Today - 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)
- In a deal that's been talked about since Sandy Weill ran Citigroup (NYSE:C), Springleaf Financial (NYSE:LEAF) has agreed to purchase Citi's OneMain Financial for $4.25B in cash. The transaction is expected to close in Q3.
- Citi's consumer finance unit, OneMain has been reported under the Citi Holdings unit, of which the bank has feverishly trying to work its way down to as close to zero dollars in assets as possible. In a presentation yesterday, the bank noted assets at Citi Holdings have fallen to just 5% of total bank assets from 32% in 2008.
- Citi will use the sale proceeds to pay down Citi Holdings debt, and the bank expects to see earnings boosted by about $1B thanks to the deal.
- For Fortress Investment (NYSE:FIG)-backed Springleaf (Fortress purchased LEAF from AIG in 2010), it gets a natural fit in a complimentary consumer finance business
- Source: Press Release
- C +1% premarket. LEAF no action.
- See also: Springleaf see big things with OneMain purchase (March 3)
- AstraZeneca (NYSE:AZN) finalizes its acquisition of Actavis' branded respiratory portfolio in the U.S. and Canada. Under the terms of the deal, AZN paid $600M up front and agrees to pay low single-digit royalties above a certain sales threshold and an additional $100M for a number of contractual consents and approvals, including certain amendments to the ongoing collaboration agreements between the two firms.
- Previously: Actavis sells U.S./Canada respiratory portfolio to AstraZeneca (Feb. 6)
- Akamai (NASDAQ:AKAM) has acquired Xerocole, a developer of technology (referred to as intelligent recursive DNS) that speeds the rate at which domain name servers are able to translate Web site/URL requests into IP addresses. Terms are undisclosed.
- Akamai exec Rick McConnell: "We see this acquisition as an important investment in engineering talent and technology that is intended to complement our DNS product portfolio and strategy. We believe that Xerocole has some of the best DNS experts in the industry and that recursive DNS has strategic value to the Akamai Platform and to each of our business units."
- The purchase is the latest in a string of acquisitions Akamai has made to bolster its value-added (non-commodity) CDN service portfolio. Others: Prolexic, Verivue, Blaze.
Monday, March 2, 2015
- Les Moonves said on CNBC last month that CBS was "very happy being alone," and the CEO doubled down on that talk at the Morgan Stanley Technology, Media and Telecom conference.
- Moonves says his COO tells him that CBS will be a $100 stock in four years, so buyers or merger partners like Time Warner (NYSE:TWX) or Viacom (VIA, VIAB) would have to pay "a very high price." CBS shares gained 4.5% Monday to close at $61.75.
- He also expressed little concern about smaller cable bundles or any lack of negotiating power by eschewing a merger, saying CBS will be in every bundle. "People can't live without CBS ... We like the hand we're playing."
- The company faces new negotiations with DirecTV (NASDAQ:DTV) and Cablevision (NYSE:CVC) at the end of the year.
- Previously: AMC Networks finally looking for a deal? (Feb. 25 2015)
- Previously: Cumulus higher in late trade as CBS M&A chatter flies (Feb. 24 2015)
- Chinese online classifieds leader 58.com (NYSE:WUBA) has bought Anjuke, owner of a popular online real estate listing platform for home buyers and renters, for $267M - $160.2M in cash and 5.09M ordinary shares (equal to 2.55M ADS').
- 58.com asserts the deal will allow it to "create China's largest secondary and rental real estate platform by combining 58.com's housing content category with Anjuke's platform," and to expand into primary real estate services.
- Chinese online real estate leader SouFun (NYSE:SFUN) fell 5.7% today in response to the news, and peer E-House (NYSE:EJ) fell 1.8%. Reacting to the deal, 86Research's Anthony Tong argued today 58.com's listing service might become an appealing alternative to SouFun clients upset about the company's efforts to partner with offline real estate agencies they compete with. "The real estate agents are looking for an alternative. 58.com with Anjuke is a perfect choice.”
- 58.com closed down 1.5%. Along with the Anjuke deal, the company announced it's releasing its Q4 report on March 9.
- The Philadelphia Semi Index (SOXX +2.4%) has rallied to new highs after NXP announced it's buying microcontroller, network processor, and RF amplifier supplier Freescale for $16.7B after factoring net cash/debt, the biggest deal yet in the chip industry's ongoing consolidation wave. The Nasdaq is up 0.5%.
- Microcontroller makers are among today's big gainers - NXP/Freescale assert they'll be the world's biggest supplier of general-purpose microcontrollers. Standouts include Atmel (ATML +6%) and STMicroelectronics (STM +3.4%), as well as Cypress (CY +3.1%) and merger partner Spansion (CODE +3.2%).
- Other notable gainers include InvenSense (INVN +3.4%), Ambarella (AMBA +6.3%), Audience (ADNC +5.5%), Cirrus Logic (CRUS +3.7%), Cavium (CAVM +4.2%), ON Semi (ONNN +3.5%), Silicon Motion (SIMO +3.5%), InPhi (IPHI +3.8%), and TowerJazz (TSEM +5.5%).
- With the Mobile World Congress as a backdrop, InvenSense has unveiled a 6-axis SoC that pairs a gyroscope and acceleromoter with a motion processor and related software/algorithms; the company claims 25%-50% better power consumption than rival solutions. It has also launched a software library meant to "provide sensor-assisted positioning in places where GNSS alone cannot provide desired accuracy."
- Cavium has announced its OCTEON Fusion-M processor line for mobile base stations. The chips support up to 16 custom CPU cores running at 2GHz., and are declared by Cavium to enable "Smart Radio Heads" that can adapt to network conditions. They begin sampling in Q3.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Previously: Chip product launches: ARMH, EZCH, BRCM, NXPI, XLNX, IDTI
- PayPal (EBAY +0.4%) is acquiring Paydiant, provider of a white-label platform that allows retailers to create their own mobile wallet apps, replete with payment, loyalty card, and digital coupon support. Multiple sources tell Re/code the purchase price is around $280M.
- Paydiant's customer base includes Subway, CapitalOne, and (notably) MCX, a consortium of major retailers that plans to launch a QR-code based mobile payments platform (called CurrentC) later this year. MCX's backers include Wal-Mart, Target, Kmart, Best Buy, Dunkin' Donuts, CVS, and several large gas station chains.
- The deal comes on the heels of the Apple Pay launch, Samsung's acquisition of mobile payments platform LoopPay, and Google's deals with U.S. carriers to pre-install Google Wallet on their Android phones. Google is also rumored to be working on Android Pay, an API for 3rd-party apps that can handle both online and in-store payments.
- Though PayPal handled $45.6B worth of mobile transactions in 2014 (mostly online), the rise of mobile payments and authentication platforms backed by tech/Internet giants has been viewed as a long-term threat. Evercore last November: "[T]he convenience that mobile necessitates means that demand channels, including marketplaces, Search, Social and even the OS, are moving closer to sellers ... The result allows demand channels the opportunity to offer payment elements, including user authentication and stored payment credentials for the user on behalf of the merchant, a role traditionally reserved for payment players, most notably PayPal."
- GrubHub (NYSE:GRUB) has closed its acquisition of Restaurants on the Run, and is adjusting its guidance since its prior outlook excluded the impact of the deal.
- The company now expects slightly higher Q1 revenue of $84M-$86M. For the full year, it's expecting revenues of $343M-$358M and adjusted EBITDA of $101M-$109M.
- Shares have opened 0.6% lower.
- Previously: GrubHub up 9% on Q4 beat; making more acquisitions (Feb. 05 2015)
- As rumored last week, HP (NYSE:HPQ) is buying Aruba Networks (NASDAQ:ARUN) in an all-cash deal for $24.67 per share. The transaction is expected to close in H2 of HP's fiscal 2015.
- Source: Press Release
- Previously: Bloomberg: HP in talks to buy Aruba Networks (Feb. 25)
- ARUN -1.5% premarket to $24.44.
- HP +0.6%
8:38 AM| Comment!
- Square 1 (NASDAQ:SQBK) will receive 0.5997 shares of PacWest (NASDAQ:PACW) common stock for each share of Square 1 they own - total consideration of $27.49 based on the most recent price.
- Square 1 in HQ'd in Durham, NC and has about $3.1B in assets, and L.A.-based PacWest has $16.2B in assets. Combined, the two will have nearly $20B in assets, 80 branches in CA, and one in NC.
- The deal is expected to close in Q4.
- Source: Press Release
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