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Clovis Deal Chatter Heats Up Again as Goldman Says Buy: Real M&A
2015-04-22 22:40:06.506 GMT


(For a Real M&A column news alert: {SALT REALMNA <GO>}.)

By Brooke Sutherland and Caroline Chen
(Bloomberg) -- Clovis Oncology Inc.’s takeover prospects
are looking better now than when it explored a sale in 2013.
The cancer-drug developer failed to draw interest then as
it was trading at a steep price for a company whose oncology
treatments were still in early stages. Fast forward to today,
and both Clovis’ lung and ovarian cancer therapies have been
granted breakthrough status by the U.S. Food and Drug
Administration. That should speed up the approval process.
Goldman Sachs Group Inc. analyst Terence Flynn this month
boosted the odds of a takeover of $2.9 billion Clovis to at
least 30 percent and recommended investors buy the stock. A
transaction would add to what’s already a strong start for U.S.
biotechnology deals this year, with activity poised to surpass
2014’s four-year high, data compiled by Bloomberg show.
“It’s fairly noteworthy that a small biotech gets
breakthrough designation on two of their products,” Jon Loth, a
money manager for Nuveen Asset Management’s Small Cap Growth
Opportunities fund, which owns Clovis shares, said in a phone
interview. These types of drug developers are appealing targets
for larger rivals in the industry that are looking for growth
potential, he said.

Scarcity Value

Clovis’ top drug rociletinib, which is being tested in lung
cancer patients who have a mutation that causes their disease to
become resistant to other treatments, is on track for approval
by around year-end, according to Charles Duncan of Piper Jaffray
Cos.
With the drug now further along in development, and few
other cancer treatments available for buyers that aren’t already
tied up in partnership with another drug company, a takeover is
more likely, said Goldman’s Flynn. He estimates an M&A valuation
of $179 a share -- more than double the current stock price.
Potential buyers could include Roche Holding AG and Pfizer Inc.,
said Loth of Nuveen.
A representative for Boulder, Colorado-based Clovis said
the company doesn’t comment on speculation. A representative for
New York-based Pfizer declined to comment, while a
representative for Basel, Switzerland-based Roche didn’t respond
to a request for comment.
Clovis plans to apply for approval of its ovarian drug
candidate rucaparib by 2016, and it also has an experimental
drug in development for breast cancer.

Pricey Purchases

A Clovis acquisition would add to a breakneck pace of
acquisitions in the cancer-treatment area, fueled by innovative
new therapies being developed by both big pharmaceutical
companies and biotech startups. With everyone anxious for a
piece of the action, prices have been pushed up accordingly.
Bristol-Myers Squibb Co. agreed in February to acquire
closely-held Flexus Biosciences Inc. for up to $1.25 billion
including milestone payments, even though Flexus didn’t yet have
a drug in human clinical trials. AbbVie Inc. and Johnson &
Johnson’s bidding war for Pharmacyclics Inc. drove up the price
to $21 billion over a single product, Imbruvica.
A takeover of Clovis may still be a while out. Chief
Executive Officer Patrick Mahaffy sold Pharmion Corp. to Celgene
Corp. in 2008 for about $3 billion, but that company already had
a product on the market. AstraZeneca Plc is developing a lung
cancer drug that’s similar to Clovis’ rociletinib and the two
are locked in a race to get approval. Buyers may wait for more
information on how Clovis’ drug stacks up before making a move.
Clovis is set to present data at the American Society of
Clinical Oncology conference in a month that may help further
differentiate rociletinib from AstraZeneca’s treatment, said
Brian Klein, a New York-based analyst at Stifel Financial Corp.

Sales Potential

Patients with EGFR mutations can develop another mutation
that makes them no longer respond to treatments. It’s the
resistance caused by that second mutation that Clovis and
AstraZeneca are trying to treat. Both are also exploring use of
the drug as a first treatment for patients with the EGFR
mutation. Approval for that indication would expand the drug’s
peak sales potential for Clovis to $2 billion, according to
Goldman’s Flynn.
“We’ve seen a sufficient amount of data to whet the
appetite but we really haven’t seen a large enough sample size
to say ‘OK, you know what? This is definitely a consistent
effect and this drug really appears to be working in this unmet
need,’” Klein of Stifel said in a phone interview. “But
management certainly has a history of selling a company at a
time that is most beneficial for investors and I would say that
they would probably pursue that route again.”

