The Institute for Mergers, Acquisitions and Alliances (IMAA) provides a detailed weekly roundup of mergers and acquisitions news, highlighting the most significant global M&A deals. This essential update offers a snapshot of the latest movements and trends within the M&A market, showcasing the top transactions that stand out in the corporate world. Through this coverage, IMAA aims to furnish M&A professionals and enthusiasts alike with a comprehensive overview of the week’s M&A activities, helping them stay informed about the evolving landscape of global mergers and acquisitions.
During the week spanning from May 6 to May 12, the global market witnessed a total of 483 Mergers and Acquisitions (M&A) deals, collectively valued at USD 25.67 billion. Among these transactions, 11 surpassed the USD 500 million mark, amassing a substantial USD 16.72 billion, constituting approximately 65% of the week’s total deal value.
One noteworthy deal during this period was the acquisition of Allete Inc. by CCP Investment and Global Infrastructure Partners for a significant USD 6.2 billion. This acquisition is particularly significant amidst a period where U.S. electric utilities are grappling with a substantial surge in demand. Factors such as the burgeoning interest in artificial intelligence driving data center developments, the establishment of new factories, and initiatives to electrify a greater portion of the economy are all placing strains on the U.S. power grid.
Additionally, it’s worth highlighting the substantial involvement of investment firms as key buyers in four out of the top five deals of the week.
A comparative analysis from the previous week reveals a 16% decline in the number of deals, plummeting from 574 to 483. This downward trend was mirrored in the deal value as well, with a notable 33% decrease from USD 38.59 billion to USD 25.67 billion.
Top 5 M&A Deals for the Week
Here are the top 5 M&A Deals for the week of May 6 – 12, 2024 in detail:
Deal No. 1: Canada Pension Plan Investment Board; Global Infrastructure Management, LLC. to Acquire ALLETE, Inc. for USD 6.20 Billion
Deal No. 2: Francisco Partners Management, L.P.; Clearlake Capital Group, L.P. to Acquire Software Integrity Group Business of Synopsys, Inc. for USD 2.10 Billion
Deal No. 3: The Ardonagh Group Limited to Acquire PSC Insurance Group Limited for USD 1.49 Billion
Deal No. 4: KKR & Co. Inc. to Acquire Wealth Management and Corporate Trust businesses of Perpetual Limited for USD 1.43 Billion
Deal No. 5: General Atlantic Service Company, L.P.; Leonard Green & Partners, L.P.; Temasek Holdings (Private) Limited; Jasper Ridge Partners, L.P.; HPS Investment Partners, LLC to Acquire Authentic Brands Group LLC for USD 1.20 Billion
Deal No. 1:
Canada Pension Plan Investment Board; Global Infrastructure Management, LLC. to Acquire ALLETE, Inc. for USD 6.20 Billion
US utility group Allete is set to undergo acquisition by the Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP) in a significant transaction valued at USD 6.2 billion, inclusive of debt (equivalent to USD 67.00 per share in cash).
This acquisition positions Allete to spearhead a Clean-Energy Future for its Customers, Communities, and Employees under private ownership.
Allete boasts a substantial customer base of nearly 188,000 in northern Minnesota and northwestern Wisconsin, while also managing diverse power generation assets including wind, solar, coal-fired, biomass, and hydroelectric facilities across the Upper Midwest.
GIP, in collaboration with CPP Investments, anticipates collaborating to furnish ALLETE with additional capital, enabling the ongoing decarbonization of its operations for the benefit of its customers and communities. This union of ALLETE, renowned for its dedication to clean energy initiatives, with GIP, a leading developer of renewable power globally, underscores the commitment to meet the escalating market demands for accessible, carbon-free, and resilient energy sources.
The acquisition process is slated for completion in mid-2025, with J.P. Morgan Securities LLC serving as the principal financial advisor to ALLETE.
Deal No. 2:
Francisco Partners Management, L.P.; Clearlake Capital Group, L.P. to Acquire Software Integrity Group Business of Synopsys, Inc. for USD 2.10 Billion
Synopsys, Inc., a pioneering force in electronic design automation software solutions, has reached an agreement to divest its Software Integrity Group business to private equity firms Clearlake Capital Group and Francisco Partners for a significant sum of USD 2.1 billion in cash. Additionally, the deal encompasses an additional USD 475 million in cash contingent upon the attainment of specified return targets tied to future liquidity events.
This strategic move will carve out the Software Integrity Group as an independent entity, poised to lead the domain of application security software provision. The new entity’s name will be disclosed in due course. With the increasing integration of security in DevOps workflows, the demand for application security testing providers is expected to rise. Clearlake’s O.P.S. framework will be utilized to drive operational improvements, strengthen the Software Integrity Group’s product offerings, and support its growth as a standalone enterprise.
