Thoma Bravo-owned QAD acquires Redzone in $1bn deal

BY Fraser Tennant

In a deal designed to deal with the challenges of rising input costs and labour shortages, Thoma Bravo portfolio company QAD has acquired employee productivity platform Redzone for $1bn.

The acquisition of Redzone’s connected workforce product – which serves over 1000 plants and 300,000 frontline workers globally – will enable QAD customers to drive rapid, tangible increases in empowerment, retention and productivity on the frontline.

“We are delighted to bring Redzone into the QAD family,” said Anton Chilton, chief executive of QAD. “We believe the emerging connected workforce space is the most transformational area of technology for manufacturing companies. As we assessed the market for the category leader, it was evident that not only is Redzone the number one provider globally, but also the pioneer of the category and the one who continues to define it.”

The addition of Redzone's connected workforce product supercharges the QAD Adaptive Applications product suite by enabling QAD customers to drive rapid, tangible increases in empowerment, retention and productivity on the frontline.

QAD Adaptive Applications are designed to support the Adaptive Enterprise where in a turbulent world, facing disruptions in supply and fluctuations in demand, manufacturers and supply chains rapidly respond to change and seamlessly optimise agility, efficiency and resilience for effective customer service.

“Joining QAD will accelerate our mission of transforming manufacturing by empowering the frontline,” said Richard Tester, co-founder and chief executive of Redzone. “We have always put the frontline worker at the heart of our technology and know that arming these teams with the right digital workflows is the fastest way to unlock productivity on the plant floor.”

QAD’s acquisition of Redzone is its second such transaction completed in the last two months. In December, the company acquired Livejourney, a provider of a real-time process mining and predictive modelling solution designed to discover, monitor and improve business processes.

“Since acquiring QAD in 2021, we have remained committed to supporting the company in its mission to enable its customers to rapidly adapt to disruption and effectively innovate for competitive advantage,” concluded Peter Stefanski, a partner at Thoma Bravo. “The acquisition of Redzone demonstrates our commitment to advancing QAD's vision and to further building its leadership position in the broader industrial software universe.”

News: Thoma Bravo-owned QAD to acquire Redzone for about $1 bln

Xylem to acquire Evoqua in $7.5bn deal

In a deal designed to address the world’s most critical water challenges, global water technology company Xylem Inc. is to acquire clean technology firm Evoqua Water Technologies in an all-stock transaction valued at approximately $7.5bn.

Under the terms of the definitive agreement, Evoqua shareholders will receive 0.480 shares of Xylem for each Evoqua share, representing a value of $52.89 per share or a 29 percent premium based on Xylem and Evoqua closing prices as of 20 January 2023.

Building on Xylem’s global leadership in water solutions and Evoqua’s leadership in advanced treatment solutions and services, the combined company will be uniquely positioned to develop and deliver an even more comprehensive offering of innovative solutions.

Moreover, the combination unlocks compelling new growth opportunities and is expected to deliver run-rate cost synergies of $140m within three years, driven by scale efficiencies in procurement, network optimisation and corporate costs.

“Solving the world’s water challenges has never been more urgent,” said Patrick Decker, president and chief executive of Xylem. “Our acquisition of Evoqua creates a transformative global platform to address water scarcity, affordability and resilience at even greater scale. The combined company delivers an unparalleled portfolio of advanced technologies, integrated services and application expertise across the water cycle.”

Following closing, the combined company will continue to be led by Mr Decker, with two current members of the board of directors of Evoqua expected to join Xylem’s board of directors.

"I am incredibly proud of what our team at Evoqua has achieved to date, providing mission-critical water treatment solutions to the market and for our customers,” said Ron Keating, president and chief executive of Evoqua. “Along the way, we have earned a reputation for quality, safety and reliability around the world. Together with Xylem, we will drive innovation on a larger scale for our customers, positioning us to create even more value for our stakeholders.”

The transaction, which is anticipated to close in mid-2023, is subject to approval by shareholders of Xylem and Evoqua, the receipt of required regulatory approvals and other customary closing conditions.

Mr Decker concluded: “Together, our complementary businesses will be even more strongly positioned to help our customers and communities tackle their most challenging water needs.”

News: Xylem to buy Evoqua in $7.5 bln deal to tap water demand

AstraZeneca strikes $1.8bn CinCor deal

BY Richard Summerfield

Multinational pharmaceutical and biotechnology company AstraZeneca has agreed to acquire US-based drug developer CinCor Pharma Inc in a deal worth up to $1.8bn.

Central to the transaction is CinCor’s experimental therapy baxdrostat, which is in development to treat conditions including high blood pressure and chronic kidney disease. Under the terms of the merger agreement, AstraZeneca will pay $26 per share in cash at closing plus a non-tradable contingent value right of $10 per share in cash payable upon a specified regulatory submission of a baxdrostat product.

The upfront cash portion of the consideration represents a transaction value of approximately $1.3bn and a premium of 121 percent over CinCor’s closing market price on 6 January 2023. Total consideration including the contingent value right, if the milestone is achieved, would be approximately $1.8bn and a 206 percent premium over CinCor’s closing market price on 6 January 2023. CinCor’s board of directors has unanimously approved the transaction.

The deal will also see AstraZeneca, which is keen to expand its pipeline of treatments for heart and kidney disorders, gain approximately $522m in cash and marketable securities on CinCor’s balance sheet.

