Today - Wednesday, March 4, 2015
- Though Semtech (NASDAQ:SMTC) beat FQ4 estimates, it's guiding for FQ1 revenue of $130M-$136M and EPS of $0.27-$0.30, below a consensus of $136.4M and $0.37.
- The analog/mixed-signal chipmaker also announces it's buying Triune Systems, a maker of wireless charging, power management, and battery charger chips, for $45M in cash + performance earn-outs. The deal is expected to be financed via Semtech's credit line, and be slightly accretive in FY16 (ends Jan. '16).
- Shares have fallen to $28.00 AH.
- FQ4 results, PR
- Avago (NASDAQ:AVGO) held "advanced talks" to buy microcontroller/network processor/base station amplifier maker Freescale (NYSE:FSL) before the chipmaker agreed to a $16.7B deal with NXP (NASDAQ:NXPI), Reuters reports.
- Avago reportedly got cold feet after Freescale's shares surged on an NY Post M&A report last month. However, sources state the company is "still looking for an acquisition that could be transformative."
- Over the last 15 months, Avago has struck a $6.6B deal to buy LSI (it later sold parts of LSI to Seagate and Intel), a $309M deal to buy PLX Technology, and (most recently) a $609M deal to buy Emulex, expanding into a number of enterprise hardware markets along the way.
- $31B worth of chip industry M&A deals took place last year, as chipmakers large and small try to reap cost and product synergies by merging with peers.
- Avago rose 0.9% today to $129.40, leaving it close to Monday's all-time high of $130.87.
- M&T Bank (MTB -0.3%) announced the agreement to purchase Hudson City Bancorp (HCBK) nearly three years ago, but the regulatory green-light has been on hold pending approval of the banks' anti-money-laundering compliance program.
- While the stress test and CCAR have nothing to do with money-laundering compliance, analyst Marty Mosby suspects if both banks' capital plans are approved, then a merger approval isn't far behind.
- The current deadline for a closing is April 30.
- The stress tests results are due after the close on Thursday, with the CCAR results six days later.
- A day after slumping to new post-IPO lows and coming within $0.03 of $80, Alibaba (NYSE:BABA) has seen dip-buyers emerge in large numbers. Naturally, Yahoo (NASDAQ:YHOO) is along for the ride.
- The gains come as a Chinese publication reports Jack Ma once said he considered acquiring Yahoo, which plans to spin off its Alibaba stake into a publicly-traded company in Q4. Ma's alleged comments: "The acquisition of Yahoo is something I worked [on] a couple of years ago, this is a political problem, not an economic problem, Yahoo is a media [company], more sensitive."
- There has already been speculation Alibaba will try to buy Yahoo's spinoff at some point. Bloomberg's Matt Levine has noted the spinoff will have to wait a year before a deal occurs, in order to maintain its tax-free status.
- Meanwhile, Alibaba's Aliyun cloud services unit (a giant in the Chinese cloud infrastructure market) has opened a Silicon Valley data center, its first in the U.S. For now, the data center will cater to Chinese companies with U.S. operations, but it plans to go after non-Chinese clients later this year. When it does, Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and a slew of other incumbents will be waiting.
- While rival Royal KPN (OTCPK:KKPNY +1%) is hoping to draw €1B in selling Base, its Belgian mobile division, France's Orange (NYSE:ORAN) -- which has a majority stake in Belgium's No. 2 provider Mobistar -- says it wants to stay in the country.
- Orange's Gervais Pellissier says his company hasn't been contacted about the Base sale but: "Consolidation is necessary in the market and it would make sense for someone already in the country to buy it."
- He expected if Mobistar got involved, in an effort to better take on market leader Belgacom, it would be tough to get the deal approved by regulators.
- Strategic bidders or private-equity funds still seem the likely candidates to buy Base in a market hit by a price war and ripe for consolidation.
- Nielsen Holdings (NYSE:NLSN) has acquired eXelate -- whose technology boosts programmatic ad buying -- for undisclosed terms (but reportedly $200M).
- The deal should smooth automated buying for Nielsen clients who can act quickly on decisions tied to Nielsen ratings info, particularly when programmatic buying moves beyond digital ads into more broadcast programming.
- EXelate has aggregated consumer segments from over 200 data providers.
- Exelon (EXC -0.3%) and Pepco (POM +0.2%) agree to more than double the value of a fund to benefit customers in Maryland, as EXC seeks approval from the state's regulators for its planned $6.8B acquisition of POM.
- Under the plan, EXC raises the level of the customer investment fund to $94.4M from $40M, which state regulators could earmark for benefits such as rate credits, energy efficiency or low income customer assistance.
- The plan also includes an increased commitment to reduce the length and frequency of power outages in the state, as well as non-compliance payments if reliability performance targets during 2018-20 are missed.
- IBM has acquired AlchemyAPI, a provider of software APIs for companies looking to add A.I./deep learning capabilities to their apps. Terms are undisclosed.
- AIchemy offers both cloud-based and on-premise versions of its API offerings, which cover image and text analysis tools. The company asserts its platform "makes it easy to create smart apps that deeply understand the world's conversations, reports and photos."
- IBM plans to integrate Alchemy's deep learning tech with its Watson A.I. hardware/software platform, declaring it will strengthen "Watson's ability to quickly identify hierarchies and understand relationships within large volume data sets." Big Blue also states the deal will "greatly expand the number and types of scalable cognitive computing APIs" available to clients, developers, and partners.
- The IT giant stated last year it wants Watson to produce $10B in revenue within 10 years - all signs suggest it has a ways to go. IBM rolled out the cloud-based Watson Analytics service last year to good reviews, as well as a cloud app development platform (Bluemix) that supports Watson services and APIs. It also bought a virtual assistant startup (Cognea) to help Watson deliver "conversational services."
- Baxter International (NYSE:BAX) acquires Martinsried, Germany-based SuppreMol for €200M ($225M). The privately-held firm develops protein therapeutics for autoimmune, inflammatory and allergic diseases.
- Its lead product candidate is SM101, currently in Phase 2 development for the treatment of primary immune thrombocytopenia and systemic lupus erythematosus. SM101 is a modulator of Fc gamma receptor IIB, a key protein in the signalling pathway that could have broad applications in autoimmune disorders.
- E.W. Scripps (NYSE:SSP) posted lackluster earnings for Q4 as TV results boosted by midterm political ads couldn't shake the drag from newspapers.
- The company missed on top and bottom lines. Income from operations before taxes of $18.1M, up from $7.1M. EPS of $0.27 was impacted by acquisition-integration costs and write-offs totaling about $0.11/share.
- Revenue breakouts: Television, $147M (up 28%); Newspapers, $95M (down 7.9%); Shared services/corporate (includes investment in digital ops), $15.1M (up 2%).
- Cash and equivalents at year's end of $158M vs. total debt of $198M.
- Along with shareholders of Journal Communications (NYSE:JRN), the company is set for a March 11 vote to merge and combine their broadcast operations in one company (to be called E.W. Scripps) and newspaper ops in the other (to be called Journal Media Group).
- The company isn't providing guidance (and hasn't been repurchasing shares) due to the Journal transaction.
- Conference call at 9 a.m. ET.
- Press release
- Sports nutrition products maker MusclePharm (OTCQB:MSLP) enters into a manufacturing agreement with fellow nutritional products developer and manufacturer Capstone Nutrition whereby MusclePharm will consolidate all of its U.S.-based powder, capsule and tablet manufacturing into Capstone facilities.
- Under the terms of the agreement, MusclePharm will receive warrants equal to 19.9% of Capstone and the right to purchase the remaining 80.1% for a period of 18 months. In addition, it will contribute $2.5M to build out Capstone's manufacturing facilities to accommodate MusclePharm's requirements.
- If the companies merge, the consolidated business will generate revenues of $450M and double-digit EBITDA this year.
- MusclePharm also plans to launch a contract manufacturing sales and business development team to complement Capstone's group.
Tuesday, March 3, 2015
- BOX has acquired Subspace, developer of a secure browser (based on the open-source Chromium project that Google Chrome relies on) for accessing corporate data and cloud apps. Terms are undisclosed.
- Though Box praises Subspace's technology, the purchase has elements of an acqui-hire: Subspace will shut down its operations next month, and its employees will "help extend the security, compliance and control features of Box's content and collaboration platform to any device used to access data." Subspace CTO Ben Kus has been named Box's director of security product.
- Among other things, Subspace's team will help make Box's Information Rights Management solution (supports preview-only content access and watermarking) applicable to any kind of content., including material accessed by partners and remote workers.
- Last month, Box announced the purchase of cloud software monitoring startup Airpost.
- Ebix (EBIX -1.3%) has acquired Via Media Health, an Indian provider of "Healthcare PR, Digital Communications & integrated communication solutions and content services for Consumer Healthcare, Hospitals, Medical Devices, Diagnostics and the Pharmaceutical industry." Terms are undisclosed.
