WillScot Mobile agrees $3.8bn McGrath deal

BY Richard Summerfield

WillScot Mobile Mini Holdings Corp has agreed to acquire McGrath RentCorp in a deal worth $3.8bn. The deal is expected to close in the second quarter of 2024, subject to approval by McGrath shareholders, regulatory approvals and other customary closing conditions.

Under the terms of the transaction, McGrath shareholders will receive either $123 in cash or 2.8211 shares of WillScot common stock per McGrath share they hold. Sixty percent of McGrath’s outstanding shares will be converted into the cash consideration and the remaining 40 percent converted into the stock consideration. The transaction values McGrath at an enterprise value of $3.8bn, including approximately $800m of net debt, and the per-share consideration represents a premium of 10.1 percent to McGrath’s closing stock price on 26 January 2024, the last day of trading before the deal was announced.

“I’m excited to welcome the McGrath team to the WillScot Mobile Mini family,” said Brad Soultz, chief executive of WillScot Mobile Mini. “The transaction will further accelerate our growth, with combined 2023 pro forma revenue of $3.2 billion and adjusted EBITDA of $1.4 billion, we will be on path to achieve a $700 million free cash flow run-rate twelve months after we close. Meanwhile, our $1 billion of idiosyncratic growth levers remain in flight, many of which will increase proportionally with the close of the transaction. Among the abundant stockholder benefits associated with this transaction, I am most excited with the prospect of extending our innovative and expansive Value-Added Products portfolio, and our unique FLEX, Cold Storage and Clearspan Space Solutions to McGrath customers. Our long-term capital allocation framework remains unchanged as we continue to accelerate our robust organic growth with highly accretive M&A, all the while creating long-term value for our shareholders.”

“This combination provides McGrath customers and employees a platform for continued growth and success, while providing McGrath shareholders with immediate cash value as well as participation in the upside potential of the combined company,” said Joseph Hanna, president and chief executive of McGrath. “This transaction validates the strength of our business, the hard work and dedication of our team members and the valuable solutions McGrath provides to our customers. For more than 40 years, we have pursued a relentless customer-centric approach and we look forward to extending our ability to provide the solutions that our customers so highly value.”

According to a statement announcing the deal, the combined company will have a strengthened financial profile, with combined 2023 revenues of $3.2bn and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $1.4bn, including run-rate operating synergies. The combined company expects to capture additional revenue synergies and fleet efficiencies through its combined commercial and branch operations and by leveraging WillScot’s best-in-class technology platform. WillScot expects the combined company will generate approximately $700m of annual free cash flow by end of the first full year following closing, with significant further accretion to free cash flow margins over time.

News: Portable building firm Willscot Mobile to buy McGrath RentCorp in $3.8 bln deal

Sanofi agrees $2.2bn Inhibrx deal

BY Richard Summerfield

In a deal that will expand its rare disease pipeline, French pharmaceutical company Sanofi has agreed to acquire Inhibrx, Inc for $2.2bn.

The transaction will give Sanofi access to Inhibrx’s INBRX-101 – an experimental treatment for a rare genetic disease – which is currently in the second of three phases of clinical trials. Its other experimental drugs will be spun off into a separate company, with Sanofi retaining an 8 percent stake. The spun-off company will operate under the Inhibrx name and be led by current Inhibrx chief executive Mark Lappe, who will become chairman and chief executive.

Sanofi expects to finance the transaction with available cash resources. Subject to the satisfaction of customary closing conditions, Sanofi and Inhibrx expect the transaction to close in the second quarter of 2024.

Under the terms of the deal, Inhibrx shareholders will receive $30 per share, below its $33.33 closing price on Monday 22 January, the day before the deal was announced. Inhibrx shareholders will also gain stakes in the new biotech, plus the chance to receive a further $5 a share if a regulatory milestone is met. As part of the transaction, Sanofi will assume and retire Inhibrx’s outstanding third-party debts, and fund the spun-off company with $200m in cash.

