Gilead agrees $4.3bn CymaBay deal

BY Richard Summerfield

In a move set to bolster its liver disease portfolio, Gilead Sciences has agreed to acquire CymaBay Therapeutics for $4.3bn.

Under the terms of the deal, CymaBay shareholders will receive $32.50 per share, a 26.5 percent premium to the company’s share price on Friday. The transaction was approved by the boards of both Gilead and CymaBay and is anticipated to close during the first quarter of 2024, subject to regulatory approvals and other customary closing conditions.

The deal will give Gilead access to CymaBay’s investigational lead product candidate, seladelpar, which is used for the treatment of primary biliary cholangitis (PBC) including pruritus. This will complement Gilead’s existing liver portfolio and aligns with its commitment to bringing transformational medicines to patients.

“We are looking forward to advancing seladelpar by leveraging Gilead’s long-standing expertise in treating and curing liver diseases,” said Daniel O’Day, chairman and chief executive of Gilead Sciences. “Building on the strong research and development work by the CymaBay team to date, we have the potential to address a significant unmet need for people living with PBC and expand on our existing broad range of transformational therapies.”

“Today’s agreement with Gilead is the culmination of years of focus and determination at CymaBay to advance seladelpar and bring new hope to people living with PBC and their families,” said Sujal Shah, president and chief executive at CymaBay. “Now that seladelpar has achieved priority review with the FDA, we are excited that Gilead, with its long-standing commitment to patients with liver disease, can apply its regulatory and commercial expertise to bring seladelpar as quickly as possible to people with PBC.”

PBC is a rare, chronic, cholestatic liver disease mainly affecting women (one in 1000 women over the age of 40 or about 130,000 total people in the US) that impairs liver function and quality of life. Seladelpar is estimated to generate sales of $1.9bn by 2029, if approved, according to LSEG data. It is an investigational, oral, selective peroxisome proliferator-activated receptor delta agonist, shown to regulate critical metabolic and liver disease pathways.

CymaBay submitted a marketing application to the US Food and Drug Administration (FDA) for the drug in December. The FDA has completed its filing review, accepted a New Drug Application for seladelpar, and granted priority review with a Prescription Drug User Fee Act target action date of 14 August 2024.

News: Gilead to buy CymaBay for $4.3 bln in bets on liver disease treatment

Barratt to acquire Redrow in £2.52bn deal

BY Richard Summerfield

The UK’s biggest housebuilder, Barratt, has agreed to acquire its smaller rival Redrow in an all-stock deal worth around £2.5bn.

The merged group, to be called Barratt Redrow, is expected to build about 23,000 homes a year and have a turnover of more than £7bn. The combined market value of the two companies was £7.2bn when financial markets closed on Tuesday, the day before the deal was announced.

Barratt shareholders will retain 67.2 percent of the new group, leaving Redrow shareholders with 32.8 percent. The Redrow brand will be retained for marketing new homes and its Heritage collection, aimed at more affluent buyers, added to the portfolio, which also comprises Barratt’s more affordable David Wilson Homes. Under the terms of the deal, each Redrow shareholder will receive 1.44 new Barratt shares for each share they hold.

According to Barratt, the deal will allow for £90m in cost-saving synergies and will offer opportunities for the new group to consolidate its supply chain. Subject to regulatory and shareholder approval, the deal is expected to complete in the second quarter of this year.

“We have great respect for Redrow, its overall strategy, its leadership and employees, and its high-quality homes and communities,” said David Thomas, group chief executive of Barratt. “This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs. The Combined Group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and - most importantly - our customers.”

“Redrow and Barratt combined creates a leading UK homebuilder,” said Matthew Pratt, group chief executive of Redrow. “Together, we’ll be in a much better position to offer a broader range of high-quality and energy efficient homes to customers. The Redrow brand, with its premium, characterful homes, has an excellent reputation and will remain a key part of the Combined Group. As with Barratt, Redrow’s fifty-year success story is based on its people, products and supply chain partners. Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas.”    

“During the 50 years since I founded Redrow, I could not be more proud of the unique reputation it has earned for building premium homes and thriving communities,” said Steve Morgan, founder of Redrow. “Barratt is a home builder I have long admired due to their likeminded attention to quality. I am confident that the Barratt / Redrow combination with their three high-quality complementary brands, will create a standout home builder for the future and accelerate the delivery of much needed homes across the UK.”

