Merger And Acquisition Recap - Part II

by: The Value Investor

This will I will run you through the most important mergers and acquisitions for the week of May 28 till June the 1st.

Flower Foods (FLO) announced that it has acquired Lepage Bakeries for $370 million in cash and stock. The companies expect to complete the transaction in the second quarter, subject to regulatory approval. As a result of the acquisition of Lepage, Flower Foods will own three more bakeries in the North East. Flower Foods will pay for the acquisition with $320 million in cash and deferred cash payments and the remainder in stock. The acquisition will add some $166 million to Flower Food's $2.8 billion in annual revenue. Shares in Flower Food's have jumped some 10% over the last two trading days on the back of the acquisition.

Teledyne Technologies (TDY) has agreed to acquire LeCroy (LCRY) for $14.30 per share. Including the assumption of debt, Teledyne pays $291 million in cash for the developer and manufacturer of oscilloscopes and communication protocol analyzers. The acquisition will add $166 million in sales to Teledyne's $1.9 billion in annual sales. Both companies hope close the transaction in July 2012. Shares in Teledyne have returned 4% so far this year.

United Financial Bancorp (UBNK) will acquire New England Bancshares in a $91 million transaction based on United's share price of $15.89. Shareholders in New England Bancshares will receive 0.9575 shares in United Financial Bancorp for each share they currently own. The acquisition will be additive to the company's earnings and add some $726 million in total assets to United's current total assets of $1.6 billion. Investors in United Financial Bancorp are not happy with the proposed deal and send shares 10% lower. United expects to close the deal in the fourth quarter of 2012.

Berkshire Hills Bancorp (BHLB) will acquire Federal Bancorp (BFED) in a $132 million deal. Shareholders in Federal Bancorp will receive $10.25 in cash and 0.46 share in Berkshire's Hills Bancorp for every share in Federal Bancorp they own. Shares in Berkshire Hills Bancorp fell 5% on the back of the announcement while shares in Federal Bancorp spiked up some 44% to $19.23. The deal should add roughly $0.22 in 2013's core earnings for Berkshire according to CEO Prossner and it should increase the firm's market share in the Central New York market.

ANSYS (ANSS) announced the acquisition of Esteral Technologies. ANSYS will acquire the French based Esterel Technologies for $53 million. The acquisition price includes retention provisions for the key employees of the company which generated $19 million in annual revenues with a workforce of 80 in 2011. In comparison, ANSYS generated $691 million in annual revenues for 2011. ANSYS' CEO Cashman is excited about the production solutions and the quality of the firm. The combination of both firms allows ANSYS to provide more complete systems to its customers.

After a particularly busy last week, activity levels and deal size in this week dropped significantly. Total announced deal size in the sample above was a mere $1 billion. Acquisitions have been rather small with exception of the nice addition made by Flower Foods. Investors in the company send its shares 10% higher after it acquired Lepage Bakeries.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.