The Firm is representing Melrose PLC on its recently announced proposed acquisition of Elster Group SE, a European public limited liability company based in Essen, Germany and listed on the NYSE. The acquisition will be implemented principally by a US tender offer to Elster ADS holders and Elster shareholders (which is expected to commence on 6 July 2012), with an aggregate equity value of approximately $2.3 billion. Melrose intends to fund the acquisition and associated expenses through a combination of a fully underwritten UK equity rights issue to raise approximately $1.8 billion and a new debt facility of approximately $2.3 billion which will also be available to refinance existing Melrose and Elster debt. The transaction is subject to regulatory clearances in the USA, EU, Russia and Ukraine and is expected to close during August 2012.
Melrose’s strategy is to “Buy, Improve, Sell” high quality manufacturing businesses with exposure to strong end markets. Value realized is then returned to shareholders. Melrose has created over £1.0 billion of shareholder value since its formation in 2003.
Elster is a world leading engineering company and one of the world’s largest providers of gas, electricity and water meters, gas utilization products and related communications, networking and software solutions for residential, commercial and industrial use with more than 200 million metering devices deployed over the last 10 years and sales in more than 130 countries.
The Simpson Thacher team includes: Adam Signy, Christina Barnsley, Neil Evans, Sam Taylor, Oliver Vallee, Kevin O'Connor and Thomas Merrifield (UK Corporate); Eric Swedenburg, Viktor Sapezhnikov and Matthew Tappin (US Corporate); Till Lefranc (US Securities); Euan Gorrie, Manas Chandrashekar, Adam Shelley and Richard Rees (UK Credit); Nick Shaw and Carol Daniel (US Capital markets); David Vann, Etienne Renaudeau, Sabrina Lee and Kenneth Ehrhard (Antitrust); Joyce Y Xu, Solomon Bashi and Philip Powers (Derivatives); and Tim Mulvihill (Environmental). Hengeler Mueller provided German legal advice to Melrose.