Today - Wednesday, May 6, 2015
- AVG (AVG +1.2%) has bought Privax, a provider of subscription-based VPN services that allow consumers to browse the Web anonymously on PCs and mobile devices, and avoid location blocks on content. The company is paying $40M in cash up-front + up to $20M in earn-outs a year after closing.
- Privax relies on servers in 182 countries to enable its services, which cost $6.55-$11.33/month. The company has 250K+ global paid subscribers to go with 8M+ monthly unique visitors for its free browser proxy service. AVG states the deal will expand its mobile security lineup, and that it will integrate Privax's offerings with AVG Zen and other products.
- The acquisition follows AVG's 2014 purchase of mobile security service provider Location Labs, and comes ahead of the company's May 12 analyst day.
- Separately, AVG has launched updates for its PC TuneUp and Cleaner apps that it promises will deliver further performance gains. The updates cover Windows, Mac, and Android apps.
- Last week: AVG soars on Q4 beat, subscription growth
- SunEdison (SUNE -0.7%) has bought LightWing, a provider of several services (sales support, marketing, project design, financing, and installation) to utilities and retail energy providers looking to sell solar electricity. Terms are undisclosed; SunEdison asserts the deal will give it "access to a significantly broader customer base."
- The company has also announced it's launching a residential power purchase agreement product (PPA - solar systems are installed for little or nothing in exchange for a commitment to buy the electricity produced), thereby entering a market where SolarCity and Vivint have major U.S. presences.
- To drive PPA growth, SunEdison has struck an reseller deal with major U.S. solar residential reseller Evolve Solar - Evolve will "now exclusively sell SunEdison solar products." The company has also lined up residential PPA tax equity financing through a fund enabled by Morgan Stanley, and launched in partnership with SunEdison's TerraForm Power (TERP -0.7%) YieldCo.
- Last month: SunEdison launches rural electric company, aims for 20M customers
- Alexion Pharmaceuticals (ALXN -9.7%) heads south on a 7x surge in volume as investors adjust to the dilution from its $8.4B takeout of Synageva BioPharma (GEVA +113.7%).
- In addition to $115 in cash, Alexion is offering 0.6581 shares of ALXN stock for each GEVA share. This represents a ~12% dilution to current ALXN shareholders.
- Here's the math: 0.6581 x 36.5M shares of GEVA = ~24M/202M shares of ALXN = ~12%.
- On stage in general session at the Internet & Television Expo, panel moderator Julia Boorstin assembled nearly all major cable CEOs and pressed them on hot M&A issues.
- Most were circumspect -- "The world's full of possibilities, but I can't tell you any of them," said Charter (NASDAQ:CHTR) CEO Tom Rutledge -- but James Dolan, CEO of Cablevision (CVC +6%), wasn't, urging market-by-market consolidation instead, starting with CVC's home market of New York City.
- “Consolidation of that marketplace would provide, one, a great deal of ingenuity and much more access to resources for the customers and lower prices,” he said, suggesting specifically that he'd deal with Time Warner Cable (NYSE:TWC), "and Comcast (NASDAQ:CMCSA) and other operators."
- Shares moved up 6% after his comments on indications that Cablevision might sell to a suitable acquirer.
- Previously: WSJ: Charter reaches out to TWC for friendly deal (May. 04 2015)
- Previously: 'As the Cable Turns': Industry deal talk turns to Bright House (Apr. 30 2015)
- A combination of MoneyGram (MGI +28.2%) and Western Union (WU +7.2%) would give the new entity a money transfer market share of close to 20%, notes Financial Post.
- JP Morgan thinks a merger would include equity due to MoneyGram's high debt load.
- That development could cut into buybacks for Western Union and dent its credit rating.
- If a deal for MoneyGram is struck at $10 to $11, JP sees EPS accretion.
- Previously: Western Union reportedly in talks to buy MoneyGram; MGI +34.6% (May. 05 2015)
- Xoom (XOOM +1.9%) appears to be getting a lift from a Bloomberg report stating Western Union is in talks to buy long-time money transfer rival MoneyGram.
- Western and (especially) MoneyGram have soared on the report. Should a deal be inked, Western/MoneyGram will likely cite the existence of online/mobile rivals such as Xoom as a reason why antitrust regulators should clear it.
