Today - Friday, December 6, 2013
4:45 PMADM still looking for overseas deals despite GrainCorp setback
- Archer Daniels Midland (ADM) is still looking for deals overseas despite last week's failure of the GrainCorp acquisition that upended its plans in Asia, CFO Ray Young says.
- ADM is interested in acquisitions as well as other investments and joint ventures to help spread its business deeper into Asia, South America and eastern Europe, areas where ADM's vast storage and transportation network may be attractive to smaller agribusiness operators, Young says.
- The global agricultural business, already dominated by a handful of major players, will continue to consolidate, the CFO says.
10:29 AMIBM takes controlling stake in Dexia IT unit, shrugs off downgrade
- IBM (IBM +0.7%) has inked $1.3B worth of outsourcing deals (spread out over 7 years) with Dexia and several other European financial institutions to manage their IT infrastructures. (PR)
- As a result, IBM will take a controlling stake in the Dexia IT services unit that had been managing said infrastructures, and will "implement a cloud infrastructure" to expand the Dexia unit's services offerings into new markets.
- The tie-up is the kind of higher-margin/value-added services deal IBM has been focusing on, as it looks for way to maintain EPS growth in the face of top-line weakness. IBM's services revenue fell 4% Y/Y in Q3, but its backlog ($141B) was flat Q/Q and up 2% Y/Y.
- Separately, Cowen has downgraded IBM to Market Perform. The firm cites negative survey data regarding Big Blue's services workload and execution/delivery, and (with $100B worth of contracts set to be renegotiated in 2014, and Indian competition an issue) thinks the company's U.S. revenue growth outlook and IT outsourcing base are at risk.
8:18 AMConfusion reigns over InterOil's Papua New Guinea sale, shares halted
- InterOil (IOC) is halted after falling 21% premarket on news of the sale of a 61.3% stake in its Papua New Guinea gas fields to Total (TOT) for as much as $3.6B, as the clarity of the deal is questioned.
- The press release issued by IOC reads little like the one issued by TOT: Total says depending on the results of the delineation of the Elk and Antelope gas fields, "this could lead to a final investment decision by 2016 for the development of the fields and the construction of a liquefaction plant located onshore on the Gulf of Papua."
5:38 AMTotal in deal worth up to $3.6B for InterOil LNG interests
- Total (TOT) has agreed to acquire a 61.3% holding in InterOil's (IOC) Papua New Guinea natural-gas fields for as much as $3.6B as part of a plan to develop the reserves.
- Total will pay $613M up front, with the extra money dependent on the size of the resource and a final investment decision on building an LNG export facility.
- Should the Papua New Guinean government and landowners exercise rights to acquire a 22.5% interest in the project, Total will end up with a 47% holding and InterOil 30%. (PR)
5:06 AMNestle continues streamlining with sale of $1.2B stake in Givaudan
- Nestle (NSRGY) is selling its 10% holding in flavors and fragrances maker Givaudan (GVDNY) via a private placement to institutional investors such as pension funds.
- The sale of the stake, which is worth up to 1.08B Swiss francs ($1.2B), comes as Nestle reviews its businesses and offloads under-performing assets. The company recently sold weight-loss firm Jenny Craig and is reportedly searching for a buyer for its PowerBar energy bars brand.
Thursday, December 5, 2013
6:32 PMLKQ to acquire Keystone Automotive Operations for $450M
- LKQ Corp. (LKQ) agrees to acquire Keystone Automotive Operations, a distributor and marketer of specialty aftermarket equipment and accessories, for $450M.
- Keystone serves more than 20K specialty retailers and equipment installers in North America offering products in the truck and off-road, speed and performance, recreational vehicle, towing, tires and performance handling, and accessories segments.
- Keystone's 2014 revenue is expected to total ~$700M.
- LKQ +1.5% AH.
2:09 PMNCR selling $1.1B worth of debt to finance acquisition, shares lower
- NCR (NCR -1.3%) is selling $1.1B worth of senior notes - $400M in 2021 notes, $400M in 2023 notes, and $300M in 2025 notes - to help pay for its $1.65B acquisition of online/mobile banking software provider Digital Insight. Moody's had assigned the debt a Ba3 rating. (PR)
- The point-of-sale hardware/software vendor had $460M in cash/equivalents at the end of Q3, and over $2.2B in debt.
- Previous: Commentary on the NCR/Digital Insight deal
11:09 AML&B urges sale of BRE Properties; nominates 6 to board
- "BRE Properties (BRE +0.4%) has chronically underperformed its closest comparables by a number of measures, including total returns, net operating income growth, FFO growth and dividend growth," says Land and Buildings CEO Jonathan Litt, urging the company to explore a sale in light of yesterday's report of Essex Property Trust's (ESS +1.3%) offer to buy for about $5B.
- "Selling the company to a best-in-class operator such as Essex would present an opportunity for BRE Properties’ shareholders to realize the potential of the company’s intrinsic value ... On behalf of all shareholders, we demand that the Board exercise its fiduciary duties and maximize shareholder value by exploring a sale of the company.”
- L&B also announces its nomination of six candidates to the board. If elected, they would constitute a majority.
- "We believe that our high level of frustration with the company’s poor track record is reflective of the views of many of BRE’s shareholders. We have been engaged with BRE’s management for over a year and BRE’s Board since August about ways to drive shareholder value, including full operational and strategic reviews." BRE this summer rejected a $60 per share bid from L&B.
