Today - Tuesday, August 23, 2016
- The U.S. Senate Judiciary Committee announces plans to hold a hearing in late September to discuss the mergers of Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD) as well as ChemChina's purchase of Syngenta (NYSE:SYT).
- Committee chair Sen. Grassley of Iowa has expressed concern that the deals would result in farmers paying more for seeds, pesticides and herbicides and reduce the companies' incentives to innovate.
- The committee has no formal say over whether the deals may go forward; the Justice Department is reviewing the Dow-DuPont merger, while the FTC is looking at ChemChina's purchase of Syngenta.
- PDC Energy (NASDAQ:PDCE) agrees to acquire two privately held companies owning 57K net acres in the core Delaware Basin for ~$1.5B in cash and stock.
- PDCE says current net production in the acreage totals ~7K boe/day from 21 horizontal wells, with two additional wells in the completion and flowback phase.
- PDCE also says it plans to spud nine horizontal wells during the rest of the year and expand certain midstream infrastructure, and is finishing completion operations on two horizontal wells with plans to operate two drilling rigs by year-end 2016.
- Z Capital Partners announces it acquired Affinity Gaming in all-cash transaction that values Affinity at approximately $580M. The deal is expected to close in Q1 of 2017.
- Under the terms of the agreement, Z Capital and its affiliates, which currently own approximately 41% of Affinity's outstanding shares, will purchase Affinity's remaining outstanding shares for $17.35 per share in cash (increased from $15.00).
- Related ETF: BJK
- Source: Press Release
- With its $3.8B acquisition deal closed, NBCUniversal (CMCSA -1.6%) has set details for its integration of DreamWorks Animation (NASDAQ:DWA).
- DreamWorks' feature animation group will be run by co-presidents of Feature Animation Bonnie Arnold and Mireille Soria, execs that DWA chief Jeffrey Katzenberg boosted in February to refocus the studio's output. They'll report to Universal Pictures Chairman Donna Langley; Margie Cohn will lead a combined DreamWorks and Universal TV animation business.
- Combined Universal/DreamWorks games, digital and consumer products will be led by NBCUniversal Brand Development President Vince Klaseus.
- As expected, Katzenberg will become Chairman of DreamWorks New Media, overseeing the company's shares in AwesomenessTV and NOVA. He walks away with a cash-out package of a whopping $391M, on the strength of 10.2M shares and options in the studio.
- Keeping up a push by Chinese firms into Hollywood, China's richest man says he has two billion-dollar deals in the pipeline and an eye beyond that to taking over one of the industry's Big Six.
- Wang Jianlin, of Dalian Wanda Group, tells Reuters that after acquiring a pair of non-production companies, he'd like to take over one of the major studios: Twentieth Century Fox (FOX, FOXA), Warner Brothers (NYSE:TWX), Walt Disney (NYSE:DIS), Universal Pictures (NASDAQ:CMCSA) and Columbia (NYSE:SNE), along with Paramount (VIA, VIAB), for which Wanda was said to be nearing a $4B purchase of 49%.
- Paramount is certainly in play, with flagging performance and a parent (Viacom) struggling with that and its TV business. But that's not all Wang has his eye on: "We are interested not only in Paramount, but all of them. If one of the Big Six would be willing to be sold to us, we would be interested."
- That's a "necessary step" to building a "real movie empire," Wang says. "Only the six are real global film companies, while the rest are not."
- Wanda bought control of production company Legendary Entertainment for $3.5B this year and wants to triple revenue from its cultural division to 150B yuan ($22.6B) by 2020.
- The conglomerate also controls theater firm AMC Entertainment, and with the completion of acquisitions of Odeon & UCI Cinemas Group and Carmike Cinemas, would control 15% of global box office revenues.
- Negotiations between Bayer (OTCPK:BAYRY) and Monsanto (NYSE:MON) are advancing toward a merger deal after making progress on issues such as the purchase price and termination fee, Bloomberg reports.
- Bayer CEO Werner Baumann and MON CEO Hugh Grant have engaged in a series of constructive meetings in recent weeks and could reach an agreement in the next two weeks, according to the report.
- MON +3.9% premarket.
Monday, August 22, 2016
- NBCUniversal (CMCSA +0.2%) has closed on its $3.8B acquisition of DreamWorks Animation (NASDAQ:DWA).
- As planned, the studio will be folded into Universal's Filmed Entertainment Group, where it joins Universal Pictures, Fandango, and NBCUniversal Brand Development.
- Holders of DWA get $41 in cash for each share.
- DWA will be delisted from Nasdaq, and the studio will redeem its $300M outstanding in 6.875% senior notes, redeeming them at 105.156% of principal amount plus accrued and unpaid interest.
- Shares jumped in April on news of the deal and have gained 59% YTD.
