Merger Arbitrage Mondays – Thoma Bravo’s Acquisition of Instructure Includes A Go-Shop Provision

Merger activity increased with five new deals announced and five 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 were two new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2019 181
Total Number of Deals Not Completed in 2019 9
Total Number of Pending Deals
Cash Deals 45
Stock Deals 19
Stock & Cash Deals 5
Special Conditions 6
Total Number of Pending Deals 75
Aggregate Deal Consideration $1.32 trillion

New Deals:

  1. The acquisition of Audentes Therapeutics (BOLD) by Astellas Pharma for $2.65 billion or $60.00 per share in cash.
  2. The acquisition of AK Steel Holding Corporation (AKS) by Cleveland-Cliffs (CLF) for $3 billion in an all stock deal. Under the terms of the merger agreement, AK Steel shareholders will receive 0.40 shares of Cliffs common stock for each outstanding share of AK Steel common stock they own.
  3. The acquisition of Instructure (INST) by Thoma Bravo for $1.86 billion or $47.60 per share in cash.We added INST as a potential deal to the Deals in the Works section on November 13, 2019, and the price after the news of the potential deal came out was $50.44.
  4. The merger of Aevi Genomic Medicine (GNMX) and Cerecor (CERC) in an all stock deal for $16.1 million plus contingent value rights, or CVRs, for up to an additional $6.5 million in subsequent milestone payments on clinical or regulatory successes, or both. The per share price will be based on the number of Aevi shares outstanding immediately prior to closing, including the shares of Aevi stock to be issued to Children’s Hospital of Philadelphia Foundation upon conversion of its outstanding secured promissory note and to AstraZeneca in connection with the exercise by Aevi of its license option for MEDI2338, which, is anticipated to result in an approximate per share value of $0.134 to Aevi stockholders, assuming the maximum net asset related adjustment. On account of the various adjustments this deal is subject to as well as the CVR, we are treating this as a “special conditions” deal worth $0.134 per share.
  5. The merger of Wellesley Bancorp (WEBK) and Cambridge Bancorp (CATC) for $122 million in an all stock deal. Under the terms of the agreement, each share of Wellesley common stock will be exchanged for 0.580 shares of Cambridge common stock.

Deal Updates:

  1. On December 3, 2019, The Federal Trade Commission (FTC) has granted early termination of the required waiting period under the Hart-Scott-Rodino Act with respect to the acquisition of Carbonite (CARB) by Open Text Corporation (OTEX).
  2. On December 5, 2019, Eldorado Resorts (ERI) announced that, the Company received approval from the Missouri Gaming Commission in connection with its pending acquisition of Caesars Entertainment Corporation (CZR), subject to customary conditions.
  3. On December 5, 2019, Centene Corporation (CNC) and WellCare Health Plans (WCG) announced that the Illinois Department of Insurance, the New Jersey Department of Banking and Insurance and the New Jersey Division of Medical Assistance and Health Services have each approved Centene’s indirect pending acquisition of WellCare domestic insurers in those respective states.

Closed Deals:

  1. The acquisition of DNB Financial Corporation (DNBF) by S&T Bancorp (STBA) on November 30, 2019. It took 178 days for this deal to be completed.
  2. The acquisition of Viacom (VIAB) by CBS Corporation (CBS) on December 4, 2019. It took 113 days for this deal to be completed.
  3. The acquisition of Cambrex Corporation (CBM) by Permira funds on December 4, 2019. It took 119 days for this deal to be completed.
  4. The acquisition of SemGroup Corporation (SEMG) by Energy Transfer (ET) on December 5, 2019. It took 80 days for this deal to be completed.
  5. The acquisition of Roan Resources (ROAN) by Citizen Energy Operating on December 6, 2019. It took 66 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $5 03/31/2020 60.00% 193.81%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.97 $5.53 01/31/2020 44.18% 304.24%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.14 12/31/2019 31.16% 516.96%
ABDC 08/13/2019 Crescent Capital BDC, Inc. (N/A) $11.02 $9 12/31/2019 22.44% 372.37%
OHAI 08/01/2019 Portman Ridge Finance Corporation (PTMN) $1.46 $1.29 12/31/2019 13.18% 218.64%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $114.62 03/31/2020 9.06% 29.25%
FIT 11/01/2019 Google LLC (N/A) $7.35 $6.74 06/30/2020 9.05% 16.19%
SORL 11/29/2019 Ruili International Inc. (N/A) $4.72 $4.4 06/30/2020 7.27% 13.01%
TSG 10/02/2019 Flutter Entertainment PLC (PDYPF) $25.74 $24.14 09/30/2020 6.63% 8.18%
ACIA 07/08/2019 Cisco Systems, Inc. (CSCO) $70.00 $66.67 07/31/2020 4.99% 7.76%

List of all pending deals:

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

Disclaimer: I hold long positions in Sprint (S), Mellanox Technologies (MLNX) and Pacific Biosciences of California (PACB). 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: or follow me on Twitter@asifsuria

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