Deal Dispatch: Altus Power, Motorsport Games Explore Options, True Value Goes Bankrupt, M&A Activity Lags – Apollo Global Management (NYSE:APO), Altus Power (NYSE:AMPS)

New On The Block

Altus Power AMPS tapped investment bank Moelis & Company LLC to explore strategies to boost shareholder value. According to the clean electricity provider, the process should wrap up by 2025. Altus retained law firm Latham & Watkins to advise on legal matters.

Motorsport Games Inc. MSGM is also looking to increase shareholder value via a potential sale or merger. The goal is to generate enough funds to bring Le Mans Ultimate to Sony PlayStation and Microsoft Xbox gaming consoles. Le Mans Ultimate is the official game of the FIA World Endurance Championship.

Off The Block

Denmark-based H. Lundbeck A/S agreed to acquire Longboard Pharmaceuticals, Inc LBPH for $60 per share in cash. The transaction is valued at approximately $2.6 billion in equity value and $2.5 billion (approximately 17 billion Danish krone). The deal is expected to close in the fourth quarter of 2024.

Universal Stainless & Alloy Products, Inc. USAP agreed to an all-cash offer by Luxembourg-based Aperam for $45 per share. The acquisition will give Aperam its first manufacturing facility in the U.S., expanding its geographic reach and product portfolio, particularly in high-growth sectors such as aerospace and industrial applications.

Bit Digital Inc BTBT purchased HPC data center company Enovum Data Centers for about CAD$62.8 million ($46 million). The acquisition closed on Oct. 11.

Updates From The Block

Private equity firms TPG and Blackstone placed a joint bid to acquire eye care company Bausch + Lomb BLCO, per the Financial Times. Last month, Bausch + Lomb said it was considering a sale to address concerns from creditors, including Apollo Global Management Inc APO,  over the separation from parent company, Bausch Health Companies BHC. The Bausch + Lomb spin-off was part of Bausch Health’s plan to alleviate its $21 billion debt.

Bankruptcy Block

True Value declared bankruptcy. It plans to sell assets to rival Do it Best. The Chicago-based hardware store chain said an agreement was reached after a “robust marketing process” from which the company emerged as the top bidder. See our coverage below.

Notes From The Block

According to S&P Global, M&A activity in the U.S. and Canada lagged compared to 2023.

• The deal tally for the U.S. and Canada announced in the third quarter was 4,153 — down 4.3% from the preceding quarter, but up 2% from the third quarter of 2023.
• Aggregate value amounted to $365.99 billion; up from $301.62 billion in the second quarter and $282.77 billion in the year-ago period.
• The first nine months of 2024 saw 12,680 M&A deals in the U.S. and Canada. That’s less than the 13,203 deals for the same time frame in 2023.
• M&A value for the first three quarters of 2024 hovered at around $1.052 trillion — up from $838.32 billion during the three months in 2023.

Joe Mantone, who authors the quarterly M&A reports at S&P Global Market Intelligence, had this to say:

BZ: Was there anything that surprised you from the latest deal data?

Mantone: The quarter-over-quarter drop in the number of deals is not that surprising given seasonal trends. Dealmaking tends to slow during the third quarter’s summer months. The year-over-year increase in deals provides a bit of evidence that M&A is recovering. But activity levels are still below historical norms, and the number of transactions announced in the US and Canada haven’t fluctuated much over the last six quarters.

BZ: Will Q4 finish strong with the change in benchmark interest rates?

Lower rates can create a more conducive backdrop for M&A, and help the number of deals announced move beyond current levels. While it’s hard to predict activity in any one given quarter, I do think lower rates will serve as a catalyst for M&A as we move into 2025, especially for deals involving private equity. Private equity firms have plenty of dry powder, and the lower interest rates will decrease the cost of acquisition financing, which is beneficial for those using leverage on the buyside. Buyers having access to less expensive debt tends to increase valuations, which can lead to more private equity firms selling portfolio companies.

BZ: How do you expect dealmakers to react post-Election Day?

On the total deal value side, the fourth quarter presents a difficult year-over-year comparison because there were some extremely large deals in the fourth quarter of 2023. It wouldn’t surprise if there was some pause around the election for bigger transactions, but I doubt that dealmakers will completely change their strategic plans based on the outcome, one way or another. 

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