For Related News and Information:
AstraZeneca Whale Racing With Minnow to Develop Lung Cancer Drug
AbbVie’s Bid Ups Ante as Buyers Bet on Cancer Drugs: Real M&A
Clovis Is Said to Get No Interest After Seeking Buyers
Bloomberg Intelligence, biotechnology: BI BIOT <GO>
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>

To contact the reporters on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net;
Caroline Chen in San Francisco at +1-415-617-7211 or
cchen509@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Drew Armstrong

BN 04/22 20:31 *ARRIS SEES DEAL ADDING 45C-55C TO ADJ. EPS
BN 04/22 20:30 *ARRIS TO BUY PACE PLC FOR $2.1B IN STOCK & CASH
BN 04/22 20:30 *ARRIS SEES PURCHASE ADDING TO EPS ADJ WITHING FIRST 12 MONTHS
BFW 04/22 20:30 *ARRIS TO BUY PACE FOR $2.1B IN STOCK, CASH
BN 04/22 20:29 *ARRIS TO BUY PACE FOR $2.1B IN STOCK, CASH

ARRIS to Acquire Pace plc for $2.1 Billion in Stock and Cash
2015-04-22 20:29:45.556 GMT

ARRIS to Acquire Pace plc for $2.1 Billion in Stock and Cash

Acquisition is expected to generate significant earnings accretion for ARRIS

PR Newswire

SUWANEE, Ga. and SALTAIRE, UK, April 22, 2015

SUWANEE, Ga. and SALTAIRE, UK, April 22, 2015 /PRNewswire/ -- ARRIS Group,
Inc. (NASDAQ: ARRS), a global innovator in broadband media technology, and
Pace plc. (LSE: PIC) today jointly announced that they have agreed that ARRIS
will acquire Pace for aggregate stock and cash consideration of US$2.1 billion
(£1.4 billion). The acquisition is expected to be accretive to ARRIS Non-GAAP
earnings per share in the first 12 months following the acquisition.

Key benefits of the transaction:                             

o Accelerates growth strategy

o ~US$8B Pro forma revenues                                
o ~8,500 combined employees, globally based
o Provides large scale entry into satellite segment
o Enhances international presence                          
o Expands product portfolio across equipment, software, and services

o Financially compelling

o US$0.45 to US$0.55 accretive in the first 12 months after close to
Non-GAAP EPS
o Reduces Non-GAAP tax rate to approximately 26% - 28%
o Significant synergy opportunity             
o Maintains capital structure flexibility

Transaction details:
The transaction will result in the formation of New ARRIS, which will be
incorporated in the U.K., and its operational and worldwide headquarters will
be in Suwanee, GA USA. New ARRIS is expected to be listed on the NASDAQ stock
exchange under the ticker ARRS. In connection with the formation of New ARRIS
each current share of ARRIS will be exchanged for one share in New ARRIS.

Under the agreed upon terms, Pace shareholders will receive £1.325 of cash and
a fixed exchange ratio of 0.1455 New ARRIS shares for each Pace share,
reflecting aggregate consideration as of April 21, 2015 of £4.265 per share,
representing a 28% premium to the Pace closing share price as of April 21,
2015. The cash portion will be funded through a combination of cash and debt. 
ARRIS has secured a fully committed facility from Bank of America Merrill
Lynch to meet the funding requirements. 

Pace shareholders will receive approximately 48.2 million shares of New ARRIS
in aggregate. On a pro forma basis current ARRIS shareholders will hold ~76%
of New ARRIS and Pace shareholders will hold ~24% of New ARRIS. The
transaction is expected to be taxable, for U.S. federal income tax purposes,
to the shareholders of ARRIS.

The proposed transaction has been approved by the respective Boards of
Directors of ARRIS and Pace and is expected to close in late 2015 after the
satisfaction of customary closing conditions, including ARRIS and Pace
shareholder approval and regulatory approvals.