- Valero Energy Partners (NYSE:VLP) agrees to acquire terminals at two refineries in Louisiana and Texas from Valero Energy (NYSE:VLO) for $325M.
- The Meraux, La., assets have 3.9M barrels of storage capacity for crude oil, intermediates and refined petroleum products, while the Three Rivers, Tex., terminal has 2.25M barrels of capacity.
- VLP expects the acquisition to add ~$25M of net income and $39M of EBITDA during the first year of operation.
- General Electric (GE +0.3%) plans to submit an offer as soon as this Thursday to buy French wind power company Adwen, Reuters reports, citing French magazine La Lettre de l'Expansion.
- Siemens (OTCPK:SIEGY) has agreed to take over Gamesa's (OTCPK:GCTAF) 50% stake in Adwen as part of its €1B ($1.1B) deal to buy a majority stake in Gamesa, and has made an offer for Areva's (OTCPK:ARVCF) 50% stake in Adwen, but Areva has until mid-September to look for an alternative buyer under the terms of an agreement in connection with the Siemens buyout.
- The report says GE is preparing to submit its bid on Aug. 24 but offers no further details.
- VisionChina Media (NASDAQ:VISN) is off 15.2% after saying it's reached a new deal to sell nearly half its subway mobile TV ad business.
- VisionChina has a new deal with Ledman Optoelectronic to sell it 49% of VisionChina New Culture Media for 382.2M yuan (about $57.5M).
- The companies had originally reached a $119M deal for the sale of the entire business in February, before Ledman applied to suspend the transaction last month.
- That deal's now terminated. "The sale of our subway mobile TV advertising business is a critical and strategic step for VisionChina Media, and we remain open in the future to sell the remaining 51% of our equity position in New Culture," says VisionChina CEO Limin Li.
- Microsoft (MSFT +0.1%) plans to shut down Genee on September 1 and integrate the service into Office 365.
- On the product: "Genee uses natural language processing and optimized decision-making algorithms so that interacting with a virtual assistant is just like interacting with a human one."
- Genee press release
- Private debt investment manager CIFC (CIFC +56%) agrees to be acquired by investment platform F.A.B. Partners for $333M, or $11.46/share.
- CIFC, which manages ~$14B in debt investments, is majority-owned by Columbus Nova, the U.S. investment arm of the Renova Group, a Russian conglomerate.
- The acquisition is the first deal by New Jersey-based F.A.B., which was set up in recent months by former executives of Deutsche Bank and Goldman Sachs.
- Gliimpse was launched in 2013 with a vision of building "personalized and shareable medical records."
- Apple's (AAPL -0.4%) existing initiatives in the medical arena include HealthKit, ResearchKit and CareKit.
- The company has reportedly issued its usual, "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," response regarding a deal, typically taken as confirmation an agreement has been struck.
- CST Brands, Inc. (NYSE:CST) announces it accepted a buyout offer from Alimentation Couche-Tard Inc. (OTCPK:ANCUF) at $48.53 per share.
- The deal represents a total enterprise value of approximately $4.4B, including the assumption of debt.
- “After the Board’s comprehensive review of strategic alternatives to enhance stockholder value, we are pleased to reach this agreement with Couche-Tard, which we expect to provide immediate and compelling value to our stockholders,” said CST CEO Kim Lubel.
- After the deal closes, Circle K will establish a new business unit in San Antonio.
- Couche-Tard expects to finance the transaction with available cash, its existing credit facilities, and a new term loan.
- The transaction is currently expected in the early part of 2017, subject to the approval of CST's stockholders and regulatory approvals in the U.S. and Canada.
- Source: Press Release
- Uber (Private:UBER) CEO Travis Kalanick doesn't support acquiring ride-hailing competitor Lyft (Private:LYFT), Bloomberg reports, due to the regulatory scrutiny a deal would bring.
- However, if Uber were to buy its rival it wouldn't pay more than $2B, well below the $5.5B that Lyft was valued at in a funding round involving GM earlier this year.
- Other names mentioned in dispatches regarding the acquisition of Lyft include Apple, Google, Amazon and China's Didi Chuxing, as well as GM.
- Japanese semiconductor firm Renesas (OTCPK:RNECF) has confirmed reports that it is in negotiations to acquire U.S.-based Intersil (NASDAQ:ISIL), which produces chips for automotive and aerospace customers.
- A deal could be valued at around ¥300B ($3B), the reports said.
- Last year, Intersil generated revenue of $522M and net profit of $7.2M.
- The Committee on Foreign Investment in the United States (CFIUS), which studies M&As for national security implications, has cleared ChemChina's $43B acquisition of Swiss pesticides and seeds company Syngenta (NYSE:SYT).
- In a statement, the firms didn't mention any concessions required, but they did say they expect to close the deal later this year as they work to receive anti-trust approval from authorities around the world.
