Merger Arbitrage Mondays – May 23, 2011

  • May 22, 2011

Merger activity increased last week with five new deals announced and seven closing.

You can find all the active deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours.

Deal Statistics:

Total Number of Deals Closed in 201174
Total Number of Deals Not Completed in 20111
Total Number of Pending Deals
Cash Deals48
Stock Deals24
Stock & Cash Deals15
Special Conditions1
Total Number of Pending Deals88

New Deals:

  1. The acquisition of Integral Systems (ISYS) by Kratos Defense & Security Solutions (KTOS) for $266 million in a cash plus stock deal, where where each Integral Systems share will be converted into $5.00 in cash and 0.588 of a share of Kratos common stock.
  2. The acquisition of Orthovita (VITA) by Stryker Corporation (SYK) for $316 million or $3.85 per share in cash.
  3. The acquisition of PRIMEDIA (PRM) by TPG Capital for $525 million or $7.10 per share in cash.
  4. The acquisition of Nobel Learning (NLCI) by Leeds Equity Partners for $149 million or $11.75 per share in cash.
  5. The acquisition of China Fire and Security Group (CFSG) by Bain Capital Partners for $265.5 million or $9.00 per share in cash. This deal was announced after the close on Friday and hence the spread looks big right now but will probably narrow significantly at the open on Monday. China Fire and Security Group went public in 2006 through a reverse merger. The stock lost almost half its value over the last year taking a hit along with other Chinese companies listed in the United States. It is interesting to see Bain step in and buy one of these reverse merger companies. There is obviously value to be found amongst these stocks provided one has the time and resources to do the necessary due diligence.


Updated Deals:

  1. RAE Systems Inc. Announces Amended Merger Agreement With Vector Capital increasing the acquisition price to $2.05 per share in cash on May 20, 2011. This has been the third upward revision in the offer price in a span of less than two months.


Closed Deals:

  1. The acquisition of Wilmington Trust Corp (WL) by M&T Bank (MTB) on May 16, 2011.
  2. The acquisition of Technology Research Corporation (TRCI) by Coleman Cable (CCIX) on May 16, 2011.
  3. The acquisition of Inspire Pharmaceuticals (ISPH) by Merck (MRK) on May 16, 2011.
  4. The acquisition of Epicor Software Corporation (EPIC) by Apax Partners on May 16, 2011.
  5. The acquisition of Silverleaf Resorts (SVLF) by an affiliate of Cerberus Capital Management on May 16, 2011.
  6. The acquisition of Celera Corporation (CRA) by Quest Diagnostics (DGX) on May 17, 2011.
  7. The acquisition of Dionex Corporation (DNEX) by Thermo Fisher Scientific Inc. (TMO) on May 18, 2011


Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring

Company

Closing

Price

Last
Price
Closing
Date
ProfitAnnu.
Profit
GRAN04/27/2011FNB United Corp (FNBN)$1.86$0.9109/30/2011

103.98%

291.95%
CSR04/20/2011Rightmark Holdings Limited (N/A)$6.50$5.1509/30/2011 26.21% 73.60%
CFSG05/20/2011Bain Capital Partners (N/A)$9.00$7.3311/15/2011 22.78% 47.25%
TAM01/19/2011LAN Airlines S.A. (LFL)$25.89$21.4112/31/2011 20.94% 34.43%
TLCR06/07/2010Grifols (GRF.MC)$31.32$28.2506/30/2011 10.88% 104.53%
ID09/20/2010Safran (N/A)$12.00$10.9005/15/2011 10.09% 0.00%
SVVS04/27/2011CenturyLink (CTL)$42.55$39.2812/31/2011 8.32% 13.69%
HYC11/17/2010Verifone Systems (PAY)$10.72$10.0709/30/2011

6.48%

18.20%
VRGY03/28/2011Advantest (ATE)$15.00$14.1012/31/2011 6.38% 10.49%
CASB03/04/2011Opus Bank (N/A)$0.45$0.42506/30/2011 5.88% 56.50%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.