Merger activity increased last week with four new deals announced and three deals completed.
There have been a total of ten new deals announced in the month of November so far.
On November 16, 2020, The Home Depot (HD) announced the acquisition of its old subsidiary, HD Supply Holdings (HDS) for $56.00 per share at a premium of 25% to the closing price of HDS prior to the announcement. In 2007, The Home Depot had sold HD Supply to private equity firm Clayton, Dubilier and Rice for $8.3 billion. Given the high demand for home building products on account of the pandemic, this deal makes a lot of sense for Home Depot. It is interesting that they chose not to use their more expensive stock to acquire the company and instead opted for an all cash deal.
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 last week.
Weekly Spread Changes:
The table below shows weekly spread changes between November 13, 2020, and November 20, 2020.
| Symbol | Quote | Acquiring Company |
Acquiring Company Quote |
Current Spread |
Last Week Spread |
Spread Change Weekly |
Deal Type |
|---|---|---|---|---|---|---|---|
| FBSS | 16.5 | Virginia National Bankshares Corporation (VABK) | 25.2 | 3.09% | 1.38% | 1.71% | All Stock |
| MCEP | 2.56 | Contango Oil & Gas Company (MCF) | 1.47 | 0.49% | -1.15% | 1.64% | All Stock |
| IPHI | 148.59 | Marvell Technology Group Ltd. (MRVL) | 43.96 | 13.14% | 12.06% | 1.08% | Cash Plus Stock |
| GSUM | 1.735 | Gridsum Corporation (N/A) | 15.27% | 14.29% | 0.98% | All Cash | |
| WLTW | 199.4 | Aon plc (AON) | 198.67 | 7.60% | 6.76% | 0.84% | All Stock |
| SG | 11.79 | Third Point Reinsurance Ltd. (TPRE) | 9.21 | -19.42% | -17.39% | -2.03% | Special Conditions |
| GNW | 4.63 | China Oceanwide Holdings Group Co., Ltd. (N/A) | 17.28% | 20.67% | -3.39% | All Cash | |
| TAT | 0.2395 | TAT Holdco LLC and TAT Merger Sub LLC (N/A) | -45.72% | -40.94% | -4.78% | All Cash | |
| CBMG | 18.3 | CBMG management (N/A) | 7.92% | 13.70% | -5.78% | All Cash | |
| HPR | 11.67 | Bonanza Creek Energy, Inc. (BCEI) | 23.86 | -76.69% | 0.00% | -76.69% | All Stock |
Deal Statistics:
| Total Number of Deals Closed in 2020 | 123 |
| Total Number of Deals Not Completed in 2020 | 16 |
| Total Number of Pending Deals | |
| Cash Deals | 38 |
| Stock Deals | 16 |
| Stock & Cash Deals | 3 |
| Special Conditions | 3 |
| Total Number of Pending Deals | 60 |
| Total Deal Size | $812.48 billion |
New Deals:
- The acquisition of HD Supply Holdings (HDS) by The Home Depot (HD) for $11.35 billion or $56.00 per share in cash.
- The acquisition of Foundation Building Materials (FBM) by American Securities for $1.37 billion or $19.25 per share in cash.
- The acquisition of China Biologic Products Holdings (CBPO) by CBPO Holdings Limited and CBPO Group Limited in a going private transaction for $3.65 billion or $120.00 per share in cash. We added CBPO as a potential deal to the Deals in the Works section on September 18, 2019, and the price after the news of the potential deal came out was $113.99.
- The acquisition of Norbord (OSB) by West Fraser Timber for $3.1 billion in an all stock deal. Under the terms of the agreement, Norbord shareholders will receive 0.675 of a West Fraser share for each Norbord share. The completion of the Transaction will also be subject to the listing by West Fraser of its common shares on the New York Stock Exchange (“NYSE”). As a result, U.S. shareholders of Norbord will receive shares of West Fraser upon completion of the Arrangement that will be tradeable on the NYSE.
Deal Updates:
- On November 13, 2020, 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 BMC Stock Holdings (BMCH) by Builders FirstSource (BLDR).
- On November 20, 2020, Virtusa Corporation (VRTU) announced that its stockholders voted to adopt the previously announced merger agreement with Baring Private Equity Asia.
Closed Deals:
- The acquisition of AMAG Pharmaceuticals (AMAG) by Covis Group S.à r.l. on November 16, 2020. It took 46 days for this deal to be completed.
- The acquisition of MyoKardia (MYOK) by Bristol-Myers Squibb Company (BMY) on November 17, 2020. It took 43 days for this deal to be completed.
- The acquisition of Yintech Investment Holdings Limited (YIN) by Yinke Holdings on November 18, 2020. It took 93 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 |
|---|---|---|---|---|---|---|---|
| GNW | 10/23/2016 | China Oceanwide Holdings Group Co., Ltd. (N/A) | $5.43 | $4.63 | 11/30/2020 | 17.28% | 788.34% |
| GSUM | 10/01/2020 | Gridsum Corporation (N/A) | $2.00 | $1.735 | 03/31/2021 | 15.27% | 43.22% |
| IPHI | 10/29/2020 | Marvell Technology Group Ltd. (MRVL) | $168.12 | $148.59 | 12/31/2021 | 13.14% | 11.87% |
| DOYU | 10/12/2020 | HUYA Inc. (HUYA) | $15.31 | $13.83 | 06/30/2021 | 10.69% | 17.73% |
| XLNX | 10/27/2020 | Advanced Micro Devices, Inc. (AMD) | $145.87 | $132.38 | 12/31/2021 | 10.19% | 9.21% |
| CBMG | 08/12/2020 | CBMG management (N/A) | $19.75 | $18.3 | 12/31/2020 | 7.92% | 74.16% |
| WLTW | 03/09/2020 | Aon plc (AON) | $214.56 | $199.4 | 06/30/2021 | 7.60% | 12.62% |
| MXIM | 07/13/2020 | Analog Devices, Inc. (ADI) | $84.97 | $80.47 | 06/30/2021 | 5.60% | 9.29% |
| OSB | 11/19/2020 | West Fraser Timber Co. Ltd. (N/A) | $37.78 | $36.21 | 03/31/2021 | 4.34% | 12.27% |
| NEWA | 10/02/2020 | Crouching Tiger Holding Limited (N/A) | $3.65 | $3.5 | 06/30/2021 | 4.29% | 7.11% |
List of all pending deals: The list of all pending deals is only available to InsideArbitrage Premium members.
Disclaimer: I have a long position in Otelco (OTEL). 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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