This month’s Big Deals column opens with Aetna Inc.’s $7.3 billion agreement to buy Coventry Health Care Inc. Before that deal was announced there was a burst of dealmaking in the health care sector in July that followed a similar flurry in April [Deals in Brief, July]. Activity in the sector has accounted for about 14 percent of overall U.S. M&A by volume this year, with 72 deals of $100 million or more worth a total of $78.1 billion through the first eight months of 2012, according to Dealogic. Below we list the advisers on four large deals announced in July.
WellPoint Inc. agreed to buy managed care company Amerigroup Corporation for $4.9 billion in cash on July 9. At $92 per target share, the deal came at a 43 percent premium to the target’s closing price on July 6, the last trading day before the announcement. Amerigroup manages state Medicaid and other publicly funded programs and serves about 2.7 million members in 13 states, while Wellpoint has almost 34 million people enrolled in its health plans. The parties hope to close the deal next year pending approvals from AmeriGroup shareholders and regulators.
For acquiror WellPoint Inc. (Indianapolis)
Linklaters: Daniel Dufner Jr. and associates Michael Deyong and Demetra Karamanos.
For target Amerigroup Corporation (Virginia Beach, Virginia)
Skadden, Arps, Slate, Meagher & Flom: Todd Freed, Jeremy London, and Paul Schnell.
Linde AG agreed on July 2 to pay $4.6 billion for Lincare Holdings Inc., a provider of home respiratory therapies. Linde is offering $41.50 in cash per Lincare share, a 64 percent premium to the target’s price on June 26, the day before news of the talks broke. In addition to paying $3.8 billion for Lincare’s equity, Linde will also assume $800 million in debt. The deal closed August 13.
For acquiror Linde AG (Munich)
Cravath, Swaine & Moore: Mark Greene, Richard Hall, and Michael Schler.
For target Lincare Holdings Inc. (Clearwater, Florida)
Weil, Gotshal & Manges: Michael Aiello, Michael Epstein, and Kenneth Heitner.
Relational Investors LLC got its wish on July 16 when Par Pharmaceuticals Companies Inc. agreed to sell to TPG Capital L.P. for $1.9 billion. Relational, a San Diego–based activist hedge fund, built a 9 percent stake in Par Pharmaceuticals in the fall and pushed the manufacturer of generic drugs to sell. At $50 per Par share, the deal came at a 37 percent premium to the target’s closing price on July 13, the last trading day before the announcement. Par had until August 24 to search for a higher offer, but none emerged. The parties hope to close the transaction before the end of the year pending approvals from regulators and Par shareholders.
For acquiror TPG Capital L.P. (Fort Worth)
Ropes & Gray: Jay Kim, Amanda Morrison, and William Shields.
For target Par Pharmaceuticals Companies Inc. (Woodcliff Lake, New Jersey)
Orrick, Herrington & Sutcliffe: R. King Milling and Richard Vernon Smith.
For Par board of directors
Cravath, Swaine & Moore: Scott Barshay and George Schoen.
GlaxoSmithKline/Human Genome Sciences
Human Genome Sciences Inc. agreed to sell to GlaxoSmithKline plc for $3.6 billion on July 16, three months after the biotechnology company announced that it had rejected an approach from the U.K. pharma giant. The initial pass came at $13 per share, an 80 percent premium to HGS’s trading price at the time, but the target’s stock jumped to $14.38 a share when news of the bid broke. GlaxoSmithKline ended up agreeing to pay $14.25 a share. The parties closed the deal on August 3.
For acquiror GlaxoSmithKline plc (London)
Cleary Gottlieb Steen & Hamilton: Victor Lewkow and Benet O’Reilly.
Wachtell, Lipton, Rosen & Katz: Adam Emmerich , David Lam, and William Savitt.
For target Human Genome Sciences Inc. (Rockville, Maryland)
Skadden, Arps, Slate, Meagher & Flom: Marc Gerber and Michael Rogan.
DLA Piper (US): David Clarke Jr., Jason Harmon, and Robert “Jay” Smith Jr.