Merger Arbitrage Mondays – Comtech Telecommunications acquires Gilat Satellite Networks in a cash plus stock deal

In the month of January, 2020, there were fourteen new deals announced, nine of which had a stock consideration. The last week of the month saw four new deals, three of which included a stock consideration.

Shares of Delphi Technologies (DLPH) shot up more than 60% after BorgWarner (BWA) announced that it was acquiring Delphi in an all stock deal. According to the press release, combining with Delphi Technologies is consistent with BorgWarner’s evolution towards the propulsion market of the future and would enable BorgWarner to maintain flexibility across combustion, hybrid, and electric propulsion (C-H-E).

On January 29, 2020, Alcentara Capital Corporation (ABDC) received shareholder approval for its acquisition by Crescent Capital. The deal was completed on January 31, 2020.

In the deal updates section for last week, Liberty Property Trust (LPT), Ladenburg Thalmann Financial Services (LTS) and William Lyon Homes (WLH) each received shareholder approval for their respective deals. The expected date of completion for all three deals has moved up to February, 2020.

Average Profit and Average Annualized Profit by Deal Type as on Friday, January 31, 2020

Merger activity increased last week with four new deals announced and four 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 2020 17
Total Number of Deals Not Completed in 2020 2
Total Number of Pending Deals
Cash Deals 40
Stock Deals 21
Stock & Cash Deals 7
Special Conditions 4
Total Number of Pending Deals 72
Total Deal Size $425.85 billion

New Deals:

  1. The merger of CenterState Bank Corporation (CSFL) with South State Corporation (SSB) for $3.29 billion in an all stock deal. Under the terms of the merger agreement CenterState shareholders will receive 0.3001 shares of South State common stock for each share of CenterState common stock they own.
  2. The acquisition of Delphi Technologies PLC (DLPH) by BorgWarner (BWA) for $3.3 billion in an all stock deal. Under the terms of the agreement Delphi Technologies stockholders would receive a fixed exchange ratio of 0.4534 shares of BorgWarner common stock per Delphi Technologies share.
  3. The acquisition of Gilat Satellite Networks (GILT) by Comtech Telecommunications (CMTL) for $532.5 million in a cash plus stock deal. Under the terms of the agreement, Gilat shareholders will receive total consideration of $10.25 per share, comprised of $7.18 per share in cash and 0.08425 of a share of Comtech common stock for each share of Gilat held.
  4. The acquisition of Stein Mart (SMRT) by Kingswood Capital Management for $819.29 million or $0.90 per share in cash.

Deal Updates:

  1. On January 28, 2020, Allergan (AGN) along with AbbVie (ABBV) announced a definitive agreement to divest Allergan’s mid-stage candidate brazikumab and marketed drug, Zenpep to UK-based AstraZeneca AZN and Swiss consumer giant Nestle, respectively. The divestment deals were made in relation to satisfy ongoing regulatory approval process being conducted by FTC and EC, which are reviewing the acquisition of Allergan by AbbVie.
  2. On January 29, 2020, TD Ameritrade (AMTD) and Schwab (SCHWeach received a request for additional information and documentary material, often referred to as a “second request,” from the Antitrust Division of the Department of Justice.
  3. On January 30, 2020, Liberty Property Trust (LPT) announced that at a Special Meeting of Shareholders, Liberty’s shareholders approved the previously announced merger agreement with Prologis (PLD). The transactions remain subject to certain closing conditions and are expected to be completed on or around February 4, 2020.
  4. On January 31, 2020, Condor Hospitality Trust (CDOR) provided an update on the previously announced acquisition by merger of the Company by NexPoint Hospitality Trust. NHT and the Company have agreed to extend the closing of the Merger to February 28, 2020, subject to further possible extension to March 16, 2020 and the satisfaction or waiver of certain remaining closing date conditions.
  5. On January 31, 2020, Ladenburg Thalmann Financial Services (LTS) and Advisor Group announced that at a special meeting, Ladenburg’s shareholders overwhelmingly voted to approve the merger of Ladenburg and Advisor Group. The parties have also received regulatory approval from the Financial Industry Regulatory Authority in connection with the merger and expect to be in position to complete the merger in mid-February 2020, subject to the satisfaction or waiver of the remaining conditions to closing.
  6. On January 31, 2020, Taylor Morrison Home Corporation (TMHC) and William Lyon Homes (WLH) announced that, at their respective special meetings of stockholders, stockholders of both companies voted to approve all stockholder proposals necessary to complete the merger between Taylor Morrison and William Lyon Homes. The companies expect the merger transaction to close in early February, subject to customary closing conditions.

Closed Deals:

  1. The acquisition of Achillion Pharmaceuticals (ACHN) by Alexion Pharmaceuticals (ALXN) on January 28, 2020. It took 104 days for this deal to be completed.
  2. The acquisition of Alcentra Capital Corporation (ABDC) by Crescent Capital BDC on January 31, 2020. It took 171 days for this deal to be completed.
  3. The acquisition of United Community Financial (UCFC) by First Defiance Financial (FDEF) on January 31, 2020. It took 144 days for this deal to be completed.
  4. The acquisition of Cision (CISN) by Platinum Equity on January 31, 2020. It took 101 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
S 04/29/2018 T-Mobile US, Inc. (TMUS) $8.12 $4.3700 03/31/2020 85.85% 540.27%
NTGN 01/16/2020 BioNTech SE (BNTX) $1.84 $1.35 06/30/2020 36.31% 88.96%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.1 03/31/2020 32.44% 204.14%
FIT 11/01/2019 Google LLC (N/A) $7.35 $6.52 06/30/2020 12.73% 31.18%
LACQ 12/30/2019 GTWY Holdings Limited (N/A) $11.50 $10.43 06/30/2020 10.26% 25.13%
TSG 10/02/2019 Flutter Entertainment PLC (PDYPF) $26.18 $23.86 09/30/2020 9.72% 14.73%
KEM 11/11/2019 Yageo Corporation (N/A) $27.20 $26.04 12/31/2020 4.45% 4.88%
FSBC 12/19/2019 Evans Bancorp, Inc. (EVBN) $17.80 $17.06 06/30/2020 4.34% 10.63%
AMTD 11/25/2019 The Charles Schwab Corporation (SCHW) $49.36 $47.48 12/31/2020 3.96% 4.35%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $120.9 03/31/2020 3.39% 21.34%

List of all pending deals:

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

Disclaimer: I hold long positions in Sprint (S) and Mellanox Technologies (MLNX). 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

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