- Last week: Xoom soars following Q1 beat, in-line 2015 guidance
- China likely is the biggest obstacle to Royal Dutch Shell’s (RDS.A, RDS.B) $70B offer for BG Group (OTCPK:BRGXF, OTCQX:BRGYY), so Shell CEO Ben Van Beurden is visiting the country this week to convince officials that the combination of two large oil and gas producers poses little risk.
- Success is not a certainty, analysts say, given the clout the combined company will have in the global market for liquefied natural gas; the Chinese may well demand that Shell limit the volumes of LNG that is supplied from their portfolio to China.
- "The thing that could potentially tumble out of the closet is BG and Shell’s LNG projects in Australia, which export to China. They might have to divest some stake," says Nomura's Gordon Kwan.
- Antitrust approvals for such large deals in China typically take at least six months.
- Gilead Sciences (GILD) acquires privately-held EpiTherapeutics ApS for $65M in cash. The Copenhagen-based firm develops cancer drugs based on epigenetics, the "on-off" switches for gene expression. Its development programs are focused on enzymes that are involved in the regulation of transcription (copying of DNA) in cancer, specifically histone demethylases and methyltransferases.
- PlasmaTech Biopharmaceuticals (NASDAQ:PTBI) acquires privately-held Abeona Therapeutics for 3,979,761 shares of PTBI common stock or $23.8M based on yesterday's close of $5.97. The deal also includes up to an additional $9M in performance milestones, payable in stock or cash.
- Abeona President & CEO Tim Miller, Ph.D., will succeed PlasmaTech chief Scott Schorer who will transition to a consulting role.
- Abeona is developing gene therapies for the childhood disorders Sanfilippo (SF) syndromes type A and type B, rare inherited lysosomal storage diseases. Its two lead product candidates are ABX-A and ABX-B. In animal studies, a single dose of ABX-A or ABX-B restored normal cell and organ function and increased the lifespan of animals with SF over 100% a year after treatment versus control.
- PTBI is up 36% premarket on robust volume.
- Crestwood Equity Partners (NYSE:CEQP) and Crestwood Midstream Partners (NYSE:CMLP) agree to merge into a single publicly-traded partnership with a consolidated enterprise value of ~$7.5B.
- CMLP unitholders will receive 2.75 units of CEQP for each CMLP unit they own, representing a 17% premium to CMLP's closing price yesterday; the company will continue to be listed on the NYSE under the ticker CEQP.
- As a result of the consolidation, Crestwood estimates another $5M of incremental cost savings can be achieved and added to the $25M-$30M run-rate savings identified as a part of 2015 cost reduction initiatives.
- Alexion Pharmaceuticals (NASDAQ:ALXN) acquires Synageva BioPharma (NASDAQ:GEVA) for $115 in cash and 0.6581 shares of ALXN for each share of GEVA, for a total value of $230 per share or $8.4B.
- Alexion expects to achieve annual cost synergies this year and growing to at least $150M in 2017. The transaction will be accretive to non-GAAP EPS in 2018.
- Synageva develops therapies for rare diseases. Its lead product candidate is the Orphan Drug-, Fast Track- and Breakthrough Therapy-designated Kanuma (sebelipase alfa), an enzyme replacement therapy for the treatment of lysosomal acid lipase deficiency or Wolman disease. Its marketing applications are currently under review in the U.S. and Europe. Its second product candidate is the Phase 1/2-stage SBC-103, an enzyme replacement therapy for mucopolysaccharidosis IIIB, known as Sanfilippo B syndrome, a rare, inherited lysosomal storage disease. It is designated an Orphan Drug by the FDA and EMA and for Fast Track review by the FDA.
- GEVA is up 124% premarket.
Tuesday, May 5, 2015
- Cogent Communications (NASDAQ:CCOI) joined Netflix today in calling for conditions on the proposed merger of AT&T (NYSE:T) and DirecTV (NASDAQ:DTV).
- Data carriers like Cogent (along with firms like Netflix) are focused on interchange issues, the fees that a broadband behemoth could collect for accepting Internet traffic -- and their opposition, or the nature of it, could be good news for the deal, says industry analyst Craig Moffett.
- The reason? The companies could be kingmakers by urging concessions, he says: They helped sink the Comcast-TWC deal, and now with AT&T/DirecTV, “two of the most ardent opponents are tacitly blessing the idea of the merger as long as there are appropriate conditions.”