ARRIS Chairman and CEO, Bob Stanzione will be New ARRIS Chairman and CEO and
the then-current ARRIS Board of Directors will serve as the New ARRIS Board of
Directors.    

"This transaction is another example of ARRIS's ongoing strategy of investing
in the right opportunities to position our company for growth. Adding Pace's
talent, products and diverse customer base will provide ARRIS with a large
scale entry into the satellite segment, broaden our portfolio and expand our
global presence. We expect this merger will enable ARRIS to increase its speed
of innovation. We believe this is a tremendous opportunity for ARRIS and our
customers, employees, shareholders and partners around the world as we
collaborate to invent the future," said Bob Stanzione. "We look forward to
working with the talented and accomplished team at Pace."

"Pace plc is a great company with a strong track record of pioneering
innovation and excellent customer service. Through a combination of organic
development and acquisitions, Pace has grown to be a leading technology
solutions provider to the PayTV and Broadband industries serving cable,
satellite and telco customers across the globe. Over the last three years,
Mike Pulli and the wider Pace team have successfully executed against our
strategic plan to develop Pace into a more distinctive, profitable and cash
generative company, creating significant value for shareholders.

"The Pace Directors believe that ARRIS's offer recognises this value and also
gives our shareholders the opportunity to share in the future success of the
combined group. While we believe that Pace is strongly positioned to continue
to execute its strategy in the medium and long term, we believe that the
combination of the complementary ARRIS and Pace businesses will create a
platform for future growth above and beyond our standalone potential. We
believe this is a great fit for both companies, our employees, customers and
trading partners," said Allan Leighton, Chairman of Pace.

Evercore is acting as lead financial advisor; Troutman Sanders is acting as
lead US legal counsel and Herbert Smith Freehills is acting as lead UK legal
counsel to ARRIS on this transaction. Bank of America Merrill Lynch is also
advising ARRIS. J.P. Morgan Cazenove is acting as lead financial advisor and
Travers Smith is acting as lead legal counsel to Pace on this transaction.

Conference Call and Webcast Details
ARRIS will host a conference call at 5:00 pm ET today to discuss this
announcement. You may participate in this conference call by dialing (888)
713-4218 or (617) 213-4870 from the US, 080 0055 6013 or +44 20 7136 5118 from
the UK prior to the start of the call and providing the ARRIS Group, Inc.
name, conference pass code 14190410, and Bob Puccini as the moderator. A
replay of the conference call can be accessed approximately two hours after
the call through April 29, 2015 by dialing (888) 286-8010 or (617) 801-6888
and using the pass code 55255256. Live internet access to the call will be
available through the Investor Relations section of the Company's website at
www.arris.com. A replay will also be made available for a period of 12 months
following the conference call on ARRIS's website at www.arris.com.

Pace acquisition-specific documents can be found at www.arris.com/pace

About ARRIS:
ARRIS is a global innovator in IP, video and broadband technology. We have
continually worked with our customers to transform the experience of
entertainment and communications for millions of people around the world. The
people of ARRIS are dedicated to the success of our customers, bringing a
passion for invention that has fueled our history: we created digital TV,
delivered the first wireless broadband gateway and are pioneering the
standards and pathways for tomorrow's personalized, Ultra HD, multiscreen, and
cloud services. We are dedicated to meeting today's challenges and preparing
for the tasks the future holds. Collaborating with our customers, ARRIS will
continue to solve the most pressing challenges of 21st century communications.
Together, we are inventing the future. For more information: www.arris.com

For the latest ARRIS news:
Check out our Blog: ARRIS EVERYWHERE 
Follow us on Twitter @ARRIS EVERYWHERE

About Pace:
Pace (LSE: PIC) is a leading provider of technology solutions to the PayTV and
Broadband industries. With a broad portfolio of customer premises equipment,
network solutions, and software and services, Pace empowers service providers
to simply and cost-effectively innovate at the speed they want, and to define
the evolution of their networks in the way they want for their subscribers.
Pace has built up its experience and expertise over 30 years and this is
recognized by a customer base of over 200 operators around the globe.

