_{DEAL OF THE MONTH}

Mars Snacks on Kellanova

Mars - not Elon Musk’s home planet but the candy company - agreed to acquire Kellanova for ~$36 billion. Now you might be wondering how big a candy company can be, but Mars is one of the largest family-owned businesses in the world, with the Mars family having six billionaires on the Forbes billionaire list.

Mars is acquiring Kellanova for $83.50/share in cash, which represents a 44% to Kellanova’s unaffected 30-day VWAP. Unsurprisingly, the public market has responded well to the offer, with Kellanova trading up almost 40% in the past month.

The transaction will be funded using cash on hand and new debt and represents a 16.4x LTM adj. EBITDA multiple.

Mars generates over $50 billion in revenue, while Kellanova adds more than $13 billion. Together, they will form one of the world's largest snack companies, boasting a portfolio that includes iconic brands like M&Ms, Twix, Pop-Tarts, and Eggo waffles (see their popular brands below).

The transaction is expected to close in the front half of 2025 and represents one of the largest deals of 2024. Citi acted as the financial advisor to Mars, with Citi and JPM providing financing support for the deal.

As you have learned by now, we love our snack deals here at Buysiders and we can’t wait to have two of our favorite snack brands under one roof. Who knows? Maybe they’ll even sponsor our next edition!

_{PRESENTED BY PORTFOLIOIQ}

VCs: Find Hidden Trends In Your Pitch Decks

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See unique trends in your deal flow in minutes (no weekend work required).

_{STRATEGIC DEAL OF THE MONTH}

Consol Energy and Arch Resources Make Coal a Core Focus

Now if there is one-thing we like a Buysiders almost as much as we love our snacks, it is rocks.

2024 has been a big year for mining deals despite the industry being out favor, as we have seen several mega-mergers announced. The latest is the merger of equals between Arch Resources and Consol Energy, which are combining in a ~$5Bn all-stock deal to create Core Natural Resources.

Under the terms of the deal, Arch shareholders will own ~45% of the pro forma company and Consol shareholders will own the other 55%.

The coal industry has not garnered much favor in the public markets recently, but Core Natural Resources is expected to generate ~$1.4Bn of free cash flow per year, partially driven by ~$125 million of annual cost savings and operational synergies between the two operations.

If there is one thing that shareholders care about in coal companies, it is return of capital, and Core should be a dividend machine. In the past two years, it has distributed ~$1.8Bn of capital back to shareholders and is expected to continue that going forward.

Over the past month, Arch has traded down ~1%, while Consol has traded up ~3%. The deal should represent a homerun for both companies, though Arch shareholders may be concerned about losing control.

Coal mergers are nothing new, in fact Arch has been working on deals for a while and recently had a failed deal with another American coal giant, Peabody Energy, which was trust-busted by the US regulators.

It is too soon to tell if the US regulators will approve the deal, but there is a diverse coal supply between the two companies in both metallurgical and thermal coal (unlike the failed powder river basin deal with Peabody), which should help the deal go through.

We don’t give investment advice here at Buysiders, but if you like dividends in your account, this could be a stock to watch for your portfolio.

_{INT’L DEAL OF THE MONTH}

CVC Leads Charge to Acquire Hargreaves Lansdown

There have been numerous international deals recently and we do our best to cover them when we can despite being freedom loving Americans.

This week in international news, a private equity consortium has finally agreed to acquire the UK’s largest direct-to-consumer investment platform Hargreaves Lansdown for £5.4 billion.

Interestingly, the consortium initially approached the Board with a £4.7 billion transaction, which was unanimously rejected by Hargreaves in May.

The Board clearly made the right call since the investors were willing to raise their price by £700 million after the Board claimed that the deal undervalued the company’s growth projects.

The deal represents a 53.1% premium to the unaffected share price and the shareholders will receive a 30 pence dividend in addition to the acquisition price of £11.40 per share in cash.

The consortium of investors is led by CVC Capital Partners and includes Nordic Capital, Platinum Ivy and the Abu Dhabi Investment Authority. This deal is yet another yet another blow to the UK seeing one of its largest companies sold to foreign investors, following similar moves involving Britvic, Darktrace, Hipgnosis Songs Fund, and Keywords Studios, to name a few.

_{NEWS ROUNDUP}

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