Primavera acquires child nutrition business from Reckitt in $2.2bn deal

BY Fraser Tennant

Further enhancing its positioning and growth prospects in China's large infant nutrition market, investment firm Primavera Capital Group is to acquire consumer health, nutrition and hygiene company Reckitt Benckiser’s Mead Johnson business in a transaction valued at $2.2bn.

Under the terms of the definitive agreement, Reckitt will retain a shareholding in Mead Johnson of 8 percent and anticipates net cash proceeds to be approximately $1.3bn. The transaction follows Reckitt’s comprehensive review of its infant formula and child nutrition business in China announced in February 2021.

The deal is another milestone for Primavera in the consumer industry. Going forward, the investment firm intends to support Mead Johnson's growth in China through innovation, operational improvement, channel optimisation and digital transformation, to further enhance its positioning and growth prospects in China’s RMB150bn infant nutrition market.

"We are pleased to acquire the Greater China business of Mead Johnson, a long-established and renowned multinational infant and children nutrition brand,” said Dr Fred Hu, founder and chairman of Primavera Capital Group. “As the controlling shareholder, Primavera is committed to serve tens of millions of Chinese mothers and babies and safeguard their wellbeing.”

Following the completion of the transaction, Primavera will have a royalty-free perpetual and exclusive license of the Mead Johnson brand in Greater China.

“After a thorough review of our infant formula and nutrition business in China, we have found an excellent home for the business under the ownership of Primavera,” said Laxman Narasimhan, chief executive of Reckitt. “As a result of this transaction, Reckitt's Nutrition business going forward will have a better and more consistent growth and margin profile.”

Founded in 1905 in the US, Mead Johnson is a world-renowned premium infant milk formula brand. In 2009, the company successfully listed on the New York Stock Exchange, and in 2017 was acquired by Reckitt .

The transaction is expected to close in the second half of 2021, subject to customary regulatory approvals.  

Mr Hu concluded: “We look forward to collaborating with Reckitt management, and to continuing to provide customers the highest-quality nutritional products through world-class scientific innovation and R&D capabilities, as well as the strictest safety and quality control.”

News: Reckitt to sell China baby formula business for $2.2 bln

A new era for Cloudera as the firm is taken private

BY Richard Summerfield

Data analytics firm Cloudera Inc. is to be taken private by private equity firms KKR & Co and Clayton Dubilier & Rice LLC (CD&R) in a $4.7bn deal.

According to a regulatory filing announcing the deal, Cloudera shareholders will receive $16 per share in cash, a premium of over 24 percent to Cloudera’s last close on Friday and a 30 percent premium to the company’s 30-day volume weighted average share price.

The deal is expected to close in the second half of 2021, subject to shareholder and regulatory approval. The board of directors of Cloudera has unanimously approved the transaction and recommends that the Cloudera shareholders approve the transaction and adopt the merger agreement.

Cloudera, which has activist investor Carl Icahn as its largest shareholder, has been exploring a potential sale since mid-2020 after receiving takeover interest from several parties.

“This transaction provides substantial and certain value to our shareholders while also accelerating Cloudera’s long-term path to hybrid cloud leadership for analytics that span the complete data lifecycle - from the Edge to AI,” said Rob Bearden, chief executive of Cloudera. “We believe that as a private company with the expertise and support of experienced investors such as CD&R and KKR, Cloudera will have the resources and flexibility to drive product-led growth and expand our addressable market opportunity.”

“We very much look forward to working with Cloudera as it continues to execute its long-term transformation strategy,” said Jeff Hawn, operating partner at CD&R, who will also serve as chairman of the company upon close of the transaction. “The company has made significant progress establishing the Cloudera Data Platform (CDP) as a leader in hybrid and multi-cloud analytics, and we believe that our experience and capabilities can offer valuable support to accelerate expansion into new products and markets.”

“We have followed the Cloudera story closely for a number of years and are pleased to be supporting its mission of helping companies make better use of their data in the ever-evolving hybrid IT environment,” said John Park, partner and head of Americas technology private equity at KKR. “We are excited to contribute to Cloudera’s accelerated innovation efforts as a private company.”

Cloudera provides cloud-based software and a platform to enterprises for data management and insights generation. The firm caters to several industries including finance, healthcare and government agencies.

News: KKR, CD&R take data analytics firm Cloudera private for $4.7 bln

Crown turns down Blackstone bid

BY Richard Summerfield

Private equity giant Blackstone has had a $6.5bn offer for troubled Australian casino operator Crown Resorts rejected.

“The board has unanimously concluded that the revised (Blackstone) proposal undervalues Crown, and is not in the best interests of Crown’s shareholders,” Crown said in a statement.

The company noted that Blackstone’s offer of A$12.35 per share, or A$8.4bn, did not consider the full value of its assets, a potential jump in earnings once the COVID-19 pandemic eases and plans to pay down a significant amount of debt. The Blackstone offer also created some uncertainty about the timing of any deal, Crown noted.