News: UK homebuilder Barratt to buy Redrow in 2.52 billion pound deal

Acerinox to acquire Haynes in near $1bn deal

BY Fraser Tennant

In a deal set to increase its presence in the high-growth US market and aerospace sector, Spanish stainless steel company Acerinox is to acquire fabricated metal products manufacturer Haynes International, Inc for $970m.

Under the terms of the definitive agreement, Acerinox will acquire all the outstanding shares of Haynes for $61 per share in cash, which represents a premium of approximately 22 percent to Haynes’s six-month volume-weighted average share price for the period ending 2 February 2024.

In addition, Acerinox plans to invest $200m into its US operations as part of the transaction, including $170m into Haynes’ operations. Upon completion of the transaction, Haynes’s shares will no longer be traded on the Nasdaq, and Haynes will become a wholly owned subsidiary of Acerinox.

“Haynes has impressive and complementary business operations, research and development capabilities and an experienced team,” said Bernardo Velázquez Herreros, chief executive of Acerinox. “Their addition strengthens our global leadership in high-performance alloys and creates meaningful opportunities in the high-growth aerospace segment and the attractive US market.”

Headquartered in Kokomo, Indiana, Haynes is a leading developer, manufacturer and distributor of high-performance alloys for use in high-temperature and corrosion applications. Since 2000, its technical programmes have yielded nine new proprietary alloys.

“We are excited to announce this combination and are confident that this is the right step to ensure the long-term success of Haynes, while maximizing value for our stockholders,” said Michael L. Shor, president and chief executive of Haynes. “By joining with Acerinox, we will be able to continue to grow and enhance our operations.”

The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the third quarter of 2024, subject to receipt of regulatory approval and the satisfaction of customary closing conditions, including approval by Haynes shareholders.

Mr Hereros concluded: “I look forward to welcoming Haynes as part of our team and working together to enhance our combined operating footprint in North America.”

News: Acerinox to Acquire Haynes International

Brazilian airline GOL files for Chapter 11

BY Fraser Tennant

In a move that reflects the lingering challenges Latin American airlines face from the coronavirus (COVID-19) pandemic era, Brazilian low-cost carrier GOL filed for Chapter 11 bankruptcy.  

The company intends to use the Chapter 11 process to restructure its short-term financial obligations and strengthen its capital structure for long-term sustainability.

GOL’s Chapter 11 filing makes it the latest Latin American carrier to seek bankruptcy protection after the global pandemic, following sister company Avianca, Mexico's Aeromexico and Chile-based LATAM Airlines.

Despite challenges to its capital structure and lower aircraft availability, GOL’s operational performance remains strong. In the third quarter of 2023, the company delivered one of the best operating results for airlines in Latin America, and the fourth consecutive quarter of high and consistent operating margins.

The airline has stated that its business will continue as normal during the oversight process conducted by the US court and the company will honour commitments to business partners and suppliers for the goods and services provided on or after the date of the Chapter 11 filing.

“GOL has been making significant efforts to offer the best travel experience to customers, while improving its profitability and financial position,” said Celso Ferrer, chief executive of GOL. “We have made notable progress so far and we believe that this process will allow us to address the challenges generated by the pandemic, while maintaining the high standard of services we offer to customers.”

The company expects to emerge from the Chapter 11 process with a significant capital investment, including the new $950m in debtor in possession (DIP) financing, giving it the opportunity to expand its position as a leading airline in Latin America.

“With the support of the court-supervised process and the additional liquidity of DIP financing, our passenger and cargo flights, the Smiles loyalty programme and other company operations continue normally,” continued Mr Ferrer. “GOL will continue to offer safe, reliable and low-cost air travel services, providing the best experience to customers, who will be able to organize their trips in the way they always have.”

One of the leading airlines in Brazil and part of the Abra Group, since its founding in 2001 GOL has been the company with the lowest unit cost in Latin America, which has enabled the democratisation of air transport.

Mr Ferrer concluded: “We are confident that the measures being taken will allow GOL to continue offering lower fares with exceptional travel experiences to Customers on an increasing number of routes, including improving accessibility, the travel experience and customer choice.”

News: Heavily indebted Brazilian airline Gol files for bankruptcy in US

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