150% Upside To Company With New Wal-Mart Deal

| About: Wal-Mart Stores, (WMT)


Wal-Mart partners with JD and Noble Roman's.

OSI buying American Science and Engineering.

IM deal offers a 21% IRR; shareholders vote today.

Welcome to the Save Money, Live Better issue of M&A Daily


Wal-Mart (NYSE:WMT) and JD.com (NASDAQ:JD) are forming an alliance, in which WMT will get 5% of JD's equity and JD will get the Yihaodian marketplace platform assets. Wal-Mart worked with Morgan Stanley (NYSE:MS) on the deal. The alliance will compete head-to-head with Alibaba (NYSE:BABA) in its direct-to-consumer business.

WMT is also welcoming Noble Roman's (OTCQB:NROM) first franchise restaurant inside a Wal-Mart store. If this one goes well, it is likely they will roll out Noble Roman's at additional Wal-Mart locations. Noble Roman's is worth at least $1.50 per share to a potential buyer, two and a half times today's stock price, due to its strong cash flow generation.

If you are interested in learning more about Wal-Mart, I recommend reading Sam Walton: Made In America. Amazon (NASDAQ:AMZN) says this about the book:

Meet a genuine American folk hero cut from the homespun cloth of America's heartland: Sam Walton, who parlayed a single dime store in a hardscrabble cotton town into Walmart, the largest retailer in the world. The undisputed merchant king of the late twentieth century, Sam never lost the common touch.

American Science and Engineering

OSI (NASDAQ:OSIS) is buying American Science and Engineering (NASDAQ:ASEI) in a $269 million cash deal. ASEI's holders get $37 per share.

Avenue Financial

The Avenue Financial (NASDAQ:AVNU) shareholder vote is today for its acquisition by Pinnacle Financial (NASDAQ:PNFP).


Towne Bank (NASDAQ:TOWN) and Monarch Financial (NASDAQ:MNRK) hold their shareholder votes today.

Ingram Micro

The Ingram Micro (NYSE:IM) shareholder vote is today for its acquisition by Tianjin Tianhai. The $3.94 arb spread offers a 21% IRR if the deal closes by year end. More to come in future editions of M&A Daily...

Done deal(s).



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Disclosure: I am/we are long NROM, IM, PNX, CVC.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Chris DeMuth Jr and Andrew Walker are portfolio managers at Rangeley Capital. We invest with a margin of safety by buying securities at discounts to their intrinsic value and unlocking that value through corporate events. To maximize returns for our investors, we reserve the right to make investment decisions regarding any security without notification except where notification is required by law. We manage diversified portfolios with a multi-year time horizon. Positions disclosed in articles may vary in sizing, hedges, and place within the capital structure. Disclosed ideas are related to a specific price, value, and time. If any of these attributes change, then the position might change (and probably will).

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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