L&G exits Cala Group for $1.8bn

BY Richard Summerfield

Legal and General (L&G) is to sell its UK housebuilder Cala Group to investment groups Sixth Street Partners and Patron Capital in a $1.8bn deal, as part of a plan to slim down and focus on its main operations.

The deal will see L&G receive around £500m when the deal closes, which is expected to happen before the end of the year, and the rest of the cash over five years. The company plans to reinvest the funds in its wider operations, as well as supporting future shareholder returns. L&G paid more than £315m to buy Patron’s majority stake in Cala in 2018. Patron formerly owned Cala alongside L&G but in 2018 sold its stake in the company at an equity valuation of £605m.

“Today’s announcement is excellent news for Cala,” said Kevin Whitaker, chief executive of Cala. “This investment by Sixth Street and Patron demonstrates their confidence in Cala’s business plan and further potential. We look forward to developing a strong partnership with Sixth Street and reigniting the excellent relationship we shared with Patron between 2013 and 2018. I would like to thank Legal & General for their support since they first invested in Cala. With their backing, Cala has successfully tripled the number of homes we build each year, whilst revenue and profits have grown five- and ten-fold respectively.”  

“Cala has a bright future and we are proud to be entering this new chapter as stewards of a company with such a deep history and long track record of sustainable growth,” said Julian Salisbury, co-chief investment officer of Sixth Street. “We, together with Patron, look forward to continuing to support Cala and its management team, not only with capital but also with the significant resources of our London-based real estate investment team led by Giulio Passanisi.” 

“We are pleased to be able to back the Cala business once again,” said Keith Breslauer, managing director and founder of Patron Capital. “Cala is one of the UK’s leading housebuilders with a best-in-class landbank and a focus on building high-quality homes, being consistently ranked five-star for customer service. Furthermore, Cala is also a people business with a strong corporate culture and a business we know well, and we look forward to working closely with Cala’s impressive management team and our partner, Sixth Street, to further build the business and help tackle the undersupply of homes in the UK.” 

“This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses,” said António Simões, group chief executive of L&G. “Cala has been an important part of L&G for over a decade, with profits increasing ten-fold since our initial investment in 2013. The sale announced today will provide capital to deliver our strategic goals of sustainable growth alongside enhanced returns for shareholders. I’d like to thank the whole Cala team for their contribution to the Group and wish them every success in the future.”

News: Legal & General sells UK housebuilder CALA Group in $1.8 bln deal

Mastercard acquires Recorded Future in $2.65bn deal

BY Fraser Tennant

In a deal that adds threat intelligence and cyber security technologies to its corporate portfolio, US multinational payment card services corporation Mastercard is to acquire threat intelligence company Recorded Future in a transaction valued at $2.65bn.

The combination of technology and expertise will help enable the development of even more robust practices and drive greater synergies in cyber security and intelligence, as well as helping to protect people and businesses.

“Trust is the foundation of any relationship,” said Craig Vosburg, chief services officer at Mastercard. “Recorded Future adds to how we deliver that greater peace of mind before, during and after the payment transaction. Together we will innovate faster, create smarter models and anticipate emerging threats before cyber attacks can take place – in payments and beyond.”

A current collaboration is an artificial intelligence (AI)-supported service that alerts financial institutions more quickly and with greater accuracy when a card is likely to have been compromised. Since its launch earlier this year, the service has doubled the rate at which compromised cards are identified, as compared to the same time period last year.

Headquartered in Boston with offices and employees around the world, Recorded Future works with over 1900 businesses and government organisations across more than 75 countries to provide real-time, unbiased and actionable intelligence.

The company offers real-time visibility into potential threats by analysing a broad set of data sources to provide insights that enable its customers to take action to mitigate risks. This ability, coupled with its use of AI and other best-in-class technologies, will add to Mastercard’s identity, fraud prevention, real-time decisioning and cyber security services.

“We created Recorded Future with a simple goal to secure the world with intelligence,” said Christopher Ahlberg, chief executive of Recorded Future. “By joining Mastercard, we see an opportunity to help more businesses and governments determine the steps to realise their full potential – and to enable everyone to feel safer in their daily lives.”

The transaction, which is anticipated to close by the first quarter of 2025, is subject to regulatory review and other customary closing conditions.

As new technologies are introduced and adopted, the acquisition bolsters the insights and intelligence used to secure today’s digital economy – in the payments ecosystem and beyond.

News: Mastercard bolsters threat intelligence capabilities with $2.65 billion deal for Recorded Future

Salesforce acquires Own Company in $1.9bn deal

BY Fraser Tennant

In its third acquisition in little more than a month, US cloud-based software company Salesforce is to acquire Own Company, a data protection and management solutions start-up, for approximately $1.9bn in cash.

The move to acquire Own Company is the latest example of Salesforce’s ‘try before you buy’ acquisition strategy, which follows deals to buy start-up software company Tenyx and retail point of sale software vendor PredictSpring.

Moreover, the acquisition comes at a time when customers are increasingly focused on mitigating data loss due to system failures, human error and cyber attacks, with the advent of artificial intelligence (AI) making customers even more aware of the need to protect and manage access to data.

“Data security has never been more critical, and Own Company’s proven expertise and products will enhance our ability to offer robust data protection and management solutions,” said Steve Fisher, president and general manager of Einstein 1 Platform and Unified Data Services at Salesforce. “This transaction underscores our commitment to providing secure, end to end solutions that protect our customers’ most valuable data and navigate the shifting landscape of data security and compliance.”

Trusted by nearly 7000 customers to safeguard mission-critical data, Own Company’s data platform provides data archiving, seeding, security and analytics capabilities that help customers ensure the availability, compliance and security of their mission-critical software as a service data.

“We are excited to join forces with Salesforce, a company that shares our commitment to data resilience and security,” said Sam Gutmann, chief executive of Own Company. “As digital transformation accelerates, our mission has expanded from preventing data loss in the cloud to helping customers protect their data, unlock business insights and accelerate AI-driven innovation.”

The transaction is expected to close in the fourth quarter of Salesforce’s fiscal year 2025, subject to customary closing conditions, including the receipt of required regulatory approvals.

Mr Gutmann concluded: “Together with Salesforce, we will deliver even greater value for our customers by driving innovation, securing data and ensuring compliance in the world’s most complex and highly regulated industries.”

News: Salesforce to buy data protection provider Own Company for $1.9 bln

Methanex strikes $2.05bn methanol deal

BY Richard Summerfield

Methanex Corporation has agreed to acquire the methanol business of Dutch green fuel manufacturer OCI Global, in a deal worth $2.05bn.

According to a statement announcing the deal, the $2.05bn purchase price will consist of $1.15bn in cash, the issuance of 9.9 million common shares of Methanex valued at $450m (based on a $45 per share price) and the assumption of $450m in debt and leases. OCI will become the second-largest shareholder of Methanex, with about 13 percent of the company.

The deal is expected to close in the first half of 2025. The transaction has been approved by the boards of directors of both companies and is subject to receipt of certain regulatory approvals and other closing conditions.

Under the terms of the deal, Methanex, a Canadian company that supplies, distributes and markets methanol worldwide, will acquire a methanol facility in Beaumont, Texas with an annual production capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia, a 50 percent interest in a second methanol facility also in Beaumont, Texas, operated by the joint venture Natgasoline, OCI HyFuels, which produces low-carbon methanol and sells volumes with trading and distribution capabilities for renewable natural gas (RNG), and a methanol facility in Delfzijl, Netherlands with an annual capacity to produce 1 million tonnes of methanol.

Methanex expects to achieve approximately $30m of annual cost synergies from lower logistics costs and lower selling, general and administrative expenses.

“This transaction is testament to the efforts of an exceptionally talented group across OCI Methanol’s platform, who have prioritized value creation for the past 14 years,” said Bashir Lebada, chief executive of OCI Methanol Group. “We are proud of OCI’s contributions to new applications, and in pioneering the use of methanol as a fuel globally, Methanex is well positioned to leverage OCI HyFuels to accelerate the transition to a low-carbon economy.”

 “We expect the acquisition to add incremental annual Adjusted EBITDA of $275 million to our expected run-rate Adjusted EBITDA of $850 million at a $350/MT realized methanol price,” said Dean Richardson, senior vice president, finance & chief financial officer at Methanex. “We remain firmly committed to maintaining financial flexibility and have in place a robust financing plan that will support de-levering to our target range of 2.5 to 3.0 times debt/Adjusted EBITDA within approximately 18 months from closing, assuming an average realized price of $350/MT. The plan includes the repayment of our $300 million bond as scheduled in December 2024.”

“This is an outstanding strategic fit for Methanex,” said Ahmed El Hoshy, chief executive of OCI. “We look forward to working closely with Methanex’s management to fully integrate the business after closing, and to ensure continuity and successful stewardship of the business.”

News: Methanex to acquire OCI's methanol business in $2.05 bln deal

Rite Aid emerges from bankruptcy protection

BY Richard Summerfield

US pharmacy chain Rite Aid Corporation has emerged from Chapter 11 bankruptcy protection after successfully completing its restructuring process.

The company has eliminated $2bn in debt and said it has “received approximately $2.5 billion in exit financing to support the business going forward.”

Following its emergence from Chapter 11, Rite Aid will operate as a privately held company owned by creditors, operating “more than 1700 retail pharmacy locations across 16 states with a workforce of more than 45,000 strong”, according to the company’s website. Rite Aid closed more than 500 stores during the bankruptcy proceedings.

Separately, Rite Aid has announced that Matt Schroeder, who most recently served as chief financial officer, has been appointed its new chief executive. He succeeds Jeffrey S. Stein, who joined the company as chief executive and chief restructuring officer to lead the court-supervised Chapter 11 process.

“Emergence is a pivotal moment in Rite Aid’s history, enabling it to move forward as a significantly transformed, stronger and more efficient company,” said Mr Stein. “We are grateful for the ongoing support of our customers, associates and partners, and we look forward to continuing to provide leading pharmacy services designed to improve health and wellness outcomes across the communities we serve. I am excited about Rite Aid’s future as it continues to focus on executing its strategy and delivering for its customers and stakeholders.”

“I am honored to lead Rite Aid on its journey as we continue serving our customers and communities,” said Mr Schroeder. “Thanks to the dedication of the entire organization, we are beginning our next phase as a transformed company. I see Rite Aid’s remarkable potential, and I look forward to working with the team as we remain committed to our purpose of helping our customers achieve whole health for life.”

Rite Aid filed for Chapter 11 bankruptcy in October 2023, in light of significant financial challenges. The company recorded $750m in losses against $24bn in revenue for the prior fiscal year. As part of the restructuring, in addition to closing hundreds of locations, the company agreed to sell its pharmacy benefit unit Elixir, and settle with key creditors, including McKesson.

The plan also allocates $47.5m to junior creditors involved in opioid-related litigation, addressing claims from individuals and local governments. Prior to its Chapter 11 filing, Rite Aid faced 1600 opioid lawsuits, including one by the federal government alleging that the company ignored potential concerns when filling suspicious prescriptions for addictive opioid pain medication.

News: US pharmacy chain Rite Aid to operate as a private company as it emerges from bankruptcy