Merger Arbitrage Mondays – April 5, 2010

  • April 5, 2010

Last week was another active week on the mergers and acquisitions front with four new deals announced, two completed and one deal sweetened to the tune of $100 million. Private investor group SSI Investments bumped up its $1.1 billion or $10.80 per share bid for SkillSoft (SKIL) to $1.2 billion or $11.25 per share. Based on the closing price of $11.10 last Thursday, the spread on the deal is still 15 cents or 1.35%. Given that the deal could close by the end of May, that represents an 8.81% annualized return.

The two deals that closed were the acquisition of Zabera Systems (ZRBA) by Woodstream Corp and the acquisition of K-Tron International (KTII) by casket maker Hillenbrand (HI).

The four new deals announced include the acquisition of Bell Microproducts (BELM) by Avnet (AVT) for $7 per share, the acquisition of BWAY Holdings by Madison Dearborn for $20 per share, the acquisition of White Electronic Designs (WEDC) by Microsemi (MSCC) for $7/share and the acquisition of North American Galvanizing & Coatings (NGA) by AZZ, Inc. (AZZ) for $7.50/share. As you can see from the table below, the spread on these four deals either does not exist or in the case of BWAY Holdings, the market is willing to pay more than the $20 announced price.

 SymbolAnnounced DateAcquiring CompanyClosing ValueClosing PriceLast PriceClosing DateProfitAnnualized Profit
+AYE2/11/2010FirstEnergy$8.5 billion26.3223.053/31/201114.19%14.55%
+SSE2/23/2010Naugatuck Valley Financial Corp$19.5 million7.256.758/16/20107.41%20.64%
+STBK3/18/2010Roma Financial Corp$14.7 million2.522.368/16/20106.78%18.89%
+PINN2/24/2010Investor Group lead by Scotia Waterous (USA)$11 million0.340.32025/17/20106.18%53.74%
+SWWC3/3/2010Institutional Investors$275 million1110.395/17/20105.87%51.02%
+BNE2/24/2010RR Donnelley$481 million11.511.099/30/20103.70%7.71%
+SII2/19/2010Schlumberger$7.5 billion44.9843.599/30/20103.19%6.65%
+MAM3/12/2010Emera Inc.$75.7 million4543.7512/31/20102.86%3.92%
+IUSA3/8/2010CCMP$460 million87.836/30/20102.17%9.32%
+ORCD3/16/2010eMusic$12.77 million2.052.018/16/20101.99%5.54%
+RISK3/1/2010MSCI$1.55 billion22.9222.67/16/20101.42%5.12%
+SKIL2/12/2010consortium of private equity funds$1.2 billion11.2511.15/31/20101.35%8.81%
+MIL3/1/2010Merck$6 billion107105.949/30/20101.00%2.09%
+ADG1/19/2010Chemring Group Plc$59 million7.257.184/19/20100.97% 
+RBI3/15/2010affiliate of Oncap Management Partners L.P. 13.5513.438/16/100.89%2.49%
+PRPX2/17/2010L.B. Foster Co.$112 million11.7111.626/30/20100.77%3.33%
+PIII2/18/2010Lineage$16.7 million5.865.82015/17/20100.69%5.96%
+TUTR3/26/2010Thoma Brava$141 million5.65.577/31/20100.54%1.69%
+CXG3/22/2010Consol Energy Inc.$363 million38.2538.055/5/20100.53%6.40%
+CITP2/2/2010Manpower$375.8 million17.6517.594/2/20100.34%-41.50%
+TRA3/12/2010CF Industries Holdings, Inc.$4.7 billion45.9645.814/12/20100.33%17.07%
+NGA4/1/2010AZZ Inc.$125.6 million7.57.498/31/20100.13%0.33%
+FACT3/9/2010Abbot$450 million2726.985/17/20100.07%0.64%
+WEDC3/30/2010Microsemi Corporation$100 million776/27/20100.00%0.00%
+BELM3/29/2010Avnet$252 million776/30/20100.00%0.00%
+CFL1/18/2010Tyco International$2.9 billion42.542.656/26/2010-0.35%-1.58%
+CKR3/1/2010Thomas H. Lee$928 million11.0511.115/17/2010-0.54%-4.69%
+LGN1/22/2010Lone Star Funds$270 million2.52.525/17/2010-0.79%-6.90%
+ZNT2/18/2010Fairfax Financial Holdings$I.4 billion3838.345/17/2010-0.89%-7.71%
+RCNI3/5/2010Abry$1.2 billion1515.159/30/2010-0.99%-2.07%
+TWLL3/22/2010Intersil Corp.$400 million18.518.715/17/2010-1.12%-9.75%
+CHRD3/15/2010Pegasystems$161.5 million55.085/17/2010-1.57%-13.69%
+BWY3/29/2010Madison Dearborn Partners, LLC ("MDP")$915 million2020.348/16/2010-1.67%-4.66%
+CCE2/25/2010The Coca-Cola Company$12.3 billion 27.8910/1/2010-100%-207.39%