Today - Friday, December 13, 2013
4:01 PMSprint reportedly working on deal for T-Mobile
- The WSJ reports Sprint (S +5%) could make a bid for T-Mobile USA (TMUS +7.8%) in 1H14. Both Sprint and T-Mobile shares have spiked in response.
- The FCC would doubtlessly give close scrutiny to a deal that would reduce the number of nationwide U.S. carriers to three from four. But Sprint majority owner SoftBank (SFTBF) hasn't been scared to make big bets.
3:24 PMWells: AER won't overpay for ILFC
- There are too many "unknowns" on a potential AerCap (AER +4%) deal to buy ILFC (AIG +1%) to figure out what AER's balance sheet and income statement would look like afterwards, says Well Fargo's Gary Liebowitz, but based on the company's recent history, he pretty certain about a few things.
- AER will NOT: 1) Overpay for aircraft 2) Subject itself to excessive residual value risk by retaining older jets 3) Impair its ability to sell aircraft, or 4) Expose itself to significant future funding risks.
- He retains his Buy rating on AER with a price target of $26-$27.
- Previous coverage of the potential deal
2:50 PMDOJ probing Applied Materials-Tokyo Electron deal
- Applied Materials (AMAT) discloses the DOJ has provided it with a request for additional info related to its planned merger with fellow chip equipment giant Tokyo Electron (TOELF). AMAT still expects the deal to close in mid-2014 or 2H14.
- Many have expected the Applied-Tokyo deal would face close scrutiny, given it stands to create a company with a dominant position in several chip equipment markets, and a total industry share (25.5% in 2012, per Gartner) roughly twice that of #2 ASML (12.8% 2012 share).
- Morningstar's Andy Ng notes Applied/Tokyo will have a 40% or higher share in six markets - including the key etch (46% 2012 share) and deposition (59%) markets, which are expected to see solid growth as chipmakers ramp production of 3D NAND flash memory and chips featuring 3D/FinFET transistors. Lam Research (LRCX +0.4%) is Applied/Tokyo's biggest rival in each market.
- Nonetheless, Ng argues chipmakers will back the deal, given the rising cost/complexity of chip manufacturing and the need for equipment vendors with huge R&D resources and diverse skill sets.
2:29 PMBloomberg: Verizon, T-Mobile close to spectrum deal
- Bloomberg reports Verizon (VZ -0.5%) is close to a deal to sell its 700MHz. A-block spectrum (good for rural areas) to T-Mobile USA (TMUS +0.6%) for a mixture of cash and urban spectrum, and could announce a sale next week.
- The much-rumored deal would help T-Mobile expand its rural coverage, and allow Verizon to improve its 4G coverage in cities where it's investing heavily to cope with surging 4G data traffic.
- The report comes shortly after the FCC delayed the auctioning of 600MHz. spectrum badly coveted by T-Mobile and Sprint to mid-2015.
1:20 PMAmpio spins off sexual dysfunction business Vyrix Pharmaceuticals
- Ampio Pharmaceuticals (AMPE +3.3%) spins off its sexual dysfunction business into a standalone company called Vyrix Pharmaceuticals. The new entity will be funded through an IPO.
- Vyrix's assets will include Zertane and Zertane-ED, late stage drugs for which the new entity will initiate further trials and develop commercialization and marketing partnerships.
- The spin-off will be headed by Jarrett Disbrow, who was previously founder and CEO of Arbor Pharmaceuticals.
- Ampio expects the IPO to take up to 12 months and that the company will maintain a 50%-80% ownership in Vyrix.
1:06 PM3D systems buys filament maker Village Plastics
- 3D Systems (DDD +0.7%) is acquiring Village Plastics, a maker of filaments for a variety of 3D printing materials. Terms are undisclosed. (PR)
- 3D says it will immediately integrate Village's materials and manufacturing tech to "accelerate its development of advanced filament-based materials" for its consumer/enthusiast-focused Cube and CubeX printers. Village Plastics could help the Cube line better compete against MakerBot's Replicator printer line.
- 3D has been buying companies early and often in recent years. Other 2013 acquisitions: The Sugar Lab, Phenix Systems, CRDM, Geomagic.
11:20 AMFMC to sell Peroxygens unit to JPM's private investment arm
- Chemicals company FMC Corp. (FMC +0.1%) agrees to sell its Peroxygens business to affiliates of One Equity Partners, the private investment arm of JPMorgan Chase in a deal valued at ~$200M.
- Peroxygens is a supplier of hydrogen peroxide, persulfate products, peracetic acid and other specialty oxidants.
- FMC says it wants to focus on its core business segments in crop protection, health and nutrition technologies, and alkali chemicals and lithium.
9:58 AMSonus buying Performance Technologies for $30M
- Sonus (SONS +0.7%) is acquiring Performance Technologies (PTIX +24.3%), a player in the fast-growing 4G diameter signaling software space, for $3.75/share in cash, or $30M net of cash on hand and acquisition-related costs. The price represents a 24% premium to PTIX's Thursday close. (PR)
- The acquisition allows Sonus to address another fast-growing telecom software market, albeit one where it'll face plenty of competition - F5, Oracle, Ericsson, Alcatel-Lucent, and Huawei are some of the other firms with diameter signaling offerings. Sonus has already been offsetting soft demand for its mainstay VoIP gateways by growing session border controller sales.
- The deal is expected to close in Q1 2014. Sonus sees it diluting 2014 EPS by $0.02 or less, but being accretive to 2015 EPS.
