Monumental $26.2bn deal sees Microsoft acquire LinkedIn

BY Fraser Tennant

In a monumental deal which combines the world's leading platform and productivity company with the world’s leading professional network, Microsoft Corp is to acquire LinkedIn Corporation in a transaction valued at $26.2bn.

Under the terms of the definitive agreement, Microsoft will acquire LinkedIn for $196 per share in an all-cash transaction, with the professional network retaining its distinct brand, culture and independence. In addition, Jeff Weiner will remain as CEO of LinkedIn and will report to Satya Nadella, CEO of Microsoft.

The world's largest and most valuable professional network, over the past year LinkedIn’s innovations, have resulted in an increase in membership, engagement and financial results, including: (i) 19 percent growth year over year (YOY) to more than 433 million members worldwide; (ii) 9 percent growth YOY to more than 105 million unique visiting members per month; (iii) 49 percent growth YOY to 60 percent mobile usage; (iv) 34 percent growth YOY to more than 45 billion quarterly member page views; and (v) 101 percent growth YOY to more than 7 million active job listings.

"The LinkedIn team has grown a fantastic business centred on connecting the world's professionals," said Mr Nadella. "Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet."

Microsoft has said that it will finance the deal transaction primarily through the issuance of new indebtedness and, upon closing, expects LinkedIn's financials to be reported as part of Microsoft's Productivity and Business Processes segment.

"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn's network, now gives us a chance to also change the way the world works," said Mr Weiner. "For the last 13 years, we've been uniquely positioned to connect professionals to make them more productive and successful, and I'm looking forward to leading our team through the next chapter of our story."

Unanimously approved by the boards of directors of both LinkedIn and Microsoft, the deal is subject to approval by LinkedIn's shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions.

The Microsoft/LinkedIn transaction is expected to close by the end of 2016.

News: Microsoft to buy LinkedIn for $26.2 billion in its largest deal

Thoma Bravo acquires Qlik for $3bn

BY Richard Summerfield

Visual analytics company Qlik has been acquired by private equity firm Thoma Bravo in a $3bn deal, the two firms have announced.

The deal, which will be an all cash affair, is expected to close in the third quarter of 2016, provided the transaction wins the approval of Qlik’s shareholders and satisfies the usual closing conditions, according to a joint statement announcing the merger. The offer will see Qlik’s shareholders receive $30.50 per Qlik share held, a premium of 40 percent over the company's 10 day average stock price prior to 3 March 2016.

According to the statement, Qlik, which went public in 2010, will remain headquartered in Radnor, Pennsylvania. The company will also retain its existing management team.

“We believe the proposed transaction is in the best interest of Qlik’s shareholders and provides the Company with additional flexibility to execute our strategic plan as we continue to diligently provide customers with the premier products and services they have come to expect,” said Lars Björk, chief executive of Qlik. “Thoma Bravo recognises the value that Qlik delivers – a platform that lets our customers see the whole story that lives within their data. Thoma Bravo has an excellent track record of investing in outstanding technology businesses for the long-term, and I am confident our employees, customers and partners will greatly benefit from our partnership with them.”

The future of Qlik had been up for debate for some time. Indeed, the company had been on the hunt for potential buyers and is believed to have received preliminary offers from a number of interested parties, including private equity groups. However, it was Thoma Bravo’s interest in the company that proved decisive.

“We look forward to partnering with the Qlik team as they continue to grow their platform-based approach to business intelligence (BI) and analytics,” said Orlando Bravo, a managing partner at Thoma Bravo. “As the need for analytic solutions grows, Qlik is well-positioned to continue to drive innovation and lead the market.”

Qlik has become the latest in a string of companies to be acquired by private equity groups at the urging of activist hedge fund Elliott Management Corp. Elliott disclosed an 8.8 percent stake in the company in March and began agitating for a sale. Qlik follows Compuware Corp, Riverbed Technology Inc, Blue Coat Systems and Informatica into private equity ownership in the wake of Elliott activism.

News: Thoma Bravo to buy analytics firm Qlik in $3 billion deal

Johnson & Johnson to acquire Vogue International for $3.3bn

BY Richard Summerfield

American multinational Johnson & Johnson has announced that it is to acquire haircare company Vogue International in a $3.3bn all cash deal.

The deal, which is subject to customary closing conditions, is expected to close in the third quarter of 2016 and is Johnson & Johnson’s biggest deal for four years. In 2012 the company paid $18bn for Synthes Inc - a deal which represented the company’s largest ever transaction.

Private equity firm Carlyle Group, which owns a 49 percent stake in Vogue (a holding which it acquired for $400m in 2014) is set to quadruple its initial stake through the deal. Vogue’s founder, Todd Christopher, who owns the remaining 51 percent stake in the company, will become a billionaire as a result of the sale.