- The two say that a combined AT&T/DirecTV with no restrictions will have a bigger incentive to stymie streaming entertainment.
- Pacific Rubiales Energy (OTCPK:PEGFF) has received a takeover offer by its biggest shareholder that values it at ~$6B including debt, Bloomberg reports.
- Mexican conglomerate Alfa and Harbour Energy are said to have made an all-cash offer that values Rubiales at ~C$6/share.
- Alfa’s interest in the company has been speculated ever since it disclosed a stake last year, which it built to 19% in October, just below the 20% threshold that would require a company to start a takeover bid in most cases under Canadian securities law.
5:28 PM| 8 Comments
- Bloomberg reports Microsoft (MSFT -1.2%) is "evaluating a bid" for Salesforce (CRM +4.8%) after Salesforce was approached by another potential suitor. Salesforce is reportedly working with two banks to determine a response.
- Bloomberg cautions Microsoft isn't currently in talks with the cloud CRM software giant, whose market cap stands at $49B. There was plenty of speculation Microsoft was the company that (per Bloomberg) recently approached Salesforce. SAP has denied being interested, and Oracle has suggested it isn't. A source says Microsoft has "long expected it might compete for Salesforce if it was for sale."
- Salesforce has jumped on the report. If Microsoft pursues a bid, activist ValueAct Capital (has a board seat) might raise objections.
- The report comes as Microsoft announces a partnership with cloud ERP/HR/e-commerce software vendor NetSuite (N +3%) to integrate NetSuite's apps with Office 365 apps and Azure services, and to make Azure NetSuite's "preferred cloud infrastructure platform." Microsoft struck an Office 365-focused partnership with Salesforce last year. NetSuite has received a lift from Bloomberg's report.
- Harris (HRS -1.6%) expects to win antitrust approval for its planned acquisition of Exelis(XLS -0.6%) without having to make any asset disposals and still anticipates the $4.6B deal to close in June.
- The remaining stumbling block is its ownership of intellectual property related to a planned Army radio upgrade, Chief Executive Bill Brown said on a post-earnings call. The company is confident it will resolve the issue.
- Earlier: More on Harris' FQ3 (May. 05 2015)
- Earlie: Harris beats by $0.07, misses on revenue (May. 05 2015)
- KapStone Paper and Packaging KS acquires Victory Packaging for $615M in cash.
- The deal terms call for payouts of another $45M if certain terms are met over the next four years.
- The company says a $100M tax benefit associated with the acquisition will lower the net purchase price to $515M.
- Previously: KapStone misses by $0.11, misses on revenue
- Previously: Volume down in Q1 for KapStone Paper and Packaging
- Mondelez International (NASDAQ:MDLZ) and D.E. Master Blenders (OTC:DEMBF) land conditional approval from the European Commission on their proposed merger after agreeing to divest a few brands in certain regions.
- The newly-created Jacobs Douwe Egberts is expected to strike revenue of more than €5B ($5.56B).
- Pierre Laubies will be the pure play coffee company's CEO.
Monday, May 4, 2015
- Syngenta (NYSE:SYT) fell 7.6% in today's trade, giving up some but not all of its 16% gain on Friday that was sparked by talk that Monsanto (NYSE:MON) had approached the company about a takeover.
- The biggest concern for regulatory approval may involve what would be an unprecedented market share in soybeans and corn seeds for the combined company, and analysts say SYT’s operations in those areas would appeal to a range of buyers including Dow Chemical (NYSE:DOW), DuPont (NYSE:DD), BASF (OTCQX:BASFY, OTCPK:BFFAF) and Bayer (OTCPK:BAYZF, OTCPK:BAYRY).
- Colin Isaac of Atlantic Equities says the deal he always expected to happen is a DuPont purchase of Dow's agriculture unit; CEO Andrew Liveris has suggested Dow is open to divesting the unit, and MON's becoming a much stronger competitor after an SYT takeover could be a catalyst for Dow to more seriously consider exiting the business, which Issac says would be prime pickings for DuPont and its Pioneer seed business.
- A $19.5B bid by DuPont for Dow’s ag sciences business could generate a 7% return on invested capital, according to a report by Laurence Alexander at Jefferies, while adding that such a move is less likely until agricultural markets improve from current trough levels.
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