Signa Sports signs SPAC deal

BY Richard Summerfield

Signa Sports United has reportedly agreed to list on the New York Stock Exchange (NYSE) through a merger with a blank cheque company, in a deal valuing the firm at $3.2bn.

The deal will raise $645m in proceeds for Signa Sports, made up of $345m from special-purpose acquisition company (SPAC) Yucaipa Acquisition and another $300m from investors through a private investment in public equity (PIPE). The transaction has been unanimously approved by the boards of directors of each of Signa Sports and Yucaipa Acquisition and is subject to approval by Yucaipa Acquisition’s shareholders and other customary closing conditions.

The transaction is expected to close in the second half of 2021. Upon completion, the combined company will trade on the NYSE under the Signa Sports United name.

As part of the deal, Signa Sports will also acquire UK-based online rival Wiggle from its private equity owners. Wiggle generates annual sales of about $500m. The combined company is expected to generate net revenues of approximately $1.6bn in the financial year ending in September 2021, serving over seven million active customers.

“We’re proud and excited by this next chapter in SSU’s growth story. Becoming a listed company allows us to continue capturing market share in Europe and to accelerate our US and international expansion while scaling our platform solutions,” said Stephan Zoll, chief executive of Signa Sports. “We also look forward to welcoming WiggleCRC to our SSU family. The acquisition enhances our global online leadership especially in the bike category. Our focus on growth and internationalization coupled with our platform approach drives significant scale benefits.”

“SSU is a global leader in the fastest-growing sports categories and is well-positioned for continued success as a public company,” said Ron Burkle, chairman and president of Yucaipa. “With its technology platform – and a combination of scale, international growth and profitability – we expect SSU to grow its leadership positions and accelerate its global expansion. We look forward to becoming shareholders and partnering closely with the talented SSU team on this exciting journey.”

The deal is another in an increasingly long line of recent SPAC transactions. SPACs have become a popular alternative to the traditional IPO process for companies looking to list on a stock exchange, accounting for nearly half of the more than $200bn raised globally in new listings over the past year.

News: Signa Sports agrees SPAC deal, to buy Wiggle bicycle store - source

Datavant and Ciox Health to merge in $7bn deal

BY Richard Summerfield

Health data companies Datavant and Ciox Health have agreed to merge in a deal valued at $7bn.

The deal is expected to close in the third quarter of 2021, subject to regulatory approval and customary closing conditions. The newly merged company will be known as Datavant and will be led by Pete McCabe, chief executive of Ciox, the companies said in a statement.

The new company will be the largest health data ecosystem in the US, enabling patients, providers, payers, health data analytics companies, patient-facing applications, government agencies and life science companies to securely exchange their patient-level data. The company will have a network of more than 2000 US hospitals and 15,000 clinics as well as data analytics companies and government agencies.

“The fragmentation of health data is one of the single greatest challenges facing the healthcare system today,” said Mr McCabe. “Each of us has many dozens of interactions with the healthcare system over the course of our lives, and that information is retained in siloed databases across disparate institutions. Every informed patient decision and every major analytical question in healthcare requires the ability to pull that information from across the health data ecosystem while protecting patient privacy.”

He continued: “We are thrilled to join forces with the Datavant team to connect health data to improve patient outcomes. Together we are well positioned to navigate the technical, operational, legal, and regulatory challenges to doing so, and are committed to acting as a neutral connectivity solution for our many customers and partners.”

“Every decision made in healthcare should be informed by data,” said Travis May, chief executive of Datavant. “Our goal is to create a ubiquitous, trusted, and neutral data ecosystem where parties across the healthcare system can seamlessly and securely exchange data – unlocking better outcomes, faster research, and healthcare at a lower cost. The combined company is positioned to transform America’s health infrastructure and power the health data economy.”

The transaction is being supported by an existing investor group of private equity, venture capital and strategic investors led by New Mountain Capital, Roivant Sciences, Transformation Capital, Merck Global Health Innovation Fund, Labcorp, Cigna Ventures, Johnson & Johnson Innovation – JJDC, Inc., and Flex Capital. It also includes a significant new investment by Sixth Street with participation from Goldman Sachs Asset Management’s West Street Strategic Solutions fund. Sixth Street will join the new company’s board of directors on completion of the transaction.

News: Datavant and Ciox Health Announce Merger, Creating the Largest Neutral and Secure Health Data Ecosystem

Ramsay Health Care to snap up Spire

BY Richard Summerfield

Independent hospital group Spire Healthcare Group is to be acquired by Australian hospital operator Ramsay Health in a deal worth $1.42bn.

Under the terms of the deal, Spire shareholders will receive 240p per share, which represents a 24.4 percent premium to Tuesday’s closing price, the day before the deal was announced. The deal will be funded through Ramsay’s existing debt facilities and the company expects to retain its 2021 dividend payout ratio in line with historical levels.

Spire operates 39 hospitals and eight clinics in the UK and posted an adjusted pre-tax loss of $326.80m in 2020, largely due to the COVID-19 pandemic. The company, which treated around 750,000 patients last year, has major contracts with the UK’s NHS network, and was dramatically impacted by the decline in routine patient visits to hospitals during the pandemic. The company expects profit to return to pre-pandemic levels this year.

