& Case Studies

October 2014

$4.2 billion Pre-negotiated Chapter 11 Reorganization; $570 million debt financing; $600 million equity financing

Pre-negotiated Chapter 11 Reorganization, debt financing and equity financing
Financial Advisor to Momentive Performance Materials on its $4.2 billion Pre-negotiated Chapter 11 Reorganization

On October 24, 2014, Momentive Performance Materials (“MPM”), one of the world’s largest producers of silicones, silicone derivatives and quartz products, successfully emerged from Chapter 11 Bankruptcy protection. Moelis & Company acted as financial advisor to MPM and was instrumental in initiating, evaluating and negotiating the transaction. Over the course of an intensive multi-party due diligence period, Moelis & Company evaluated and assisted in the development of the pro forma business plan, negotiated a fully committed equity rights offering and assisted in securing $570 million in DIP financing as well as exit financing at favorable terms. On April 13, 2014,
MPM entered into a Restructuring Support Agreement with holders of $1.3 billion of Second Lien Notes, the fulcrum security, under a pre-negotiated plan, and on September 10, 2014, MPM’s Plan of Reorganization was confirmed. Key terms included a $600 million fully committed rights offering, which was backstopped by approximately 90% of the holders of the Second Lien Notes, along with a 100% recovery to the holders of First Lien Senior Notes and Replacement Notes, trade creditors and other general unsecured creditors.

Moelis & Company played a pivotal role as lead witness in the landmark Bankruptcy Court decision on cram down interest rates based on the Supreme Court’s Till decision, providing expert testimony regarding the appropriate rate for the Replacement Notes. The Court largely found in favor of MPM, saving the estate hundreds of millions of dollars while providing long-term financing to fund its business operations and future growth.

May 2014

$850 million

Capital Raise
Exclusive Financial Advisor and Placement Agent to Extraction Oil & Gas on its $850 million Capital Raise

On May 29, 2014, Extraction Oil & Gas, LLC (“Extraction”), a Denver-based energy company focused on the exploration and production of oil and gas reserves in the Rocky Mountains, completed a $230 million HoldCo loan and $230 million of common equity units. In addition to this financing, Moelis & Company also secured commitments for Extraction from the same investor group for an additional $425 million of debt and equity financing. The debt and equity financing comes from a syndicate of top tier institutional investors including mutual funds, alternative investment managers, pension funds, endowments and funds-of-funds. Both the debt and equity financings were significantly oversubscribed, resulting in attractive terms for Extraction. This transaction demonstrates Moelis & Company’s ability to seamlessly execute a complex joint debt-and-equity capital markets transaction to meet the needs of our clients. Moelis & Company acted as exclusive financial advisor and placement agent to Extraction on the financing transactions.

April 2014

£320 million

Initial Public Offering
Exclusive Financial Advisor to Polypipe Group on its £320 million Initial Public Offering

On April 11, 2014, Polypipe Group plc (“Polypipe”), the largest manufacturer by revenue in the United Kingdom of plastic pipe systems for the residential, commercial, civils and infrastructure sectors, successfully completed its initial public offering at a price of £2.45 per share and began trading on the London Stock Exchange. Proceeds of £320 million were raised for existing shareholders. Moelis & Company was mandated by the company and its private equity backer Cavendish Square Partners to evaluate strategic alternatives. Following an extensive review of all sale and timing alternatives, Moelis & Company advised the company to consider an IPO and to delay any exit until 2014 in order to maximize value. This advice resulted in a valuation significantly above the company’s initial expectations. The transaction represents the largest IPO in the UK construction & building products sector in the last 15 years and the second largest ever.

Given the momentum in the share price, with the stock trading meaningfully above the IPO price, Cavendish Square Partners decided to reduce its holding in Polypipe via a £50 million accelerated bookbuild offering. Moelis & Company advised Cavendish Square Partners on the transaction, which was completed on December 11, 2014.

February 2014

$15.7 billion

Sale to Thermo Fischer Scientific Inc.
Financial Advisor to Life Technologies on its $15.7 billion sale to Thermo Fisher

On April 15, 2013, Life Technologies Corporation (“Life Technologies”), a leading life sciences company, agreed to be acquired by Thermo Fisher Scientific Inc. (“Thermo Fisher”), the world leader in serving science, for approximately $15.7 billion. The purchase price reflects a 38% premium over the closing price immediately prior to the news reports that the company was exploring a potential sale. The combination of Life Technologies and Thermo Fisher created an unrivaled industry leader and enhanced all three elements of Thermo Fisher’s growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets. The transaction represents the largest global healthcare M&A deal in 2013.

Moelis & Company provided comprehensive M&A strategic advice including bid strategy, bid timing, bidder consortium formation, negotiation and valuation, and created a highly customized sale process strategy to maximize value for Life Technologies shareholders. The transaction highlights Moelis & Company’s commitment to fostering long-term client relationships, representing our sixth M&A transaction with Life Technologies since 2007, and the Moelis team’s twelfth transaction with Life Technologies and its predecessor since 2000. The transaction successfully closed in February 2014.

January 2014

€3.1 billion

Acquisition of Grohe Group S.a.r.l.
Financial Advisor to LIXIL on its €3.1 billion acquisition of Grohe Group

On September 26, 2013, LIXIL Corporation (“LIXIL”) and Development Bank of Japan (“DBJ”) agreed to acquire an 87.5% equity interest in Grohe Group S.a.r.l, Europe’s largest and the world’s leading single-brand manufacturer of premium sanitary fittings, from private equity funds managed by TPG Capital and DLJ Merchant Banking Partners. The transaction represents a significant step in the successful implementation of LIXIL’s strategy to become the global leader in the building materials and housing equipment industry. With an implied Enterprise Value of €3.1 billion ($4.1 billion), this is the largest ever German investment by a Japanese company and the largest cross-border acquisition by a Japanese corporate in 2013. The combined sanitary businesses of both groups generate more than €4 billion of annual revenue, making it the largest player in its industry. In the three months following announcement, LIXIL’s share price significantly outperformed both its peers and the markets (+33% by December 17, 2013). The transaction was successfully completed in January 2014.

Moelis & Company and SMBC Nikko acted as financial advisors to LIXIL. Moelis & Company provided effective tactical advice in a very competitive and complex cross–border dual track IPO and M&A process driven by private equity sellers. The off-balance sheet acquisition structure featuring a non-recourse loan from three Japanese banks (including SMBC) was arranged by SMBC Nikko and enables LIXIL to act on this strategic opportunity while maintaining its current leverage level and the financial flexibility to pursue other strategic opportunities as they arise. This transaction represents one of the largest joint Moelis & Company/SMBC Nikko mandates since the establishment of our alliance in March 2011.

December 2013

£1.5 billion

Exclusive Financial Advisor to the Ad Hoc Committee of Lower Tier 2 Noteholders of The Co-operative Bank on its £1.5 billion recapitalization

On December 20, 2013, Co-operative Group Limited (the “Group”) and The Co-operative Bank p.l.c. (the “Bank”) completed the revised recapitalization plan for the Bank. The plan was announced on November 4, 2013 and included a Liability Management Exercise (the “LME”) structured for the different classes of bondholders and preference shareholders, a capital injection from the Group of £333 million, and a capital raise of £125 million underwritten by the Lower Tier 2 Noteholders (the “LT2 Group”). The plan enables the Bank to continue its unique mission as a UK bank committed to the values and ethics of the co-operative movement. The LME received overwhelming support from bondholders with 97.6% of lower tier 2 security holders and 99.9% of tier 1 and upper tier 2 security holders voting in favor. The recapitalization represents the first successful consensual creditor bank bail-in in the United Kingdom, without taxpayer support.