Business Management - M&A

Just as the COVID-19 outbreak created financial uncertainty on Wall Street and on Main Street, it has also put a deep freeze on impending M&A mega-deals. The novel coronavirus has scuttled Xerox Holdings' $34.9 billion, $24 per share unsolicited, hostile takeover attempt of fellow printing industry icon HP Inc.

The Target Report is usually a gestalt of the prior month’s transactional activity. However, given the seismic nature of the current crisis, the rear view mirror is less useful, so we’ll depart from our usual style this month, look backwards just a bit, and offer our view through the front windshield.

Mesirow Financial acted as the exclusive financial advisor to Mac Papers in its sale to private investment firm Monomoy Capital Partners. Monomoy plans to invest significant capital into Mac Papers to facilitate and accelerate its continued growth.

Perhaps facing the "perfect storm" of a global pandemic outbreak; a U.S. stock market response to COVID-19 that has pummeled Xerox and HP stock prices; and Canon's announcement that it will sever business ties with HP if HP's merger with Xerox comes to fruition, Xerox finds itself in a precarious position.

Mesirow Financial acted as financial advisor to Quad/Graphics for the sale of its Omaha, Neb., packaging plant to Graphic Packaging Holding Company. This transaction is one of 125 within the paper, plastics, packaging, and speciality papers sectors that Mesirow Financial has facilitated.

The Welch Packaging Group acquired PAX Corrugated Products from Georgia-Pacific amid a trend of the company making corrugated acquisitions. This supports the trend of regional companies leapfrogging to an adjacent metro market via a series of strategically sound acquisitions.

On March 2, Xerox Holdings launched a $34.9 billion proxy bid to acquire all of the outstanding shares of HP Inc. for $24 per share.

On Feb. 20, the HP board of directors adopted a Shareholder Rights Plan ("Poison Pill") to thwart Xerox's planned hostile proxy bid to acquire all of the outstanding shares of HP stock on March 2 for $34.9 billion. In another defensive move, HP announced it will buy back $15 billion worth of outstanding HP shares.

Resource Label Group announced it has acquired label and packaging solutions supplier Axiom Label & Packaging, broadening its presence in California. Axiom represents the company’s sixth acquisition in California and will allow Resource Label Group to expand its product offerings to better meet customer demands.

Though the ongoing communications between the boards of directors at Xerox Holdings and HP Inc. have been quite bitter in recent weeks, Xerox announced it has sweetened its offer in its attempt to acquire HP.