- The transaction is of concern to the U.S. as Syngenta has facilities in North Carolina, and a presence in California, Minnesota and elsewhere.
- Syngenta shares are +12.4% in Zurich.
Sunday, August 21, 2016
- Japan’s Renesas Electronics (OTCPK:RNECF) reportedly is in talks to acquire chipmaker Intersil (NASDAQ:ISIL) for as much as ¥300B (~$3B), with a basic agreement possibly reached as early as this month.
- The potential deal, which was first reported by Japan's Nikkei Asian Review, would represent the latest move in a trend of recent consolidation among global chipmakers.
- Renesas was the world's third largest chipmaker by market share at the end of 2015, with 9.1%, according to data from the Gartner research firm.
- Pfizer (NYSE:PFE) is close to a $14B deal to acquire cancer drugmaker Medivation (NASDAQ:MDVN), FT says.
- The price is about 1/3 higher than Medivation's closing price on Friday.
- Pfizer would be beating out rivals including Celgene (NASDAQ:CELG), Gilead (NASDAQ:GILD), Sanofi (NYSE:SNY), Merck (NYSE:MRK) and AstraZeneca (NYSE:AZN), who have been pursuing Medivation for months.
- Medivation has already rejected two "inadequate" bids from Sanofi, the last for $11B ($58/share).
- Shares of Medivation have more than doubled in the last six months.
- Medivation makes the leading prostate cancer drug, Xtandi, which is expected to generate $5.7B in annual revenue by 2020.It is also developing an experimental drug called Talazoparib, which is designed to stop tumor cells from multiplying by damaging their DNA.
- Update: It's official. Pfizer will acquire Medivation for $81.50 a share (~$14B). The deal will be immediately accretive to Pfizer's non-GAAP EPS, adding ~$0.05 in the first full year after the transaction closes, expected by Q4. Its 2016 guidance will be unaffected. The deal will be financed with existing cash. Pfizer will host a conference call this morning at 9:00 am ET to discuss the acquisition.
Friday, August 19, 2016
- Ride-hailing firm Lyft (Private:LYFT) -- reported to have turned down a takeover from General Motors (NYSE:GM) -- has held sales talks with with a wide number of companies, also including Apple, Google, Amazon.com, Uber and China's Didi Chuxing, The New York Times reports.
- All those overtures resulted in no deal, the NYT says -- mainly due to cost. Lyft was valued at $5.5B after a January investment round, and a sale would have to come at a premium to that.
- Tech publisher The Information reported that Lyft turned down GM in their talks. The NYT says its sources said GM never made a written offer to buy the ride-sharing firm.
- Lyft was set to pursue a new funding round, and it has $1.4B in cash, giving it cushion to continue as an independent entity.
- Shares of Viacom (VIA +1.6%, VIAB +1.2%) are up today after news of the culmination of its legal drama, including the departure of CEO and Chairman Philippe Dauman.
- A reported settlement of legal action between the company and controlling shareholder Sumner Redstone last night brought an end to months of wrangling over Redstone's decisions and mental competence.
- Dauman is exiting by the end of September with a $72M parachute, and the board is then expected to make a decision on whether interim CEO Tom Dooley, a longtime Viacom veteran, will take over the job permanently.
- Some observers are turning attention to the bigger picture -- what's next to fix a flagging business with declining ratings in its TV unit. Doug Mitchelson of UBS lays out priorities: Balance sheet issues (3.4x TTM net debt/EBITDA); content performance that might call for operational changes; all-time low distributor relationships (Mitchelson suggests ending SVOD sales); and a "lot of fat" still in the cost structure.
- Meanwhile, the ascendance of Shari Redstone among the company's decision-makers has many investors looking at a not-unlikely next step: pursuing a re-merger of Viacom with CBS (NYSE:CBS). Viacom had acquired CBS for $37B in 2000, and the two companies split at the beginning of 2006.
- Analyst Michael Nathanson is all for a reunion to fix a "major mistake": “We find it hard to believe that anything will be solved until the CBS-Viacom pieces are put back together. And even then, the combined assets would not be that much of bargain relative to its peers." He says Viacom needs to fix its biggest problem by selling "100% of Paramount to the highest bidder," before turning to cable programming problems.
- "The purchase of Pentair’s (PNR -1.6%) Valves & Controls business adds definitive risk to Emerson’s (EMR -3.8%) earnings over the next several years," says Buckingham Research's Joshua Pokrzywinski, downgrading Emerson to Underperform from Neutral, and cutting the price target to $44 from $49.
- “We believe the strategic overlap is less than ideal."
- Also downgrading is Credit Suisse, to Neutral from Outperform. The price target remains at $57.