“The addition of INBRX-101 as a high potential asset to our rare disease portfolio reinforces our strategy to commit to differentiated and potential best-in-class products,” said Houman Ashrafian, head of research and development at Sanofi. “With our expertise in rare diseases and growing presence in immune-mediated respiratory conditions, INBRX-101 will complement our approach to deploy R&D efforts in key areas of focus and address the needs of the underserved AATD patients and communities.”

INBRX-101 is designed to treat AATD, a disease that progressively damages the lungs and liver, by reducing inflammation and staving off further damage to the tissue. The size of the AATD market is expected to grow considerably in the coming years, with many other biotech companies, including Mereo BioPharma, Vertex, Wave Life Sciences, BioMarin, Intellia Therapeutics and Peak Bio, all believed to be pursuing AATD therapies.

Sanofi has been particularly active in recent months. In late 2023, the company and artificial intelligence (AI) specialist Aqemia entered a multi-year research collaboration worth $140m to discover small molecule drug candidates across several therapeutic areas. Sanofi also entered into a partnership with BioMap, another AI specialist, to accelerate drug discovery for biotherapeutics, in a deal potentially worth over $1bn. Furthermore, in March 2023 Sanofi acquired Provention Bio for $2.9bn.

News: France's Sanofi to buy U.S. drugs project INBRX-101 for about $2.2 billion

Blackstone takes Tricon private in $3.5bn deal

BY Fraser Tennant

In a major residential real estate deal that takes the North American property company private, Tricon Residential Inc. is to be acquired by private equity giant Blackstone for $3.5bn.

Under the terms of the definitive agreement, Blackstone will acquire all outstanding common shares of Tricon for $11.25, approximately C$15.17, per common share in cash.

Subject to and upon completion of the transaction, Tricon’s common shares will no longer be listed on the NYSE or TSX. The company will remain headquartered in Toronto, Ontario.

The acquisition was unanimously recommended by a committee of independent members of Tricon’s board of directors. The committee determined that the transaction is in the best interests of Tricon and fair to Tricon shareholders, and recommended that Tricon shareholders vote in favour of the transaction.

“We are proud of the significant and immediate value that this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents,” said Gary Berman, president and chief executive of Tricon. “Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefitting from their expertise and capital as we partner in building thriving communities.”

Providing rental homes and apartments, along with resident services through its technology-enabled operating platform and dedicated on-the-ground operating teams, Tricon serves communities in high-growth markets such as Atlanta, Charlotte, Dallas, Tampa and Phoenix, as well as Toronto, Canada.

In addition to managing a single-family rental housing portfolio, Tricon has a single-family rental development platform in the US with approximately 2500 houses under development, as well as numerous land development projects that can support the future development of nearly 21,000 single-family homes.

Under Blackstone’s ownership, Tricon plans to complete its $1bn development pipeline of new single-family rental homes in the US and $2.5bn of new apartments in Canada. The company will also continue to enhance the quality of existing single-family homes in the US through an additional $1bn of planned capital projects over the next several years.

Completion of the transaction – which is expected in the second quarter of 2024 – is subject to customary closing conditions, including court approval, the approval of Tricon shareholders, and regulatory approval under the Canadian Competition Act and Investment Canada Act.

“Tricon provides access to high-quality housing, and we are fully committed to delivering an exceptional resident experience together,” concluded Nadeem Meghji, global co-head of Blackstone Real Estate. “We are excited that our capital will propel Tricon’s efforts to add much needed housing supply across the US and in Toronto, Canada.”

News: Blackstone to take Tricon Residential private for $3.5 billion

Synopsys to acquire Ansys in $35bn mega-deal

BY Fraser Tennant

In the largest technology acquisition in over a year, electronic design automation (EDA) company Synopsys is to acquire engineering simulation leader Ansys in a transaction with an enterprise value of approximately $35bn.

