft leasing with a fleet that includes Boeing 767, Airbus A321 and Airbus A330 converted freighters.

“ATSG plays a fundamental role in enabling the growth of e-commerce globally in a world that continues to shift away from brick-and-mortar shopping,” said James Wyper, senior managing director and head of transportation & logistics at Stonepeak. “ATSG’s deep relationships with some of the world’s largest e-commerce companies and integrators gives us confidence in the company’s trajectory as a sector leader.”

The transaction is expected to close in the first half of 2025, subject to customary closing conditions, including approval of ATSG’s shareholders and receipt of regulatory approvals.

Mr Berger concluded: “We would like to thank our employees for helping us achieve this significant milestone and for their continued dedication as we prepare to enter this new chapter as a private company.”

News: Stonepeak nears $3.1 billion deal for aircraft lessor ATSG

Global deal volume and values on the rise – report

BY Richard Summerfield

Despite several significant headwinds, global M&A deal volume and value continued to rise in Q3 2024, according to S&P Global’s ‘Q3 2024 M&A Equity Offerings Market Report’.

According to the report, stock market volatility led to a fall of nearly 33 percent in the total value of equity issuance, to $65.63bn from second quarter levels and nearly 21 percent from the same period in 2023. But the number of global M&A announcements increased quarter over quarter for the second straight period (though the increase was slight, rising just 0.36 percent) - the first time this has happened since the third and fourth quarters of 2020. Furthermore, the total value of global M&A deals increased 29.1 percent year over year to $708.74bn in the third quarter.

On a year-over-year basis, global M&A announcements increased 7.3 percent, ending a period of 10-straight quarters of declining global announcements. Deal announcement in the Asia-Pacific region were one of the key drivers of Q3 improvements. Across Asia Pacific, the number of transactions increased to 2742, up 16.1 percent from the previous quarter and 17.3 percent from the same period in 2023. Likewise, the total value of the deals announced increased to $165.81bn, almost doubling the previous quarter’s total and a 37.7 percent increase year over year.

Europe produced some year-over-year growth with M&A announcements increasing 7.0 percent to 2846 and the total value increasing 8.8 percent to $130.89bn. But M&A activity in the region fell quarter over quarter, with the number of transactions dropping 6.1 percent and aggregate value 25.8 percent.

Globally, initial public offerings (IPOs) struggled across the first three quarters of the year, driven by economic volatility and the surfeit of elections across Europe. Global IPO activity picked up from the lows in the first half of 2024, but the pace slowed compared to previous years. The value of offerings rose to $23.32bn in the third quarter, an increase of nearly 22 percent from the second quarter of 2024, but was down 32 percent from the third quarter of 2023.

The number of IPO transactions increased worldwide to 326, up from 322 in the second quarter, but down from 387 in the third quarter of 2023. There were 946 transactions across the first three quarters of 2024, down from 1061 in the first nine months of 2023. The Asia-Pacific region did buck this trend to an extent, and India in particular was a relative hotbed of IPO activity, with the number of deals across the country up 32.3 percent year over year to 262 for the first nine months of 2024. Over the same period, the growth in total value has been smaller, however, up 12.7 percent year over year to $7.65bn.

Report: Q3 2024 M&A Equity Offerings Market Report

Longboard Pharma sold in $2.6bn deal

BY Richard Summerfield

Neuroscience specialist Lundbeck has agreed to buy Longboard Pharmaceuticals in a $2.6bn deal.

The transactions, which has been unanimously approved by the boards of both companies, is expected to close in the fourth quarter of 2024, subject to the tender of at least a majority of the total number of Longboard outstanding voting shares, receipt of required regulatory clearances, and other customary conditions.

The transaction values Longboard stock at $60 a share, representing $2.6bn in equity value and $2.5bn net of cash.

Longboard is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The company is currently working on treatments for forms for epilepsy, including Dravet and Lennox-Gastaut syndromes. Its leading drug, bexicaserin, has shown promising anti-seizure effects in preclinical and clinical studies. Lundbeck estimates bexicaserin could bring in a peak of $1.5bn to $2bn in sales, assuming a launch in the fourth quarter of 2028.

“This transformative transaction will become a cornerstone in Lundbeck’s neuro-rare franchise, with a potential to drive growth into the next decade,” said Charl van Zyl, president and chief executive of Lundbeck. “Bexicaserin addresses a critical unmet need for patients suffering from rare and severe epilepsies, for which there are very few good treatment options available. With this acquisition, we continue to execute on our Focused Innovator strategy, transforming the lives of patients suffering from severe brain disorders.”

“Longboard was founded to transform the lives of people living with devastating neurological conditions,” said Kevin R. Lind, president and chief executive of Longboard. “I am incredibly proud of what our team has achieved; delivering groundbreaking data with a differentiated and inclusive clinical approach to address the needs of a wide range of DEEs and obtaining Breakthrough Therapy designation.

“Lundbeck’s remarkable capabilities will accelerate our vision to provide increased equity and access for underserved DEE patients with significant unmet medical needs,” he added.

According to Mr van Zyl, the acquisition is part of Longboard’s broader focused innovator strategy. The strategy has already seen the company passing over the US rights for depression drug Trintellix to its partner Takeda in the summer in order to “create financial flexibility and reallocate resources to other growth opportunities”.

News: Denmark’s Lundbeck bets on epilepsy drug with $2.6 bln Longboard deal

Chevron to sell oil sands and shale assets for $6.5bn

BY Richard Summerfield

Chevron Canada, a subsidiary of Chevron Corporation, has agreed to sell its assets in Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources in a $6.5bn deal.        

The all-cash deal is expected to close in Q4 2024, subject to regulatory approvals and other customary closing conditions, and is part of the company’s strategy to divest $10bn to $15bn of assets by 2028.

The deal will see Chrevon sell its 20 percent non-operated interest in the Athabasca Oil Sands Project, 70 percent operated interest in the Duvernay shale, and related interests, all located in Alberta, Canada, to Canadian Natural Resources. The assets contributed 84,000 barrels of oil equivalent per day (boe/d) of production, net of royalties, to Chevron in 2023. Canadian Natural Resources said that these acquisitions add targeted 2025 production of approximately 122,500 boe/d, and the addition of approximately 1448 million boe/d of total proved plus probable reserves.

“These assets are a great fit for Canadian Natural and will allow us to further implement our strong operating culture and drive significant value for shareholders,” said Scott Stauth, president of Canadian Natural. “We have made significant progress in driving efficiencies at AOSP over the last 7 years since the original acquisition in May 2017. We expect further efficiencies and improved performance going forward as a result of our relentless focus on continuous improvement.

“The light crude oil and liquids rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play,” he continued. “Both acquisitions provide Canadian Natural with immediate free cash flow generation and further opportunities to drive long term shareholder value.”

“This is a great opportunity to add to our world class Oil Sands Mining and Upgrading asset at AOSP, as well as light crude oil and liquids rich assets in Alberta,” said Mark Stainthorpe, chief financial officer of Canadian Natural. “Both of these acquisition properties are targeted to provide significant free cash flow generation on a go forward basis. Having operated the AOSP mines and knowing the assets well, eliminates the risks associated with a brownfield or greenfield project. These transactions are immediately cash flow and earnings accretive to Canadian Natural shareholders.

“Given our strong balance sheet and significant free cash flow generation we are in an excellent position to take advantage of these opportunities that don’t come along very often,” he added.

News: Chevron to sell assets worth $6.5 billion to Canadian Natural Resources