Headquartered in the UK, Pace operates in markets across the world, and
employs around 2,300 people in locations that also include the USA, France,
India, and China. For further information, visit: www.pace.com.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

No Offer or Solicitation
This document is provided for informational purposes only and does not
constitute an offer to sell, or an invitation to subscribe for, purchase or
exchange, any securities or the solicitation of any vote or approval in any
jurisdiction, nor shall there be any sale, issuance, exchange or transfer of
the securities referred to in this document in any jurisdiction in
contravention of applicable law.

Forward-Looking Statements
This document may contain forward-looking statements concerning certain
trends, expectations, forecasts, estimates, or other forward-looking
information affecting or relating to PACE or ARRIS or its industry, products
or activities that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform
Act of 1995 and other laws and regulations. Forward-looking statements speak
only as to the date of the document and may be identified by the use of
forward-looking terms such as "may", "will", "expects", "believes",
"anticipates", "plans", "estimates", "projects", "targets", "forecasts",
"outlook", "impact", "potential", "confidence", "improve", "optimistic",
"deliver", "comfortable", "trend" and "seeks,", or the negative of such terms
or other variations on such terms or comparable terminology. These
forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially from those indicated in the
forward-looking statements. Such risks and uncertainties include, but are not
limited to, the possibility that a possible combination will not be completed,
failure to obtain necessary regulatory approvals or required financing or to
satisfy any of the other conditions to the possible combination, adverse
effects on the market price of ARRIS shares and on ARRIS's or Pace's operating
results because of a failure to complete the possible combination, failure to
realize the expected benefits of the possible combination, negative effects
relating to the announcement of the possible combination or any further
announcements relating to the possible combination or the consummation of the
possible combination on the market price of ARRIS shares or Pace shares,
significant transaction costs and/or unknown liabilities, customer reaction to
the announcement of the combination, possible litigation relating to the
combination or the public disclosure thereof, general economic and business
conditions that affect the combined companies following the consummation of
the possible combination, changes in global, political, economic, business,
competitive, market and regulatory forces, future exchange and interest rates,
changes in tax laws or their interpretation or application, regulations, rates
and policies, future business combinations or disposals and competitive
developments. These factors are not intended to be an all-encompassing list of
risks and uncertainties. Additional information regarding these and other
factors can be found in ARRIS's reports filed with the SEC, including its
Annual Report on Form 10-K for the year ended December 31, 2014. By their
nature, forward-looking statements involve known and unknown risks and
uncertainties because they relate to events and depend on circumstances that
will occur in the future. The factors described in the context of such
forward-looking statements in this Announcement could cause ARRIS's plans with
respect to Pace, ARRIS's or Pace's actual results, performance or
achievements, industry results and developments to differ materially from
those expressed in or implied by such forward-looking statements. Although it
is believed that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations will prove to
have been correct and persons reading this document are therefore cautioned
not to place undue reliance on these forward-looking statements which speak
only as at the date of this document. ARRIS and Pace expressly disclaim any
obligation to release publicly any revisions to forward-looking statements as
a result of subsequent events or developments, except as required by law.

Important Additional Information Regarding the Transaction Will Be Filed With
The SEC
It is expected that the shares of New ARRIS to be issued by New ARRIS to Pace
shareholders under the scheme will be issued in reliance upon the exemption
from the registration requirements of the Securities Act of 1933, as amended,
provided by Section 3(a)(10) thereof. In connection with the issuance of New
ARRIS shares to ARRIS stockholders pursuant to the merger that forms a part of
the combination, New ARRIS will file with the SEC a registration statement on
Form S-4 that will contain a prospectus of New ARRIS as well as a proxy
statement of ARRIS relating to the merger that forms a part of the
combination, which we refer to together as the Form S-4/Proxy Statement.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE FORM S-4/PROXY STATEMENT,
AND OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION
CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE
RISKS ASSOCIATED WITH THE TRANSACTION. Those documents, if and when filed, as
well as ARRIS's and New ARRIS's other public filings with the SEC may be
obtained without charge at the SEC's website at www.sec.gov, at ARRIS's
website at http://ir.arris.com. Security holders and other interested parties
will also be able to obtain, without charge, a copy of the Form S-4/Proxy
Statement and other relevant documents (when available) by directing a request
by mail to ARRIS Investor Relations, 3871 Lakefield Drive, Suwanee, GA 30024
or at http://ir.arris.com. Security holders may also read and copy any
reports, statements and other information filed with the SEC at the SEC public
reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please
call the SEC at (800) 732-0330 or visit the SEC's website for further
information on its public reference room.

