Chevron to acquire PDC Energy for $7.6bn

BY Richard Summerfield

Chevron Corp has agreed to acquire oil & gas producer PDC Energy in a deal worth $7.6bn.

Under the terms of the deal, Chevron will acquire all of the outstanding shares of PDC in an all-stock transaction valued at $6.3bn, or $72 per share. Based on Chevron’s closing price on 19 May 2023, PDC shareholders will receive 0.4638 shares of Chevron for each PDC share. The total enterprise value of the transaction is $7.6bn.

The deal has been unanimously approved by the boards of directors of both companies and is expected to close by year-end 2023. The acquisition is subject to PDC shareholder approval, as well as regulatory approvals and other customary closing conditions.

“PDC’s attractive and complementary assets strengthen Chevron’s position in key U.S. production basins,” said Mike Wirth, chairman and chief executive of Chevron. “This transaction is accretive to all important financial measures and enhances Chevron’s objective to safely deliver higher returns and lower carbon. We look forward to welcoming PDC’s team and shareholders to Chevron and continuing both companies’ focus on safe and reliable operations.”

“The combination with Chevron is a great opportunity for PDC to maximize value for our shareholders. It provides a global portfolio of best-in-class assets,” said Bart Brookman, president and chief executive of PDC. “I look forward to blending our highly complementary organizations, and I’m excited that PDC’s assets will help propel Chevron toward our shared goal for a lower carbon energy future.”

The deal for PDC will increase Chevron’s oil & gas footprint in the US, adding around 10 percent to the company’s reserves, giving it future production in the US, as well as adding about $1bn to both its capital expenditures and free cash flow as soon as 2024, or within a year of the deal closing. According to Mr Wirth, the acquisition will add 260,000 barrels of oil and gas production per day to Chevron’s output in 2024. The deal will also increase Chevron’s capital spending by about $1bn per year, raising its range to $14bn to $16bn through 2027.

Chevron has been increasingly active in recent years, completing deals to grow its operations in Colorado and Wyoming. The company, the second largest US oil producer, is one of the top producers in the Denver-Julesburg Basin after its $13bn acquisition of Noble Energy in 2020.

News: Chevron to boost US presence with $7.6 bln PDC Energy buy

TGP to acquire Angelo Gordon in a $2.7bn deal

BY Richard Summerfield

Private equity (PE) giant TPG has agreed to acquire investment firm Angelo Gordon in a cash and stock deal worth $2.7bn.

Under the terms of the agreement, TPG, an investment firm focused on the credit and real estate markets, will pay approximately $970m in cash and up to 62.5 million units of the TPG Operating Group and restricted stock units of TPG. The acquisition is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including international regulatory approvals and other client and third-party consents.

Angelo Gordon has roughly $53bn in assets under management (AUM), the majority of which are in credit or real estate. Once the deal closes, TPG will be scaling up with $38bn of AUM in real estate alone. As of the end of 2022, the two companies had a combined $208bn in AUM.

“This strategic transaction meaningfully expands our investing capabilities and broadens our product offering,” said Jon Winkelried, chief executive of TPG. “The addition of Angelo Gordon also underscores our continued focus on growing and scaling through diversification, while driving long-term value for our shareholders. Following more than a year of building relationships between the leadership teams of both organizations, we are confident the combination represents a strong strategic and cultural fit and will create additional opportunities for employees of both firms. We look forward to welcoming the Angelo Gordon team as we execute on our shared vision.”

“This is a terrific partnership that provides Angelo Gordon with the scale to capitalize on the growing opportunity set we see in the credit and real estate markets, the diversification to create new solutions for our clients across the risk spectrum in all market conditions, and the opportunity to share our collective expertise, insights, and knowledge,” said Josh Baumgarten, co-chief executive and head of credit at Angelo Gordon.

“We are proud to be joining a world-class investment platform that shares our philosophy on firm culture, investment excellence, and delivering for clients,” said Adam Schwartz, co-chief executive and head of real estate at Angelo Gordon. “This transaction is a testament to the team and business that we have built over nearly 35 years, and we are excited about the new and expanded opportunities ahead for our employees and LPs.”

“Both firms have grown organically over the past three decades, from private founder-led businesses into seasoned firms with next-generation executive leadership poised to accelerate further growth as part of a diversified platform,” added Jim Coulter, co-founder and executive chairman of TPG. “There is a clear alignment of interests, values, and culture with a focus on entrepreneurship, innovation, and investment excellence. We look forward to building on our collective momentum together.”

News: TPG buys $73bn asset manager Angelo Gordon to expand in credit, real estate

Drugmaker Athenex files for Chapter 11

BY Fraser Tennant

After exploring several options to stay afloat, biopharmaceutical company Athenex, Inc has voluntarily filed for Chapter 11 bankruptcy to divest its assets, while seeking to maximise value for its stakeholders.

The company has also reached agreement with its lenders to move forward with an expedited sales process of its assets across its primary businesses, which is expected to conclude by 1 July 2023, with Chapter 11 cases continuing thereafter to resolve claims.

Athenex has also reached an agreement with its secured lenders, subject to court approval, for the consensual use of cash collateral, which will enable the company to, among other things, satisfy certain obligations to its vendors for authorised goods received and services rendered after the filing.

