Nordic Aviation files for Chapter 11

BY Fraser Tennant

One of the world's largest aircraft leasing companies Nordic Aviation Capital (NAC), together with its subsidiaries, has filed for Chapter 11 bankruptcy in order to implement a financial restructuring plan.  

Under the terms of its restructuring support agreement (RSA), NAC’s debt obligations will be comprehensively restructured, including the conversion of a substantial amount of its debt to equity, with an infusion of $537m in additional capital through a $337m new equity rights offering and a new $200m revolving credit facility.

Furthermore, NAC has obtained an additional $170m debtor in possession financing facility from its existing creditors to help fund operations during the Chapter 11 process. The additional capital will serve to support the company’s liquidity position and its plans to pursue growth in purchasing aircraft.

Following its emergence from the Chapter 11 process, the reorganised NAC will be majority-owned by its largest creditors, which are committed to the company’s long-term success and will invest substantial new equity capital in the business.

“NAC is taking this proactive step in the US because we believe it is the most efficient and effective way to implement a consensual and comprehensive financial restructuring,” said Justin Bickle, vice chairman of NAC and chairman of its restructuring committee. “With the strong support we’ve received from our lenders to date, we are pleased to be entering the Chapter 11 process with a restructuring support agreement in place.”

The industry’s leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries, NAC’s fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft.

“I am comforted to see the significant support demonstrated by the lenders and their confidence in NAC’s business model,” concluded Martin Moller, former chairman and founder of NAC. “I have the utmost confidence in the company’s resilience and ability to continue to serve customers in a sustainable manner throughout this process and beyond.”

News: Nordic Aviation Capital Files Bankruptcy to Overhaul Debt

Fluor’s nuclear unit goes public via $1.9bn SPAC deal

BY Fraser Tennant

In a combination that will take it public, Fluor Corporation’s nuclear energy unit NuScale Power is to merge with special purpose acquisition company (SPAC) Spring Valley Acquisition Corp in a transaction valued at $1.9bn.

Upon completion, Fluor projects will own approximately 60 percent of the combined company, based on the private investment in public equity (PIPE) investment commitments received and the current equity and in-the-money equity equivalents of NuScale Power and Spring Valley.

Having invested more than $600m in NuScale Power since 2011 to help bring its technology to market, Fluor expects that the merger will bolster and accelerate the path to commercialisation and deployment of NuScale Power’s unique small modular nuclear reactor technology.

The combined company will become the first and only publicly-traded company focused on development of advanced small modular reactor (SMR) technology. Currently NuScale Power is the developer of the only SMR technology that has received standard design approval from the US Nuclear Regulatory Commission (NRC).

“The merger is further evidence that cost-shared government funding to build first-of-a kind commercial scale technology can attract private investment and yield results,” said Alan Boeckmann, executive chairman of Fluor. “Fluor will continue to serve as an important partner by providing NuScale Power and its clients with world-class expertise in engineering services, project management and supply chain support.”

Headquartered in Irving, Texas, Fluor has been providing engineering, procurement and construction services for more than 100 years. Its 44,000 employees provide professional and technical solutions that deliver safe, well-executed, capital-efficient projects to clients around the world.

The proposed transaction is anticipated to close in the first half of 2022 subject to customary closing conditions.

Mr Boeckmann concluded: “This is the next step in Fluor’s plan, first outlined 10 years ago, to work closely with NuScale Power, Congress and the Department of Energy to commercialise this unique carbon-free energy technology. ”

News: Fluor's nuclear energy unit NuScale to go public via $1.9 billion SPAC deal

Rentokil and Terminix to form pest control giant

BY Richard Summerfield

Rentokil Initial has agreed to acquire extermination group Terminix Global Holdings in a cash and shares deal worth $6.7bn.

The deal, which will significantly improve Rentokil’s presence in the US, will see Terminix shareholders issued 643.3 million new shares, worth about £3.86bn. Rentokil will pay around $1.3bn in cash. The deal implies a value of $55 per Terminix share - a 47 percent premium to its share price on Monday.

The companies expect the transaction to close in the second half of 2022, subject to regulatory and shareholder approval. Cost synergies of at least $150m by the third full year following the deal’s completion are expected.

“This is an exciting and transformational combination that will create the global leader in commercial, residential and termite pest control, and a leader in North America, the world’s largest pest control market,” said Andy Ransom, chief executive of Rentokil Initial. “It brings together c.56,000 colleagues, protecting people, enhancing lives in over 87 countries, and serving c.4.9m customers. These are two highly complementary businesses with a similar operational playbook focused on supporting great people to provide outstanding customer service across Pest Control and Hygiene & Wellbeing.

“The combination will deliver further investment and the sharing of best practices to enable our talented teams to better serve customers, protecting them from the growing threat of pests and meeting their future needs,” he continued. “We will open our first innovation centre in the US and provide our industry-leading innovations and digital technologies to a far larger customer base. This is a win-win-win for colleagues, customers and shareholders.”

“This is an exciting next step that significantly advances Terminix’s journey toward becoming a global leader in pest management,” said Brett Ponton, chief executive of Terminix. “As part of a larger and stronger organisation, we will offer superior service and an even more comprehensive range of solutions for our customers, while accelerating our investments in growth and technology. I look forward to the opportunity this combination provides for our colleagues and customers.