Sandra Horbach, Carlyle managing director and head of the company’s consumer & retail team, said in a statement: “It has been a privilege to partner with Todd and to support his efforts to develop and launch innovative products, strengthen and grow the organisation, advance sustainability practices, and reach new customers all around the world with the OGX brand. Johnson & Johnson Consumer Inc. will be a great new home for Vogue.”

The deal, once completed, will add a number leading haircare brands, such as OGX shampoos and FX hair styling products, to Johnson & Johnson’s consumer portfolio that already includes globally recognisable brands, including Neutrogena and Clean & Clear. Though the company is perhaps best known for its sales of drugs and medical devices, Johnson & Johnson’s consumer brands are also a key part of its offering. Indeed, Johnson & Johnson has been revamping its consumer division of late. Consumer products accounted for around 19 percent of the company’s sales last year.

Given that Vogue’s estimated annual sales are in the $300m range, the acquisition could be a notable one for Johnson & Johnson. “Our acquisition of Vogue International's full line of leading advanced hair care products sold in the US and in 38 countries will strengthen our global presence in this important category. Vogue International's commitment to quality, innovation, and consumer preference complement our Consumer portfolio, while also presenting attractive hair care category growth opportunities for Johnson & Johnson," said Jorge Mesquita, worldwide chairman of consumer goods at Johnson & Johnson.

News: J&J to buy hair care products maker Vogue for $3.3 billion

Bayer launches $62bn Monsanto bid

BY Richard Summerfield

German pharmaceutical and chemical powerhouse Bayer AG has launched a $62bn all cash takeover bid for US seeds firm Monsanto Co. A merger between the two would create a “global agriculture leader”, Bayer announced in a statement.

According to Bayer, the $122 per share cash offer for Monsanto represents a 37 percent premium over the company’s closing price on 9 May, the day before rumours of Bayer’s interest in the firm emerged. Under the terms of the proposal, the deal would be funded by a combination of debt and equity, with about 25 percent of the enterprise value coming from selling shares to existing investors.

However, the likelihood of the offer being accepted by Monsanto’s shareholders remains unknown. Last week, a Monsanto shareholder was keen to dismiss Bayer’s interest in a deal as nothing more than "arrogant empire-building".

In the statement announcing its interest in the firm, Bayer’s chief executive Werner Baumman said, “We have long respected Monsanto’s business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies’ shareholders. Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate.”

According to Bayer, a deal for Monsanto would add to core earnings per share by a mid-single-digit percentage in the first full year after completion of the transaction. It would also provide a double-digit percentage moving forward. The company’s earnings would also be bolstered by savings of about $1.5bn from the fourth year following the deal.

Should the deal win the approval of Monsanto’s shareholders it would be the biggest corporate takeover ever completed by a German firm and a clear signal of intent from Mr Baumann, who has been Bayer’s CEO for less than a month. Furthermore, the transaction would be a departure for Monsanto, which has been a keen acquirer itself of late. In August 2015, the company was forced to abandon a $43.7bn bid for Swiss pesticide manufacturer Syngenta AG when the firm refused to agree to a deal.

Syngenta was subsequently acquired by China National Chemical Corp for around $43bn. DuPont Co and Dow Chemical Co have also recently announced plans to merge and then carve out a new crop-science unit in another transaction in the fast moving crop and seed industry.

News: Bayer announces $62 billion cash offer for Monsanto

Halliburton and Baker Hughes announce termination of $28bn merger

BY Fraser Tennant

Oilfield services giants Halliburton Company and Baker Hughes Incorporated have terminated their $28bn merger agreement following a far-reaching regulatory review.

The review, which involved both US and European antitrust regulators, culminated in the US Department of Justice (DOJ) stating last month that it intended to block the deal.

In a statement, the DOJ explained that the deal would have resulted in just two dominant entities in this business: the newly formed company (Halliburton and Baker Hughes) and Schlumberger, the world's largest oil services company.

"The companies' decision to abandon this transaction — which would have left many oilfield service markets in the hands of a duopoly — is a victory for the US economy and for all Americans," said US attorney general Loretta E. Lynch.

The DOJ statement also opines that the merger would have "raised prices, decreased output and lessened innovation in at least 23 oilfield products and services critical to the nation's energy supply".

The merger, originally valued at $34.6bn, was first announced in November 2014.

“While both companies expected the proposed merger to result in compelling benefits to shareholders, customers and other stakeholders, challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action,” said Dave Lesar, chairman and chief executive of Halliburton, one of the world's largest providers of products and services to the energy industry.

As part of the termination of the merger agreement, Halliburton is to pay Baker Hughes a termination fee of $3.5bn by Wednesday 4 May 2016.

“Today’s outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies’ employees,” said Martin Craighead, chairman and chief executive of Baker Hughes, a leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry.

Continued Mr Craighead: “This was an extremely complex, global transaction and, ultimately, a solution could not be found to satisfy the antitrust concerns of regulators, both in the United States and abroad.”

News: Halliburton and Baker Hughes scrap $28bn merger