- “Investors will be rightly cautious of this pitched ‘strategic deal’ at the wrong time of the cycle,” says Stifel's Robert McCarthy as he maintains his Buy rating. "The perception [will be] that Emerson has caught a falling knife in the same general end market where it struggled for the past two plus years.”
- Previously: Emerson to buy Pentair's valves and controls business for $3.15B (Aug. 18)
- Citing reasons of national interest, Australian Treasurer Scott Morrison confirmed he will block foreign buyers State Grid Corp. and Cheung Kong Infrastructure Holdings (OTCPK:CKISY) from purchasing a majority stake in Ausgrid, the country's largest electricity network.
- The A$10B ($7.7B) decision risks souring relations with Australia's biggest trading partner China, which has accused the government in Canberra of protectionism.
Thursday, August 18, 2016
- Emerson Electric (NYSE:EMR) has agreed to buy the Valves & Controls business of Pentair (NYSE:PNR) for $3.15B.
- Pentair shares are up 1.1% after hours.
- It's a move in line with Emerson's two core verticals, particularly combined with Emerson's planned multibillion-dollar divestitures of Network Power, Leroy-Somer and Control Techniques.
- “This acquisition delivers on our strategic plan of investing in Automation Solutions and in markets where we have a global leadership position and see significant long-term growth opportunities,” says CEO David Farr in a statement.
- The deal's expected to close in four to six months.
- Conference call link
- Lightly traded Emmis Communications (EMMS -0.8%) says it's gotten a go-private offer from a company owned by its chairman and CEO.
- Jeff Smulyan owns E Acquisition Corp., and is the controlling shareholder of Emmis.
- E Acquisition has made a nonbinding offer to acquire outstanding publicly held shares of Emmis for $4.10/share in cash, which is a 3% premium over yesterday's close and is 3.5% over today's closing price.
- The deal includes a committed acquisition facility from an affiliate of Falcon Investment Advisors, and would include selling off non-core assets, which likely include its publishing division, WLIB-AM in New York and the radio stations in Terre Haute, Ind.
- Terminix announces it acquired the assets of Hawaiian firm Sandwich Isle Pest Solutions.
- "The acquisition of Sandwich Isle is an important strategic step in expanding our business on the Hawaiian Islands, an important region for termite, mosquito and general pest activity," said ServiceMaster (SERV +2.2%) CEO Rob Gillette.
- ServiceMaster owns the Terminix business which now provides service in 47 states.
- Terms of the deal weren't disclosed.
- Source: Press Release
- Telenor (OTCPK:TELNY +1.9%) is still working out how to divest a $2.5B stake in VimpelCom (VIP +0.7%), a move it planned last October amid multiple government probes into bribery at VimpelCom.
- But a key problem is that the only other obvious buyer is Mikhail Fridman and his LetterOne, with whom Telenor has been in open conflict over control of VimpelCom.
- "We have hired financial advisers that are helping us to plan how our exit will happen but we don't know what the structure will look like. We are in a planning phase," says Telenor CEO Sigve Brekke.
- Telenor lost its chairman last fall as part of the VimpelCom fallout, and the company cut ties with its ex-CEO, who had been working as a consultant.
- VimpelCom agreed to a $795M settlement of a U.S. and Dutch probe over its dealings in Uzbekistan.
- Williams Cos. (NYSE:WMB) has jumped (as much as 11.6% minutes ago) on a report that Enterprise Product Partners (NYSE:EPD) approached it this summer with an acquisition.
- Williams shares have fallen back to just a 6.6% gain. EPD spiked briefly and has now headed for negative territory, -0.2%.
- Williams didn't make an official response, Reuters says, since its recent gains meant Enterprise's offer carried little to no premium.
- Despite that, Enterprise remains interested in a deal that would create an $80B giant, the Financial Times reports.
- A planned merger of Williams with Energy Transfer Equity fell apart in June as ETE walked away after a favorable court ruling.
- The companies announced the $12 per-share buyout yesterday evening (a 45% premium over the day's closing price).
- The arrangement was unanimously approved by both companies' board of directors.
- SunEdison Semiconductor (SEMI +38.5%) CEO Shaker Sadasivam: "We believe this transaction is in the best interest of our company. We look forward to a smooth process to facilitate an efficient closing, which we hope can occur before the end of the year."
- Johnson & Weaver, LLP, a shareholder rights law firm based in San Diego, has subsequently launched an investigation into the price of the transaction.
- SunEdison Semiconductor is up more than 155% over the last three months.
- After winning the assets of Gawker Media in a bankruptcy auction, Univision (Pending:UVN) plans to shut down the flagship site Gawker.com after it closes the deal, The Wall Street Journal says.
- Gawker says the site will end operations next week.
