Boston acquires Silk Road in $1.16bn deal

BY Fraser Tennant

In an acquisition that adds innovative technology for stroke prevention to its vascular portfolio, multinational biotechnology firm Boston Scientific Corporation has purchased medical device company Silk Road Medical for $1.16bn.

Under the terms of the definitive agreement, Boston will pay $27.50 for each share of Silk Road held, representing a premium of 27 percent to the stock’s last close. Upon completion of the transaction, Silk Road will become a wholly-owned subsidiary of Boston Scientific.

A medical device company focused on reducing the risk of stroke and its devastating impact, Silk Road has pioneered a new approach for the treatment of carotid artery disease called transcarotid artery revascularization (TCAR).

The TCAR procedure involves accessing the carotid artery through a small incision in the neck and temporarily reversing blood flow away from the brain to prevent plaque from dislodging and causing a stroke. A stent is then placed at the site of the blockage for long-term plaque stabilisation and future stroke prevention.

“The TCAR platform developed by Silk Road Medical is a notable advancement in the field of vascular medicine,” said Cat Jennings, president of vascular, peripheral interventions at Boston Scientific. “The procedure has revolutionised stroke prevention and the treatment of carotid artery disease."

Boston’s acquisition of Silk Road follows its $3.7bn buyout of medical technology company Axonics in January 2024, which gave Boston access to devices used to improve bladder function.

The TCAR system gained US Food and Drug Administration approval in 2015 and is supported by several clinical studies demonstrating a reduced risk of stroke and other complications associated with traditional open surgery. The products sold by Silk Road Medical are the only devices commercially available for use during the TCAR procedure.

The transaction – which has been unanimously approved by Silk Road’s board of directors – is expected to close in the second half of 2024, subject to customary closing conditions.

Ms Jennings concluded: “We believe the addition of the TCAR platform to our vascular portfolio demonstrates our continued commitment to provide meaningful innovation for physicians who care for patients with peripheral vascular disease.”

News: Boston Scientific to buy Silk Road Medical in $1.16 billion deal

HanesBrands sells Champion to Authentic in $1.2bn deal

BY Fraser Tennant

As part of a move to streamline its business and focus on innerwear categories, US multinational clothing company HanesBrands is to sell its sportswear brand Champion to Authentic Brands Group in a deal valued at $1.2bn.

Unanimously approved by the HanesBrands board of directors, the value of the transaction could reach up to $1.5bn through an additional contingent cash consideration of up to $300m based on achievement of performance thresholds.

The move for Champion – which currently operates in more than 90 countries, with more than 40 percent of its business hailing from outside North America – demonstrates Authentic's commitment to expanding its portfolio of iconic sports, lifestyle, entertainment and media brands and will increase its system-wide annual retail sales to more than $32bn worldwide.

“We are excited to acquire Champion, a brand that shares our pioneering spirit,” said Jamie Salter, chairman and chief executive of Authentic. “Over the last few years, the addition of new brands together with the expansion of live events has grown Authentic into a world leading sports and entertainment licensing company. Bringing Champion into the fold further expands our position in this space.”

Upon completion of the transaction, HanesBrands intends to focus on extending its leadership position in the innerwear category and generating above-market growth through continued consumer-centric product innovation and increased investment across its portfolio of leading brands.

“This transaction is the culmination of significant effort by our teams to position all of our brands on the optimal path for the future,” said Steve Bratspies, chief executive of HanesBrands. “Over the past three years, we have taken necessary actions to enhance our operations and financial performance – returning to historical gross margins, reducing our cost structure, lowering our debt levels and generating consistent cash flow.”

The transaction is subject to customary closing conditions and is expected to be completed in the second half of 2024.

Mr Bratspies concluded: “We believe we are in an even stronger position to further extend our leadership in innerwear, pursue new cost reduction opportunities as we ensure we have the right operating structure in place to drive strong shareholder returns.”

News: HanesBrands to sell sportswear business Champion to Authentic Brands in $1.2 bln deal

Fisker Inc files for Chapter 11 protection

BY Richard Summerfield

US electric vehicle (EV) start-up Fisker has filed for Chapter 11 bankruptcy protection after talks with an unnamed major car maker on a cash injection ended without a deal. The company will now look to sell assets.

According to the court filing, the company’s operating unit, Fisker Group Inc, filed for Chapter 11 bankruptcy in Delaware, listing estimated assets of $500m to $1bn and liabilities of $100m to $500m. The company has between 200-999 creditors.

Fisker’s future has been the source of speculation in recent months. In February, the company warned about its ability to remain in business after earlier announcing weaker-than-expected earnings and plans to cut 15 percent of its workforce. In March, the company said it had secured $150m in financing from an existing lender, but this was tied to the startup securing investment from the unidentified automaker.

“Fisker has made incredible progress since our founding, bringing the Ocean SUV to market twice as fast as expected in the auto industry and making good on our promises to deliver the most sustainable vehicle in the world,” said a Fisker spokesperson. “We are proud of our achievements, and we have put thousands of Fisker Ocean SUVs in customers’ hands in both North American and Europe. But like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently. After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”

The bankruptcy filing comes just a year after Fisker delivered its all-electric vehicle, the Ocean SUV, to customers. The company also changed its business model earlier this year. As a result, Fisker was no longer selling directly to customers and instead tried to partner with established dealers. Furthermore, the company recently cut prices on its inventory vehicles after pausing production. Fisker made more than 10,000 vehicles last year, less than a quarter of forecast production, and delivered only around 4700 to customers in the US and Europe.

