Today - Monday, March 30, 2015
- Vail Resorts (NYSE:MTN) is buying Perisher Ski Resort for AU$176.6M ($136M) in cash. The deal represents Vail's first purchase of an international resort, and is expected to close in the company's July quarter.
- Vail notes Perisher, located in the state of New South Wales, is Australia largest/most visited ski resort, and holds a long-term lease/license that lasts until 2048 with a 20-year renewal option. Perisher is expected to produce $16M in EBITDA and $6M in free cash flow in its first year of operation following the purchase.
- The deal will be financed using cash on hand and the revolver portion of Vail's credit facility.
- The Federal Trade Commission has brought an early close to its antitrust review of John Malone's swap of 4.5% of Starz (NASDAQ:STRZA) for 3.43% of Lions Gate (NYSE:LGF), effectively giving it the go-ahead.
- Malone will get a board seat at Lions Gate and will remain the largest voting shareholder at Starz, holding about 32% of the voting power with his 6.1% equity interest.
- Previously: Maffei: More might come from Malone-Lions Gate relationship (Mar. 09 2015)
- Previously: Starz, Lions Gate deal may presage closer relationship (Feb. 11 2015)
- Previously: Lions Gate adds Liberty's Malone to board in Starz stock-swap deal (Feb. 11 2015)
- Teck Resources (NYSE:TCK) -7.3% AH after saying it is not in any type of deal discussions with Antofagasta (OTC:ANFGF), and there are no other corporate developments that justify any significant movement in its share price.
- TCK was responding to earlier reports that the two companies were exploring a potential merger that would create one of the world's largest copper miners.
- Teck Resources (TCK +10.9%) and Antofagasta (OTC:ANFGF +4.1%) are exploring a merger that would create one of the world’s largest copper producers, Bloomberg reports.
- The mining companies reportedly have held early-stage talks, and any agreement is said to hinge on the approval of the families that control each company.
- With a market value of ~C$11.3B, TCK is Canada’s third-largest mining group and London-listed Antofagasta has a market value of ~£7.3B ($10.8B), so a purchase of either company would be one of the mining industry’s largest deals over the past five years.
- The latest buzz surrounding Panasonic Healthcare's rumored bid for Bayer's (OTCPK:BAYRY +1%) diabetes device business pegs the price at $830M, down substantially from earlier estimates as high as $2.5B.
- Bayer intends to divest the unit in order to remain focused on its life sciences drugs. Panasonic, interested in Bayer's blood glucose meters, joins a list of Japanese electronics firms that are getting more involved in healthcare and its fatter margins.
- Previously: Bayer mulling sale of diabetes business (Nov. 24, 2014)
- Novatel (MIFI +3%) has acquired Feeney Wireless, a provider of hardware, software, and services for M2M/IoT systems and networks, for $25M in cash and stock + up to $25M in earn-outs to be paid over 4 years.
- With Feeney expected to generate 2015 revenue of $38M, Novatel is paying less than 0.7x forward sales; the company's 2015 non-GAAP EBITDA is expected to total $3M. Its hardware includes M2M/IoT modems, in-vehicle gateways, and power components; its software includes an M2M app framework and device management software; its services cover hardware design, systems integration, and remote monitoring.
- Novatel, which already offers M2M modems and tracking/management software, asserts the deal allows it to be "a total IoT solutions and services leader, from hardware to SaaS to connectivity." It follows Sierra Wireless' purchase of M2M service provider Wireless Maingate, and Amazon's purchase of IoT cloud service provider 2lemetry.
- To help finance the deal, top shareholder HC2 Holdings has exercised $8.6M worth of Novatel warrants (issued last September) ahead of plan.
- According to Bloomberg, privately-held Rome-based drug firm Sigma-Tau Group is attracting interest from prospective bidders for its rare diseases business. The unit, valued as high as $1B, could be nice fit with Jazz Pharmaceuticals (JAZZ -0.3%) or Shire plc (SHPG -1%). Last year, Jazz acquired the rights to Sigma-Tau's defibrotide in the Americas for as much as $250M. No formal negotiations are underway, though, and the Cavazza family that owns the business may choose not to sell.
- Sigma-Tau, founded in 1957, generated sales of €697M ($757M) in 2013, with the rare diseases unit contributing €165M. The 220-employee unit focuses on blood diseases and cancer.
- Previously: Jazz kicks off Fast Track review process for VOD med (Dec. 12, 2014)
- Previously: Jazz secures rights to defibrotide in the Americas (July 2, 2014)
- With estimated cost savings of 37% of The Bank of Maine's pre-tax noninterest expense and an anticipated closing date in Q3, the deal is expected to be mid-teens accretive to Camden National's (CAC +1.4%) EPS starting in 2016.
- Consideration is a combination of cash and CAC stock valued at about $135M.
- Source: Press Release
- After rising 28.4% on Friday on reports Intel (INTC -0.3%) is in talks to buy the company, Altera (ALTR -3.8%) is paring its gains in response to downgrades from CLSA, Morgan Stanley, and Macquarie. Morgan Stanley has also downgraded Xilinx (XLNX +0.3%), which rose 5.8% on the reports.
- Reactions to the reports, which vindicate at least a few predictions, have been largely positive. Among the perceived benefits to Intel from a deal: 1) Cost synergies from handling the manufacturing of Altera's FPGAs in-house. 2) Lowering Intel's PC dependence amid soft industry demand. 3) The potential to better cater to the likes of Facebook and Google (and keep ARM rivals at bay) by creating Xeon server CPUs with built-in FPGA circuitry to accelerate algorithm performance. 4) The potential to create system-level solutions for servers, telecom infrastructure gear, and other products that combine processors, FPGAs, and other chips.