“The shared cultural focus on providing our people with the training, tools, and technology necessary to provide world-class customer service will provide new opportunities for our teammates to develop as part of the worldwide leader in pest control. Leveraging our strong combined residential and commercial capabilities and enhanced customer density will bring us closer to our customers and improve the quality of service we provide to our customers,” he added.

News: UK's Rentokil to buy U.S. rival Terminix in $6.7 bln pest control deal

Mimecast to be taken private by Permira

BY Richard Summerfield

Email security company Mimecast has agreed to be taken private by funds advised by private equity firm Permira in a deal worth $5.8bn.

Under the terms of the agreement, which was approved and recommended by an independent special committee, and then approved by the Mimecast board of directors, Mimecast shareholders will receive $80 in cash for each ordinary share they own. The purchase price represents a premium of approximately 16 percent to Mimecast’s closing stock price on 27 October 2021, the last full trading day prior to rumours of a potential deal appearing in the press.

The transaction is expected to close in the first half of 2022, subject to customary closing conditions, including approval by Mimecast shareholders and receipt of regulatory approvals. Upon completion of the transaction, Mimecast will become a privately held company and the ordinary shares of Mimecast will no longer be listed on any public market. The deal has a ‘go-shop’ period of 30 days for Mimecast to court other offers.

“Today is an exciting milestone for Mimecast as we begin a new chapter for our company,” said Peter Bauer, chairman and chief executive of Mimecast. “Our team has done an outstanding job growing and expanding our relationships with customers and innovating our platform. Permira has a strong track record of collaboratively supporting companies’ growth ambitions and strategic goals, and we look forward to working together to further strengthen the cybersecurity and resilience of organizations around the world. This is a great outcome for our company and our shareholders.”

 “We have long admired Mimecast, its management team and its talented employees,” said Michail Zekkos and Ryan Lanpher, partners at Permira. “Email is the leading vector for cyberattacks, and phishing and impersonation attempts are continuously evolving. This means there has never been more urgency or need for organizations to protect their critical data and infrastructure. With an innovative platform, world-class security controls and scalable model, Mimecast is ideally positioned to help companies both large and small protect their employees from malicious activity. We look forward to leveraging our experience scaling global technology businesses as we partner with Peter and team on their next phase of growth.”

“Mimecast is widely recognized as an established leader and innovator in the email security space with a strong and growing position in the enterprise market,” said Pierre Pozzo, a principal at Permira. “We share the company’s belief in the significant opportunity ahead in cybersecurity across all collaboration channels, especially as more individuals have transitioned to a remote workplace. We look forward to partnering with the Mimecast team to accelerate the product roadmap and expand the go-to-market organization in order to drive further growth.”

News: Permira to take email security firm Mimecast private in $5.8 bln deal

Rivals unite: CSC acquires Intertrust in $2bn deal

BY Fraser Tennant

In a combination that creates a global leader in corporate, fund, capital market and private wealth services, Corporation Service Company (CSC) is to acquire its Dutch rival Intertrust in a transaction valued at $2bn.  

Under the terms of the agreement, Intertrust and CSC have agreed on a recommended all-cash offer of €20 per share. CSC will fund the acquisition of the shares, the refinancing of Intertrust's existing debt, the settlement of fair value of Intertrust's derivatives, and the payment of fees and expenses via available cash resources and debt financing.

Underpinned by strong reputations and similar cultural values and focus, CSC and Intertrust customers will benefit from a strengthened and enhanced geographical and broadened service offering, built on the highly complementary strengths of CSC’s leadership in the US and Intertrust’s leadership in Europe.

Moreover, CSC shares Intertrust's vision and regards its emphasis on environmental, social and governance (ESG) principles with particular focus on human capital. Employees will benefit from CSC’s strong corporate culture and values, and a significantly larger and more global company offering enhanced career development opportunities.

“We have been following Intertrust’s growth and transformation for many years,” said Rodman Ward III, chief executive of CSC. “At the same time, we have been building and growing our trust and corporate services offering in the US, scaling our fund administration and international expansion solutions globally, and providing a service model to navigate an increasingly complex international regulatory environment.”

Founded in 1899, CSC is the world’s leading provider of business, legal, tax and digital brand services to companies around the globe. The firm is the trusted partner for 90 percent of the Fortune 500, nearly 10,000 law firms and more than 3000 financial organisations.

“In CSC we have found a long-term partner that is highly complementary to us, given its strong position in the US and complementary service offerings,” said Shankar Iyer, chief executive of Intertrust. “The combination will enable us to strengthen our position as a leading tech-enabled corporate and fund services provider and accelerate our transformation by expediting digitalisation initiatives.”

The transaction is subject to regulatory and competition clearances and is expected to close in the second half of 2022.

Mr Ward concluded: “Intertrust presents a unique opportunity unmatched in the market due to our business model, our people, our industry-leading and award-winning customer service, stability, continuity and our passion for the complex.”

News: Intertrust agrees to $2 bln takeover bid from corporate services firm CSC