China’s CH-AUTO goes public in $1.7bn SPAC deal

BY Fraser Tennant

In a move that takes the Chinese electric vehicle manufacturing and design service company public, CH-AUTO Technology Corporation Ltd is to merge with US special purpose acquisition company (SPAC) Mountain Crest Acquisition Corp. IV in a deal valued at $1.7bn, including debt.

Under the terms of the definitive agreement, CH-AUTO shareholders will be entitled to receive approximately 125 million shares valued at $10 per share, subject to closing adjustments.

The combined company plans to operate under the name CH Auto Inc and list on the Nasdaq stock exchange.

“The past two years have been quite challenging for us,” said Qun Lu, founder and chief executive of CH-AUTO. “We had to reduce our operations by slowing down the businesses of manufacturing of vehicles and automotive parts. By entering into this agreement with Mountain Crest, we expect to see a positive and rebounding impact on CH-AUTO’s finance capabilities, manufacturing and sales activities, and promotion of brand awareness.”

Mr Lu will continue to lead the holding company as its chief executive after closing of the transaction, which is expected in the fourth quarter of 2022.

“CH-AUTO is a unique and compelling investment opportunity, being one of the first electric vehicle automakers in China with proven technology breakthroughs as well as manufacturing innovations, along with its enormous future growth potential through its existing and pipeline vehicle models,” said Suying Liu, chairman, chief executive and chief financial officer of Mountain Crest. “I am thrilled to be partnering with Mr Lu and his exceptional team to bring their vision to fruition.”

While the transaction has been approved by the boards of directors of CH-AUTO and Mountain Crest, it will require the approval of stockholders and is subject to other customary closing conditions, including the receipt of certain regulatory approvals.

Mr Lu concluded: “Dr Liu and I are excited about the development prospect for the combined company, and we expect that CH-AUTO will rapidly transform into a leading next-generation automotive company that is built on years of design and manufacturing experience.”

News: Chinese EV company CH-AUTO to go public via $17-bln SPAC deal

Sembcorp agrees $6.29bn Keppel Corp deal

BY Richard Summerfield

Singaporean offshore engineering group Sembcorp Marine has agreed to a $6.29bn merger with Keppel Corp’s offshore and marine unit. 

Under the terms of the deal, Temasek, Sembcorp’s majority shareholder, will become the largest shareholder in the merged company, with a 33.5 percent stake. As part of the merger, Keppel and its shareholders will own 56 percent of the newly combined company, with Sembmarine’s shareholders owning the rest.

According to a joint statement announcing the deal, the combined entity’s market value was S$8.7bn on a proforma basis, but that this could change based on the entity’s share price when it lists.

The combined company will be wholly owned by a new holding entity, which will be listed on the Singapore stock exchange, the two companies said in the joint statement. A shareholder meeting is expected to be held in the fourth quarter to seek approval for the transaction, which is subject to various regulatory sign offs.

“The signing of a win-win agreement on the Proposed Combination of Keppel O&M and Sembcorp Marine marks a strategic milestone for the offshore & marine sector,” said Loh Chin Hua, chief executive of Keppel and chairman of Keppel O&M. “It brings together two leading O&M companies in Singapore to create a stronger player that can realise synergies and compete more effectively amidst the energy transition. Together with the resolution of Keppel O&M’s legacy rigs, this is a major step forward in Keppel’s Vision 2030 journey, as we simplify our business and sharpen our focus on providing solutions for sustainable urbanisation.”

“The Proposed Combination marks a major milestone in Sembcorp Marine’s strategic business transformation journey since 2015 to stay resilient amid dramatic changes in our industry,” said Tan Sri Mohd Hassan Marican, chairman of Sembcorp Marine. “Sembcorp Marine and Keppel O&M are Singapore’s homegrown marine icons. I am confident the Combined Entity, with its larger operational scale, broader geographical footprint and enhanced capabilities, will create a leading Singapore player to capitalise on the opportunities in the offshore and marine, as well as the renewable and clean energy sectors.”

“We are pleased that Keppel and Sembcorp Marine have come to an agreement on the terms of a combination that we think will be transformational for the companies,” said Nagi Hamiyeh, head of the portfolio development group at Temasek. “We believe the combined business will have the expertise and capacity to accelerate the pivot towards growing opportunities in the renewable and clean energy sectors, and pursue meaningful projects around the world that address the increasing need for greener and cleaner energy solutions. In doing so, it will be able to deliver long-term value creation for shareholders and other stakeholders. We look forward to the support of the shareholders of Keppel and Sembcorp Marine to make this possible.”     

News: Temasek-backed oil rig builders agree $6.3 bln merger amid sector downturn

Humana sells majority stake in hospice business in $3.4bn deal

BY Fraser Tennant

In a transaction which gives it a strategic minority interest, US health insurance company Humana Inc. is to sell a majority stake in the hospice and personal care divisions of its Kindred at Home (KAH) unit to private investment firm Clayton, Dubilier & Rice (CD&R).

Under the terms of the definitive agreement, Humana will divest a 60 percent interest in KAH Hospice and receive cash proceeds of approximately $2.8bn, reflecting an enterprise valuation of $3.4bn. Humana intends to use proceeds from the transaction for the repayment of debt and share repurchases.

Upon closing of the transaction, Humana’s hospice and personal care divisions will be restructured into a standalone operation. These divisions include patient-centred services for hospice, palliative, community and personal care. The company had previously indicated its intent to divest a majority stake in these non-core businesses when it acquired the remaining interest in Kindred at Home in April 2021.

“While palliative and hospice services are important components in the continuum of care that Humana offers patients, we are confident that we can deliver desired patient outcomes and improved customer experiences through partnership models rather than fully owning KAH Hospice,” said Susan Diamond, chief financial officer of Humana. “We explored a broad range of alternatives and believe this transaction best allows Humana to divest majority ownership of these non-core businesses today, while still maintaining a strategic minority interest through our remaining stake.”

The transaction is expected to close in the third quarter of 2022 and is subject to customary state and federal regulatory approvals.

Ms Diamond continued: “With CD&R’s established physician relationships, value-based care expertise, and record of providing strategic capital to a wide range of businesses, we are certain that these divisions are well-positioned for success under the joint ownership of Humana and CD&R.”

A private investment firm with a strategy predicated on building stronger, more profitable businesses, since its inception CD&R has managed the investment of approximately $40bn in more than 100 companies with an aggregate transaction value of more than $175bn.

David Causby, president and chief executive of KAH’s hospice and personal care divisions, concluded: “We are excited by the new strategic partnership structure with Humana and look forward to working closely with CD&R to pursue growth that is centred on improved access, equity and quality of care across an expanded group of patients.”

News: Humana to sell majority stake in hospice business to CD&R for $2.8 billion

Elon Musk acquires Twitter in $44bn transaction

BY Fraser Tennant

In a deal that shifts control of the social media platform to the world's richest man, Twitter, Inc. has been acquired by entrepreneur, investor, media proprietor and business magnate Elon Musk for $44bn.

Under the terms of the definitive agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. Upon completion of the transaction, Twitter will become a privately held company.

Mr Musk has secured $25.5bn of fully committed debt and margin loan financing and is providing an approximately $21bn equity commitment. There are no financing conditions to the closing of the transaction.

The world's richest person according to Forbes magazine, Mr Musk has an estimated net worth of $273.6bn, mostly due to his shareholding in electric vehicle maker Tesla and his aerospace firm SpaceX.

"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," said Mr Musk. "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.”

The transaction, which has been unanimously approved by the Twitter board of directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

"The Twitter board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, independent board chair at Twitter. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."

Mr Musk concluded: “Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."

News: Musk gets Twitter for $44 billion, to cheers and fears of 'free speech' plan

Blackstone acquires ACC in $12.8bn transaction

BY Fraser Tennant

In a transaction valued at $12.8bn, global investment business Blackstone Inc. is to acquire American Campus Communities (ACC), the largest developer, owner and manager of high-quality student housing communities in the US.

Under the terms of the definitive agreement, Blackstone will acquire all outstanding shares of common stock of ACC for $65.47 per fully diluted share in an all-cash transaction, including the assumption of debt.

ACC’s portfolio comprises 166 owned properties in 71 leading university markets, including Arizona State University, the University of Texas, Florida State University and the University of California, among many others. Moreover, ACC’s properties are high-quality, purpose-built student housing assets located within walking distance of their respective university campuses, with approximately 24 percent of ACC’s communities located on campus.

“Through our initial public offering (IPO), 18 years ago, we began our pioneering quest to transform the student housing sector into a mainstream, institutional asset class within the commercial real estate sector,” said Bill Bayless, co-founder and chief executive of American Campus Communities. “We have certainly accomplished that mission and are proud and excited to have our best-in-class company join Blackstone, the world’s largest alternative asset manager.”

A global leader in real estate investing, Blackstone’s real estate business was founded in 1991 and has $279bn of investor capital under management. The firm is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, residential, office, hospitality and retail.  

“ACC has a best-in-class portfolio and platform, built on longstanding relationships with some of the most distinguished and fastest growing universities in the country,” said Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate. “Our capital will enable ACC to invest in its existing assets and create much-needed new housing in university markets.”

Unanimously approved by ACC’s board of directors and the independent special committee of ACC’s board, the transaction is expected to close in the third quarter of 2022, subject to approval by ACC’s shareholders and other customary closing conditions.

“This transaction represents the culmination of the passion and dedicated service of the ACC team to our student residents and university partners, while creating significant value for our shareholders,” concluded Mr Bayless. “Moving forward together, the combined synergies of our organisations will enable us to better serve our current and future residents and university partners.”

News: Blackstone to buy American Campus Communities for nearly $13 billion