It's a moving target, but I'm calculating $2.36 profit per share of TLCR based on the following as of the closing bell on October18, 2010:
TLCR:
Current price of TLCR: $24.00 / share
Shares of TLCR: 122.88 million
Market Cap: $2.95 billion
Closing Price:
Cash per share: $19 per share
Total cash: $2.33 billion
Current price of Grifols: $11.50 / share
Share value: $0.91 billion
Total closing price (cash and shares): $3.24 billion
Purchase Premium: $290 million
Premium Per Share of TLCR: $2.36
That's a non-annualized return of 9.8% or 47.0% annualized if closing happens by December 31, 2010.
More about the acquisition from Grifols' website:
Financial Details and Closing Conditions
Grifols will acquire all of the common stock of Talecris for $19.00 in cash and 0.641 newly-issued non-voting Grifols´ shares for each Talecris share. Based on the closing price of Grifols´ ordinary shares as of June 4th 2010 and prevailing Euro-Dollar exchange rates, this represents an implied price of $26.16 per Talecris share, which constitutes a premium of 53% to the average closing price of Talecris common stock over the last 30 days. The total implied offer value for Talecris is $3.4bn (€2.8bn) and the resulting transaction value, including net debt, is approximately US$4.0 billion (€3.3 billion).
The newly-issued non-voting Grifols shares will be listed on the NASDAQ Global Market and the Mercado Continuo (Spain) and will carry the same dividend and economic rights as Grifols´ ordinary shares. The Boards of Directors of both Grifols and Talecris have unanimously approved the transaction and recommended it to their respective shareholders.
The acquisition is expected to generate approximately $230 million in operating synergies from a more efficient plasma collection network, optimized manufacturing sales, marketing and R&D, which Grifols expects to realize over the next four years with an associated one-time cost of $100 million. The transaction is expected to be accretive to earnings in the first year and produce meaningful accretion from year two. The combined company will have pro-forma annual revenues of approximately $2.8 billion with 58% coming from North America, 28% from Europe and 14% from the rest of the world.
The transaction´s financing is fully committed by a syndicate led by Deutsche Bank, Nomura, BBVA, BNP Paribas, HSBC and Morgan Stanley. The merger agreement has no financing contingency. After the transaction, Grifols anticipates that its initial net debt to EBITDA ratio will reach approximately five times. Grifols expects the combined company to generate significant free cash flow over the near term, which together with the synergies will enable it to reduce leverage rapidly. Grifols expects a progressive reduction in debt ratios to approximately three times EBITDA by year-end 2012 and below two times by year-end 2014 even as key capital programs are sustained.
The transaction is subject to customary closing conditions, including antitrust and regulatory review, and requires the approval of each company´s shareholders. The leading shareholders of Grifols have agreed to vote their shares in favor of the transaction and an affiliate of Cerberus Capital Management, L.P., which owns approximately 49% of the outstanding Talecris common stock, has entered a similar agreement. The transaction is expected to close in the second half of 2010.
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