Qualcomm and SSW Partners agree $4.5bn Veoneer deal

BY Richard Summerfield

Chip manufacturer Qualcomm and newly formed private equity firm SSW Partners have agreed to acquire Swedish automotive technology group Veoneer for $37 a share in a deal worth $4.5bn.

The deal for Veoneer ends the ongoing battle for the company which had been a target for both Qualcomm and Magna International Inc, a Canadian mobility technology company. In July, Magna made an offer worth around $3.8bn for Veoneer which was accepted by Veoneer’s board. As a result of the agreed Qualcomm/SWW deal, Veoneer has terminated its prior acquisition agreement with Magna, which means Veoneer will pay a termination fee of $110m to Magna.

The boards of Veoneer and Qualcomm have both approved the transaction and expect it to close next year. Under the terms of the deal, at closing, SSW Partners will acquire all of the outstanding capital stock of Veoneer, shortly after which it will sell Veoneer’s autonomous-driving software operation, known as Arriver, to Qualcomm and retain Veoneer’s Tier 1 supplier businesses. SSW will also seek owners for the rest of Veoneer’s businesses. The Arriver business emerged from a collaboration between Qualcomm and Veoneer first announced in August 2020. The transaction is the first deal for SSW Partners.

“Qualcomm is the natural owner of Arriver,” said Cristiano Amon, president and chief executive of Qualcomm. “By integrating these assets, Qualcomm accelerates its ability to deliver a leading and horizontal ADAS solution as part of its digital chassis platform. We believe that this transaction and structure benefits both Qualcomm’s and Veoneer’s shareholders, positions all of Veoneer’s businesses for success and provides a compelling opportunity to customers and employees.”

“This transaction creates superior value for our shareholders,” said Jan Carlson, chairman, president and chief executive of Veoneer. “It also provides attractive opportunities to our Arriver team at Qualcomm and allows our other businesses to find long-term industrial partners where they can continue to develop.”

“We are excited to partner with Qualcomm to acquire Veoneer,” said Antonio Weiss and Josh Steiner of SSW Partners. “While Qualcomm focuses on the Arriver business, we will focus on finding strong, long-term strategic homes for the rest of Veoneer’s businesses – we are committed to ensuring that Veoneer’s employees prosper, the businesses continue to innovate and grow and customers continue to have uninterrupted access to the outstanding service and quality for which Veoneer is known. We have high regard for Veoneer’s management team and look forward to partnering with them to ensure a successful outcome for all stakeholders.”

News: Qualcomm, SSW Partners to buy Veoneer in $4.5 billion deal

Packable strikes $1.55bn SPAC deal

BY Richard Summerfield

Ecommerce marketplace enablement platform Packable has entered into a definitive agreement to merge with Highland Transcend Partners Corp, a special purpose acquisition company (SPAC), in a deal worth $1.55bn.

Packable, which is backed by private equity firm The Carlyle Group, was valued at around $1.1bn in November 2020 when Carlyle invested $250m to acquire its stake in the company.

Under the terms of the deal, Packable’s existing shareholders will receive 71 percent of the combined company, Highland Transcend SPAC founders and investors will own 19 percent, while private investment in public equity (PIPE) investors, including Fidelity Management & Research Company, Lugard Road Capital, Luxor Capital, Park West Asset Management and Morningside, will receive the remaining 11 percent.

“This is an incredibly exciting time for our team, and we are thrilled to partner with Highland Transcend as we plan to enter our next chapter as a public company,” said Packable co-founder and chief executive Andrew Vagenas. “While we’ve become a market leader in our industry, there is significant runway ahead of us in multiple avenues: from the continued proliferation of online marketplaces and geographic opportunities to our ability to invest in and grow Digitally Native Brands, while providing new data and technology services, as well as marketing options for our brand partners.”

“While we believe that third-party marketplaces will contribute more than 40 percent of all ecommerce revenues by 2025, brands find themselves challenged to manage the complexity of executing across these platforms,” said Ian Friedman, chief executive of Highland Transcend. “Packable has a leading software-driven offering enabling brands to grow their businesses across multiple online marketplaces. Andrew and the entire team have built an incredibly strong competitive platform; with approximately 75 million customer transactions to-date, we believe that Packable has one of the largest sets of third-party marketplace transaction data, outside of the marketplaces themselves. This data enables Packable’s competitive pricing, merchandising, and marketing decisions and will allow the company to launch a Software-as-a-Service offerings in the future.”

News: Carlyle-backed Packable agrees $1.55 billion SPAC merger

Cornerstone taken private in $5.2bn deal

BY Richard Summerfield

Private equity firm Clearlake Capital is to take cloud computing and management software provider Cornerstone OnDemand private in a deal worth $5.2bn.

Under the terms of the deal, Cornerstone shareholders will receive $57.50 per share in cash, a 15 percent premium over the stock’s closing price on the day before the deal was announced last week.  The transaction is expected to close in the second half of 2021, subject to customary closing conditions, including the receipt of regulatory approvals and approval by a majority of Cornerstone stockholders. Certain stockholders, including Clearlake, representing 15.65 percent of the company’s outstanding shares, have agreed to vote their shares in favour of the transaction.

