Merger activity increased significantly last week with eight new deals announced, four deals completed and two deals terminated. Three of the eight new deals announced last week were potential deals in the works. It was a busy week with respect to SPAC business combinations as well with 11 new SPAC business combinations announced.
The acquisition of Bottomline Technologies (NASDAQ:EPAY) was Thoma Bravo's 6th acquisition for the year. Proofpoint, QAD Inc., Talend, Stamps.com and Medallia were the other five companies in our list of active deals that entered into a definitive agreement to be acquired by Thoma Bravo this year.
Founded in 1989 and headquartered in Portsmouth, New Hampshire, Bottomline Technologies provides cloud-based business payments, and document automation solutions to financial institutions, corporations, and banks. These solutions provided by the company are used to streamline payment processes across global businesses, automate, and manage processes that involve payments, invoicing, global cash management, supply chain finance, and transactional documents.
We added Bottomline Technologies to our list of potential deals on December 9, 2021, when Bloomberg reported that the company was exploring a sale. EPAY's price after the news of the potential deal came out was $53.05. On December 17, 2021, Bottomline Technologies entered into a definitive agreement to be acquired by Thoma Bravo for $57 per share in cash.
Another significant deal announced last week was the acquisition of Arena Pharmaceuticals (ARNA) by Pfizer (NYSE:PFE) for $4.69 billion or $100 per share in cash, representing a premium of over 100% to ARNA's closing price on Friday, December 10, 2021. Through this acquisition Pfizer plans to gain access to its auto-immune therapy Etrasimod. Based in Park City, Utah, Arena Pharmaceuticals is a biopharmaceutical company that develops a diversified portfolio of therapeutic candidates targeting gastroenterology, dermatology, and cardiology. According to the press release, Arena has built a robust development program for etrasimod, including two Phase 3 studies in ulcerative colitis (UC), a Phase 2/3 program in Crohn's Disease, a planned Phase 3 program in atopic dermatitis, and ongoing Phase 2 studies in eosinophilic esophagitis and alopecia areata.
Pfizer is using its newfound vaccine related cash to acquiring several companies and the announcement to acquire Arena comes less than a month after Pfizer closed its $2.2 billion deal to acquire Trillium Therapeutics. Just like the Trillium deal and Sanofi's acquisition of Kadmon Holdings, the spread on the Arena deal is large at 8.93% (nearly 17% annualized if the deal closes by June 2022). The large spreads on all these deals reflects regulatory concerns.
There were three new deals announced in the Deals in the Works section last week. On December 16, 2021, The Wall Street Journal reported that Oracle (ORCL) is in talks to buy electronic-medical-records company Cerner (CERN), a deal that could be worth around $30 billion and push the enterprise-software giant further into healthcare.
There were 15 SPAC IPOs filed and 11 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.
The table below shows weekly spread changes between December 10 and December 17, 2021.
|Symbol||Quote||AcquiringCompany||AcquiringCompany Quote||CurrentSpread||Last WeekSpread||Spread ChangeWeekly||DealType|
|MNTV||19.98||Zendesk (ZEN)||102.32||15.23%||5.49%||9.74%||All Stock|
|XLNX||200.14||Advanced Micro Devices, Inc. (AMD)||137.75||18.62%||9.94%||8.68%||All Stock|
|JOBS||47.78||Garnet Faith Limited (N/A)||65.45%||58.45%||7.00%||All Cash|
|MILE||2.34||Lemonade (LMND)||46.28||4.03%||1.92%||2.11%||All Stock|
|COHR||262.52||II-VI Incorporated (IIVI)||68.16||7.43%||5.62%||1.81%||Cash Plus Stock|
|PTRS||9.7||OceanFirst Financial Corp. (OCFC)||21.53||7.01%||9.03%||-2.02%||Special Conditions|
|LEVL||38.56||First Merchants Corporation (FRME)||39.71||0.18%||2.22%||-2.04%||Cash Plus Stock|
|STXB||27.63||Simmons First National Corporation (SFNC)||28.62||5.65%||7.89%||-2.24%||All Stock|
|CSPR||6.66||Durational Capital Management LP (N/A)||3.60%||6.98%||-3.38%||All Cash|
|AJRD||46.15||Lockheed Martin Corporation (LMT)||344.14||10.51%||19.75%||-9.24%||All Cash|
|Total Number of Deals Closed in 2021||190|
|Total Number of Deals Not Completed in 2021||16|
|Total Number of Pending Deals|
|Stock & Cash Deals||6|
|Total Number of Pending Deals||87|
|Total Deal Size||$1.04 trillion|
|Symbol||Announced Date||Acquiring Company||Closing Price||Last Price||Closing Date||Profit||Annualized Profit|
|JOBS||06/21/2021||Garnet Faith Limited (N/A)||$79.05||$47.78||12/31/2021||65.45%||2171.61%|
|VRS||12/19/2021||BillerudKorsnäs AB (N/A)||$27.00||$20.05||06/30/2022||34.66%||65.90%|
|TMX||12/14/2021||Rentokil Initial plc (RTOKY)||$55.00||$44.01||12/31/2022||24.97%||24.24%|
|CHNG||01/06/2021||UnitedHealth Group Incorporated (UNH)||$25.75||$20.89||06/30/2022||23.26%||44.23%|
|XLNX||10/27/2020||Advanced Micro Devices, Inc. (AMD)||$237.40||$200.14||12/31/2021||18.62%||617.72%|
|PNM||10/21/2020||Avangrid, Inc. (AGR)||$50.30||$45.07||12/31/2021||11.60%||385.05%|
|SJR||03/15/2021||Rogers Communications Inc. (RCI)||$32.40||$29.04||06/30/2022||11.57%||22.00%|
|AJRD||12/20/2020||Lockheed Martin Corporation (LMT)||$51.00||$46.15||03/31/2022||10.51%||37.98%|
|ARNA||12/13/2021||Pfizer Inc. (PFE)||$100.00||$91.8||06/30/2022||8.93%||16.98%|
Apart from multiple new deals announced last week, two active deals were terminated. While Magnachip Semiconductor Corporation and South Dearborn Limited mutually terminated their merger agreement, R.R. Donnelley & Sons Company terminated its merger agreement with Atlas Holdings and agreed to be acquired by Chatham Asset Management, putting an end to the month long bidding war. Unlike other deals that fell apart and triggered forced selling by arbitrageurs, Magnachip saw its stock head higher on optimism related to its business prospects as an independent company.
This article was written by
I am an entrepreneur and investor with a focus on event driven strategies including merger arbitrage, spinoffs, (legal) insider trading, buybacks and SPACs. I was one of the earliest contributors on Seeking Alpha and started publishing here in 2005. For more than a decade I have been writing every week about M&A and interesting insider transactions. My work has been mentioned in Barron's, Dow Jones, BNN Bloomberg and other publications.
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Disclosure: I/we have a beneficial long position in the shares of MX, NUAN, CHNG, PFE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Disclaimer: I have long positions in Magnachip Semiconductor (MX), Nuance Communications (NUAN), Change Healthcare (CHNG) and Pfizer (PFE). I also have put options in Change Healthcare. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.