Star Entertainment Group, which owns and operates casinos and hotels across Australia, most notably in New South Wales and Queensland, has also made an all-stock offer for Crown. In a separate statement, Crown said it had not yet formed a view on the merits of the Star merger proposal but had requested certain information to better understand preliminary matters. The Star proposal is expected to attract antitrust scrutiny, which could create difficulties going forward.

Crown has endured a considerable adversity of late. In addition to a slump in profits due to the coronavirus pandemic, the company has also faced increased regulatory scrutiny, lost its licence to operate a flagship new casino on Sydney’s waterfront amid allegations of money laundering and links to organised crime, and also faces inquiries in the other two Australian states where it is licensed to operate. Furthermore, the company is facing two civil lawsuits accusing it of failing to disclose risks which led to share price declines.

Blackstone initially offered $11.85 a share for Crown, representing a 19 percent premium to the volume-weighted average price of Crown shares since the release of its first half results for the financial year 2021. Blackstone, which owns around 10 percent of Crown shares, increased its previous offer in April. The modified deal included conditions designed to safeguard Blackstone against an adverse recommendation like the cancellation or suspension of Crown’s Western Australia or Victorian licences by either inquiry before the deal is approved by courts.

Rival private equity firm Oaktree Capital Group has also expressed an interest in Crown, offering a “structured instrument” to help Crown buy back the 37 percent stake held in the company by founder James Packer.

News: Crown Resorts rejects Blackstone’s proposal and keeps Star under review

Verizon Media sold for $5bn

BY Richard Summerfield

Verizon Communications has sold its Verizon Media assets, including AOL and Yahoo, to private equity giant Apollo Global Management in a deal worth $5bn.

Under the terms of the deal, Verizon will receive $4.25bn in cash from Apollo, along with preferred interests of $750m and a 10 percent stake in the unit. Verizon originally paid nearly $9bn for the pair. The divested unit, which was previously named Oath and renamed Verizon Media in 2018 when Verizon wrote off around half of the unit’s value, will now be called Yahoo when the deal closes, which is expected to be in the second half of 2021.

Verizon has been making moves to refocus its attention on its wireless networks and other internet provider businesses of late and has been selling off its media properties. Last year, the company sold HuffPost to BuzzFeed. It also recently sold off or shut down other media properties like Tumblr and Yahoo Answers.

“We are excited to be joining forces with Apollo,” said Guru Gowrappan, chief executive of Verizon Media. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long- term success of the company.”

“We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms,” said David Sambur, senior partner and co-head of private equity at Apollo. “Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive.”

“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” said Hans Vestberg, chief executive of Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”

Apollo has engaged in a number of transactions in recent months, announcing deals to acquire Michaels, a chain of crafting stores in the US, and the Venetian Resort in Las Vegas.

News: Verizon to offload Yahoo, AOL for $5 billion

Blackstone Group sells portfolio for $2.9bn

BY Richard Summerfield

Blackstone Group has agreed to sell its portfolio of warehouse and logistics assets in Australia to ESR Cayman Ltd in a deal worth $2.9bn.

ESR, a Hong Kong-listed property manager, has partnered with Singaporean sovereign wealth fund GIC Pte Ltd to acquire the portfolio. GIC will contribute 80 percent of the required equity for the deal, with ESR providing the rest. The portfolio consists of 45 assets held by Blackstone’s Milestone Logistics across major cities including Adelaide, Brisbane, Melbourne, Perth and Sydney, covering a total land area of 3.6 million square metres.

The deal, which is expected to provide an initial yield of 4.5 percent with a 6.9-year weighted average lease expiry, is the largest logistics and general property portfolio transaction in Australia to date. Upon completion, ESR will be the third-biggest logistics landlord in the country with assets under management increasing to A$7.9bn.

The potential sale of the portfolio has been under discussion for some time. In January, Blackstone received more than 10 first-round bids for Milestone Logistics. The firm also considered an initial public offering (IPO) for the portfolio.

“The opportunity to secure such a large portfolio with extremely well-located assets across Adelaide, Brisbane, Melbourne, Perth and Sydney, strategically positions EMP to benefit from the continued growth in demand for warehouse space, particularly as the robust demand for logistics real estate is expected to remain strong due to sustained growth in e-commerce,” said Phil Pearce, chief executive of ESR Australia.

“We are extremely pleased to deepen our partnership with GIC with this momentous transaction,” said Jeffrey Shen and Stuart Gibson, co-founders and group co-chief executives of ESG. “The acquisition of the Milestone portfolio is a significant leap forward for ESR. This tremendous expansion not only adds immediate scale to our presence in Australia and the region, but also extends our footprint and reaffirms our commitment to one of our highest conviction markets in Asia Pacific.”

GIC and ESR are no strangers to one another. In December 2020, the firms announced a strategic partnership to establish a $750m joint venture to develop and acquire industrial and logistics assets in India.

News: ESR, GIC to buy Australian logistics property portfolio from Blackstone for $2.9 bln