Biogen acquires HI-Bio in $1.8bn deal

BY Fraser Tennant

In a deal that bolsters its late-stage pipeline, US multinational biopharmaceutical company Biogen Inc. is to acquire privately-held clinical-stage biotechnology firm Human Immunology Biosciences (HI-Bio) for $1.8bn.

Under the terms of the definitive agreement, Biogen will make an upfront payment to HI-Bio of $1.15bn, with HI-Bio’s stockholders eligible for payments of up to an additional $650m. 

Biogen also plans to leverage its existing global development and commercialisation capabilities in rare diseases and its strong scientific expertise in immunology to support the advancement of felzartamab and the HI-Bio pipeline.

Felzartamab, HI-Bio’s lead asset, is a fully human anti-CD38 monoclonal antibody that has been shown in clinical studies to selectively deplete CD38-plus cells including plasma cells and natural killer, or NK, cells which may allow for additional applications that improve clinical outcomes in a broad range of immune-mediated diseases.

“This late-stage asset has demonstrated its impact on key biomarkers and clinical endpoints in three renal diseases with serious unmet needs,” said Priya Singhal, head of development at Biogen. “It is a strategic addition to the Biogen portfolio as we continue to augment our pipeline and build on our expertise in immunology.”

Founded in 1978, Biogen is a leading biotechnology company that pioneers innovative science to deliver new medicines to transform patients’ lives and to create value for shareholders and our communities.

“With its deep development and commercialisation capabilities, Biogen is in a position to accelerate the development of new medicines, including felzartamab, for patients with severe immune-mediated diseases,” said Travis Murdoch, chief executive of HI-Bio. “We are excited to combine the HI-Bio team’s expertise with Biogen’s global footprint.”

In addition to lead programme felzartamab, the HI-Bio pipeline includes izastobart/HIB210, an anti-C5aR1 antibody currently in a phase 1 trial and with potential for continued development in a range of complement-mediated diseases. HI-Bio also has discovery stage mast cell programmes with potential in a range of immune-mediated diseases.

The transaction is subject to customary closing conditions, including receipt of necessary regulatory approvals, and is currently anticipated to close in the third quarter of 2024.

News: Biogen in up to $1.8 bln deal as rare diseases take center stage

Red Lobster files for Chapter 11

BY Fraser Tennant

With debts of approximately $294m, US-based restaurant chain Red Lobster, along with its direct and indirect operating subsidiaries, has filed for Chapter 11 bankruptcy protection.

The company intends to use the bankruptcy proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.

In addition, the company has been working with vendors to ensure that operations are unaffected and has received a $100m debtor-in-possession financing commitment from its existing lenders.

As part of the Chapter 11 filing, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders.

“This restructuring is the best path forward for Red Lobster,” said Jonathan Tibus, chief executive of Red Lobster. “It allows us to address several financial and operational challenges and emerge stronger and refocused on our growth.”

The company has also stated that while its restaurants will remain open and operating as usual during the Chapter 11 process, some underperforming restaurants will be closed and sold to a group of its lenders, which includes Fortress Investment Group.

Concurrent with the Chapter 11 process, court documents reveal that Red Lobster is investigating the role its majority owner, Thai Union, played in the restaurant chain’s ‘endless shrimp’ promotion that caused $11m in losses.

Red Lobster has said that the failed promotion was part of a pattern of mismanagement by the global seafood company that owns most of its equity and supplies shrimp to its restaurants.

Founded in 1968 and headquartered in Orlando, Florida, Red Lobster’s is focused on serving the highest quality, freshly prepared seafood that is traceable, sustainable and responsibly sourced. The company has around 550 casual dining restaurants in the US.

Mr Tibus added: “The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”

News: Red Lobster probes “endless shrimp” losses after bankruptcy filing

SouthState to acquire Independent Bank Group in $2bn deal

BY Richard Summerfield

SouthState Corporation and Independent Bank Group, Inc. have entered into a definitive agreement under which SouthState will acquire Independent Bank Group, in an all-stock transaction valued at approximately $2bn.

Under the terms of the deal, which is expected to close by the end of Q1 2025, Independent Bank shareholders will receive 0.60 shares of SouthState for each stock they own. The deal values Independent Bank at $48.51 per share, which represents a 10.4 percent premium to the stock’s last close before the deal was announced.

According to a statement announcing the deal, the combined bank will have total assets of $65bn and a market capitalisation of around $8.2bn. The transaction will also help deepen SouthState’s presence in the Dallas-Fort Worth, Austin and Houston areas in Texas, as well as the Colorado Front Range.

“With a local, geographic management model, an industry-leading track record on credit and a presence in some of the best markets in the country, Independent Bank Group is a great fit with SouthState,” said John C. Corbett, chief executive of SouthState.”

“We are excited about the opportunity to join SouthState, a company whose culture, business model and credit discipline matches well with ours,” said David R. Brooks, chairman and chief executive of Independent Bank Group. “The combination of these two companies operating in growing markets provides a great opportunity for our Independent Bank Group teammates, clients and communities to flourish.”

The transaction has been approved by the boards of directors of SouthState and Independent Bank Group by the unanimous vote of directors present at their respective meetings. Completion of the transaction is subject to customary closing conditions, including receipt of required regulatory approvals and approval from shareholders of Independent Bank Group and SouthState. Upon completion of the deal, three Independent Bank directors will join SouthState’s board.

The deal is the most recent in a number of consolidation deals in the US regional banking space. Last month, UMB Financial agreed to buy Heartland Financial in a deal worth around $2bn.

News: Regional lender SouthState to buy Texas-based Independent Bank for about $2 bln

Telecom deal value leaps in Q1 2024 – report

BY Richard Summerfield

Amid a period of upheaval in the telecommunications sector, companies are turning to M&A to drive their business forward, according to analysis by Bain & Company. Integrated telcos are becoming disaggregated and narrowly focused business models are emerging, altering the telecommunications landscape.

With this shift, M&A deal value in the telecommunications space spiked in the first quarter of 2024, as some telcos increased scale and others expanded in adjacent sectors such as finance and insurance, according to Bain.

Indeed, deal value increased significantly from around $2bn in Q1 2023 to almost $21bn in Q1 2024. Though the figure is down from $35bn in Q4 2023, a single deal - Telecom Italia’s $23.3bn agreement to sell its fixed network business to KKR - accounted for two-thirds of that quarter’s value. By comparison, the largest announced transaction in Q1 2024 was a scale deal which saw Swisscom agree to acquire Vodafone Italia for $8.7bn and merge it with Swisscom’s Italian subsidiary Fastweb.

Europe has been the focal point of many industry transactions in recent years, driven by in-country scale deals and infrastructure divestments. Scale deals accounted for slightly more than half of global deal value in the first quarter of the year, a notable shift from each of the past two years, when this category made up less than a quarter of deal value. Infrastructure divestments dominated telecom M&A from 2019 to 2022, but high interest rates and other macroeconomic challenges have reversed that trend of late.

According to Bain, factors such as fibre network consolidation will likely spur deals going forward. Brazil and the US are some of the largest markets where such consolidation is expected to occur. Likewise, enterprise services and other higher-growth segments are set to attract deals, with private equity firms expected to be among the most active dealmakers.

News: Telecom M&A: Here Are the Latest Deal Trends Worldwide

Ardonagh acquires PSC in A$2.3bn deal

BY Fraser Tennant

In a move that will see the UK-based insurance distribution platform expand its footprint in the region, Ardonagh Group is to acquire Australia's PSC Insurance in a transaction valued at A$2.3bn.

Under the terms of the agreement, Ardonagh will acquire all of the issued ordinary shares in PSC for A$6.19 in cash per PSC share. The acquisition has received the unanimous recommendation of the PSC board of directors.

Ardonagh stated that it will fund 50 percent of the deal from existing shareholders Madison Dearborn Partners and HPS Investment Partners and the rest from existing and new debt.

One of the world’s largest independent insurance distribution platforms and a top 20 global broker, Ardonagh has a combined workforce of over 10,000 people and a network spanning 200-plus locations in more than 30 countries.

Ardonagh intends to merge PSC’s Australia and New Zealand operations with Envest Pty Ltd, an entity it acquired in February 2023. The combined unit will become one of Australia’s largest privately owned insurance distribution platforms.

“This acquisition is a significant milestone in the global growth of Ardonagh and underlines our strong commitment to the markets we serve,” said David Ross, chief executive of Ardonagh. “Ardonagh has been assembled as a bastion of independence and scale, aligning high calibre businesses and management teams around quality advice for clients and entrepreneurial connectivity within the Group.”

In addition, PSC’s UK operations will be merged into Ardonagh Specialty and Ardonagh Advisory, further building the group’s position as one of the leading players in UK wholesale and retail broking.

“This transaction recognises the quality and strength of PSC’s people and business that has developed over the last 18 years,” said Paul Dwyer, chairman of PSC. “We believe this transaction maximises value for PSC shareholders while also providing an excellent platform for growth for PSC employees and our clients.”

The transaction, which is subject to customary regulatory approvals, is expected to be implemented in late 2024.

Mr Ross concluded: “PSC’s journey and values align with our own and its portfolio of highly complementary businesses provides an abundance of opportunity to strengthen our positions in Australia, wholesale and specialty markets.”

News: UK’s Ardonagh to buy Australia's PSC Insurance in $1.51 bln deal