The Top of the Class in Deal-Making

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It is that time of the year again, when we award the Deal Professor A’s, the grade for the best deals and deal-makers of 2011. Here are the highlights (with a few grades of F as well), in alphabetical order:Attachmate Group/Novell. The 2.2 billion deal involved the innovative sale of certain of Novell's intellectual property assets to CPTN Holdings, a company organized by Microsoft and a number of other technology companies. The deal, along with Google's 12.5 billion acquisition of Motorola Mobility, showed that technology companies were willing to pay dearly to acquire intellectual property assets. Deal-makers were more than willing to leverage this desire.Berkshire Hathaway/Lubrizol. Warren E. Buffett yet again shows that not only does he do deals fast, but that they usually fall into his lap like manna from heaven. Like Buffett targets of years past, Lubrizol seemed to be quite captivated by Mr. Buffett and willing to sell quickly. <a href="http://www.buylouisvuittonoutletonline.com"><strong>louis vuitton outlet</strong></a> Mr. Buffett receives an A for showing not only his skill at capturing bargains, but navigating this deal through a scandal involving a former Berkshire executive, David Sokol.Carlyle/Diversified Machine/Platinum Equity. Carlyle bought this automotive supply manufacturer out of bankruptcy in 2005. During a six-year period, Carlyle grew the company's revenues 4.5 times and the company's employee head-count went from about 525 employees to more than 2,200. Carlyle sold Diversified to Platinum for an undisclosed purchase price but was reportedly seeking about 400 million for the asset. Carlyle wins the first annual Teddy Forstmann memorial private equity value creation award.Caterpillar/Bucyrus International. Caterpillar wins a significant asset and just as important wins Chinese antitrust approval — after 143 days, almost two months after obtaining clearances from European Union and United States regulators. The deal underscores the increasing importance of Chinese antitrust clearance in global mergers and acquisitions.ChemChina/Koors/Makhteshim. China National Chemical, or ChemChina, in partnership with Koor Industries of Israel buys 60 percent of Israeli agricultural chemical company Makhteshim. The deal valued at 2.4 billion was one of the largest outbound investments by China ever, and showed that the country was on the prowl internationally for key suppliers. In light of American efforts to block many Chinese deals on national security grounds Chinese funds are being directed elsewhere.China Fire and Security/Bain; China Security and Surveillance/GuoshenTu; Funtalk China Holdings/insider led consortium; Harbin Electric/CEO Tianfu Yang and Abax Global. Many a Chinese deal was hit by short-sellers who sought to bet on uncertainty over China and the accounting of its companies. None of these deals were pretty, but they all managed to get completed despite this turbulence, beginning a mini-wave of Chinese companies reversing United States market listings to go private.Frontier Oil/Holly. If you terminate your deal in 2003 and end up suing each other, try again in 2011 this time reversing buyer and seller. This one gets the Elizabeth Taylor/Richard Burton optimism award.Fundtech/S-1/GTCR/ACI. S1 and Fundtech had agreed to combine in a stock-for-stock merger valued at about 318 million. Each soon received its own unsolicited offer to be acquired. S1 and Fundtech terminated their deal with S1 being acquired by ACI <a href="http://www.louisvuittonukhandbagsuk.com"><strong>Louis Vuitton</strong></a> and Fundtech going to GTCR. The deals showed the rare ability of a bidder to top a stock-for-stock deal and not only disrupt it but end up on the winning end.Groupon I.P.O. It is all about perspective. The investment bankers get an A for pushing through an initial public offering at a high price despite all the turbulence. But F’s abound here also, including to Groupon itself for its iffy accounting and to its chief executive, Andrew Mason, for nearly torpedoing the I.P.O. by appearing to violate Securities and Exchange Commission rules requiring a company to be quiet just before its initial public offering.Hertz/Avis/Dollar Thrifty. A hang-over deal from 2010, Dollar Thrifty shareholders reaped the benefit of saying no to Hertz even after a second broken auction. Dollar Thrifty shares are now trading at about 69.86 after Hertz's offer in the low 50s was voted down. Along with Airgas, whose shares are 79.65 well above the 72 per share offered by Air Products, these companies made the right decision compared with, say, Yahoo which spurned Microsoft's advances back in 2008. Avis, meanwhile, was able to scoop up Avis Europe at an attractive price by leveraging Avis Europe's fears that if Avis did a Dollar Thrifty deal it would not have capacity or desire to do Avis Europe deal for a long time.International Paper/Temple-Inland. International Paper shows that after Airgas, a hostile bid against a company with a staggered board and poison pill can succeed. You just need to act fast and pay a high price. It is just that easy.iGate/Patni Computer Systems. Indian-based outsourcing company iGate partnered with Apax Partners to acquire another Indian company, Patni, in a 1.2 billion deal. The acquisition was one of the largest leveraged buyouts in India ever, and one of the first to tap the high yield debt market in the United States.Microsoft/Silver Lake Partners/Skype. Silver Lake Partners turned an amazing profit by buying a 70 percent interest in Skype for 1.9 billion from eBay. Silver Lake flipped eBay's orphan 18 months later to Microsoft for 8.5 billion. It remains to be seen if Microsoft will similarly profit, but the deal also allowed Microsoft to put its 42 billion foreign cash pile to work buying Luxembourg-based Skype.Oracle/Art Technology Group. Oracle wins the speed award for finishing this cash merger deal announced in 2010 in 63 days, a month earlier than usual. The deal would have closed even earlier but the Delaware Chancery Court enjoined the ART Technology special meeting for 14 days in order for ART Technologies to make additional disclosure. The deal shows that in some cases a merger can almost be as quick as a tender offer structure.Ramius/Royalty Pharma/Cypress Bioscience. An activist hedge fund puts its money where its mouth is. Ramius Value and Opportunity Advisors ends up teaming with Royal <a href="http://www.louisvuittonoutletsale2u.com"><strong>Louis Vuitton Outlet</strong></a> Pharma to buy Cypress for 255 million. The acquisition came after almost six months of back and forth started by Ramius making an offer to buy the entire company. The buyout group paid a 160 percent premium to Cyprus's share price the day before Ramius first announced its offer.Renaissance Learning/Permira. A private equity bidding war broke out between Permira and Plato Learning, a portfolio company of Thoma Bravo and HarbourVest, over Renaissance. But Renaissance's co-founders Terrance and Judith Paul, the owners of 69 percent of Renaissance, refused to countenance a Plato bid. The result: Renaissance public shareholders lost out when Plato offered 18 a share to the public holders against a bid of 16.60 a share from Permira. The Pauls, in a rare case of generosity by a controlling shareholders, took only 15 a share. The Pauls receive an A for their generosity in wanting to preserve Renaissance's headquarters location in Wisconsin. The lawyers on the deal (Godfrey & Kahn and Sidley Austin for Renaissance and Skadden, Arps, Slate, Meagher & Flom for Permira) also deserve an A for forcing through a clever structure designed to take advantage of Renaissance's incorporation in Wisconsin and the unique laws there. For public shareholders however, this deal is an F.Teva Pharmaceutical Industries/Cephalon. Teva made a quick strike to buy Cephalon for 6.8 billion after hostile bidder Valeant Pharmaceuticals opened up the opportunity. Teva showed the value of opportunistic and quick action in deal-making winning the Bruce Wasserstein "Dare to Be Great" award.I wish you all the best in the new year. May it be a happy and healthy one.