Thursday, December 12, 2013
6:29 PMStrategic Hotels & Resorts divests Four Seasons Punta Mita resort for $200M
- Strategic Hotels & Resorts (BEE) sells the Four Seasons Punta Mita resort and adjacent 48 acre La Solana land parcel in Mexico for $200M to Bill Gates' Cascade Investment (a 6.4% shareholder of BEE). Closing is expected in Q1.
- The sale represents a price of ~$980K/key. The resort was acquired back in 2001 from DESC and Four Seasons for an undisclosed price.
- The company has been taken to task for its relative underperformance by activists like Orange Capital, with one of the fund's recommendations being that BEE explore strategic alternatives.
3:36 PMJones Group spikes on report that Sycamore is nearing a deal| Comment!
1:07 PMSparton acquires electronic controls contract manufacturer Beckwood Services
- Sparton (SPA -0.3%) acquires electronic controls and assemblies contract manufacturer Beckwood Services in an all-cash deal. Terms were undisclosed.
- Beckwood generates annual revenue of $18M. Its customers include Fortune 1000 manufacturers of industrial control systems, measurement/detection equipment, analytical instruments, and military/DHS equipment.
- Sparton expects the acquisition to be accretive to earnings within the first year.
12:47 PMEU to reportedly give Telefonica/KPN deal close scrutiny
- Reuters reports the E.C. will "open an in-depth probe" into Telefonica's (TEF -0.9%) $11.9B cash/stock purchase of KPN's (KKPNF) German unit on Friday, and will reject a German proposal to handle regulatory scrutiny of the deal.
- Many expected the E.C. to closely scrutinize the acquisition, which stands to lower the number of German mobile carriers from four to three (Telefonica/KPN, Deutsche Telekom, and Vodafone). Citi has estimated the deal could produce €4B ($5.5B) in annual synergies.
11:20 AMLifeLock acquires mobile wallet solutions provider Lemon for $42.6M
- LifeLock (LOCK) acquires mobile wallet solutions provider Lemon for $42.6M in cash to expand its reach into mobile.
- The Lemon Wallet app, which allows users to digitally store their credit cards and use them for mobile transactions, has been downloaded more than 3.6M times.
- In conjunction with the acquisition, LifeLock has launched a new digital identity protection app utilizing Lemon technology called LifeLock Wallet on iOS and Android. The offering is free and offers the features of the Lemon Wallet app, with the option to add a LifeLock subscription to receive fraud alerts and insurance.
10:45 AMTrimble acquires crop and soil data provider C3| Comment!
8:13 AMCentene to buy 68% stake in home health care provider for $200M
- Centene (CNC) agrees to acquire a ~68% interest in U.S. Medical Management, a provider of in-home health services, for $200M in cash and stock as it continues to expand its stable of services.
- In conjunction with the deal, CNC also is forming a new healthcare enterprise holding company that will connect it and other health solution providers.
- CNC expects the deal to add $0.02-$0.05 to EPS next year and $0.20-$0.25 in 2015, and add annual revenue of $220M-$240M.
7:00 AMIndian court lifts freeze on Nokia factory
- An Indian court has agreed to unfreeze a phone-making factory owned by Nokia (NOK) so that it can complete the sale of its handset unit to Microsoft (MSFT).
- Authorities seized the plant following a tax dispute. Nokia will deposit 22.50B rupees ($367.17M) in an escrow account as a condition for lifting the freeze and transferring the factory to Microsoft.
- The tax case will continue separately. If Nokia loses, it could face a bill of up to $3.4B.
4:21 AMLiberty back in for Holland's Ziggo
- Liberty Global (LBTYA) is in negotiations to acquire Dutch cable group Ziggo (ZIGGY), which already rejected an offer from the U.S. group in October for being too low.
- Liberty owns 28.5% in Ziggo, whose market cap is €6.63B.
- The talks come as Liberty expands its presence in Europe, having acquired Virgin Media for $16B earlier this year.
Wednesday, December 11, 2013
4:48 PMUNS Energy +30% AH after Fortis agrees to acquire for $60.25/share
- UNS Energy (UNS) agrees to be acquired by Fortis (FRTSF), Canada's largest investor-owned gas and electric distribution utility, for $60.25/share, a 31% premium to today's closing price.
- The $4.3B deal, which includes the assumption of ~$1.8B in debt, would provide additional capital and new resources for UNS subsidiaries including Tucson Electric Power and UniSource Energy Services.
- Fortis serves more than 2.4M through its electric utilities in five Canadian provinces and two Caribbean countries, a natural gas company in British Columbia, and a gas and electric utility in New York.
- UNS +30.2% AH.
4:48 PMExelis to spin-off military and government services business
- Exelis's (XLS) board authorizes a plan to spin-off its military and government services business, Exelis Mission Systems. Completion is expected in summer of 2014.
- Exelis will focus future investments on strengthening its Critical Networks, ISR & Analytics, Electronic Warfare, and Aerostructures ops.
- Exelis is expected to generate $3.4B in revenue in 2013 after a pro forma adjustment for the spin-off, with a "meaningful appreciation in its growth and operating margin profile" as well as diversification of non-U.S. defense customers to 50% from 30% currently.
- Exelis Mission Systems' pro forma 2013 revenue is estimated at $1.5B. Division President Kennett Hunzeker will lead the spun-off entity.
- Conference call at 8:30am ET tomorrow