Under the terms of the definitive agreement, Ansys shareholders will receive $197 in cash and 0.3450 shares of Synopsys common stock for each Ansys share. Ansys shareholders are expected to own approximately 16.5 percent of the combined company on a pro forma basis.

Upon completion of the transaction, Synopsys’ pioneering semiconductor electronic design automation (EDA) and Ansys’ broad simulation and analysis portfolio will create a leader in silicon to systems design solutions.

“The megatrends of artificial intelligence, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity,” said Sassine Ghazi, president and chief executive of Synopsys. “Bringing together Synopsys’ industry-leading EDA solutions with Ansys’ world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful and seamlessly integrated silicon to systems approach to innovation.”

According to both companies, this combination brings together their highly complementary capabilities to meet the evolving needs of today’s engineers and give them unprecedented insight into the performance of their products.

“This acquisition will accelerate the development of our joint portfolio and deliver an increased level of innovation, which will benefit Ansys’ traditional customers,” said Ajei Gopal, president and chief executive of Ansys.

The combined company expects to achieve approximately $400m of run-rate cost synergies by year three post-closing and approximately $400m of run-rate revenue synergies by year four post-closing, growing to more than approximately $1bn annually in the longer-term.

The transaction is anticipated to close in the first half of 2025, subject to approval by Ansys shareholders, the receipt of required regulatory approvals and other customary closing conditions.

Mr Ghazi concluded: “This acquisition is the logical next step for our successful, seven-year partnership with Ansys and we look forward to working closely with the Ansys team to realise the benefits of this combination for our customers, shareholders and employees.”

News: Synopsys to buy engineering software firm Ansys in $35 billion deal

Talos announces $1.29bn QuarterNorth deal

BY Richard Summerfield

Talos Energy has agreed to acquire QuarterNorth Energy in a $1.29bn cash and stock deal. QuarterNorth is a privately-held US Gulf of Mexico exploration and production company with ownership in several prolific offshore fields. Talos expects the deal to improve its base decline rate by approximately 20 percent.

Under the terms of the deal, QuarterNorth Energy will receive about 24.8 million shares of Talos’s common stock and around $965m in cash. The board of directors of both Talos and QuarterNorth have unanimously approved the deal, which is expected to close by the end of the first quarter of 2024, subject to certain customary closing conditions and regulatory approvals.

The deal will offer a significant boost to Talos’s operations in the Gulf of Mexico. QuarterNorth’s assets include six major fields in the region, predominantly in deep water. According to Talos, the acquisition will add production of about 30,000 barrels of oil equivalent per day (boe/d) expected for the full year 2024, averaging about 75 percent oil from approximately 95 percent operated assets proved reserves of around 69 million boe with a PV-10 of $1.7bn, high margin, low decline production, with low reinvestment rate requirements to sustain production and no meaningful near-term asset retirement obligations conducive to long-term high free cash flow generation.

“Today’s announcement marks one of Talos’s most significant milestones as we build a large-scale offshore exploration and production company,” said Timothy S. Duncan, president and chief executive of Talos. “The addition of QuarterNorth’s overlapping deepwater portfolio with valuable operated infrastructure will increase Talos’s operational breadth and production profile while enhancing our margins and cash flow. This Transaction aligns with Talos’s overall strategy of leveraging existing infrastructure and complementary acreage to accelerate shareholder value creation.

“The pro forma footprint in the U.S. Gulf of Mexico should allow us to capture meaningful operating synergies,” he continued. “The expected financing structure of the Transaction accelerates de-leveraging, immediately improves our credit profile, is accretive on key metrics, and positions us to consider additional capital return initiatives following deleveraging in the near term. We look forward to completing this Transaction in the next few months and continuing our strategy of building a large-scale, diverse energy company.”

News: Talos Energy to acquire QuarterNorth Energy for $1.29 bln