Merger Arbitrage Mondays – September 11, 2017
Merger activity decreased last week with four new deals announced and three deals closing. You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.
There was one new deal announced in the Deals in the Works section.
Deal Statistics:
| Total Number of Deals Closed in 2017 | 144 |
| Total Number of Deals Not Completed in 2017 | 8 |
| Total Number of Pending Deals |
| Cash Deals | 53 |
| Stock Deals | 24 |
| Stock & Cash Deals | 12 |
| Special Conditions | 10 |
| Total Number of Pending Deals | 99 |
| Total Deal Size | $905 billion |
New Deals:
- The acquisition of Rockwell Collins (COL) by United Technologies (UTX) for $30 billion in a cash plus stock deal. Under the terms of the agreement, each Rockwell Collins shareowner will receive $93.33 per share in cash and $46.67 in shares of UTC common stock, subject to a 7.5 percent collar centered on UTC’s August 22, 2017 closing share price of $115.69. We are treating this as a special conditions deal.
- The acquisition of YuMe (YUME) by RhythmOne (RTHM.L) for $102.36 million in a cash plus stock deal. Under the terms of the agreement, YuMe shareholders will receive $1.70 per share in cash and 7.325 shares in RhythmOne stock.
- The acquisition of Landauer (LDR) by Fortive Corporation (FTV) for $770 million or $67.25 per share in cash.
- Cogint (COGT) entered into a definitive transaction agreement with BlueFocus International Limited, under which cogint and BlueFocus will combine their businesses. In the transaction, BlueFocus will contribute to cogint (1) $100 million in cash, (2) Canadian-based marketing communications company Vision7 International, (3) U.K.-based global socially-led creative agency We Are Very Social Limited, and (4) Indigo Social. As part of the transaction, immediately prior to the closing, cogint will spin-off its data and analytics operations and assets into a public company, expected to be listed on NASDAQ, named Red Violet, Inc.. The shares of Red Violet will be distributed to cogint’s shareholders as of a record date to be determined as a stock dividend upon closing of the transaction. Since we can’t determine the value of the combined company with certainty, we are not going to add this deal to the Merger Arbitrage Tool. We will be tracking the spinoff in our list of upcoming spinoffs.
Deal Updates:
- On September 4, 2017, The Chilean Fiscalía Nacional Económica (FNE) approved AT&T’s (T) pending acquisition of Time Warner (TWX).
- On September 6, 2017, Cabela’s Incorporated (CAB) was notified that the Board of Governors of the Federal Reserve (the “FRB”) has approved the previously announced sale of the assets and liabilities of the Company’s wholly owned bank subsidiary, World’s Foremost Bank, to Synovus Bank. The double digit spread on this deal narrowed immediately following this news and the spread is currently less than 1%.
- On September 6, 2017, EU antitrust regulators have halted for a second time their review of U.S. smartphone chipmaker Qualcomm’s (QCOM) $38-billion bid for NXP Semiconductors (NXPI) after the companies failed to provide key details of the deal.
- On September 7, 2017, Wabash National Corporation (WNC) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or HSR Act, applicable to the acquisition of Supreme Industries (STS) by Wabash National expired on September 6, 2017.
- On September 7, 2017, in connection with the previously announced agreement to acquire Guidance Software (GUID), OpenText (OTEX) announced that it has extended the expiration of its tender offer to acquire all of the outstanding shares of Guidance’s common stock. The tender offer is now scheduled to expire on September 13, 2017, unless it is further extended.
- We have re-classified the CombiMatrix Corporation (CBMX) deal as a ‘special conditions deal’, since the consideration payable to CombiMatrix shareholders is a fixed amount of $27 million paid in Invitae Corporation (NVTA) stock and subject to an adjustment for “Net Cash” of CombiMatrix at closing.
Closed Deals:
- The acquisition of Nord Anglia Education (NORD) by Canada Pension Plan Investment Board and Baring Private Equity Asia on September 5, 2017. It took 133 days for this deal to be completed.
- The acquisition of Rocket Fuel (FUEL) by Sizmek on September 6, 2017. It took 50 days for this deal to be completed.
- The acquisition of Swift Transportation Company (SWFT) by Knight Transportation (KNX) on September 10, 2017. It took 153 days for this deal to be completed.
Top 10 deals with largest spreads:
Closing
Price |
|---|
| GNW | 10/23/2016 | China Oceanwide Holdings Group Co., Ltd. (N/A) | $5.43 | $3.45 | 11/30/2017 | 57.39% | 261.85% |
| LSCC | 11/03/2016 | Canyon Bridge Capital Partners, Inc. (N/A) | $8.30 | $5.63 | 09/30/2017 | 47.42% | 911.05% |
| MGI | 01/26/2017 | Ant Financial Services Group (N/A) | $18.00 | $16.40 | 12/31/2017 | 9.76% | 32.08% |
| HUN | 05/22/2017 | CLARIANT N (CLN.VX) | $29.45 | $26.84 | 12/31/2017 | 9.74% | 32.02% |
| YUME | 09/05/2017 | RhythmOne plc (RTHM.L) | $5.18 | $4.72 | 03/31/2018 | 9.67% | 17.56% |
| CBMX | 07/31/2017 | Invitae Corporation (NVTA) | $8.33 | $7.60 | 12/31/2017 | 9.61% | 31.58% |
| SGBK | 03/27/2017 | Home Bancshares, Inc. (HOMB) | $49.00 | $44.83 | 12/31/2017 | 9.30% | 30.59% |
| MON | 09/14/2016 | Bayer AG (BAYRY) | $128.00 | $117.42 | 12/31/2017 | 9.01% | 29.63% |
| NXTM | 08/07/2017 | Fresenius Medical Care (N/A) | $30.00 | $27.88 | 06/30/2018 | 7.60% | 9.51% |
| TWX | 10/22/2016 | AT&T, Inc. (T) | $107.50 | $100.20 | 12/31/2017 | 7.29% | 23.96% |
List of all pending deals:
The list of all pending deals is only available to InsideArbitrage Premium and Plus members.
Disclaimer: I hold positions in Staples (SPLS), Cabela’s (CAB), Fortress Investment Group (FIG), MaxPoint Interactive (MXPT) and CombiMatrix (CBMX). 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.
Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria
