Barratt to acquire Redrow in £2.52bn deal

BY Richard Summerfield

The UK’s biggest housebuilder, Barratt, has agreed to acquire its smaller rival Redrow in an all-stock deal worth around £2.5bn.

The merged group, to be called Barratt Redrow, is expected to build about 23,000 homes a year and have a turnover of more than £7bn. The combined market value of the two companies was £7.2bn when financial markets closed on Tuesday, the day before the deal was announced.

Barratt shareholders will retain 67.2 percent of the new group, leaving Redrow shareholders with 32.8 percent. The Redrow brand will be retained for marketing new homes and its Heritage collection, aimed at more affluent buyers, added to the portfolio, which also comprises Barratt’s more affordable David Wilson Homes. Under the terms of the deal, each Redrow shareholder will receive 1.44 new Barratt shares for each share they hold.

According to Barratt, the deal will allow for £90m in cost-saving synergies and will offer opportunities for the new group to consolidate its supply chain. Subject to regulatory and shareholder approval, the deal is expected to complete in the second quarter of this year.

“We have great respect for Redrow, its overall strategy, its leadership and employees, and its high-quality homes and communities,” said David Thomas, group chief executive of Barratt. “This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs. The Combined Group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and - most importantly - our customers.”

“Redrow and Barratt combined creates a leading UK homebuilder,” said Matthew Pratt, group chief executive of Redrow. “Together, we’ll be in a much better position to offer a broader range of high-quality and energy efficient homes to customers. The Redrow brand, with its premium, characterful homes, has an excellent reputation and will remain a key part of the Combined Group. As with Barratt, Redrow’s fifty-year success story is based on its people, products and supply chain partners. Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas.”    

“During the 50 years since I founded Redrow, I could not be more proud of the unique reputation it has earned for building premium homes and thriving communities,” said Steve Morgan, founder of Redrow. “Barratt is a home builder I have long admired due to their likeminded attention to quality. I am confident that the Barratt / Redrow combination with their three high-quality complementary brands, will create a standout home builder for the future and accelerate the delivery of much needed homes across the UK.”

News: UK homebuilder Barratt to buy Redrow in 2.52 billion pound deal

Acerinox to acquire Haynes in near $1bn deal

BY Fraser Tennant

In a deal set to increase its presence in the high-growth US market and aerospace sector, Spanish stainless steel company Acerinox is to acquire fabricated metal products manufacturer Haynes International, Inc for $970m.

Under the terms of the definitive agreement, Acerinox will acquire all the outstanding shares of Haynes for $61 per share in cash, which represents a premium of approximately 22 percent to Haynes’s six-month volume-weighted average share price for the period ending 2 February 2024.

In addition, Acerinox plans to invest $200m into its US operations as part of the transaction, including $170m into Haynes’ operations. Upon completion of the transaction, Haynes’s shares will no longer be traded on the Nasdaq, and Haynes will become a wholly owned subsidiary of Acerinox.

“Haynes has impressive and complementary business operations, research and development capabilities and an experienced team,” said Bernardo Velázquez Herreros, chief executive of Acerinox. “Their addition strengthens our global leadership in high-performance alloys and creates meaningful opportunities in the high-growth aerospace segment and the attractive US market.”

Headquartered in Kokomo, Indiana, Haynes is a leading developer, manufacturer and distributor of high-performance alloys for use in high-temperature and corrosion applications. Since 2000, its technical programmes have yielded nine new proprietary alloys.

“We are excited to announce this combination and are confident that this is the right step to ensure the long-term success of Haynes, while maximizing value for our stockholders,” said Michael L. Shor, president and chief executive of Haynes. “By joining with Acerinox, we will be able to continue to grow and enhance our operations.”

The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the third quarter of 2024, subject to receipt of regulatory approval and the satisfaction of customary closing conditions, including approval by Haynes shareholders.

Mr Hereros concluded: “I look forward to welcoming Haynes as part of our team and working together to enhance our combined operating footprint in North America.”

News: Acerinox to Acquire Haynes International

WillScot Mobile agrees $3.8bn McGrath deal

BY Richard Summerfield

WillScot Mobile Mini Holdings Corp has agreed to acquire McGrath RentCorp in a deal worth $3.8bn. The deal is expected to close in the second quarter of 2024, subject to approval by McGrath shareholders, regulatory approvals and other customary closing conditions.

Under the terms of the transaction, McGrath shareholders will receive either $123 in cash or 2.8211 shares of WillScot common stock per McGrath share they hold. Sixty percent of McGrath’s outstanding shares will be converted into the cash consideration and the remaining 40 percent converted into the stock consideration. The transaction values McGrath at an enterprise value of $3.8bn, including approximately $800m of net debt, and the per-share consideration represents a premium of 10.1 percent to McGrath’s closing stock price on 26 January 2024, the last day of trading before the deal was announced.

“I’m excited to welcome the McGrath team to the WillScot Mobile Mini family,” said Brad Soultz, chief executive of WillScot Mobile Mini. “The transaction will further accelerate our growth, with combined 2023 pro forma revenue of $3.2 billion and adjusted EBITDA of $1.4 billion, we will be on path to achieve a $700 million free cash flow run-rate twelve months after we close. Meanwhile, our $1 billion of idiosyncratic growth levers remain in flight, many of which will increase proportionally with the close of the transaction. Among the abundant stockholder benefits associated with this transaction, I am most excited with the prospect of extending our innovative and expansive Value-Added Products portfolio, and our unique FLEX, Cold Storage and Clearspan Space Solutions to McGrath customers. Our long-term capital allocation framework remains unchanged as we continue to accelerate our robust organic growth with highly accretive M&A, all the while creating long-term value for our shareholders.”

“This combination provides McGrath customers and employees a platform for continued growth and success, while providing McGrath shareholders with immediate cash value as well as participation in the upside potential of the combined company,” said Joseph Hanna, president and chief executive of McGrath. “This transaction validates the strength of our business, the hard work and dedication of our team members and the valuable solutions McGrath provides to our customers. For more than 40 years, we have pursued a relentless customer-centric approach and we look forward to extending our ability to provide the solutions that our customers so highly value.”

According to a statement announcing the deal, the combined company will have a strengthened financial profile, with combined 2023 revenues of $3.2bn and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $1.4bn, including run-rate operating synergies. The combined company expects to capture additional revenue synergies and fleet efficiencies through its combined commercial and branch operations and by leveraging WillScot’s best-in-class technology platform. WillScot expects the combined company will generate approximately $700m of annual free cash flow by end of the first full year following closing, with significant further accretion to free cash flow margins over time.

News: Portable building firm Willscot Mobile to buy McGrath RentCorp in $3.8 bln deal

Sanofi agrees $2.2bn Inhibrx deal

BY Richard Summerfield

In a deal that will expand its rare disease pipeline, French pharmaceutical company Sanofi has agreed to acquire Inhibrx, Inc for $2.2bn.

The transaction will give Sanofi access to Inhibrx’s INBRX-101 – an experimental treatment for a rare genetic disease – which is currently in the second of three phases of clinical trials. Its other experimental drugs will be spun off into a separate company, with Sanofi retaining an 8 percent stake. The spun-off company will operate under the Inhibrx name and be led by current Inhibrx chief executive Mark Lappe, who will become chairman and chief executive.

Sanofi expects to finance the transaction with available cash resources. Subject to the satisfaction of customary closing conditions, Sanofi and Inhibrx expect the transaction to close in the second quarter of 2024.

Under the terms of the deal, Inhibrx shareholders will receive $30 per share, below its $33.33 closing price on Monday 22 January, the day before the deal was announced. Inhibrx shareholders will also gain stakes in the new biotech, plus the chance to receive a further $5 a share if a regulatory milestone is met. As part of the transaction, Sanofi will assume and retire Inhibrx’s outstanding third-party debts, and fund the spun-off company with $200m in cash.

“The addition of INBRX-101 as a high potential asset to our rare disease portfolio reinforces our strategy to commit to differentiated and potential best-in-class products,” said Houman Ashrafian, head of research and development at Sanofi. “With our expertise in rare diseases and growing presence in immune-mediated respiratory conditions, INBRX-101 will complement our approach to deploy R&D efforts in key areas of focus and address the needs of the underserved AATD patients and communities.”

INBRX-101 is designed to treat AATD, a disease that progressively damages the lungs and liver, by reducing inflammation and staving off further damage to the tissue. The size of the AATD market is expected to grow considerably in the coming years, with many other biotech companies, including Mereo BioPharma, Vertex, Wave Life Sciences, BioMarin, Intellia Therapeutics and Peak Bio, all believed to be pursuing AATD therapies.

Sanofi has been particularly active in recent months. In late 2023, the company and artificial intelligence (AI) specialist Aqemia entered a multi-year research collaboration worth $140m to discover small molecule drug candidates across several therapeutic areas. Sanofi also entered into a partnership with BioMap, another AI specialist, to accelerate drug discovery for biotherapeutics, in a deal potentially worth over $1bn. Furthermore, in March 2023 Sanofi acquired Provention Bio for $2.9bn.

News: France's Sanofi to buy U.S. drugs project INBRX-101 for about $2.2 billion

Synopsys to acquire Ansys in $35bn mega-deal

BY Fraser Tennant

In the largest technology acquisition in over a year, electronic design automation (EDA) company Synopsys is to acquire engineering simulation leader Ansys in a transaction with an enterprise value of approximately $35bn.

Under the terms of the definitive agreement, Ansys shareholders will receive $197 in cash and 0.3450 shares of Synopsys common stock for each Ansys share. Ansys shareholders are expected to own approximately 16.5 percent of the combined company on a pro forma basis.

Upon completion of the transaction, Synopsys’ pioneering semiconductor electronic design automation (EDA) and Ansys’ broad simulation and analysis portfolio will create a leader in silicon to systems design solutions.

“The megatrends of artificial intelligence, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity,” said Sassine Ghazi, president and chief executive of Synopsys. “Bringing together Synopsys’ industry-leading EDA solutions with Ansys’ world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful and seamlessly integrated silicon to systems approach to innovation.”

According to both companies, this combination brings together their highly complementary capabilities to meet the evolving needs of today’s engineers and give them unprecedented insight into the performance of their products.

“This acquisition will accelerate the development of our joint portfolio and deliver an increased level of innovation, which will benefit Ansys’ traditional customers,” said Ajei Gopal, president and chief executive of Ansys.

The combined company expects to achieve approximately $400m of run-rate cost synergies by year three post-closing and approximately $400m of run-rate revenue synergies by year four post-closing, growing to more than approximately $1bn annually in the longer-term.

The transaction is anticipated to close in the first half of 2025, subject to approval by Ansys shareholders, the receipt of required regulatory approvals and other customary closing conditions.

Mr Ghazi concluded: “This acquisition is the logical next step for our successful, seven-year partnership with Ansys and we look forward to working closely with the Ansys team to realise the benefits of this combination for our customers, shareholders and employees.”

News: Synopsys to buy engineering software firm Ansys in $35 billion deal