The EV market has faced significant headwinds in recent years, with manufacturers including Proterra, Lordstown and Electric Last Mile Solutions also filing for bankruptcy due to dwindling cash reserves and fundraising difficulties. Global supply chain issues caused by ongoing economic and geopolitical uncertainty have also disrupted production across the EV space.

News: EV startup Fisker files for bankruptcy, aims to sell assets

Cognizant makes $1.3bn Belcan acquisition

BY Richard Summerfield

In a move that will expand its presence in the aerospace, defence, space and automotive sectors, Cognizant Technologies has agreed to acquire digital engineering firm Belcan for nearly $1.3bn in cash and stock.

The transaction is expected to close in Q3 2024, subject to the receipt of required regulatory approvals and other closing conditions. The total purchase price of approximately $1.29bn comprises $1.19bn in cash consideration and a fixed 1.47 million Cognizant shares, with a current value of $97m based on Cognizant’s closing share price on Friday 7 June 2024. The cash consideration is expected to be funded through a mix of cash on hand and debt.

Cognizant said it intends to increase its share repurchase plan to maintain current share count guidance of 497 million for the full year 2024.

“We believe that acquiring Belcan will strengthen Cognizant’s position in the sizable and fast-growing ER&D services market,” said Ravi Kumar, chief executive of Cognizant. “Belcan’s deep engineering capabilities and domain expertise across the aerospace & defense market will be complemented by Cognizant’s scale and own multi-decade digital engineering expertise, providing Belcan’s blue-chip client roster access to our advanced AI, Cloud and Data technologies. We see the opportunity to immediately accelerate revenue growth and create compelling shareholder value through our combined engineering capabilities. Belcan’s clients would gain access to Cognizant’s full suite of technology services, while Cognizant’s clients across the manufacturing, automotive, energy, and high-tech sectors we believe will benefit from Belcan’s engineering skills.”

Lance Kwasniewski, the current chief executive of Belcan, is expected to continue to lead the company, which will operate under the Belcan name as an operating unit of Cognizant.

“We are excited about this unique combination and the value creation it will bring to our customers, along with the opportunities it will provide for our employees” said Mr Kwasniewski. “Cognizant will better position our team to capitalize on compelling tailwinds, including increasing outsourced ER&D spend, the transformative impact of digital engineering adoption rates, robust commercial aerospace demand, and favorable long-term defense and space spending. Belcan’s experienced team has built a growth-oriented business delivering highly complex, mission-critical, scalable services to our long-standing customer base. I look forward to continuing to lead our team as we unite and leverage Belcan’s and Cognizant’s comprehensive services and cross-industry clientele to execute on our collective strategy, ultimately earning the role of our clients’ most trusted partner in intelligent engineering.”

Belcan has been owned by private equity firm AE Industrial Partners since 2015.

Cognizant expects the Belcan deal to deliver over $100m in annual revenue synergies within three years, with additional cost synergies expected over time.

News: Cognizant to acquire Belcan for $1.3 billion

Bain Capital acquires PowerSchool in $5.6bn deal

BY Fraser Tennant

In a deal that takes the K-12 education software and cloud-based solutions provider private, PowerSchool Holdings is to be acquired by US private investment firm Bain Capital in a transaction valued at $5.6bn.

Under the terms of the definitive agreement, PowerSchool stockholders will receive $22.80 per share in cash upon completion of the proposed transaction, which represents a premium of 37 percent over PowerSchool’s unaffected share price of $16.64 as of 7 May 2024.

Upon completion of the transaction, PowerSchool’s common stock will no longer be publicly listed on the New York Stock Exchange, and PowerSchool will become a privately held company.

A global education technology company supporting over 55 million students and over 17,000 customers in more than 90 countries, PowerSchool brings together the best of K-12 educational and operational technology to support every step of the learning journey.

“PowerSchool is uniquely positioned to provide differentiated, mission-critical solutions that drive better education outcomes, empower educators and help district operations run more efficiently,” said Hardeep Gulati, chief executive of PowerSchool. “With Bain Capital’s support, PowerSchool will have access to additional resources and the flexibility to deliver even more growth and innovation.”

“PowerSchool’s innovative software solutions in and out of the classroom provide a strong foundation for K-12 academic success. said David Humphrey, a partner at Bain Capital. “Their products are highly respected by administrators, educators, students and parents because they foster active collaboration and offer actionable insights needed to support positive learning outcomes.”

The transaction – which has been approved by the PowerSchool board of directors – is expected to close in the second half of 2024, subject to customary closing conditions, including receipt of regulatory approvals.

“As demand for K-12 educational technology grows, we believe there are significant opportunities to expand access to PowerSchool’s best-in-class product suite around the world,” concluded Max de Groen, a partner at Bain Capital. “We look forward to working with PowerSchool to accelerate the company’s growth while strengthening its commitment to help educators and students realise their full potential.”

News: Bain Capital to take PowerSchool private in $5.6 bln deal