- CLSA: "[W]e view a potential Altera deal favorably given the manufacturing and end-market synergies ... Altera’s strong base station presence is valuable to Intel ... we see $0.05-0.10 accretion to our 2016 EPS, and additional accretion down the road as manufacturing moves in house."
- Cowen: "[W]e surmise the deal would be heavily debt financed ... ALTR is one of the only semiconductor companies with better gross margin than INTC ... PLDs are one of the only verticals requiring leading-edge silicon in which INTC does not compete."
- Though upgrading Altera to Market Perform, Wiliam Blair is more cautious. "[W]e believe Altera’s fundamentals have deteriorated as the company has faced multiple headwinds. These include market share loss to Xilinx, declining margins, delays in new product ramp-ups, and competitive issues ... On top of this, we believe Altera (as well as Xilinx) has been negatively affected by the increased adoption of SoC solutions, resulting in decreased demand for FPGAs for Glue Logic functions." Bernstein (still bearish on Intel) notes Altera's revenue is only equal to 3% of Intel's.
- If a deal happens, many think Xilinx will be acquired soon afterwards. The short list of chipmakers big enough to swallow Xilinx ($11.1B market cap) and arguably having complementary products includes Texas Instruments, Qualcomm, Analog Devices, NXP/Freescale (about to merge), Skyworks, and Avago. There's also some speculation Intel, which has sat out the chip industry's recent M&A wave, will follow up on an Altera deal by making other purchases to lower its PC exposure.
- The European Commission (EC) conditionally approves Zimmer Holdings' (NYSE:ZMH) acquisition of Biomet. The EC's clearance is conditional on Zimmer selling certain assets comprising the remedy package previously submitted to the EC which includes the divestment of its Unicondylar Knee implant and Biomet's Discovery Elbow business in the European Economic Area (EEA) and Biomet's Vanguard Total Knee system in Denmark and Sweden.
- Zimmer expects to close the transaction next month. The approval of the U.S. Federal Trade Commission is pending.
- Fortune Brands Home & Security (NYSE:FBHS) announces it acquired Norcraft Companies (NYSE:NCFT) for an enterprise value of $600M.
- Norcraft shareholders will receive $25.50 per share in a tender offer under the terms of the deal.
- The company expects to fold Norcraft into its cabinets business after the merger closes in Q2.
- NCFT +13.54% premarket to $26.00.
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- Teva Pharmaceutical Industries (NYSE:TEVA) acquires Auspex Pharmaceuticals (NASDAQ:ASPX) for $101 per share ($3.2B) in an all-cash transaction. The deal will enhance Teva's revenue and earnings growth profile as well as strengthen its central nervous system franchise.
- Auspex's lead product candidate is SD-809, a small molecule inhibitor of vesicular monoamine 2 transporter (VMAT2), that is designed to regulate the levels of dopamine in the brain. It is being investigated for the treatment of various movement disorders.
- Shares are up 42% premarket on average volume.
- Previously: Auspex Pharma completes enrollment in tardive dyskinesia trial (Feb. 3)
- Previously: Auspex chorea treatment candidate successful in Phase 3, shares jump (Dec. 17, 2014)
- Previously: Auspex candidate for TS tagged an Orphan Drug (Jan. 14)
- UnitedHealth (NYSE:UNH) has agreed to acquire Catamaran (NASDAQ:CTRX) for about $12.8B in cash, planning to merge the pharmacy-benefit manager into its OptumRx unit.
- UnitedHealth will pay $61.50 per share of Catamaran, a 27% premium over Friday’s closing price of $48.32.
- The deal is expected to close in the fourth quarter and will be accretive to UnitedHealth's 2016 net earnings by about $0.30 a share.
- UNH +2.7%; CTRX +26.2% premarket
- Horizon Pharma (NASDAQ:HZNP) has agreed to acquire all of the issued and outstanding shares of Hyperion Therapeutics' (NASDAQ:HPTX) common stock for $46 per share in cash or approximately $1.1B on a fully diluted basis.
- "This transaction will be immediately accretive to adjusted EPS and we expect the contribution of orphan disease products, RAVICTI and BUPHENYL, to add approximately $100M to our adjusted EBITDA in 2016," announced Horizon Pharma CEO Timothy Walbert.
- The proposed transaction has been unanimously approved by both companies' boards of directors.
- Eurocement, the second-largest shareholder in Holcim (OTCPK:HCMLY), plans to vote against the Swiss company's union with Lafarge (OTCPK:LFRGY) unless the financial terms of the deal are altered.
- Last week, the two cement companies salvaged their $44B merger with a revision to their agreement, saying Holcim would offer 0.90 of one of its shares for each one of Lafarge, instead of a one-for-one swap.
- Eurocement alone can’t derail the deal, which requires the approval of two thirds of Holcim's shareholders at an extraordinary meeting (scheduled for May 8).
- In Asia's biggest block deal this year, Chevron (NYSE:CVX) has sold its entire stake in Caltex Australia (OTC:CTXAY), the country's biggest refiner, for A$4.7B ($3.7B).
- Offshore institutional investor demand for the 50% holding was strong, with bidding driving the final price to A$35 a share.
- Previously: Chevron looks to sell Caltex Australia stake (Mar. 27 2015)
- Following months of regulatory examination, Reynolds American (NYSE:RAI) and Lorillard (NYSE:LO) are expected to meet this week with members of the Federal Trade Commission ahead of a final decision by the agency on whether to allow the companies to merge.
- When the two U.S. cigarette makers announced their $25B deal last July, they sought to address potential regulatory concerns about competition by selling $7.1B in brands and other assets to Imperial Tobacco (OTCQX:ITYBY).
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