- Univision bid $135M for the assets of the blog network, pushed into bankruptcy by a $140M jury verdict against it in a case filed by former pro wrestler Hulk Hogan (and bankrolled by Silicon Valley billionaire Peter Thiel). That case is under appeal.
- Univision's bid still needs an OK from Gawker's bankruptcy judge, who's holding a hearing this afternoon.
- 888 Holdings (OTCPK:EIHDF) and Rank Group (OTCPK:RANKF) have thrown in the towel on their acquisition bid for William Hill (OTC:WIMHF) after being rebuffed twice.
- "We believe that there was compelling industrial logic for the combination of these highly complementary businesses," stated 888 CEO Itai Frieberger.
- 888 Holdings press release
- Shares of William Hill fell 1.53% in London trading.
- John Wiley & Sons (NYSE:JW.A) has a deal to buy publishing-software firm Atypon, for $120M in cash.
- Privately held Atypon partners with scholarly societies and publishers to manage content on the Web with direct control through its Literatum platform.
- Wiley will manage Atypon, which drew $31M in revenue in 2015, as a separate business unit, and Atypon founder Georgios Papadopoulos will stay on to lead the business. It has about 260 employees.
- The deal is expected to close Oct. 1.
- Illumina (ILMN +0.7%) has reportedly received a $30B offer from Thermo Fisher Scientific (TMO -0.9%).
- Illumina, sporting a $25B market cap, is a global leader in molecular diagnostic systems. In Q2 it earned $0.82 a share on revenues of $600M.
- Large cap ($61B) Thermo is a global leader in clinical diagnostics that generates ~$17B a year in sales.
- BWX Technologies' (NYSE:BWXT) subsidiary, BWXT Canada, has agreed to acquire all of the shares of the GE Hitachi Nuclear Energy Canada joint venture.
- The acquisition roughly doubles BWXT's footprint in Canada and signals a long-term strategic commitment to the attractive CANDU nuclear power segment and the attendant growth opportunities related to plant life extensions.
- While terms of the transaction are not being disclosed, it is expected to be accretive within the first year and to favorably impact margins in the Nuclear Energy Segment.
9:00 AM| 9:00 AM
- Raptor Pharmaceuticals (NASDAQ:RPTP) is ahead 16% premarket on robust volume on the buzz that several companies are eyeing the Novato, CA firm, including Shire plc (NASDAQ:SHPG) who alleged has already bid $800M and Retrophin (NASDAQ:RTRX), founded by biotech bad boy Martin Shkreli.
- Raptor focuses its development efforts in rare diseases. Its pipeline includes programs in Huntington's disease, cancer, cystic fibrosis and mitochondrial diseases.
- It currently markets two products: PROCYSBI (cysteamine bitartrate) delayed-release capsules for nephropathic cystinosis and QUINSAIR (aerosolized form of levofloxacin) for the management of chronic pulmonary infections.
- Just six months after it emerged from Chapter 11 bankruptcy, American Apparel (OTCPK:APPCQ) has hired investment bank Houlihan Lokey to explore a sale, Reuters reports.
- Teen clothing retail has been recently hit by the growing popularity of online shopping. At least eight teen apparel retailers filed for bankruptcy this year amid fierce competition and stagnating sales, including Aeropostale, PacSun and the Wet Seal.
Wednesday, August 17, 2016
- Detailing its report on new merger chatter around Sprint (S -1.5%) and T-Mobile (TMUS +0.5%), Bloomberg notes that Masayoshi Son -- the mogul at the head of SoftBank (OTCPK:SFTBY -2.3%) who abandoned a merger bid before -- will likely try the combination again if he thinks a new head of the FCC is amenable.
- That agency head holds key power, with the threat of putting such a proposed deal into an administrative hearing, which would postpone action indefinitely. A similar threat caused Comcast to drop its proposed takeover of Time Warner Cable. Son has indicated he would legally challenge any Justice Dept. opposition.
- Shares of Sprint and T-Mobile made positive moves of 3% and 2.5% respectively in the span of a few minutes before pulling back.
- Son could pursue the argument that Sprint will never be a legitimate fourth competitor in the market alone, but that may not fly, says Public Knowledge's Gene Kimmelman. “You would need to see a pretty significant reversal of fortunes across both companies -- Sprint and T-Mobile -- for the antitrust enforcers to change their views ... You’d have to see a clear demonstration of a company in jeopardy.”
- A Trump administration, though, could mean "a whole new ball game" with companies like Sprint rolling the dice, Kimmelman says.
- “The rule of thumb is that Democratic administrations will allow an industry to consolidate down to four players, and Republicans will let an industry go down to three,” says analyst Roger Entner. “Masa has to hope that the next president’s name is Donald."
- Talks between the two companies are forbidden as of now, with the FCC's broadcast incentive spectrum auction going on (and looking more likely to run into 2017).