Clearlake and Francisco Partners have a history of successful investments in software platforms and are viewed as suitable partners to support the continued growth of the Software Integrity Group as an independent software security provider.
For Synopsys, the decision to divest its Software Integrity Group business reflects a strategic emphasis on core offerings.
The transaction is projected to close in the latter half of 2024. J.P. Morgan advised Synopsys on financial matters, while Evercore, Deutsche Bank, and Barclays provided financial counsel to Clearlake and Francisco Partners.
Deal No. 3:
The Ardonagh Group Limited to Acquire PSC Insurance Group Limited for USD 1.49 Billion
The Ardonagh Group, a significant player in the global insurance broking sector, is set to acquire Australian-based PSC Insurance Group for AUD 2.3 billion (USD 1.49 billion). This acquisition reflects Ardonagh’s strategic interest in expanding its presence in the Australian market.
PSC is a versatile insurance services group with over 40 trading brands and operations across Australia, the United Kingdom, Ireland, Hong Kong, Vietnam, New Zealand, and Bermuda.
Ardonagh plans to integrate PSC’s Australian and New Zealand operations with Envest Pty Ltd, an entity acquired by Ardonagh in February 2023. This integration aims to create a sizable insurance distribution platform in Australia, with an annual gross written premium of AUD 3.3 billion. Additionally, PSC’s operations in the United Kingdom will be merged into Ardonagh Specialty and Ardonagh Advisory divisions.
Through this strategic partnership, the combined entity aims to capitalize on growth opportunities within the insurance sector, enhancing competitiveness.
The anticipated completion of this deal is scheduled for late September, with Macquarie Capital and Stanton Road Partners providing financial advisory services to The Ardonagh Group.
Deal No. 4:
KKR & Co. Inc. to Acquire Wealth Management and Corporate Trust businesses of Perpetual Limited for USD 1.43 Billion
US-based buyout firm KKR & Co. has sealed a deal to acquire the wealth management and corporate trust units of Australian asset manager Perpetual Ltd. for AUD 2.175 billion (approximately USD 1.43 billion).
This acquisition will reshape Perpetual as a focused asset management entity, retaining its autonomy while overseeing approximately AUD 227 billion in assets. For KKR, the move represents a strategic expansion into the Australian market, bolstering its global investment presence.
The consolidation of Perpetual’s Australian Asset Management division with previous acquisitions like Trillium, Barrow Hanley, and Pendal positions the firm as a robust global player. With a streamlined structure, Perpetual aims to enhance agility and concentrate on empowering its investment experts to deliver superior returns to clients, while also fostering long-term growth for shareholders.
As part of the deal, Perpetual will offer transitional support to KKR for 18 months following completion, with provisions for possible extensions up to 12 months. The acquired Wealth Management and Corporate Trust divisions will maintain autonomy under existing management structures, ensuring continuity of operations.
The transaction is expected to finalize by February 2025, subject to customary conditions, with BofA Securities and Goldman Sachs serving as financial advisers.
Deal No. 5:
General Atlantic Service Company, L.P.; Leonard Green & Partners, L.P.; Temasek Holdings (Private) Limited; Jasper Ridge Partners, L.P.; HPS Investment Partners, LLC to Acquire Authentic Brands Group LLC for USD 1.20 Billion
Simon Property Group announced the successful divestment of its remaining 10% interest in Authentic Brands Group (Authentic) for a substantial sum of USD 1.2 billion.
Several prominent entities, including Leonard Green & Partners, General Atlantic, HPS Partners, Jasper Ridge Partners, and the Singaporean sovereign wealth fund Temasek Holdings, acquired Simon’s shares in this transaction.
This sale follows Simon Group’s strategic maneuver last October when it downsized its ownership in Sparc Group, a collaborative venture with Authentic, from 50% to 33%. Sparc Group, in partnership with Authentic, holds licenses for renowned brands such as Aéropostale, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brand, Nautica, and Reebok.
Authentic Brands Group predominantly derives its revenue from licensing a diverse portfolio of over 50 brands and managing the likeness rights or estates of renowned figures such as Muhammad Ali, Elvis Presley, and Marilyn Monroe.
Despite the challenges faced by many retail establishments amidst the pandemic, Simon’s prestigious portfolio of malls continues to thrive. Simon has acknowledged the inherent volatility of retail operations compared to its core real estate business, emphasizing their subordinate role within the REIT structure. The decision to divest the remaining stake stems from Simon’s objective to optimize its investment returns, capitalizing on an opportune moment to secure a favorable price for its holdings.
This concludes our M&A news coverage of the top global mergers and acquisitions deals for the week of May 6 – 12, 2024. For continuous and detailed insights into the evolving landscape of M&A news, we invite you to follow the Institute for Mergers, Acquisitions, and Alliances (IMAA).
