Thursday, February 26, 2015
- Recent IPO Diplomat Pharmacy (DPLO +11.8%) acquires privately-held BioRx, a highly specialized pharmacy and infusion services provider focused on patients with ultra-orphan and rare chronic diseases.
- Under the terms of the agreement, Diplomat will buy BioRx for $210M in cash and $105M in DPLO stock. The transaction is expected to close in March.
- Diplomat provides medication management services for patients with complex chronic diseases including cancer, immunology, hepatitis, multiple sclerosis and HIV.
- Town Sports International (NASDAQ:CLUB) is higher in early trading after reporting earnings and announcing a strategic review which could include approving a sale.
- The company also named Daniel Gallagher to be the new CEO to replace Robert Giardina who will move into the exective chairman role.
- Galagher was COO at the company.
- Deutsche Bank is on the scene to help Town Sports look at strategic options.
- Previously: Town Sports beats by $0.05, beats on revenue (Feb. 25 2015)
- CLUB +7.4% premarket.
- Sorin S.p.A. (OTC:SORJF) and Cyberonics (NASDAQ:CYBX) agree to merge, creating a combined company with an equity value of ~$2.7B. Under the terms of the transaction, the firms will combine under a newly formed holding company, "NewCo", which will be named prior to the close of the deal. Each Cyberonics shareholder will receive one ordinary share of NewCo for each CYBX share. Each Sorin shareholder will receive a fixed ratio of 0.0472 ordinary shares of NewCo for each Sorin share owned. After the close, Cyberonics shareholders will own ~54% of NewCo while Sorin shareholders will own ~46%.
- The marriage brings Sorin's leadership in cardiac surgery together with Cyberonics' leadership in neuromodulation. Sorin CEO Andre-Michel Ballester will be Chief Executive of NewCo while Cyberonics CEO Dan Moore will become non-executive Chairman.
- Spanish utility Iberdrola (OTCPK:IBDRY) has agreed to buy UIL Holdings (NYSE:UIL) for about $3B, creating a new listed power and electric utility.
- Iberdrola said the deal would help implement its growth plans in the U.S. through 2016, as it seeks to expand its footprint outside its sluggish home market.
- The deal values each share of UIL at $52.83, representing a 23.6% premium over its closing price on Wednesday.
Wednesday, February 25, 2015
- The addition of Gregg Seibert, the former investment banker, as vice chairman of AMC Networks (NASDAQ:AMCX) has folks talking about whether the network is now a much more likely candidate for an acquisition.
- "Clearly he is there to do deals," FBN Securities' Robert Routh says. "Either it's going to be a sale or a big acquisition or possibly a privatization. The question is, what is it?"
- Speculation has floated about AMC as a takeover target for some time, with CBS or Twenty-First Century Fox (NASDAQ:FOXA) among the names listed as potential buyers.
- AMC has sported high-quality programming that's attractive to partners, including Mad Men, The Walking Dead and Breaking Bad, and has been garnering critical acclaim for its spinoff Better Call Saul, though as hits end, they'll need to be replenished. Rich Tullo at Albert Fried called for AMC to go with an a la carte service.
- AMCX announces earnings in the morning; expectations are for EPS of $1.01 on revenues of $603.1M.
- In tandem with its FQ1 results, Avago (NASDAQ:AVGO) announces it's buying Fibre Channel/Ethernet connectivity hardware maker Emulex (NYSE:ELX) for $609M net of cash and debt, or $8/share. The price represents a 26% premium to Emulex's Wednesday close.
- The deal is expected to be funded with cash on hand, and to close in the second half of Avago's FY15 (ends Nov. 1). It's expected to be immediately accretive.
- Avago is less than a year removed from buying LSI, whose product line includes RAID storage controllers, storage adapter cards, hard drive SoCs, and network processors. Much of Emulex's product line, which includes Fibre Channel and Ethernet adapter cards, Ethernet and storage controllers, and network monitoring hardware, is complementary to LSI's and/or services the same hardware OEMs.
- Avago is up 5.3% AH to $118.64 following the acquisition news, its FQ1 EPS beat, and strong FQ2 revenue guidance. Emulex is up 24.8% to $7.94. Emulex archrival QLogic (NASDAQ:QLGC) is up 4% to $15.16.
- Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
- Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
- HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
- Citing good progress in obtaining clearances and approvals, GlaxoSmithKline (GSK +0.1%) expects to complete its three-part deal with Novartis (NVS -0.2%) sometime during the first week in March.
- The transaction, first announced in April of last year, consists of GSK buying NVS's vaccines business, the creation of a consumer healthcare joint venture between the two firms and the sale of GSK's marketed oncology portfolio to NVS, including related R&D and the rights to two AKT inhibitors in development.
