Transactions
& Case Studies

December 2013


$29.6 billion Chapter 11 Re- organization; $17.0 billion merger with US Airways Group

Chapter 11 Reorganization and merger with US Airways Group
Exclusive Investment Banker to the Official Committee of Unsecured Creditors of AMR Corporation on its $29.6 billion Chapter 11 Reorganization and $17.0 billion merger with US Airways Group

On December 9, 2013, AMR Corporation (“AMR”), the parent company of American Airlines Inc., successfully completed its Chapter 11 Reorganization. As part of the reorganization, AMR also completed its $17.0 billion merger with US Airways Group (“US Airways”). Operating under the American brand, the combined American – US Airways (“American Airlines Group”) created the world’s largest airline.

AMR filed for Chapter 11 bankruptcy protection on November 29, 2011, with reported assets and liabilities of $24.7 and $29.6 billion, respectively. Shortly thereafter, the Official Committee of Unsecured Creditors (the “UCC”) was formed by a highly diverse group of nine creditor constituencies. The UCC quickly became an influential factor in the reorganization and this group was seen as a pivotal piece to any plan of action. The UCC advocated for a broad review of strategic options, including possible merger opportunities. Moelis & Company was instrumental in designing and creating a process that allowed for engagement between AMR and US Airways despite initial reluctance on the part of AMR. Over the course of the intensive US Airways – AMR diligence process, Moelis & Company evaluated the pro forma business plan, assessed the need for DIP and exit financing, and helped drive parties to a mutually agreeable expectation of synergies and negotiated relative deal economics, while continually working with advisors to resolve complex social and employee issues. On February 14, 2013, AMR and US Airways announced that their respective boards of directors had unanimously approved a definitive merger agreement between the two companies.

The merger delivered far superior returns to creditors and investors as compared to the company’s initial plan for a standalone option, and resulted in par plus accrued recoveries to $29.6 billion in creditor claims. Shareholder value in excess of $10 billion was created, versus the equity market cap of approximately $85 million at the time of the Chapter 11 filing. Moelis & Company represented a driving force in the initial consideration and ultimate consummation of the merger, building consensus amongst various parties to consider and pursue a single, value maximizing plan of action. This transaction demonstrates Moelis & Company’s ability to deliver superior results for our clients; the reorganization and merger achieved full recoveries for unsecured creditors, significant recoveries for shareholders and the unique occurrence of pre-petition convertible notes converting into pre-petition equity.

November 2013


$10.7 billion

Sale to Intercontinental Exchange, Inc.
Financial Advisor to NYSE Euronext on its $10.7 billion sale to IntercontinentalExchange

On December 20, 2012, IntercontinentalExchange, Inc. (“ICE”) agreed to acquire NYSE Euronext, Inc. (“NYSE Euronext”), the preeminent global equity, equity options and fixed income derivatives market operator, in a stock and cash transaction. The transaction value of $33.12 per share represented a 37.7% premium over NYSE Euronext’s closing share price on December 19, 2012. Moelis & Company acted as financial advisor to NYSE Euronext. The transaction represents Moelis & Company’s ability to successfully execute large, public transactions. The transaction successfully closed in November 2013.

June 2013


$28 billion

Sale to 3G Capital and Berkshire Hathaway
Financial Advisor to the Transaction Committee of the Board of Directors of Heinz on its $28 billion sale to 3G Capital and Berkshire Hathaway

On February 14, 2013, H.J. Heinz Company (“Heinz”), one of the world’s most iconic food companies, agreed to be acquired by an investment consortium comprised of 3G Capital and Berkshire Hathaway. Under the terms of the agreement, which was unanimously approved by Heinz’s Board of Directors, Heinz shareholders received $72.50 in cash for each share of common stock owned, in a transaction valued at $28 billion including the assumption of Heinz’s outstanding debt. The per share price represents a 20% premium to Heinz’s closing share price of $60.48 on February 13, 2013 and a 19% premium to Heinz’s all-time high share price. The transaction was financed through a combination of cash provided by Berkshire Hathaway and affiliates of 3G Capital, rollover of existing debt, as well as debt financing. The deal was among the largest transactions ever in the food industry and the largest leveraged buyout since 2007. Moelis & Company acted as financial advisor to the Transaction Committee of the Board of Directors of Heinz. Moelis provided its own independent view in addition to the company’s two existing advisors – one that had a longstanding relationship with the Heinz management team and the other that was an existing lender. The deal demonstrates our ability to successfully execute large, public M&A transactions and highlights our mandate to provide unbiased, conflict-free advice to public company boards. The transaction successfully closed in June 2013.