Participants in the Solicitation
ARRIS, its directors and certain of its executive officers may be considered
participants in the solicitation of proxies in connection with the
transactions contemplated by the Proxy Statement. Information about the
directors and executive officers of ARRIS is set forth in its Annual Report on
Form 10-K for the year ended December 31, 2014, which was filed with the SEC
on February 27, 2015, and its proxy statement for its 2015 annual meeting of
shareholders, which was filed with the SEC on April 9, 2015. Other information
regarding potential participants in the proxy solicitations and a description
of their direct and indirect interests, by security holdings or otherwise,
will be contained in the Proxy Statement/Prospectus when it is filed.

Pace and New ARRIS are each organized under the laws of England and Wales.
Some of the officers and directors of Pace and New ARRIS are residents of
countries other than the United States. As a result, it may not be possible to
sue Pace, New ARRIS or such persons in a non-US court for violations of US
securities laws. It may be difficult to compel Pace, New ARRIS and their
respective affiliates to subject themselves to the jurisdiction and judgment
of a US court or for investors to enforce against them the judgments of US
courts.

Responsibility
The directors of ARRIS accept responsibility for the information contained in
this document and, to the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case), the information contained in
this document is in accordance with the facts and it does not omit anything
likely to affect the import of such information.

ARRIS and the ARRIS Logo are trademarks or registered trademarks of ARRIS
Enterprises, Inc.  All other trademarks are the property of their respective
owners. © ARRIS Enterprises, Inc. 2015.  All rights reserved.

 

To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/arris-to-acquire-pace-plc-for-21-billion-in-stock-and-cash-300070526.html

SOURCE ARRIS Group, Inc.

Website: http://www.arrisi.com
Contact: ARRIS Contacts: For Investors, Bob Puccini, ARRIS Investor Relations,
+1.720.895.7787, bob.puccini@arris.com, For Media, Jeanne Russo,
+1.215.323.1880, jeanne.russo@arris.com, PACE Contacts: For Investors and
Media, Chris Mather, +44 7534 875 125, chris.mather@pace.com

-0- Apr/22/2015 20:29 GMT

Omnicare Is Said to Explore Sale of Nursing Home Drug Supplier
2015-04-22 19:25:30.37 GMT


By Ed Hammond, Jeffrey McCracken and Matthew Campbell
(Bloomberg) -- Omnicare Inc., a supplier of drugs and
services to nursing homes, is exploring a sale, people with
knowledge of the matter said.
The company, with a market value of about $7.9 billion, is
working with financial advisers as it seeks buyers, the people
said. The sale process is at an early stage and its possible no
deal will be reached, the people cautioned.
Omnicare delivers drugs and helps senior living facilities
manage their residents’ medications. Demand for such pharmacy
services is rising as patients, insurers and companies look for
ways to manage costs with drug prices on the rise.
A spokesman for Omnicare didn’t immediately reply to an e-
mail or phone call seeking comment.
Omnicare’s shares are trading at record levels, in part
after the U.S. Supreme Court last month gave the nursing-home
pharmacy a partial victory in a ruling over investor lawsuits.
Omnicare is being sued by investors who allege it misled
purchasers of its shares by saying it was operating within the
law in documents filed with regulators. A federal appeals court
ruling would have required Omnicare to defend against the
lawsuit. The Supreme Court decision sends the case back to the
lower courts to assess whether Omnicare omitted any material
facts in its filing.

For Related News and Information:
Investor Suits Limited by Top U.S. Court in Omnicare Case
UnitedHealth Pays $12.8 Billion for Catamaran’s Drug Clients
Busiest Day for Health-Care Deals Is Set to Spawn More: Real M&A
Top Stories:TOP<GO>

To contact the reporters on this story:
Ed Hammond in New York at +1-212-617-1963 or
ehammond12@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net;
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Crayton Harrison