“Clearlake’s investment reflects their confidence in our talented people, the power of our SaaS solutions and our value proposition for our customers,” said Phil Saunders, chief executive of Cornerstone. “With this transaction, we plan to continue to pursue new software capabilities that advance our customers’ efforts to optimize workforce agility, transform skill development, deliver personalized, engaging growth experiences, and align their organizations around a shared definition of success. We’re thrilled to welcome Clearlake as a partner that appreciates the impact our SaaS solutions have on the lives of people at work and our customer-centric philosophy as we accelerate our innovation.”

“We have long admired Cornerstone’s leading talent management SaaS solutions and the Company’s mission to help customers modernize the learning and development experience for their employees,” said Behdad Eghbali, co-founder and managing partner at Clearlake. “We believe there is a significant opportunity to strategically position Cornerstone in the market as a buy-and-build platform and industry consolidator, and we look forward to partnering with the management team to drive value through both organic growth acceleration and inorganic transformation.”

Cornerstone also reported its second-quarter earnings last week, recording $214.3m in revenue, with 97 percent coming from subscriptions, and representing a 16.3 percent year-over-year increase. The company has more than 6000 customers and 75 million users, and its software is available in 180 countries and 50 languages. Cornerstone went public in 2011.

News: Clearlake Capital to take Cornerstone OnDemand private for $3.8 billion

Advent sells Allnex for $4.75bn

BY Richard Summerfield

US private equity firm Advent International has agreed to sell German coating resins manufacturer Allnex to PTT Global Chemical for $4.75bn. The deal is expected to close in Q4 2021, subject to regulatory approvals.

Allnex has around 4000 employees worldwide and manages a global production network of 33 state-of-the-art manufacturing sites and 23 research and technology facilities. The company has been pioneering sustainable innovations for the coatings industry for over 70 years and focuses on environmentally friendly technologies, such as waterborne industrial resins, powder resins, energy curable resins and high-solids technologies. The company has annual revenue of around €2bn.

Advent acquired Cytec Industries’ coating resins business in 2013, rebranded it Allnex and merged it with Nuplex in 2016.

“We are proud of the success we have had in building allnex into a global player and are very grateful to Advent for its strong support and excellent partnership over the past years,” said Miguel Mantas, chief executive of Allnex. “In order to build on our leading market position, we will continue to invest in innovative technologies and look to expand our presence in APAC. With its resources, industrial network and expertise, PTT Global Chemical will represent an extraordinary opportunity to take the next steps in the development of our business.”

“Over the past eight years, we have supported allnex’s management team in transforming the company from a corporate carve-out into the number one global producer of industrial coating resins,” said Ronald Ayles, managing partner and head of the global chemicals and materials practice at Advent. “Our significant investment in growth lead to an impressive track record – especially in green technologies. With PTTGC, we have now found the ideal partner to support allnex’s next phase of growth and to continue its success story.”

“In line with our vision to become a leading global chemical company while improving people’s quality of life, as well as our core strategies to drive new sustainable growth opportunities, we are pleased to announce PTTGC International (Netherlands) B.V., a PTTGC wholly owned subsidiary, invests in allnex, a business with outstanding innovation, history and promise, to establish a stronger position internationally,” said Dr Kongkrapan Intarajang, chief executive of PTTGC.

New: Advent sells coating resins maker Allnex to Thailand's PTTGC

KPS Capital exits DexKo in $3.4bn deal

BY Richard Summerfield

Brookfield Business Partners has agreed to acquire DexKo Global Inc, a maker of recreational vehicle components, from private equity firm KPS Capital Partners LP in a $3.4bn deal.

Brookfield Business Partners, a subsidiary of Brookfield Asset Management, said the deal would be funded with about $1.1bn of equity, of which Brookfield intends to invest approximately $400m. The balance of the equity investment will be funded by institutional partners. The transaction is expected to close by the end of the year.

Michigan-based DexKo manufactures highly engineered components for recreational vehicles, trailers and towable equipment providers. The company employs more than 6000 people across 50 production facilities.

“We are pleased to grow our industrials operations with the acquisition of DexKo, a market leader known for quality and reliability,” said Mark Weinberg, managing partner of Brookfield Business Partners. “DexKo’s world-class management team has delivered consistently strong performance and we are excited to partner with them to further build on an established track record of value creation.”

“DexKo exemplifies the KPS investment strategy of seeing value where others do not, buying right and making businesses better, across decades, economic and business cycles, geographies and industries,” said Raquel Palmer, co-managing partner of KPS. “We are proud of DexKo’s extraordinary transformation under our ownership. DexKo demonstrates our ability to partner with world-class management teams to build industry-leading manufacturing companies on a global basis.”

“Our partnership with KPS has been extraordinary,” said Fred Bentley, chief executive of DexKo. “KPS recognized DexKo’s strength and potential from the start and invested to support DexKo’s growth ambitions. DexKo has become a better business as a result of KPS’ investments in our operations and people.

“DexKo is well positioned for future growth which we look forward to pursuing in partnership with Brookfield,” he added.

The deal is the latest addition to Brookfield’s portfolio of industrials, infrastructure and business services. The company says it has $600bn in assets under management with $22bn invested in the industrials sector alone.

Financing for the deal will be led by a syndicate of banks including Credit Suisse, Deutsche Bank, BMO Capital Markets, Bank of America, Goldman Sachs and RBC Capital Markets. Davis Polk & Wardwell LLP is acting as legal adviser to Brookfield.

News: Brookfield to buy recreational vehicle parts maker DexKo Global for $3.4 billion