Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail [email protected] with your contact information.
Archives > Transaction Case Study 63
SOKOLOFF & COMPANY CASE STUDY:
DATE ANNOUNCED: May 21, 2012
FORM OF PURCHASE PRICE: A combination of cash, debt and equity. Under the terms of the deal each stockholder will receive $39.15 in cash and .077479 of share in a newly created company: Eaton Global Corp. Plc. The combination is worth $72 per share. Eaton will use a $6.75 billion bridge financing facility from Morgan Stanley Bank, Morgan Stanley Senior Funding Inc. and Citibank to fund the cash portion of the buyout.
SELLER’S FINANCIAL INFORMATION AND M&A MULTIPLES
TRANSACTION DRIVERS: The acquisition will not only significantly increase the capabilities and geographic breadth of the combined company’s power management portfolio and electric business but it is expected to achieve $375 million of operational synergies (i.e. estimated cost savings and added revenue resulting from the combination). There will also be a tax benefit of about $160 million per year as the new company will incorporate in Ireland. According to Ajay Kejriwal, an FBR Capital Markets analyst, “The combined company leverages complementary products, accelerates long-term growth opportunities and increases exposure to high-potential end markets.”
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