PLC What's Market Wrap-up for the Week ending January 6, 2012 | Practical Law

PLC What's Market Wrap-up for the Week ending January 6, 2012 | Practical Law

A wrap-up of market activity as tracked by PLC What's Market during the week ending January 6, 2012. 

PLC What's Market Wrap-up for the Week ending January 6, 2012

Practical Law Legal Update 5-517-1206 (Approx. 3 pages)

PLC What's Market Wrap-up for the Week ending January 6, 2012

by PLC Corporate & Securities
Published on 05 Jan 2012USA (National/Federal)
A wrap-up of market activity as tracked by PLC What's Market during the week ending January 6, 2012.
Public Merger Activity
The year 2011 concluded with a total of 157 executed public merger agreements to acquire US target companies in deals valued at $100 million or more, down from 181 in 2010. While the pace of M&A activity was on track with 2010 levels through the first half of 2011, there was a dramatic decline in deal activity from the mid-third quarter on.
Only one agreement for a US public (non-REIT) company acquisition with a deal value of $100 million or more was filed during the last two weeks. On December 23, 2011, Perfumania Holdings, Inc. agreed to acquire Parlux Fragrances, Inc. in a transaction valued at $170 million at signing. Under the agreement, the Parlux stockholders can elect to receive either all-stock or cash-and-stock consideration, subject to adjustment for maximum cash payment and maximum stock issuance. The merger agreement also provides Parlux with a 30-day go-shop period to solicit superior offers, together with a two-tier break-up fee of $4 million (2.35% of the deal value) or $2 million (1.18% of the deal value). The higher fee is triggered, for example, if Parlux terminates the merger agreement to enter into an agreement for a superior offer after the end of the go-shop period. The lower fee is payable if the merger agreement is terminated under the same circumstances but during the go-shop period.
Private Acquisition Spotlight
On December 28, 2011, Epiq Systems Holdings, LLC, a subsidiary of Epiq Systems, Inc., acquired all of the outstanding equity interests of De Novo Legal LLC, a provider of document review, legal staffing and placement services and e-discovery products and services. Epiq paid about $68 million in cash at closing and held back $5 million, which is being held for 18 months to cover any indemnification obligations of De Novo's members. The purchase price is subject to post-closing adjustments based on De Novo's working capital, indebtedness, cash and certain employee benefit payments. It is also subject to additional earn-out payments, up to $33.6 million, based on De Novo's future operating revenue growth for each of the 2012 and 2013 calendar years.
Links above are to summaries of deals contained in PLC What's Market. For additional examples of summaries on current deal activity, see PLC What's Market, which provides a continuously updated database of deals that allows you to analyze and compare terms or features across multiple deals and contains links to the underlying public documents.
Risk Factors
Risk factor of the week: "In light of the increased dependence on digital technologies by public companies and the increasing frequency and severity of cyber incidents, the Securities and Exchange Commission's Division of Corporation Finance issued "CF Disclosure Guidance: Topic No. 2" on October 13, 2011, providing its views regarding disclosure obligations relating to cybersecurity risks and cyber incidents. As we operate in multiple retail channels and maintain our own credit operations, we are subject to cybersecurity risks and incidents. Our business involves the storage and transmission of customers' personal information, consumer preferences and credit card information. We also use mobile devices, social networking and other online activities to connect with our customers. While we have implemented measures to prevent security breaches and cyber incidents, our measures may not be effective and any security breaches and cyber incidents could adversely affect our business" (from Nordstrom, Inc.'s 10-Q for the quarter ended October 29, 2011, as included in Practice Note, What's Market: Risk Factors: Retailers).
PLC What's Market describes and provides examples of risk factors in a series of maintained, industry-specific practice notes. To access these practice notes, see What’s Market Risk Factor Practice Notes.