AstraZeneca believes that baxdrostat will complement its strategy to provide more treatments for cardiorenal diseases, an area that has a “high unmet medical need”. The company added that baxdrostat could be combined with its chronic kidney disease drug Farxiga.

“We are excited about the proposed acquisition of CinCor Pharma by AstraZeneca as we believe it offers the prospect of accelerating the development timeline and expanding the breadth of benefits patients with cardiorenal diseases might obtain from baxdrostat, if approved,” said Marc de Garidel, chief executive at CinCor. “CinCor is committed to ensuring a smooth transition of the development responsibilities to AstraZeneca once the acquisition is consummated. Thank you to all who have played, and will continue to play, essential roles in developing and evaluating baxdrostat as a potential novel treatment for cardiorenal diseases.”

“AstraZeneca’s shared commitment to addressing the unmet medical need for patients with hypertension and cardiorenal disease will accelerate CinCor’s mission to develop and deliver life-changing therapies that improve patient care,” said James Healy, chairman of CinCor’s board of directors and managing partner at Sofinnova Investments. “The CinCor management team has laid very important scientific and clinical groundwork for the baxdrostat program, including the successful Phase 2 BrigHtn trial that was recently published in the New England Journal of Medicine. On behalf of CinCor’s Board of Directors, I would like to recognize and thank the CinCor team, scientific advisors and patients for their dedication and contributions to the advancement of the development of baxdrostat.” 

News: AstraZeneca boosts heart, kidney business with $1.8 bln CinCor deal

Space company Maxar acquired by Advent for $6.4bn

BY Fraser Tennant

In a transaction that takes the space technology company private, Maxar Technologies is to be acquired by global private equity (PE) firm Advent International for approximately $6.4bn.

Under the terms of the definitive agreement, which has been unanimously approved by Maxar’s board of directors, Maxar stockholders will receive $53 in cash for each share of common stock they own.

As a private company, Maxar will be able to accelerate investments in next-generation satellite technologies and data insights that are vital to the company’s government and commercial customers, as well as pursue select, strategic M&A to further enhance its portfolio of solutions.

“Advent has a proven record of strengthening its portfolio companies and a desire to support Maxar in advancing our long-term strategic objectives,” said Daniel Jablonsky, president and chief executive of Maxar. “As a private company, we will have enhanced flexibility and additional resources to build on our strong foundations, further scale operations and capture significant opportunities in a rapidly expanding market.”

Headquartered in the US, Advent has a demonstrable track record as a responsible owner of defence and security businesses. Following the close of the transaction, Maxar will remain a US-controlled and operated company.

“We have tremendous respect and admiration for Maxar, its industry-leading technology and the vital role it serves in supporting the national security of the US and its allies around the world,” said David Mussafer, chairman and managing partner of Advent. “We will prioritise Maxar’s commitment as a core provider to the US defence and intelligence communities, and allies, while providing Maxar with the financial and operational support necessary to apply its technology and team members even more fully to the missions and programmes of its government and commercial customers.”

The transaction is expected to close mid-2023, subject to customary closing conditions, including approval by Maxar stockholders and receipt of regulatory approvals.

Mr Jablonsky concluded: “This transaction is an exceptional outcome for stockholders and is a testament to the hard work and dedication of our team, the value Maxar has created and the reputation we have built in our industry.”

News: Advent to buy satellite operator Maxar Technologies for about $4 billion

L3Harris to acquire Aerojet Rocketdyne for $4.7bn

BY Richard Summerfield

L3Harris Technologies Inc. has agreed to acquire rocket engine manufacturer Aerojet Rocketdyne Holdings Inc. in a deal valued at around $4.7bn.

Under the terms of the deal, which is expected to close in 2023, subject to required regulatory approvals and clearances and other customary closing conditions, L3Harris will pay $58 per share, in an all-cash transaction valued at $4.7bn, inclusive of net debt. L3Harris will use existing cash and issue new debt to fund the deal

The deal marks L3Harris’ second acquisition announcement of 2022 after previously agreeing to acquire Viasat’s tactical data links unit, which provides data and voice communications systems for military vehicles, aeroplanes and ships, for $1.96bn.

Lockheed Martin, the world’s largest defence contractor by revenue, tried to buy the Rocketdyne for $4.4bn before abandoning the bid after federal regulators sued in January to block it. The Federal Trade Commission (FTC) noted that Lockheed would use its ownership of Aerojet to damage other defence companies and would ultimately control multiple defence programmes critical to national security.

“We’ve heard the DoD leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said Christopher E. Kubasik, chief executive and chair of L3Harris. “With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset.”

“This agreement will accelerate innovation for national security propulsion solutions while providing a premium cash value for our shareholders and tremendous benefits for our employees, customers, partners and the communities in which we operate,” said Eileen P. Drake, chief executive and president of Aerojet Rocketdyne. “Joining L3Harris is a testament to the world-class organization and team we’ve built and represents a natural next phase of our evolution. As part of L3Harris, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration. This is an exciting new chapter for Aerojet Rocketdyne and our over 5,200 dedicated team members, providing them with additional opportunities, and we look forward to working closely with L3Harris to complete this transaction.”

Aerojet Rocketdyne currently generates around $2.3bn in annual revenue. The company’s employees operate out of advanced manufacturing facilities across the US. L3Harris has more than $17bn in annual revenue and customers in more than 100 countries.

News: Defense firm L3Harris to buy Aerojet for $4.7 bln with eye on missile demand