Founded in 2003, Athenex is a clinical-stage biopharmaceutical company dedicated to becoming a leader in the discovery, development and commercialisation of next-generation cell therapy products for the treatment of cancer.

“Throughout our history, we have sought to become a leader in bringing innovative cancer treatments to the market and improving patient health outcomes,” said Dr Johnson Lau, chief executive of Athenex. “Our team was successful in bringing tirbanibulin, through regulatory approvals, to the US market and a number of European Union (EU) countries, as well as Taiwan.

“Unfortunately, our oral paclitaxel product candidate received a complete response letter from the US Food and Drug Administration, and this significant regulatory setback, coupled with challenging biotech markets and the difficult economic environment, put tremendous pressure on our ability to continue to fund our businesses.”

Over the past two years, Athenex has refocused its business around its NKT cell therapy platform, monetised non-core assets to improve its balance sheet and extended its cash runway, while paying down $108m of debt and undertaking a comprehensive review of strategic alternatives to create value for our stakeholders.

Dr Lau concluded: “We are incredibly thankful to our team for their dedication to Athenex and will look to support our colleagues through this transition period.”

News: Drugmaker Athenex voluntarily files for U.S. Chapter 11 proceedings

Baxter divests biopharma business to PE group for $4.25bn

BY Fraser Tennant

In a deal designed to accelerate its clinical development pipeline and drive product innovation, global medical technology company Baxter International Inc. is to divest its biopharma solutions (BPS) unit to a private equity consortium comprising Warburg Pincus and Advent International.

Under the terms of the definitive agreement, Baxter will receive $4.25bn in cash, subject to certain closing adjustments, with net after-tax proceeds currently estimated to be approximately $3.4bn.

As a standalone company and in partnership with Advent and Warburg Pincus, BPS – a provider of sterile contract manufacturing solutions, parenteral delivery systems and customised support services to the pharma and biotech industries for decades – will operate as a premier, independent end-to-end contract development manufacturing organisation providing a range of services for clients, from clinical research to commercial deployment.

The transaction includes BPS manufacturing facilities and approximately 1700 employees in Bloomington, Indiana and Halle, Germany. The deal is also expected to generate revenues of approximately $600m for 2023.

“This transaction represents an important step in Baxter’s ongoing transformation journey as we continue to execute against our strategic priorities, enhance our focus and create additional value for all our stakeholders,” said José E. Almeida, chairman, president and chief executive of Baxter. “BPS has long been recognised worldwide as a trusted and preferred partner of contract manufacturing services for the pharmaceutical and biotech industries.”

Following completion of the transaction, Baxter expects BPS to be well-positioned to accelerate its go-to-market strategy and clinical development pipeline, execute on throughput expansion and drive further product innovation.

“BPS is a premier asset at the forefront of the biopharma industry, and one we have been closely following for a number of years,” said John Maldonado, a managing partner at Advent. “Leveraging our deep sector expertise and significant strategic resources, we believe this partnership can unlock multiple opportunities for growth and help the business realise its full potential.”

TJ Carella, managing director and head of healthcare at Warburg Pincus, added: “We are excited to partner with Advent and the impressive team at BPS who have developed differentiated technical capabilities and established an industry-leading reputation for quality and reliability in the supply chain for parenteral drugs.”

The transaction is expected to close in the second half of 2023, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions.

Mr Almeida concluded: “I am confident that under the stewardship of Advent and Warburg Pincus, BPS will continue to build on its leadership position, foster world-class talent, invest in new capabilities and capacity, and provide leading-edge, high-quality solutions for its clients.”

News: Baxter to divest biopharma business for $4.25 billion

Bittrex bankrupt

BY Richard Summerfield

Cryptocurrency exchange Bittrex Inc has filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware, just weeks after the company was accused of operating an unregistered securities exchange by the US Securities and Exchange Commission (SEC).

At the end of April, Seattle-based Bittrex halted its US operations and noted that its international customers, which are served by its global platform based in Liechtenstein, would not be impacted by its US bankruptcy. Bittrex, which was founded in 2014, said it has more than 100,000 US-based creditors. Its estimated liabilities are between $500m and $1bn, according to the court filing. The US Treasury’s Office of Foreign Assets Control (OFAC) emerged as the company’s largest creditor, with a substantial claim exceeding $24m.

In mid-April, the SEC sued Bittrex on allegations it operated a national securities exchange, broker and clearing agency. The SEC also sued former Bittrex chief executive Bill Shihara and Bittrex Global. Oliver Linch, chief executive of Bittrex Global. said last month that the exchange intended to fight the charges in court, but a bankruptcy proceeding may make this more difficult.

“Having previously announced that Bittrex, Inc. would be ceasing all operations in the U.S. effective April 30th, we have now made the decision to file Chapter 11 bankruptcy in federal court in Delaware,” said Bittrex in a statement announcing the bankruptcy filing. “This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.

“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole. While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them,” he added.

In filings made at the Delaware Court, Evan Hengel, the co-chief restructuring officer of Bittrex, said that customers would get a “100 percent like-kind cryptocurrency distribution” under its liquidation plan, enabling them to access the Bittrex platform and withdraw their funds.

News: Crypto exchange Bittrex files for bankruptcy after SEC complaint