According to Ramsay, the combination with Spire builds a broader platform to take advantage of the opportunity for sustained growth in the £5.8bn UK private hospital sector.

“Ramsay will work closely with the Department of Health & Social Care to ensure all shared objectives are closely aligned and we stand ready to support the NHS in tackling the significant increase in waiting lists and the return of elective procedures in the UK,” said Craig McNally, chief executive and managing director of Ramsay.

“Spire’s track record of serving self-pay and insured patients will increase patient choice at Ramsay,” he continued. “It will enhance our capacity to work closely with our consultant partners and clinicians to ensure further investment in clinical excellence in all our specialties through the provision of multi-disciplinary care to better service both self-pay and insured patients.”

“The acquisition of Spire will transform our UK business from a financial perspective, with the combination of Spire with Ramsay’s UK business delivering a powerful foundation for further growth by diversifying our payer sources and case mix through Spire’s expertise in acute care and significant exposure to the self-pay and insured patient market,” said Andy Jones, UK chief executive of Ramsay.

Ramsey said it would engage with the UK Competition and Markets Authority (CMA), which may require it to divest certain hospitals and clinics for the deal to go through.

Mediclinic PLC, which holds a 29.9 percent interest in Spire, has indicated it will vote in favour of the offer. The company will receive £287.8m from the sale, which would provide “additional financial flexibility to deliver Mediclinic’s strategic goals including the pursuit of further growth opportunities”.

News: Australia’s Ramsay Health Care to buy UK’s Spire for $1.4 billion

Canadian National and Kansas City Southern to combine in $33.6bn deal

BY Fraser Tennant

In a merger intended to create a premier railway for the 21st century, railway company Canadian National and transportation holding company Kansas City Southern are to combine in a deal valued at $33.6bn.

Under the terms of the definitive agreement, Kansas City Southern shareholders will receive $200 in cash and 1.129 shares of Canadian National common stock for each Kansas City Southern common share, with Kansas City Southern shareholders expected to own 12.6 percent of the combined company.

The combination will further accelerate Canadian National’s industry-leading growth profile by connecting North America’s industrial corridor to create new options for shippers. The combined company will substantially help realise the many benefits of the United States-Mexico-Canada Agreement (USMCA), bringing it to life in a meaningful way.

Although Canadian National's offer to buy Kansas City Southern upended a $29bn deal with its competitor Canadian Pacific, the rival bidder has stated that it is willing to re-engage with Kansas City Southern should the deal run into regulatory difficulties with the US Surface Transportation Board (STB), the regulator that oversees railroad companies.

“We are thrilled that Kansas City Southern has agreed to combine with Canadian National to create the premier railway for the 21st century,” said Jean-Jacques Ruest, president and chief executive of Canadian National. “I would like to thank the numerous stakeholders of both companies who have demonstrated overwhelming support for this compelling combination, and we look forward to delivering the many benefits of this pro-competitive transaction to them.”

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

“As North America’s most customer-focused transportation provider, we are excited about this combination, which will provide customers access to new single-line transportation services at the best value for their transportation dollar and increase competition,” said Patrick J. Ottensmeyer, president and chief executive of Kansas City Southern. “Our companies’ cultures are strongly aligned, and we share a commitment to environmental stewardship, safe operations, reliable service and outstanding performance.”

Both companies are confident that they will obtain all necessary regulatory approvals, including from the STB, as well as the Federal Economic Competition Commission and Federal Telecommunications Institute in Mexico.

Robert Pace, chair of the board of Canadian National, concluded: “We are confident in our ability to gain the necessary regulatory approvals and complete the combination with Kansas City Southern, and we look forward to combining to create new opportunities, more choice and a stronger company.”

News: Kansas City Southern sticks to Canadian National after Canadian Pacific fails to raise bid

AT&T and Discovery combine media brands in $43bn deal

BY Fraser Tennant

In a deal that creates one of the largest global streaming players, US telecoms giant AT&T is to combine its WarnerMedia premium entertainment, sports and news assets with streaming service Discovery's nonfiction and international entertainment and sports businesses.  

Under the terms of the definitive agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T will receive $43bn in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. AT&T’s shareholders will receive stock representing 71 percent of the new company, while Discovery shareholders will own 29 percent.  

Once the transaction is complete, the new company will compete globally in the fast-growing direct-to-consumer business, bringing compelling content to direct-to-consumer subscribers across its portfolio, including HBO Max and the recently launched discovery+.

In addition, the transaction will combine WarnerMedia’s storied content library of popular and valuable intellectual property with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 200 countries and territories.

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” said John Stankey, chief executive of AT&T. “It will support fantastic growth and create efficiencies which can be re-invested in producing great content to give consumers what they want.”

Moreover, Discovery president and chief executive David Zaslav will lead the proposed new company, with a management team and operational and creative leadership drawn from both companies.

“It is exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity,” said Mr Zaslav. “We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world.”

The boards of directors of both AT&T and Discovery have approved the transaction, which is anticipated to close in mid-2022, subject to approval by Discovery shareholders and customary closing conditions, including receipt of regulatory approvals.

Mr Stankey concluded: “This is an opportunity to unlock value and be one of the best capitalised broadband companies – a global media leader that can build one of the top streaming platforms in the world.”

News: AT&T set to end media voyage with $43 bln Discovery deal