- In-play Medivation (MDVN +2.1%) perks up on modestly higher volume on the news that Merck (MRK -0.3%) has joined Sanofi (SNY -0.5%), Celgene (CELG +0.3%), Gilead Sciences (GILD +1.7%), Pfizer (PFE +0.6%) and AstraZeneca (AZN -0.2%) as potential acquirers.
- Medivation has already rejected two "inadequate" bids from Sanofi, the last for $11B ($58/share).
- Sprint (NYSE:S), down nearly 3% on the day, made a midday spike back to the flat line on yet another resurgence of merger rumors -- though, just like that, the spike is gone and Sprint is off 1.8% again.
- Bloomberg is saying that Masayoshi Son of Sprint owner SoftBank (OTCPK:SFTBY) is still "holding out hope" to combine Sprint with T-Mobile (TMUS -0.2%) -- which also spiked into positive ground before an immediate pullback.
- Conventional wisdom has it that the previous outbreaks of Sprint/T-Mobile rumors were put to rest with no possibility of a combination at least until a new U.S. presidential administration.
- Privately held Lightower Fiber Networks is exploring a sale that will draw interest from infrastructure rivals including Level 3 Communications (LVLT -1.3%) and possibly Zayo Group (ZAYO -0.6%), CTFN reports.
- A source says Lightower could be counting on scarce assets to drive its valuation up to 13-14 times EBITDA from a more typical 10-11 times. That would mean if EBITDA were $400M, as the source estimates, the company's valued between $4B and $5.6B.
- Berkshire Partners bought the firm and merged it with Sidera for $2B in 2013.
11:00 AM| 11:00 AM | 12 Comments
- Perrigo (NYSE:PRGO) agrees to acquire Geiss, Destin & Dunn, a small national distributor of over-the-counter (OTC) healthcare and consumer products to non-chain retail and institutional markets, for an undisclosed sum. The deal should close by the end of the month.
- Perrigo has been using the Peachtree City, GA-based to distribute its products so it's basically recapturing the margin.
- A deal could be announced as early as this week (it could also fall through), according to the report.
- Northern Virginia-based Cardinal (NASDAQ:CFNL) has total assets of $4.2B, and United Bankshres (NASDAQ:UBSI) - based out of D.C. and Charleston, WV - has about $14B in assets.
- A deal would be the latest in regional bank mergers, as lenders - facing a revenue squeeze thanks to low rates, and an expense squeeze from post-crisis regulations - look to add value by getting bigger.
- Cardinal reportedly put itself on the block in late July.
- UBSI -0.6%, CFNL +3% premarket
- Sorrento Therapeutics (NASDAQ:SRNE) subsidiary Scintilla Pharmaceuticals inks a binding term sheet to acquire privately held Semnur Pharmaceuticals. Under the terms of the agreement, Semnur will receive an upfront payment of $60M ($40M in cash + $20M in SRNE common stock) and up to $140M in milestones.
- The Los Altos, CA-based firm's lead product candidate is Phase 2-stage resiniferatoxin (the active ingredient in chili peppers) a non-opioid pain medication for the treatment of intractable cancer pain (and lower back pain according to Semnur's website).
- The Treasury Department issued rules this year that thwarted several tax inversions, but one large deal that managed to get through was the $16B acquisition of Tyco International (NYSE:TYC) by Johnson Controls (NYSE:JCI).
- The last hurdle for the transaction is a vote today by both sets of shareholders.
- Johnson Controls shareholders are set to vote in Dallas, while Tyco's shareholders will do so in Dublin.
Tuesday, August 16, 2016
- Curse, "a leading global multimedia and technology company focused on content and products specifically for gamers," was founded in 2006 and counts 30M unique monthly visitors to its various properties.
- From the announcement: "Gamers count on Curse for the latest news and information, gaming-optimized voice comms, comprehensive databases and wikis, engaging communities, managing mods for their favorite games and their MCN Union for Gamers. Curse fosters the formation of communities and helps like-minded gamers around the world connect, compete, interact, and share information."
- Terms of the deal were not disclosed.
- Microsoft last week acquired live-streaming interactive gaming platform Beam in another recent move in the space.
- Twitch (NASDAQ:AMZN) blog post
- Alimentation Couche-Tard (OTCPK:ANCUF) confirms it's in talks with a third party over an acquisition.
- The development follows very closely on yesterday's Wall Street Journal report indicating that the company has serious interest in CST Brands (CST +6.7%).
- Buzz over a deal helped push CST to an all-time high of $48.31.
- Previously: WSJ: Couche-Tard near deal to buy CST Brands (Aug. 15)
- Analysts say a merger of industrial gas makers Praxair (PX +3%) and Linde (OTCPK:LNAGF) likely would trigger antitrust reviews to protect competition in regional markets as well as broader scrutiny of global competition.