- Ebix plans to add Via to its A.D.A.M. health information exchange unit. Back in December, the company bought Oakstone Publishing, a U.S. provider of certification materials and continuing education products for healthcare professionals (also integrated with A.D.A.M.).
- Western Digital's (WDC -2.5%) HGST unit (formerly Hitachi's hard drive division) is acquiring Amplidata, a provider of software for managing object storage deployments within data centers. Terms are undisclosed.
- Amplidata argues its software, which is sold to enterprises, service providers, and OEMs, offers unmatched data reliability and durability, and can scale infinitely as more nodes are added. Demand for object storage solutions has been outpacing broader storage growth, as enterprises increasingly rely on them to handle unstructured data (documents, e-mails, videos, etc.).
- HGST already relies on Amplidata's software to help power its Active Archive storage systems, and says the deal "supports the company's strategy to expand into higher value data storage platforms and systems." It follows HGST's December acquisition of flash storage array vendor Skyera.
- Of note: Though having a sizable Silicon Valley presence, Amplidata is incorporated in Belgium. Thus, Western is likely using offshore cash to pay for the acquisition.
- Springleaf's (LEAF +28.5%) B rating and OneMain's B+ rating have both been put on CreditWatch with negative implications at S&P following the deal for LEAF to buy OneMain from Citigroup.
- S&P expects Springleaf to have a stronger market position following the merger, but substantially higher leverage, and - depending on the details of the financing - the agency expects to cut LEAF's rating by either one or two notches. OneMain's rating will likely be lowered by a similar amount.
- Efficient markets? The purchase of OneMain by Springleaf has been one of the market's worst kept secrets for some time, yet LEAF is higher by nearly 30% on the announcement.
- Previously: Springleaf sees big things with OneMain purchase (March 3)
- Previously: Springleaf (finally) lands Citi's OneMain Financial (March 3)
- Thinly-traded nano cap Islet Sciences (OTCQB:ISLT +22.6%) cancels its previously-announced merger with Brighthaven Ventures, LLC (BHV) after it secures exclusive rights to develop and commercialize SGLT2 inhibitor remogliflozin, currently in Phase 2 development for type 2 diabetes and non-alcoholic steatohepatitis (NASH), from BHV.
- Under the terms of the agreement, Islet will pay BHV an upfront fee of $5M, up to $111.85M in development, regulatory and commercial milestones and royalties on net sales. The exclusive license is contingent on Islet raising $10M in capital and paying BHV the upfront fee by May 31.
- Remogliflozin etabonate (REMO) is an orally available highly selective sodium glucose co-transporter 2 (SGLT2) inhibitor. Each day, ~180g of glucose is filtered by the kidney's glomeruli in a healthy adult. Almost all of it is reabsorbed and returned to circulation by SGLT2. Inhibiting SGLT2 blocks the reabsorption of glucose and increases its secretion thereby lowering blood glucose levels.
- Previously: Islet Sciences to merge (Oct. 2, 2014)
- In taking an 86.7% stake in Germany's e-Shelter, Nippon Telegraph & Telephone (NTT -0.8%) makes itself a key player in Europe's data center industry, jumping into the No. 3 spot in the market.
- E-Shelter is Germany's top operator of data center services, managing 90K square meters of space in Germany, Switzerland and Austria.
- The hotly contested market is growing at 9% a year, according to Gartner.
- For its part, NTT operates more than 130 data centers worldwide.
- The move follows shortly behind a merger of Telecity (OTCPK:TLEIY) with InterXion (NYSE:INXN) to create a leader in that space.
8:15 AM| Comment!
- The purchase of Citi's OneMain Financial is expected to boost 2017 earnings by $470M, says Springleaf (NYSE:LEAF), which earned about $600M in the 12 months ending last September. The combined company will have nearly $14B in core consumer net finance receivables and almost 2K branches across 43 states.
- The combined company will be led by Springleaf CEO Jay Levine and current OneMain CEO Mary McDowell, who will continue in that role. Both the Springleaf and OneMain brands will be initially maintained, before migration to just OneMain beginning in mid-2016.
- Fortress investment (NYSE:FIG) - an owner of 73M shares of Springleaf - Co-Chairman Wes Edens: "We believe this is a compelling transaction, both strategically and financially. It brings together two companies with similar cultures and exceptional management teams, singularly focused on meeting the everyday financing needs of an enormous population of working Americans."
- A conference call is set for 8:30 ET
- Previously: Springleaf (finally) lands Citi's OneMain Financial (March 3)
Visit Seeking Alpha’s new Earnings Center
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs