Alnylam secures $2bn Blackstone investment

BY Richard Summerfield

Private equity firm Blackstone Group Inc is to invest $2bn in Alnylam Pharmaceuticals through an equity-and-debt deal, the firms announced on Monday.

Under the terms of the deal, Blackstone will acquire $100m in Alnylam stock and pay $1bn for 50 percent of Alnylam’s royalties and commercial milestones for inclisiran. The drugmaker could pick up another $150m from Blackstone Life Sciences for its cardiometabolic programmes vutrisiran and ALN-AGT, as well as a loan worth up to $750m.

“Alnylam is focused on building a top-tier biopharmaceutical company, advancing RNAi therapeutics as a whole new class of medicines with transformative potential for patients around the world,” said John Maraganore, chief executive of Alnylam. “This exciting new relationship with Blackstone brings us much closer to that goal, securing our bridge towards a self-sustainable financial profile that we believe can now be achieved without any need for Alnylam to access the equity markets in the future.”

He continued: “A central component of this strategic relationship is a partial monetization of our royalty for inclisiran. If approved, we believe this therapy holds enormous promise as a potential game-changer in hypercholesterolemia management. We are pleased to retain half of the royalties we receive from Novartis, allowing Alnylam to benefit from inclisiran’s anticipated future success. We couldn’t be more pleased to enter into this highly innovative arrangement with Blackstone, which has shown a significant commitment to Alnylam’s future and alignment with our long-term vision.”

“Blackstone is uniquely positioned to provide customized, one-stop-shop financing solutions at scale while establishing development collaborations with the world’s leading biotech companies,” said Nicholas Galakatos, global head of Blackstone Life Sciences. “Alnylam’s RNAi technology represents one of the most promising and rapidly advancing frontiers in biology and drug development today, and aligns perfectly with our investment strategy.

“Our collaboration with Alnylam provides non-dilutive access to capital to advance important new medicines in development across several disease indications including heart disease, the leading cause of death in the U.S. and globally,” he added.

Alnylam had been in talks with several buyers to sell its royalty rights for its cholesterol therapy inclisiran months before the global COVID-19 outbreak.

News: Alnylam's gene-silencing efforts get $2 billion Blackstone backing

PE giant Lone Star acquires hotel operator Unizo for $1.9bn

BY Fraser Tennant

Following months of negotiations and counter bids, global private equity (PE) firm Lone Star Funds has won the race to acquire Japan-based company Unizo Holdings Co Ltd for $1.9bn.

The transaction will see Lone Star, in tandem with a number of Unizo employees, acquire all 29,618,824 shares tendered in the offer at ¥6000 apiece in cash. The tendered shares – including those of Unizo shareholders Elliott International and Liverpool Limited Partnership – represent 86.55 percent of Unizo’s outstanding shares.

Furthermore, Lone Star plans to acquire the hotel operator’s remaining shares that were not tendered in the offer. Throughout the long open-bidding process, Unizo had expressed a preference for its employees to be involved in the deal, a scheme which allows a group of Unizo employees to own 73 percent of common shares, while Lone Star would hold the remainder.

Principally engaged in the real estate sector, Unizo has two core business divisions: a real estate business and a hotel business. The company owns and leases office buildings located in central areas of Japan and prime locations in large cities in the US, as well as operating several hotels located in prime locations of major cities in Japan.

In a statement, Unizo said that it had rejected a number of bids due to concerns over securing employment. The hotel operator also stated that it had made a rare request to bidders for Unizo employees to be able to control the new owner’s power to sell assets – a request with which Lone Star concurred and which helped seal the deal.

Based in Dallas, Texas, Lone Star invests globally in real estate, equity, credit and other financial assets. Since the establishment of its first fund in 1995, the firm has organised 17 PE funds with aggregate capital commitments totalling over $70bn.

To acquire Unizo, Lone Star had to outpace a number of fellow bidders, including Fortress Investment Group and Blackstone, which made a sweetened bid for Unizo in January 2020 after its initial October 2019 offer was rejected.

News: Lone Star succeeds in $1.9-billion buyout of Japan hotel chain Unizo

Carlyle’s Japan-focused fund

BY Richard Summerfield

Private equity giant Carlyle Group has raised $2.3bn (¥258bn) for its fourth Japanese buyout fund, Carlyle Japan Partners IV ( CJP IV).

The fund will focus on targets shed by conglomerates as well as succession deals. Specifically, it will focus on upper mid-market investment opportunities in Japan across consumer, retail and healthcare, general industries and technology, media and telecoms. It will also pursue large-cap investments on an opportunistic basis.

The fund received strong backing from domestic and global investors and is more than double the size of its predecessor fund, CJP III, which raised ¥120bn.

“Our investments over the past 20 years have earned us the trust and support of our investors, who we would like to thank for their continued confidence in our ability to create value and drive performance,” said Kazuhiro Yamada, head of Carlyle Japan in a statement. “We are seeing growing opportunities in Japan across succession and carve-out deals, and with this larger fund and strengthened leadership, we believe we are well-positioned to capture these.”

“We have been a driving force in the development of the Japanese private equity market for two decades, combining our deep local knowledge with our global platform to create significant long-term value for our investors and for Japanese companies,” said Kewsong Lee, co-CEO of The Carlyle Group. “We are excited about how the market is evolving and will strive to further build out our Japan business by partnering with strong management teams and high potential companies to drive growth and value over the long-term.”

Corporate asset acquisitions are likely to range between ¥20bn and ¥40bn, though for larger deals the firm will also use money from other funds in Asia, Europe and the US.

News: Carlyle raises $2.3 billion for its biggest Japan fund to date

Pennon to sell Viridor to KKR in $4.2bn deal

BY Fraser Tennant

In a deal valued at $4.2bn, water utility and waste management company Pennon Group Plc has agreed to sell its recycling and residual waste business Viridor to investment firm Planets UK Bidco.

Pennon has stated that the sale of Viridor will be done on a cash-free, debt-free basis. There is also the potential for additional consideration of up to £200m contingent on future events and outcomes.

The Pennon board – which unanimously agreed the transaction – intends to use the deal’s £3.7bn net cash proceeds to reduce its borrowings and make a return to shareholders, while retaining some funds to pursue operational excellence and growth within the UK water industry.

Planets UK Bidco is a new company established by funds advised by global investment firm Kohlberg Kravis Roberts (KKR), a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds.

“Following a detailed review of the Group's strategic options, we are pleased to announce the proposed sale of Viridor for an enterprise value of £4.2bn,” said Chris Loughlin, chief executive of Pennon. “The transaction is great news for shareholders as it recognises the strategic value that Pennon has developed and nurtured in Viridor over many years and accelerates the realisation of that value for shareholders.”

A company at the forefront of the resource sector in the UK, Viridor transforms waste into energy, high-quality recyclates and raw materials. It provides services to around 150 local authorities and major corporate clients as well as around 32,000 customers across the UK.

Expected to complete in summer 2020, the transaction is conditional on approval from Pennon shareholders, merger control clearance from the European Commission and certain other conditions.

Mr Loughlin concluded: “On completion of the transaction, Pennon will continue to focus on its sector-leading water and wastewater businesses and will consider further growth opportunities that create value for customers, employees and shareholders."

News: British utility Pennon to sell waste management unit for $5 billion, including debt

Far Point goes Global

BY Richard Summerfield

The blank cheque FinTech firm Far Point Acquisitions has agreed to acquire shopping tax refund company Global Blue in a $2.6bn deal. The deal is expected to close in the second quarter of 2020.

Far Point’s majority owner, private equity investor Silver Lake, will retain around 42 percent of the combined company, according to a statement announcing the deal. Under the terms of the deal, Far Point will invest $650m in cash, while Ant Financial and Third Point have agreed to invest a total of $350m in the newly combined company.

Far Point is a special purpose acquisition company (SPAC) established by hedge fund Third Point LLC and ex-New York Stock Exchange president Thomas Farley. Going forward, Global Blue’s chief executive Jacques Stern will continue to lead the combined company, and Mr Farley will become chairman of the firm.

“Global Blue is the clear market leader in the attractive and growing Tax Free Shopping ecosystem worldwide,” said Mr Farley. “The company has achieved remarkable progress in digitalization, geographic expansion and strategic value creation under Jacques’ leadership and the stewardship of its existing shareholders, including controlling shareholder Silver Lake, whose principals I have known personally and professionally for years. I look forward to working with Global Blue to capitalize on favorable trends in the business, including the growth of the emerging markets middle-class, positive VAT dynamics, and further digitalization.”

“I am delighted about this collaboration with Far Point and Tom, as I believe it will help create long-term value for Global Blue and its shareholders,” said Mr Stern. “In recent years, we have built a true leader in our industry, powered by a cutting-edge integrated technology platform. We strongly believe that continued investment in innovation will bring value to all our partners and customers, and we look forward to accelerating our strategic collaboration with Ant Financial as a showcase of such innovation.”

The new public company will be incorporated in Switzerland and will trade as Global Blue upon closing.

News: Far Point to buy tax-free shopping firm Global Blue at $2.6 billion valuation