CVS contemplates a breakup
Happy Friday!
Earlier this week, yours truly reported that CVS Health is exploring options that could include a break-up of the company to separate its retail and insurance units, as the struggling healthcare services giant attempts to orchestrate a turnaround in its fortunes.
CVS has been discussing various options - including how such a split would work - with its financial advisers in recent weeks
The plan to potentially split the company's pharmacy chain and the insurance business has been discussed with the board of directors, which is yet to finalize a decision on the separation.
CVS is also discussing whether its pharmacy benefits manager unit, which manages drug benefits for health plans, should be housed within the retail unit or under insurance, if it were to proceed with a separation that could result in two publicly traded companies.
Such a move would effectively unwind CVS's landmark $70 billion takeover of healthcare insurer Aetna in 2017 and come as CVS attempts to navigate one of the most challenging periods in its six-decade history.
The latest discussions come as CVS faces increasing pressure from investors such as Glenview Capital, which is said to be pushing for changes at the company to help improve its operations, after it cut its 2024 earnings outlook for a third consecutive quarter in August.
CVS, which has a market value of about $79 billion and held long-term debt of roughly $58 billion at the end of December, in August lowered its annual profit forecast to $6.40 to $6.65 per share, from its previous forecast of least $7.00 per share.
Elsewhere, Milana Vinn was first to report that fiber network owner Zayo Group and buyout firm TPG are competing to acquire the fiber and wireless assets of Crown Castle, in a deal that could be valued at nearly $10 billion.
Zayo, which is owned by buyout firms EQT AB and DigitalBridge, and TPG are the two remaining bidders for the assets, which include Crown Castle's fiber business and its small cell business, which provides wireless services and technology.
Both units are worth less than $5 billion each and it is possible that Crown Castle could choose to sell only one of the assets, one of the sources said. If both assets are sold, the deal is likely to be valued between $8 billion and $10 billion. A deal is still several weeks away and not imminent.
Ernest Scheyder and Clara Denina scooped that Rio Tinto has been holding talks to buy lithium miner Arcadium, a deal that would make Rio the third-largest producer of the electric vehicle battery metal.
Talks have been ongoing and continued in London this week during the LME Week conference. An offer is expected to come in the near future. Talks are ongoing and may not necessarily result in a deal. Arcadium shares surged 36% in extended trading on Friday.
Echo Wang and I were first to report that private equity firm Apollo Global is in talks to acquire Barnes Group, a manufacturer of aerospace components with a market value of about $2 billion.
Bristol, Connecticut-based Barnes is negotiating granting exclusivity to Apollo, which is set to prevail over other buyout firms that were also vying for the company, the sources said, requesting anonymity as the discussions are confidential.
The deal is likely to value Barnes at more than $45 per share. The company's shares, which have risen about 25% since the start of the year till Thursday’s close, jumped as much as 11% to $44.50 on Friday morning on our scoop.
If the talks are successful, a deal could be signed in the coming days.
And finally, late this evening yours truly and Abigail Summerville teamed up to report that Vista Outdoor agreed to sell itself in parts to two separate buyers for a total of $3.35 billion, including debt, after fending off a hostile suitor that pursued the sporting goods and ammunitions maker for months.
Vista struck a deal to sell its sporting goods unit Revelyst to investment firm Strategic Value Partners for $1.1 billion. It has also agreed to revise the terms of a previously agreed deal to sell its ammunitions business Kinetic to Prague-based defense contractor Czechoslovak Group (CSG).
CSG has raised its offer for Kinetic by $75 million to $2.2 billion. The company, which had initially also agreed to buy a 7.5% stake in Revelyst for $150 million, will no longer do so.
Taken together, the two deals value Vista at $45 per share, topping a rival $43 per share offer from MNC Capital, an investment firm led by former Vista board member Mark Gottfredson. MNC has repeatedly attempted to acquire Vista this year.
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And here’s the best of the rest from the Reuters corporate finance file:
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Shein is set to hold informal investor meetings in the coming weeks for its planned London initial public offering (IPO), three sources with knowledge of the matter said, pushing ahead with preparations as it awaits UK regulatory approval.
Buyout firm TPG has emerged as the frontrunner to pick up a minority stake worth $2 billion in Creative Planning, in a deal that could value the wealth management firm at more than $15 billion, people familiar with the matter said.
UK-based payments group SumUp is planning a new share sale that could value the privately-held group at more than 8 billion euros ($8.87 billion), two people familiar with the matter said.
Australian lender ANZ and Indonesia's Gunawan family are considering selling a combined controlling interest in Jakarta-listed Bank Pan Indonesia Tbk PT (Panin Bank), in which they each hold substantial stakes, three sources with knowledge of the matter said.
StandardAero, a U.S. aircraft maintenance services provider, priced its U.S. initial public offering above its indicated range to raise $1.44 billion, people familiar with the matter said.
Family-owned Badia Spices has agreed to sell a majority stake to a group of investors including a Latin American conglomerate's investment arm and the merchant bank BDT & MSD Partners, with three sources saying the deal values the Hispanic food company at around $1.2 billion.
The private equity owners of Flowco have kicked off preparations for an initial public offering of the oilfield services provider that could value it at as much as $2 billion and come as early as the first half of 2025, according to people familiar with the matter.
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Have a terrific weekend!
Best, Anirban
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Anirban Sen
Editor in Charge, U.S. Mergers & Acquisitions
Reuters News
Thomson Reuters
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