- The two companies, which confirmed today that they are in merger talks, have discussed potential divestitures to address antitrust concerns, which could include selling gas production operations in local markets, Bloomberg reports.
- The U.S. FTC cleared Air Liquide's takeover Airgas in May after the companies agreed to sell businesses that produce certain industrial gases; the investigation focused on specific regions around the U.S. rather than a national market, in part because industrial gases cannot be transported more than a few hundred miles.
- Analysts say the biggest competition issues might arise in South America, particularly Brazil, where a combined Praxair-Linde might have a market share upwards of 60%.
- Blackstone (BX -0.4%) has offered a financing plan to help JDA Software, giving it an alternative option to selling itself to Honeywell (HON -0.3%), Reuters reports.
- BX reportedly has proposed to JDA a payment-in-kind financing deal whose coupon would be paid with additional securities, and would include equity warrants that would give BX a significant minority stake in the company.
- JDA's majority owner, buyout firm New Mountain Capital, now must decide whether to sell the company outright to HON for ~$3B, or stick with it and seek to speed its turnaround with new capital from BX that would allow JDA to invest in its sales force and products, according to the report.
- Bayer (OTCPK:BAYRY) is considering making a hostile bid for Monsanto (MON +0.9%) after the next few weeks show whether the two sides can reach a deal, Handelsblatt reports, citing sources close to Bayer's negotiating team.
- If a friendly deal fails to materialize, Bayer is prepared to appeal directly to MON shareholders, over the heads of MON's board, according to the report, which cites sources close to the company.
- MON rejected Bayer's last offer that valued the company at ~$64B, and some observers expect CEO Hugh Grant to reject any offer of less than $67B-$69B.
- Great Plains Energy’s (GXP -0.8%) proposed $8.6B purchase of Westar Energy (WR -0.1%) is being closely examined by Missouri regulators, who could derail the deal even as GXP says it does not need the state’s permission for the merger.
- James Owen of the Missouri Office of Public Counsel contends that an earlier agreement between GXP and the state 15 years ago still requires any acquisition by the company to fall under Missouri jurisdiction.
- Owens also notes that WR has operations in Missouri as part owner of a power company in Joplin, which means it is subject to the state’s oversight.
8:44 AM| 8:44 AM
- Honeywell (NYSE:HON) and JDA Software weren't talking yesterday about the possibility of the industrial giant buying Scottsdale software company.
- "We don't comment on market rumor or speculation," said Rob Ferris, vice president of external communications and public affairs.
- An earlier report in the WSJ said Honeywell was gearing up to buy JDA for $3B.
- While Didi's (Private:DIDI) decision to buy UBER's Chinese operation creates a $35B ride-sharing juggernaut ruling almost 90% of the market, the odds are slim that regulatory agencies will nix the deal.
- "It requires a very complicated process to determine monopoly status. Revenue and market share figures usually do not show the full picture," said Huang Yong, a senior member of an anti-monopoly board advising China's State Council.
Monday, August 15, 2016
- StemCells (NASDAQ:STEM) +55.6% AH after disclosing an agreement to reorganize and merge with privately held Israeli company Microbot Medical.
- Current STEM shareholders are expected to own 5% of the combined company, while former Microbot stockholders would own 95%.
- Ian Massey has resigned as STEM's CEO, President and as a director, and Gregory Schiffman has resigned as CFO.
- Circle K owner Alimentation Couche-Tard (OTCPK:ANCUF) is nearing a deal to buy fuel and convenience store chain CST Brands (NYSE:CST), with an announcement possible as soon as this week, WSJ reports.
- The price of the acquisition is not clear, but CST has a market value of ~$3.4B and is the second largest publicly traded fuel and convenience retailer in North America.
- Earlier this year, CST said it had hired bankers to explore strategic options amid pressure from activist shareholders.
- Praxair (NYSE:PX) +3.3% AH following a Dow Jones report that it has held merger talks with Germany's Linde (OTCPK:LNAGF), in a deal that would create the world’s largest industrial gas supplier with more than $30B in annual revenue.
- The report comes less than three months after Air Liquide bought Airgas for ~$10B, perhaps setting off a wave of consolidation in an industry hit by declining energy prices and sluggish economic growth.
- Parsley Energy (NYSE:PE) agrees to acquire 11,672 leasehold acres of undeveloped acreage and producing oil and gas properties, as well as associated mineral and overriding royalty interests, in Texas' Midland Basin from unnamed sellers for a combined $400M.
- PE also says its first producing horizontal well on the Glasscock County acreage acquired in May registered a strong peak 30-day initial production rate of 1,161 boe/day.
- To help fund the deal, PE says it has launched a 7M-share public offering, with an underwriters option to purchase up to an additional 1.05M common shares, and a $200M private placement of additional 6.250% senior notes due 2024.