8:17 AMMylan restructures Strides transaction to include provision for regulatory issue
- Allegations of "significant violations of current good manufacturing practice," may cost Strides Arcolab a quarter of a billion in its deal with Mylan (MYL).
- MYL's deal for the Bangalore-based company's injectable drugs business is now setup to exclude $250M unless the company can resolve the FDA's concerns.
- Here's the language from MYL: "The final transaction terms have been restructured to include provisions such as a hold back, or contingent consideration, of $250M of the potential $1.75B total purchase price, which will be payable in whole or in part to Strides upon satisfaction of certain regulatory conditions."
- For more on the FDA warning letter, see here
7:21 AMMerck to buy AZ Electronic for £1.6B
- Germany's Merck KGaA (MKGAF) has agreed to acquire AZ Electronic Materials (AZECF), a U.K.-listed provider of specialty chemicals used in the production of microchips and flat-panel devices, for £1.6B ($2.6B).
- Merck is offering 403.5 pence ($6.61) a share, a premium of 53% to AZ's closing price yesterday.
- The deal will enable Merck to grow beyond liquid crystals for flat-screen displays.
Wednesday, December 4, 2013
6:22 PMIntuit buying document site Docstoc, reportedly for up to $50M
- Intuit (INTU) is acquiring Docstoc, a document-focused resource site for small businesses that claims 25M+ registered users. AllThingsD reports the purchase price "could reach $50 million."
- Docstoc offers 20M+ professional documents on its site, along with articles, videos, and other content aimed at SMBs. Some of its content is free, while other material requires subscription plans. The startup also provides a platform for uploading, syncing, and selling user-created documents.
- Docstoc is the latest in a string of SMB-focused acquisitions made by Intuit, which recently obtained $1.025B from the sale of its online/mobile banking software unit (but apparently could've obtained more).
- Other recent acquisitions include workers comp. tech provider Prestwick Services, tax return software firm GoodApril, and Facebook ad/e-commerce services provider Payvment.
5:59 PMTeng Yue unwilling to sell 6.8% stake in iSoftStone at proposed $5.45/ADR
- 6.8% shareholder Teng Yue Partners writes a letter to the board of iSoftStone (ISS) calling the current $5.45/ADR (previously $5.85) offer made by a consortium composed of CEO Tianwen Liu and ChinaAMC "wholly unacceptable."
- The fund is unwilling to sell its shares at the price and aims to discuss with the Independent Committee of the board a price at which it would be willing to do so.
5:11 PMNewmont Mining selling Nevada site for $83M| Comment!
4:59 PMCareer Education completes European ops divestiture| Comment!
12:20 PMTopsy seen improving iOS search; Twitter reportedly mulled acquisition
- As analysts and pundits mull Apple's (AAPL -0.6%) surprising purchase of Twitter analytics startup Topsy, plenty of attention has been given to Topsy's advanced search tools, which many consider to be better than Twitter's (TWTR +5%) on-site search capabilities.
- Azeem Azhar, the founder of fellow social analytics firm PeerIndex, thinks Topsy could end up acting as "the search layer for iOS," indexing both social media content and "the best bits of the Web that power Siri and Apple Maps." He points out doing so would reduce (but not eliminate) Apple's dependence on Google.
- TechCrunch, meanwhile, thinks Topsy's search tech and ability to gauge consumer sentiment could improve the quality of the App Store and iTunes' search and recommendation engines. And Gene Munster sees Topsy potentially improving Siri and Maps by integrating data related to current events and trending topics.
- Separately, AllThingsD reports Twitter, which is rallying today along with other Internet momentum names, considered buying Topsy on multiple occasions, out of interest in its search tools. But the microblogging giant ultimately held off, something sources think stems from Twitter's belief it could build some of Topsy's tools on its own.
11:55 AMANSYS acquires chemistry simulation software maker Reaction Design
- ANSYS (ANSS +0.7%) acquires chemistry simulation software developer Reaction Design. Closing is expected in Jan.
- Reaction Design has over 400 customers globally. ANSYS plans to offer Reaction Design's CHEMKIN-PRO gas-phase and surface chemistry software alongside its computational fluid dynamics solutions, aiming the offerings at users who want to improve fuel efficiency of combustion engines.
10:59 AMEssex reportedly offering more than $60 per share for BRE
- Essex Property's (ESS -2.4%) offer for BRE Properties (BRE +13.3%) is higher than a rejected $60 bid from Land & Buildings earlier this year, reports Bloomberg, citing two sources. BRE has been working with Wells Fargo to explore strategic options, including a sale. Essex plans to pay for the purchase with bank financing, a stock offering, and the sale of assets.
- It's been a busy deal year in the REIT sector, with $78B of acquisitions YTD, up 41% from 2012.
- BRE's currently trading at $60.50.
- Earlier coverage
10:53 AMTeradata falls due to fresh Morgan Stanley downgrade
- Less than two months after cutting Teradata (TDC -5.3%) to Equal Weight, Morgan Stanley has downgraded the maker of data warehousing and business intelligence hardware/software to Underweight. The prior downgrade took place after Teradata issued a big Q3/2013 warning.
- There have been concerns about the long-term impact the adoption of the increasingly popular Hadoop big data/analytics framework will have on Teradata's traditional warehousing solutions (though some argue it's only a minor threat), as well as about the growth seen by Amazon's Redshift warehousing service since its 2012 launch.