- Previously: Novartis announces billions of dollars in deals with GSK, Eli Lilly (April 22, 2014)
- SFX Entertainment (NASDAQ:SFXE) CEO Robert Sillerman proposes to take the company private with an offer to buy all outstanding shares at $4.75 per share.
- Sillerman is expected to file a report with the SEC sometime today disclosing how many shares he has already accumulated.
- The board can still explore other strategic alternatives.
- SFXE +20.5% premarket to $4.46, still 6.1% below Sillerman's offer price.
- TC Pipelines (NYSE:TCP) agrees to acquire the remaining 30% interest in Gas Transmission Northwest from its parent company, TransCanada (NYSE:TRP), in a $446M deal.
- The total includes $253M in cash, the assumption of $98M in proportional GTN debt and the issuance of $95M of new Class B units to TRP which will entitle TRP to a distribution based on 30% of GTN's annual cash distributions.
- GTN is a 1,353-mile pipeline that transports natural gas under long-term contracts from the Western Canada Sedimentary Basin and the Rocky Mountains to Washington, Oregon and California.
- TRP says the partnership has the capacity to complete dropdowns in excess of $1B/year.
- Rio Tinto (NYSE:RIO) will not be taken over by rival Glencore (OTCPK:GLNCY) because there is no value in it for shareholders and regulators will never let it happen, announced Rio Tinto chief executive Sam Walsh.
- Rio snubbed a takeover approach from Glencore last August to create a $160B mining and trading giant, but Glencore never ruled out making a fresh attempt.
- Under U.K. rules, it could return with an offer from April onward.
- Previously: Glencore confirms it is no longer considering merger with Rio Tinto (Oct. 07 2014)
- Previously: Rio Tinto says it turned down Glencore merger idea in August (Oct. 06 2014)
Tuesday, February 24, 2015
- Sandell Asset Management is reportedly pressing a familiar line with CBS: Spin off your radio stations and (in this case) merge them with Cumulus Media (NASDAQ:CMLS).
- While CBS chief Les Moonves has highlighted the cash flow and 40% margins provided by the 117 stations the company owns, Sandell suggests that in a reverse Morris Trust merger, CBS could divest an asset with a low tax base at low impact.
- Cumulus' takeaway? Scaling up to combined sales of $2.4B and a market cap of almost $5B.
- One headwind is Cumulus' leverage, at a ratio of 6.5x EBITDA after purchases of Citadel Broadcasting and WestwoodOne, while another is Sumner Redstone's grip on CBS' vote.
- After hours: CMLS +3.1%.
4:24 PM| 3 Comments
- Further expanding its transportation business overseas, Hitachi (OTCPK:HTHIY -1.7%) has agreed to pay $1B for two units from Finmeccanica (OTCPK:FINMY -2.7%), which is looking to concentrate on its core aerospace and defense businesses.
- Hitachi will pay €773M ($876.1M) for Finmeccanica’s 40% stake in rail signaling operator Ansaldo and €36M for its unprofitable train manufacturer AnsaldoBreda.
- Following the closing of the deal, Hitachi will launch a mandatory tender offer on Ansaldo’s publicly traded shares, potentially boosting its total payout to as much as $2.5B.
- Previously: Hitachi confirms bid for Finmeccanica train-making, signal assets (Dec. 17 2014)
- Shire plc (NASDAQ:SHPG) acquires San Diego, CA-based Meritage Pharma for an upfront payment of $70M plus milestones.
- Meritage's lead product candidate is an oral budesonide suspension for the treatment of eosinophilic esophagitis.
- Shire obtained the rights to acquire Meritage in connection with its buy of ViroPharma, which purchased the exclusive right to acquire Meritage in 2011.
- Previously: Shire extends offer for ViroPharma (Dec. 27, 2013)
- AmerisourceBergen (NYSE:ABC) finalizes its acquisition of MWI Veterinary Supply (NASDAQ:MWIV) by completing its tender offer to purchase all outstanding MWIV shares at $190 per share in cash. As of midnight last night, 10,096,484 shares had been tendered representing 78.1% of MWIV's outstanding common stock on a fully diluted basis.
- The European Commission has opened an in-depth investigation into Cargill's $440M planned acquisition of Archer Daniels Midland's (NYSE:ADM) chocolate business, saying the deal could lead to higher prices.
- Previously expecting the deal to close by July 1, ADM is "now targeting closing in mid-2015," announced spokeswoman Jackie Anderson.
- The EU executive has until July 8 to investigate the purchase.
- Looking to bolster its equipment leasing business, Huntington Bancshares (NASDAQ:HBAN) has agreed to acquire Macquarie Group's (OTC:MCQEF) equipment finance unit for around $380M, Reuters reports, saying a deal could be announced as early as this week.
- Macquarie bought the unit, then named CIT Systems Leasing, from CIT Group in 2008. At the time of the acquisition, the business had $700M of assets.
- HBAN +0.8% premarket
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