- Compass Minerals (NYSE:CMP) agrees to acquire the remaining 65% of Brazilian specialty plant nutrition company Produquímica Indústria e Comércio for $460M-$480M (including debt), based on expected 2016 performance.
- Produquímica makes and distributes various specialty plant nutrition products and specialty chemicals, primarily for the water treatment industry and for use in other industrial processes in Brazil; CMP purchased 35% of the company in December 2015.
- CMP expects the transaction to add $0.12-$0.15 to FY 2016 diluted EPS.
- Concho Resources (NYSE:CXO) -1.4% AH after agreeing to acquire ~40K net acres in the Midland Basin from privately-held Reliance Energy for $1.625B in cash and stock.
- CXO says the deal includes 10K boe/day of production from 326 vertical wells and 44 horizontal wells, only one of which was completed in 2016, and expands its core Midland Basin position to more than 150K net acres and production of 30K boe/day.
- To help fund the deal, CXO announces a 9M-share public offering, with an underwriters option to purchase up to an additional 1.35M common shares.
- AIG -- formerly readying an initial public offering of its United Guaranty mortgage insurance unit -- is instead nearing a deal to sell it for $3.4B, The Wall Street Journal reports.
- The insurer could announce an agreement with Arch Capital Group as soon as early this week, it says.
- An IPO would have left AIG with a majority stake in United Guaranty, but selling it outright would help the insurer speed up returning cash to shareholders.
- The unit has been a star performer at AIG lately, amid an environment of improving mortgage-insurance results on top of higher-quality underlying home loans in the U.S. recovery.
- It works fairly independently from the rest of AIG, making for a easier divestiture.
- A competing bidder who had offered $3/share for Morgans Hotel (MHGC +0.2%) has withdrawn its proposal, NY Post reports, after Ron Burkle’s Yucaipa Cos. and Sam Nazarian’s SBE Entertainment Group offered $2.25/share for the hotel chain in May.
- Burkle appears close to acquiring MHGC after a seven-year saga after the unnamed suitor worried that the investor, who holds veto power over significant MHGC asset sales, would prove to be a roadblock to any deal other than his own, according to the report.
- Shareholders must vote on the deal, which values MHGC at ~$800M, by Sept. 14.
- Genesee & Wyoming (NYSE:GWR) announced that it acquired Providence and Worcester Railroad Company (NASDAQ:PWX) for $25.00 per share.
- The $126M deal is expected to close following the receipt of P&W shareholder approval in Q4.
- Upon approval by the Surface Transportation Board, P&W would be managed as part of G&W’s Northeast Region.
- The company expects the acquisition to unlock significant cost savings through overhead, operational, and long-term network efficiencies as well as to generate significant new commercial opportunities.
- G&W expects P&W will require approximately $3M of annual capital expenditures and have depreciation and amortization expense of approximately $3M.
- PWX +49.20% premarket to $24.32.
- Source: Press Release
- Zimmer Biomet Holdings (NYSE:ZBH) acquires privately held CD Diagnostics for an undisclosed sum. The Claymont, DE-based immunoassay developer markets a product called Synovasure PJI, used to diagnose periprosthetic joint infection and native septic arthritis by measuring certain proteins in synovial (joint) fluid.
- Xylem (NYSE:XYL) agrees to acquire smart meter company Sensus for ~$1.7B in cash, confirming an earlier report.
- Sensus, owned by investment funds affiliated with Jordan Co. and GS Capital Partners 2000, provides smart meters, network technologies and data analytics services for the water, electric and gas industries.
- Sensus generated $837M in FY 2016 (ended March 31), and XYL expects the deal to be accretive to earnings in 2017.
- Mid-America Apartment (NYSE:MAA) agrees to acquire Post Properties (NYSE:PPS) in an all-stock deal worth ~$3.88B, confirming an earlier report.
- MAA shareholders will own ~67.7% and former PPS shareholders will own 32.3% of the combined company with a ~$12B market cap, creating the largest multi-family REIT by number of units, with ~105K across 317 properties.
- The companies expect the deal to achieve $20M in annual gross synergies.
- M&A activity is kicking off the headlines this week with an array of deals expected to be announced shortly.
- Among them: Mid-America Apartment (NYSE:MAA)- Post Properties (NYSE:PPS), Sharp (OTCPK:SHCAY)- Foxconn (OTC:FXCOF), Honeywell (NYSE:HON)- JDA Software, Xylem (NYSE:XYL)- Sensus USA and KKR- Entertainment One (OTC:ENTMF).
- The technology sector is still leading the global M&A market in 2016, but the real estate segment is not far behind.
- Will 2016 outpace 2015's record in terms of acquisitions and deal value?
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