December 2012


£1.4 billion

Sale to Hong Kong Exchanges and Clearing Limited
Exclusive Financial Advisor to the London Metal Exchange on its £1.4 billion sale to Hong Kong Exchanges and Clearing Limited

On June 15, 2012, the board of the London Metal Exchange (“LME”) announced that it had agreed to recommend a cash offer of £1.4 billion for the entire issued and outstanding ordinary share capital of the LME by Hong Kong Exchanges and Clearing Limited (“HKEx”). The transaction brings together the LME, the world’s leading non-ferrous base metals trading venue, and HKEx, the world’s largest exchange group by market capitalization and the leading operator of exchanges and clearing houses in Asia. The sale to HKEx preserves the features of the LME’s unique business model and significantly accelerates the LME’s access to China. Moelis & Company acted as exclusive financial advisor to the LME. This landmark transaction, involving one of the most iconic exchanges in the world, represents Moelis & Company’s ability to conduct a highly competitive and complex international sale process while balancing financial and non-financial transaction aspects to achieve an exceptional outcome for our client. The transaction successfully closed in December 2012.

October 2012


£1.1 billion

Restructuring
Financial Advisor to the Cross-Holder Committee of Travelodge Hotels Group on its £1.1 billion restructuring

On October 12, 2012, Travelodge Hotels Group (“Travelodge”), the second largest budget hotel operator in the UK, completed its financial restructuring after nine months of complex negotiations led by the Cross-holder Committee (“CHC”) of lenders. The financial restructuring included an operational restructuring which was effected by way of a Company Voluntary Arrangement (CVA), an in-court mechanism for distressed companies to formalize compromise agreements with their creditors, as well as a Scheme of Arrangement, to restructure 505 leases across the UK. As a result of the restructuring, the CHC lenders ultimately received 100% ownership of Travelodge in exchange for £75 million of new money, rollover of their senior debt and full equitization of their Mezz and PIK holdings. Total leverage was reduced by approximately 6 turns. The restructuring of Travelodge represents the largest hotel sector restructuring in Europe in 2012 and one of the largest and most complex CVAs ever completed in the UK, based on size, number of properties and asset values. Additionally, the Travelodge CVA achieved the highest approval rate for any CVA in the UK, as of 2012, with a 97% majority in the first vote and 95% majority in the second vote; landlords overwhelmingly supported the CVA with 95% voting in favor. Moelis & Company was instrumental in driving all aspects of Travelodge’s financial and operational restructuring and acted as financial advisor to the CHC.

August 2012


Undisclosed

Portfolio Monetization & Fund Recapitalization
Exclusive Financial Advisor to Willis Stein & Partners III, L.P. on its Portfolio Monetization and Fund Recapitalization

On August 27, 2012, Willis Stein & Partners (“Willis Stein”), a Chicago-based middle market private equity firm, completed an innovative transaction to provide cash liquidity to limited partners (“LPs”) of its third and most recent fund, Willis Stein & Partners III, L.P. (the “Fund”). LPs were also permitted to elect to retain an investment in certain portfolio companies in order to benefit from their continued growth. The Fund was raised in 2000 with $1.8 billion in commitments and, at the time of Moelis & Company’s engagement in January 2012, was operating in its second of three one-year extensions. As an alternative to a third fund extension or liquidation of the remaining assets, Moelis & Company structured this transaction to address the varying objectives of a diverse group of existing investors, including a liquidity option at an attractive price. This was the third transaction that Moelis & Company completed in 2012 for Willis Stein or its portfolio companies, demonstrating our commitment to building long-term client relationships. Moelis & Company acted as exclusive financial advisor to the Fund.